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The management of Sharrar Corporation would like to




1. The management of Sharrar Corporation would like to investigate the possibility of;basing its predetermined overhead rate on activity at capacity rather than on the estimated;amount of activity for the year. The companys controller has provided an example to;illustrate how this new system would work. In this example, the allocation base for the;upcoming year is 45,000 machine hours. In addition, capacity is 52,000 machine-hours;and the actual activity for the year is 47,100 machine-hours. All of the manufacturing;overhead is fixed and is $1,029,600 per year. For simplicity, its assumed that this is the;estimated manufacturing overhead for the year as well as the manufacturing overhead at;capacity and the actual amount of manufacturing overhead for the year.;Questions;A. Determine the predetermined overhead rate if the predetermined overhead rate is;based on the estimated amount of the allocation base.;B. Determine the under applied or over applied overhead for the year if the;predetermined overhead rate is based on the estimated amount of the allocation;base.;C. Determine the predetermined overhead rate if the predetermined overhead rate is;based on the amount of the allocation base at capacity.;D. Determine the under applied or over applied overhead for the year if the;predetermined overhead rate is based on the amount of the allocation base at;capacity.;2. Fryer Corporation uses the weighted-average method in its process costing system. This;month, the beginning inventory in the first processing department consisted of 700 units.;The costs and percentage completion of these units in beginning inventory were;Cost;Percent Complete;Material Costs$12,600;75%;Conversion costs..$8,900;60%;A total of 7,300 units were started and 6,200 units were transferred to the second;processing department during the month. The following costs were incurred in the first;processing department during the month;Cost;Material Costs..$132,200;Conversion Costs $117,500;The ending inventory was 80% complete with respect to materials and 45% complete;with respect to conversion costs.;Question;A. The total cost transferred from the first processing department to the next;processing department during the month is closest to what amount?;3. Financial statements for Praven Company appear below;Praven Company;Statement of Financial Position;December 31, Year 2 and Year 1;(dollars in thousands);Year 2;Year 1;Current assets;Cash and marketable securities.. $150;$130;Accounts receivable, net $190;$160;Inventory.. $170;$180;Prepaid expenses $50;$40;Total current assets $560;$510;Noncurrent assets;Plant and equipment, net.. $1,420;$1,330;Total assets. $1,980;$1,840;Current liabilities;Accounts payable. $110;$100;Accrued liabilities... $90;$60;Notes payable, short term $260;$260;Total current liabilities. $460;$420;Noncurrent liabilities;Bonds payable. $400;$400;Total liabilities.. $860;$820;Stockholders equity;Preferred stock, $5 par, 15% $120;$120;Common stock, $10 par.. $240;$240;Additional paid-in capital common stock $210;$210;Retained earnings. $550;$450;Total stockholders equity.. $1,120;$1,020;Total liabilities & stockholders equity. $1,980;$1,840;Praven Company;Income Statement;For the Year Ended December 31, Year 2;(dollars in thousands);Sales (all on account). $1,700;Cost of goods sold $1,190;Gross margin.. $510;Selling and administrative expense.. $200;Net operating income $310;Interest expense. $40;Net income before taxes. $270;Income taxes (30%).. $81;Net income $189;Dividends during Year 2 totaled $89 thousand, of which $18 thousand were preferred dividends.;The market price of a share of common stock on December 31, Year 2 was $130.;Questions;Compute the following for Year 2;a. What is Book value per share?;b. What is Working capital?;c. What is current ratio?;d. What is acid-test ratio?;e. What is accounts receivable turnover?;f. What is average collection period?;g. What is inventory turnover?;h. What is average sale period?;i. What is times interest earned?;j. What is debt-to-equity ratio?;4. Porter Company has provided the following data for the second quarter of the most recent;year;Sales. $300,000;Fixed manufacturing overhead $55,000;Direct labor. $72,500;Fixed selling expense $46,250;Variable manufacturing overhead.. $41,000;Variable administrative expense. $48,000;Direct materials $51,500;Fixed administrative expense $44,500;Variable selling expense $49,750;Assume that direct labor is a variable cost and that there were no beginning or ending;inventories.;Question;What is the total contribution margin of Porter Company for the second quarter?;5. Jatry Corporations budgeted sales are $300,000, its budgeted variable expenses are;$210,000, and its budgeted fixed expenses are $60,000.;Question;What is the companys break-even in dollar sales amount?;6. Superior Industries sales budget shows quarterly sales for the next year as follows;Quarter;Sales (units);First.. 10,000;Second.. 8,000;Third 12,000;Fourth.. 14,000;Company policy is to have a finished goods inventory at the end of each quarter equal to;20% of;next quarters sales.;Question;How much should the budgeted production for the second quarter be?;7. The following information is available on Company A;Sales. $900,000;Net operating income $36,000;Stockholders equity.. $100,000;Average operating assets $180,000;Minimum required rate of return.. 15%;Question;What is Company As residual income amount?;8. Nordstrand Companys net income last year was $36,000. Changes in selected balance;sheet accounts for the year appear below;Increases;(Decreases);Debit balances;Accounts receivable $ (7,000);Inventory. $ (5,000);Prepaid expenses.. $ 3,000;Credit balances;Accumulated depreciation.. $18,000;Accounts payable. $13,000;Accrued liabilities.. $ (9,000);Taxes payable. $ 0;Deferred taxes.. $1,000;Question;Based solely on this information, the net cash provided by operations under the;indirect method on the statement of cash flows would be how much?


Paper#33198 | Written in 18-Jul-2015

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