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Question;Part I. 6 Comprehensive problems worth 50;points total;1.Points = 4;Hayes Enterprises produces;miniature parasols. Each parasol consists of $1.20 of variable costs and $.90;of fixed costs and sells for $4.50. A French wholesaler offers to buy 9,000;units at $1.40 each, of which Pederson has the capacity to produce. Hayes will;incur extra shipping costs of $.12 per parasol.;Instructions;Determine the incremental income or loss that Hayes Enterprises;would realize by accepting the special order.;2.Points = 4;DSD Inc. produces several;models of clocks. An outside supplier has offered to produce the commercial;clocks for DSD for $270 each. R&R needs 2,000 clocks annually. R&R has provided;the following unit costs for its commercial clocks;Direct materials;$100;Direct labor;110;Variable overhead;30;Fixed overhead (70% avoidable);150;Instructions;Prepare an incremental analysis, which shows the effect of the;make-or-buy decision.;3. Points = 12;The current sections of;Allie Inc.'s balance sheets at December 31, 2013 and 2014, are presented here.;Allie?s net income for 2014 was $210,000. Depreciation expense was;$20,000.;2014;2013;Current assets;Cash;$115,000;$99,000;Accounts receivable;105,000;89,000;Inventory;154,000;172,000;Prepaid expense;27,000;21,000;Total current;assets;$401,000;$381,000;Current liabilities;Accrued expenses;payable;$ 15,000;$ 5,000;Accounts payable;85,000;93,000;Total current;liabilities;$100,000;$ 98,000;Instructions;Prepare the net cash provided by operating activities section of;the company's statement of cash flows for the year ended December 31, 2014;using the indirect method.;4.Points = 10;Mimi Manufacturing Company;uses a job order cost accounting system and keeps perpetual inventory records.;Prepare journal entries to record the following transactions during the month;of June.;June;1;Purchased raw materials for $22,000 on account.;8;Raw materials requisitioned by production;Direct materials;$8,500;Indirect materials;1,500;15;Paid factory utilities, $2,400 and repairs for factory;equipment, $7,500.;25;Incurred $98,000 of factory labor.;25;Time tickets indicated the following;Direct Labor;(6,000 hrs. @ $13 per hr.);=;$78,000;Indirect Labor;(2,500 hrs. @ $8 per hr.);=;20,000;$98,000;25;Applied manufacturing overhead to production based on a predetermined;overhead rate of $10 per direct labor hour worked.;28;Goods costing $20,000 were completed in the factory and were;transferred to finished goods.;30;Goods costing $16,000 were sold for $23,000 on account.;5. Points = 12;Meyer Manufacturing;Company uses a process cost system. The Molding Department adds materials at;the beginning of the process and conversion costs are incurred uniformly;throughout the process. Work in process on May 1 was 75% complete and work in;process on May 31 was 40% complete.;Instructions;Complete the Production Cost Report for the Molding Department for;the month of May using the above information and the information below.;6. Points;= 8;Data concerning manufacturing;overhead for Arianna Industries are presented below. The Mixing Department is a;cost center.;An analysis of the overhead costs reveals that all variable costs;are controllable by the manager of the Mixing Department and that 50% of;supervisory costs are controllable at the department level.;The flexible budget formula and the cost and activity for the;months of June and July are as follows;Instructions;(a);Prepare the responsibility reports for the Mixing Department for;each month.;(b);Comment on the manager's performance in controlling costs during;the two-month period.;Part II: 25 Multiple choice;questions @ 2 points each = 50 points;1.Jackson;Company is a publicly held corporation whose $1 par value stock is actively;traded at $64 per share. The company issued 3,000 shares of stock to acquire;land recently advertised at $200,000. When recording this transaction, Jackson;Company will;A)debit;Land for $200,000.;B)credit;Common Stock for $192,000.;C)debit;Land for $192,000.;D)credit;Paid-In Capital in Excess of Par for $196,000.;2.Victory;Corporation sold 400 shares of treasury stock for $45 per share. The cost for;the shares was $35. The entry to record the sale will include a;A)credit to;Gain on Sale of Treasury Stock for $14,000.;B)credit to;Paid-in Capital from Treasury Stock for $4,000.;C)debit to;Paid-in Capital in Excess of Par for $4,000.;D)credit to;Treasury Stock for $18,000.;3.Which of the following show the proper effect of a stock split and;a stock dividend?;4.Dabney;Inc., has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and;40,000 shares of $1 par value common stock outstanding at December 31, 2014.;There were no dividends declared in 2013. The board of directors declares and;pays a $60,000 dividend in 2014. What is the amount of dividends received by;the common stockholders in 2014?;A)$0;B)$25,000;C)$10,000;D)$35,000;5.A;$600,000 bond was retired at 98 when the carrying value of the bond was;$590,000. The entry to record the retirement would include a;A)gain on;bond redemption of $10,000.;B)loss on;bond redemption of $10,000.;C)loss on;bond redemption of $2,000.;D)gain on;bond redemption of $2,000.;6.The following data are available for Two-off Company.;Increase in accounts payable;$120,000;Increase in bonds payable;300,000;Sale of investments;150,000;Issuance of common stock;160,000;Payment of cash dividends;90,000;Net cash provided by financing activities is;A)$180,000.;B)$370,000.;C)$360,000.;D)$420,000.;7.The net;income reported on the income statement for the current year was $220,000.;Depreciation recorded on plant assets was $35,000. Accounts receivable and;inventories increased by $2,000 and $8,000, respectively. Prepaid expenses and;accounts payable decreased by $2,000 and $12,000 respectively. How much cash;was provided by operating activities?;A)$200,000;B)$235,000;C)$220,000;D)$255,000;8.If a;company reports a net loss, it;A)may still;have a net increase in cash.;B)will not;be able to pay cash dividends.;C)will not;be able to get a loan.;D)will not;be able to make capital expenditures.;9.A creditor would be most interested in evaluating which of the;following ratios?;A)Asset;turnover;B) Earnings per share;C) Payout ratio;D) Times interest earned;10.Lionel;Company has beginning work in process inventory of $220,000 and total;manufacturing costs of $950,000. If cost of goods manufactured is $940,000;what is the cost of the ending work in process inventory?;A)$210,000.;B)$230,000.;C)$240,000.;D)$206,000.;11.The principal difference between a merchandising and a;manufacturing income statement is the;A)cost of;goods sold section.;B)extraordinary;item section.;C)operating;expense section.;D)revenue;section.;12.Given the;following data for Good man Company, compute (A) total manufacturing costs and;(B) costs of goods manufactured;Direct materials used;$345,000;Beginning work in process;$15,000;Direct labor;305,000;Ending work in process;60,000;Manufacturing overhead;450,000;Beginning finished goods;75,000;Operating expenses;525,000;Ending finished goods;45,000;Total Manufacturing Costs;Costs of Goods Manufactured;A);$1,055,000;$1,100,000;B);$1,070,000;$1,130,000;C);$1,100,000;$1,055,000;D);$1,130,000;$1,055,000;13.Alpine;Inc. uses job order costing for its brand new line of sewing machines. The cost;incurred for production during 2014 totaled $20,000 of materials, $8,000 of;direct labor costs, and $8,000 of manufacturing overhead applied. The company;ships all goods as soon as they are completed which results in no finished;goods inventory on hand at the end of any year. Beginning work in process;totaled $9,000, and the ending balance is $15,000. During the year, the company;completed 20 machines. How much is the cost per machine?;A)$1,500;B)$1,880;C)$1,320;D)$1,760;14.For Cevu Company;the predetermined overhead rate is 75% of direct labor cost. During the month;$750,000 of factory labor costs are incurred of which $200,000 is indirect;labor. Actual overhead incurred was $420,000. The amount of overhead debited to;Work in Process Inventory should be;A)$560,000;B)$412,500;C)$420,000;D)$562,500;15.Hunten Manufacturing assigns overhead based on machine hours. The;Milling Department logs 1,400 machine hours and Cutting Department shows 3,000;machine hours for the period. If the overhead rate is $5 per machine hour, the;entry to assign overhead will show a;A)debit to;Manufacturing Overhead for $22,000.;B)credit to;Work in Process?Cutting Department for $15,000.;C)debit to;Work in Process for $15,000.;D)credit to;Manufacturing Overhead for $22,000.;16.The;Molding Department of Bidwell Company has the following production data;beginning work process 40,000 units (60% complete), started into production;680,000 units, completed and transferred out 640,000 units, and ending work in;process 80,000 units (40% complete). Assuming materials are entered at the;beginning of the process, equivalent units for materials are;A)720,000.;B)600,000.;C)640,000.;D)760,000.;17.ThoAon, Inc. collected the following production data for the past;month;Units Produced;Total Cost;1,600;$22,000;1,300;19,000;1,500;22,500;1,100;16,500;If the high-low method is used, what is the monthly total cost;equation?;A)Total;cost = $4,400 + $11/unit;B)Total;cost = $5,500 + $10/unit;C)Total;cost = $0 + $15/unit;D)Total;cost = $3,300 + $12/unit;18.At the;break-even point of 2,000 units, variable costs are $120,000, and fixed costs;are $64,000. How much is the selling price per unit?;A)$92;B)$32;C)$28;D)Not;enough information;19.The following information is taken from the production budget for;the first quarter;Beginning inventory in units;1,800;Sales budgeted for the quarter;678,000;Capacity in units of production facility;708,000;How many finished goods units should be produced during the;quarter if the company desires 4,800 units available to start the next quarter?;A)675,000;B)681,000;C)711,000;D)682,800;20.Jared;Manufacturing is planning to sell 1,200 boxes of ceramic tile, with production;estimated at 1,120 boxes during May. Each box of tile requires 44 pounds of;clay mix and a quarter hour of direct labor. Clay mix costs $0.50 per pound and;employees of the company are paid $15.00 per hour. Manufacturing overhead is;applied at a rate of 110% of direct labor costs. Jared has 5,200 pounds of clay;mix in beginning inventory and wants to have 6,000 pounds in ending inventory.;What is the total amount to be budgeted for manufacturing overhead;for the month?;A)$4,620;B)$4,950;C)$18,480;D)$19,800;21.Sales;results that are evaluated by a static budget might show;1.;favorable differences that are not justified.;2.;unfavorable differences that are not justified.;A)1;B)2;C)both 1;and 2.;D)neither 1;nor 2.;22.If the;materials price variance is $3,600 F and the materials quantity and labor;variances are each $2,800 U, what is the total materials variance?;A)$3,600 F;B)$2,800 U;C)$6,300 F;D)$800 F;23.The per-unit standards for direct labor are 1.5 direct labor hours;at $15 per hour. If in producing 2,300 units, the actual direct labor cost was;$46,000 for 3,000 direct labor hours worked, the total direct labor variance is;A)$2,300;unfavorable.;B)$5,750;favorable.;C)$6,750;unfavorable.;D)$5,750;unfavorable.;24.It costs;Maker Company $22 of variable and $15 of fixed costs to produce one Panini;press which normally sells for $57. A foreign wholesaler offers to purchase;1,000 Panini presses at $40 each. Maker would incur special shipping costs of;$5 per press if the order were accepted. Maker has sufficient unused capacity;to produce the 1,000 Panini presses. If the special order is accepted, what;will be the effect on net income?;A)$13,000;decrease;B)$13,000;increase;C)$22,000;decrease;D)$7,000;increase;25.Nelson;Manufacturing Company can make 100 units of a necessary component part with the;following costs;Direct Materials;$120,000;Direct Labor;25,000;Variable Overhead;45,000;Fixed Overhead;70,000;If Nelson Manufacturing Company purchases the component;externally, $30,000 of the fixed costs can be avoided. At what external price;for the 100 units is the company indifferent between making or buying?;A)$190,000;B)$200,000;C)$210,000;D)$220,000


Paper#37503 | Written in 18-Jul-2015

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