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##### Accounting Seven Problems Set

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solution

**Question**

Question;Problem;1. Standard and actual costs for direct;materials for the manufacture of 1,000 units of product were as follows;Actual costs;1,550 lbs. @ $9.10;Standard costs;1,600 lbs. @ $9.00;Determine the (a) quantity variance, (b) price variance, and (c);total direct materials cost variance.;2. Standard and actual costs for direct labor;for the manufacture of 1,000 units of product were as follows;Actual costs;950 hours @ $37.00;Standard costs;975 hours @ $36.00;Determine the (a) time variance, (b) rate variance, and (c) total;direct labor cost variance.;3. A department store apportions payroll costs;on the basis of the number of payroll checks issued. Accounting costs are;apportioned on the basis of the number of reports. The payroll costs for the;year were $231,000 and the accounting costs for the year totaled $75,500. The;departments and the average cost of store equipment and average cost of;inventory for each are as follows;Number of;Payroll Checks;Number;of Reports;Department R;483;70;Department S;1,470;85;Department T;147;345;Determine the amount of (a) payroll cost and (b) accounting cost;to be apportioned to each department.;4. The sales, income from operations, and;invested assets for each division of Grosbeak Company are as follows;Sales;Income from;Operations;Invested;Assets;Division E;$5,000,000;$550,000;$2,400,000;Division F;4,800,000;860,000;2,500,000;Division G;7,000,000;860,000;2,900,000;(a);Using the expanded expression;determine the profit margin, investment turnover, and rate of return on;investment for each division. Round to one decimal place.;(b);Which is (are) the most profitable per;dollar invested?;5. The sales, income from operations, and;invested assets for each division of Wren Company are as follows;Sales;Income from;Operations;Invested;Assets;Division C;$5,000,000;$630,000;$4,000,000;Division D;6,800,000;760,000;3,900,000;Division E;3,750,000;750,000;7,500,000;Management has established a minimum rate of return for invested;assets of 10%.;(a);Determine the residual income for each;division.;(b);Based on residual income, which of the;divisions is the most profitable?;6. Snipe Company has been purchasing a;component, Part Q, for $19.20 a unit. Snipe is currently operating at 70% of;capacity and no significant increase in production is anticipated in the near;future. The cost of manufacturing a unit of Part Q, determined by absorption;costing methods, is estimated as follows;Direct materials;$11.50;Direct labor;4.50;Variable factory overhead;1.12;Fixed factory overhead;3.15;Total;$20.27;Prepare a differential analysis report, dated March 12 of the;current year, on the decision to make or buy Part Q.;7.;Schedule of Activity;Costs;Quality Control Activities;Activity Cost;Process audits;$55,000;Training of machine operators;26,000;Processing returned products;18,000;Scrap processing (disposal);29,000;Rework;8,000;Preventative maintenance;30,000;Product design;46,000;Warranty work;12,000;Finished goods inspection;22,000;From the above schedule;determine;a. the;value added costs;b. the nonvalue added costs;c. the internal failure costs;d. the;external failure costs

Paper#40998 | Written in 18-Jul-2015

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