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Straight-line amortization, manufacturing concepts, schedule of cost of goods manufactured, income statement, manufacturing statements and cost behavior. ACC 206




2. Bond computations: Straight-line amortization;Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow.;?;Case A ?The bonds are issued at 100.;?;Case B ?The bonds are issued at 96.;?;Case C ?The bonds are issued at 105.;Southlake uses the straight-line method of amortization.;Instructions;Complete the following table;Case A;Case B;Case C;Cash inflow on the issuance date;$900,000;$900,000;$900,000;Total cash outflow through maturity;Total borrowing cost over the life of the bond issue;Interest expense for the year ended December 31, 20X1;Amortization for the year ended December 31, 20X1;Unamortized premium as of December 31, 20X1;Unamortized discount as of December 31, 20X1;Bond carrying value as of December 31, 20X1;3. Definitions of manufacturing concepts;Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended;Materials and supplies used;Brass $75,000;Repair parts 16,000;Machine lubricants 9,000;Wages and salaries Machine operators 128,000;Production supervisors 64,000;Maintenance personnel 41,000;Other factory overhead Variable 35,000;Fixed 46,000;Sales commissions 20,000;Compute;a.;Total direct materials consumed;b.;Total direct labor;c.;Total prime cost;d.;Total conversion cost;4. Schedule of cost of goods manufactured, income statement;The following information was taken from the ledger of Jefferson Industries, Inc.;Direct labor;$85,000;Administrative expenses;$59,000;Selling expenses;34,000;Work in. process;Sales;300,000;Jan. 1;29,000;Finished goods;Dec. 31;21,000;Jan. 1;115,000;Direct material purchases;88,000;Dec. 31;131,000;Depreciation: factory;18,000;Raw (direct) materials on hand;Indirect materials used;10,000;Jan. 1;31,000;Indirect labor;24,000;Dec. 31;40,000;Factory taxes;8,000;Factory utilities;11,000;Prepare the following;a.;A schedule of cost of goods manufactured for the year ended December 31.;b.;An income statement for the year ended December 31.;5. Manufacturing statements and cost behavior;Tampa Foundry began operations during the current year, manufacturing various products for industrial use. One such product is light-gauge aluminum, which the company sells for $36 per roll. Cost information for the year just ended follows.;Per Unit;Variable Cost;Fixed Cost;Direct materials;$4.50;$ ?;Direct labor;6.5;?;Factory overhead;9;50,000;Selling;?;70,000;Administrative;?;135,000;Production and sales totaled 20,000 rolls and 17,000 rolls, respectively There is no work in process. Tampa carries its finished goods inventory at the average unit cost of production.;Instructions;a.;Determine the cost of the finished goods inventory of light-gauge aluminum.;b.;Prepare an income statement for the current year ended December 31;c.;On the basis of the information presented;1.;Does it appear that the company pays commissions to its sales staff? Explain.;2.;What is the likely effect on the $4.50 unit cost of direct materials if next year's production increases? Why?


Paper#74862 | Written in 18-Jul-2015

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