Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.

Production Activity

Indirect Labor

Indirect Materials

Other Overhead

Grinding

$320,000

Polishing

$135,000

Product modification

600,000

Providing power

$255,000

System calibration

500,000

Additional information on the drivers for its production activities follows.

Grinding

13,000 machine hours

Polishing

13,000 machine hours

Product modification

1,500 engineering hours

Providing power

17,000 direct labor hours

System calibration

400 batches

Required

1. Classify each activity as unit level, batch level, product level, or facility level.

2. Compute the activity overhead rates using ABC. Form cost pools as appropriate.

3. Determine overhead costs to assign to the following jobs using ABC.

Job 3175

Job 4286

Number of units

200 units

2,500 units

Machine hours

550 MH

5,500 MH

Engineering hours

26 eng hours

32 eng. hours

Batches

30 batches

90 batches

Direct labor hours

500 DLH

4,375 DLH

4. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286?

5. If the company used a plantwide overhead rate based on direct labor hours, what is the overhead cost for each unit of Job 3175? Of Job 4286?

6. Compare the overhead costs per unit computed in requirements 4 and 5 for each job. Which method more accurately assigns overhead costs?

Answer:

Craftmore Machining

1. Classification of activity as unit level, batch level, product level, or facility level:

Production Activity         Level

Indirect Labor                 Facility

Indirect Materials           Product

Grinding                          Product

 Polishing                         Product

Product modification     Product  

Providing power            Facility

 System calibration         Batch

2. The Activity Overhead Rates using ABC:

Grinding = $24.62/machine hour

Polishing = $10.38/machine hour

Product modification = $400/eng.h

Providing power = $15/DLH

System calibration = $1.25/batch

3. Assignment of overhead costs:

                                    Job 3175               Job 4286

Number of units         200 units             2,500 units

Machine hours           550 MH                5,500 MH

Engineering hours     26 eng hours       32 eng. hours

Batches                      30 batches           90 batches

Direct labor hours     500 DLH              4,375 DLH

                                                            Job 3175               Job 4286

Grinding = $24.62/machine hour      $13,541                  $135,410

Polishing = $10.38/machine hour         5,709                    57,090

Product modification = $400/eng.h   10,400                     12,800

Providing power = $15/DLH                 7,500                    65,625

System calibration = $1.25/batch              37.50                      112.50

Total costs allocated                         $37,187.50            $271,037.50

Cost per unit                                      $185.94                  $108.42

4. Overhead cost per unit:

Job 3175 , Overhead cost per unit  = $185.94 ($37,187.50/200)

Job 4286 Overhead cost per unit = $108 ($271,037.50/2,500)

5. Plantwide overhead rate

Total overhead costs = $1,810,000

Total direct labor hours = 4,875

Overhead rate = $1,810,000/4,875 = $371.28

                                   Job 3175               Job 4286

Direct labor hours     500 DLH              4,375 DLH

Total overhead cost $185,640           $1,624,350

Overhead cost per unit $928.20       $649.74

6.  Overhead cost per unit   Job 3175               Job 4286

    Using ABC                         $185.94                  $108.42

    Using Plantwide rate        $928.20                $649.74

ABC rate more accurately assigns overhead costs than using plantwide rate.

Explanation:

a) Data and Calculations:

Production Activity      

Indirect Labor    

Indirect Materials

Other Overhead           Costs         Usage                                 Usage Rate

Grinding                      $320,000     13,000 machine hours     $24.62/mh

Polishing                      $135,000     13,000 machine hours     $10.38/mh

Product modification    600,000     1,500 engineering hours $400/eng.h

Providing power        $255,000      17,000 DLH                       $15/DLH

System calibration       500,000     400 batches                      $1.25/batch

Total overhead        $1,810,000

b) Craftmore incurs unit-level costs each time a unit is produced. It incurs batch-level costs each time it produces a batch of goods. It incurs product-level costs to support the production of each type of product. Finally, Craftmore's facility-level costs sustain the facility's general manufacturing process.

Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $220 million of 8% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. When the company purchased the bonds, management elected to account for them under the fair value option. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $201 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2018, was $210 million.

Required:
a. Prepare the journal entry to record Fuzzy Monkey’s investment on January 1, 2018.
b. Prepare the journal entry by Fuzzy Monkey to record interest on June 30, 2018.
c. Prepare the journal entries by Fuzzy Monkey to record interest on December 31, 2018.

FORco, a country F corporation, wants to open a sales office in the United States. FORco does not form a U.S. subsidiary, but instead operates in the U.S. as a branch. Country F does not have a income tax treaty with the U.S. If FORco loans operating funds to the U.S. branch, when the U.S. branch makes interest payment to FORco, the interest payment will be subject to:____.

Most interest-paying checking accounts exhibit characteristics of both checking and savings accounts. Specifically, they earn relatively high rates of interest, especially compared with regular savings accounts, and allow relatively limited check-writing privileges. They are available through depository and nondepository institutions, including commercial banks, savings banks, credit unions, stock brokerage firms, mutual funds, and other financial services companies. What are some of the important characteristics of the following four major types of interest-paying checking accounts?

a. AMA: Asset Management Accounts
b. MMDA: Money Market Deposit Accounts
c. MMMF: Money Market Mutual Funds
d. NOW: Negotiable order of Withdrawal

For each additional room in the house, we estimate the appraised value to increase $74,800. For a house with 0 rooms, we estimate the appraised value to be $74,800. For each additional room in the house, we estimate the appraised value to increase $17,800. For each additional dollar of appraised value, we estimate the number of rooms in the house to increase by 17.80 rooms.

very urgent, i need this answered asap

Tyler Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 2014, Tyler entered into a 3-year service contract with Walleye Tech. Walleye promises to pay $10,500 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $9,800. In addition, Walleye agrees to pay an additional $20,600 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract.
1. Prepare the journal entries for Tyler in 2014 and 2015 related to this service contract. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Jan 1, 2014
Dec 31, 2014
Jan 1, 2015
Dec 31, 2015
2. Prepare the journal entries for Tyler in 2016 related to the modified service contract, assuming a prospective approach. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Jan 1, 2016
Dec 31, 206
3. Repeat the requirements for part (b), assuming Tyler and Walleye agree on a revised set of services (fewer bookkeeping services but more tax services) in the extended contract period and the modification results in a separate performance obligation. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Jan 1, 2016
Dec 31, 2016

The following information is related to Nash Company for 2020.
Retained earnings balance, January 1, 2020 $901,600
Sales Revenue 23,000,000
Cost of goods sold 14,720,000
Interest revenue 64,400
Selling and administrative expenses 4,324,000
Write-off of goodwill 754,400
Income taxes for 2020 1,144,480
Gain on the sale of investments 101,200
Loss due to flood damage 358,800
Loss on the disposition of the wholesale division (net of tax) 404,800
Loss on operations of the wholesale division (net of tax) 82,800
Dividends declared on common stock 230,000
Dividends declared on preferred stock 73,600
Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e.g. 1.49.)

how important are the development of the many management theories
​

On October 21, 2004, Abitibi-Consolidated Inc., a large Canadian-based newsprint and groundwood producer, reported net income for its third quarter, 2004, of $182 million. This compares with a net loss for the same quarter of 2003 of $70 million. Sales for the quarter were up, to $1528 million, and earnings excluding low persistence items, was a loss of $27 million. the low - persistence items included a gain of $239 million before tax from foreign exchange conversion. Much of the company's long term debt is denominated in US dollars. The foreign exchange gain arose because of the rising value of the Canadian dollar, relative to the US dollar, during the quarter. Comparable figures for the third quarter of 2003 were as follows: sales of $ 1,340 mil-lion, a loss before low- persistence items of $ 32 million, and foreign exchange conversion gain of $ 13 million. There is no mention of R& D costs in the company’s third quarter report. Its 2003 annual report mentions R& D only in passing, with reference to forest conservation. Presumably, R& D expenditures are relatively low. Abitibi- Consolidated’s share price rose $ 0.59 to $ 7.29 on the Toronto Stock Exchange on October 21, 2004. The S& P/ TSX Composite index gained 59 points to close at 8,847 on the same day. According to media reports, the increases were driven by a "red- hot" materials and energy sect

The state of Oregon's wine industry specializes in the production of Pinot Noir wine, a type of red wine. Oregon's Pinot Noir is very similar to wines made in Santa Barbara and the Burgundy region of France. Oregon's Pinot Noir is also known to pair well with lamb, that is, many people choose to drink Pinot Noir while eating lamb.

For many years, states levy a special sales tax on wine often called a "sin tax". The reasoning behind these special sales taxes is that wine consumption can lead to particular social costs such as drunk driving, violence, etc.

However, many medical studies have demonstrated that moderate consumption of red wine can lower the risks for many diseases such as coronary heart disease. Thus, there are social benefits as well.

Suppose that states, in recognition of some of the benefits to wine consumption, decide to decrease the sales tax on Oregon Pinot Noir. What effect will this have on consumer surplus, producer surplus and deadweight loss.
A. Consumer surplus increases, producer surplus increases, the deadweight loss decreases.
B. Consumer surplus decreases, producer surplus decreases, the deadweight loss decreases.
C. Consumer surplus decreases, producer surplus increases, the deadweight loss is unchanged.
D. Consumer surplus increases, producer surplus increases, the deadweight loss increases.

Pierre Corporation has a precredit U.S. tax of $315,000 on $1,560,000 of taxable income in the current year. Pierre has $312,000 of foreign source taxable income characterized as foreign branch income and $156,000 of foreign source taxable income characterized as passive category income. Pierre paid $63,000 of foreign income taxes on the foreign branch income and $27,000 of foreign income taxes on the passive category income. What amount of foreign tax credit (FTC) can Pierre use on its current U.S. tax return and what is the amount of the carryforward, if any

Trak Corporation incurred the following costs while manufacturing its bicycles. Bicycle components $100,000 Advertising expense $45,000 Depreciation on plant 60,000 Property taxes on plant 14,000 Property taxes on store 7,500 Delivery expense 21,000 Labor costs of assembly-line workers 110,000 Sales commissions 35,000 Factory supplies used 13,000 Salaries paid to sales clerks 50,000
Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs. Bicycle components select a classification Depreciation on plant select a classification Property taxes on store select a classification Labor costs of assembly-line workers select a classification Factory supplies used select a classification Advertising expense select a classification Property taxes on plant select a classification Delivery expense select a classification Sales commissions select a classification Salaries paid to sales clerks

Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture. Required: 1. Classify the following manufacturing costs of Business Solutions as (a) variable or fixed and (b) direct or indirect. 2. Prepare a schedule of cost of goods manufactured for Business Solutions for the month ended January 31, 2020. Assume the following manufacturing costs: Direct materials: $2,600 Factory overhead: $520 Direct labor: $1,200 Beginning work in process: none (December 31, 2019) Ending work in process: $590 (January 31, 2020) Beginning finished goods inventory: none (December 31, 2019) Ending finished goods inventory: $370 (January 31, 2020) 3. Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2020. Pre

Stewart owns a home with a replacement cost of $300,000. He purchased $200,000 of property insurance on the house with a $1,000 deductible for all losses. The house caught on fire and sustained $100,000 worth of damage. The actual cash value (ACV) of the damaged portion of the property was $80,000. How much will Stewart receive as reimbursement for the loss

Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows:
Job 11-101 $6,240
Job 11-102 9,000
Job 11-103 7,210
Job 11-104 6,750
Factory supervision 4,000
Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $18 per direct labor hour. The direct labor rate is $40 per hour.
A. Journalize the entry to record the factory labor costs.
B. Journalize the entry to apply factory overhead to production for November.

Melissa is conducting a survey of our classmates because our teacher wants the class to learn more about hygiene habits Melissa House develop a list of 10 questions

Desert, Inc. has year-end account balances as of December 31, 2020 of Sales Revenue $907,000; Interest Revenue $24,000; Cost of Goods Sold $593,000; Administrative Expenses $188,000; Income Tax Expense $31,000; Dividends $18,000, Unrealized Pension Liability Adjustments of $21,500 (dr) and a correction of an error in recording Depreciation Expense for 2018 of $12,000 (dr).

To prepare the year-end closing entry required to close the Income Summary account, Desert would record a:_________

a. Debit to Net Income for $107.000.
b. Debit to Income Summary for $119,000
c. Debit to Retained Earnings for $89,000
d. Debit to Income Summary for $67,500

Would you rather be able to change the size of your body, or be able to change your age?

Tullius Corporation has received a request for a special order of 8,600 units of product C64 for $45.50 each. The normal selling price of this product is $50.60 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product C64 is computed as follows:
Direct materials $ 16.30
Direct labor 5.60
Variable manufacturing overhead 2.80
Fixed manufacturing overhead 5.70
Unit product cost $ 30.40
Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product C64 that would increase the variable costs by $5.20 per unit and that would require a one-time investment of $45,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order.
Required: Determine the effect on the company's total net operating income of accepting the special order.

You are the manager of two plants (factories) in Mexico that manufacture shoes. The combined monthly output of both plants is to be 10,000 pairs of shoes. How you would best divide this output of 10,000 pairs of shoes between the two plants. You may make your arguments in words with the aid of diagrams, i.e., without the use of math. On the other hand, if you are comfortable with math (calculus), the following additional information may be made use of by you. The cost function of Plant 1 is C1 = a1Q1 + a2Q12 + Q13and that of Plant 2 is C2 = b1Q2 + b2Q22 + Q23, where Q1 and Q2 denote, respectively, the outputs of Plant 1 and Plant 2.

The following balances were taken from the books of Novak Corp. on December 31, 2020.

Interest revenue $88,200 Accumulated depreciation—equipment $42,200
Cash 53,200 Accumulated depreciation—buildings 30,200
Sales revenue 1,382,200 Notes receivable 157,200
Accounts receivable 152,200 Selling expenses 196,200
Prepaid insurance 22,200 Accounts payable 172,200
Sales returns and allowances 152,200 Bonds payable 102,200
Allowance for doubtful accounts 9,200 Administrative and general expenses 99,200
Sales discounts 47,200 Accrued liabilities 34,200
Land 102,200 Interest expense 62,200
Equipment 202,200 Notes payable 102,200
Buildings 142,200 Loss from earthquake damage 152,200
Cost of goods sold 623,200 Common stock 502,200
Retained earnings 23,200

Assume the total effective tax rate on all items is 20%.

Required:
Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year.

Staley Co. manufactures computer monitors. The following is a summary of its basic cost and revenue data: Per Unit Percent Sales price $525 100 Variable costs 300 57 Unit contribution margin $225 43 Assume that Staley Co. is currently selling 500 computer monitors per month and monthly fixed costs are $75,000. Staley Co.'s margin of safety ratio (MOS%) if 500 units are sold would be (round intermediate calculation up to nearest whole number of units): Group of answer choices 33.2%. 20.5%. 17.7%. 19.5%. 23.7%.

the point where total expenses equals to total income? ​

Listed below are selected Rules of Conduct and ethical problems. Match the rule with the problem to which it applies. (One Rule of Conduct may apply to more than one ethical problem.)
Rules
A. Independence
B. Integrity and objectivity
C. General standards
D. Compliance with standards
E. Accounting principles
F. Contingent fees
G. Acts discreditable
H. Advertising and other forms of solicitation
I. Commissions and referral fees
J. Form or practice and name
Rules
1. An audit client owes the CPA past-due audit fees.
2. A member violates rules issued by the Accounting and Review Services Committee.
3. A CPA accepts a percentage of the client's loan as an audit fee.
4. A CPA robs a service station.
5. The auditors fail to qualify their opinion on financial statements that do not properly apply FASB standards.

True or False?
a. Financing for public corporations must flow through financial markets.
b. Financing for private corporations must flow through financial intermediaries.
c. Almost all foreign exchange trading occurs on the floors of the FOREX exchanges in New York and London.
d. Derivative markets are a major source of finance for many corporations.
e. The opportunity cost of capital is the capital outlay required to undertake a real investment opportunity.
f. The cost of capital is the interest rate paid on borrowing from a bank or other financial institution.

Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio Consider the following case: Crawford Construction has a quick ratio of 2.00x, $36,225 in cash, $20,125 in accounts receivable, some inventory, total current assets of $80,500, and total current liabilities of $28,175. The company reported annual sales of $100,000 in the most recent annual report. Over the past year, how often did Crawford Construction sell and replace its inventory? O 4.14 x 4.55 x 2.86x 8.01 x The inventory turnover ratio across companies in the construction industry is 4.55x. Based on this information, which of the following statements is true for Crawford Construction? O Crawford Construction is holding less inventory per dollar of sales compared to the industry average O Crawford Construction is holding more inventory per dollar of sales compared to the industry average You are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. You've collected data from the companies' financial statements. This information is listed as follows: Data Collected (in dollars) Accounts receivable Net fixed assets Total assets Like Games 2,700 55,000 95,000 Our Play 3,900 80,000 125,000 Industry Average 3,850 216,750 234,600 Using this information, complete the following statements to include in your analysis days of sales tied up in receivables, which is much than the industry average. It takes Our Play 1. Our Play has time to collect cash from its customers than it takes Like Games. more than that of Our Play. This is because Like Games was formed eight years ago, so the 2. Like Games's fixed assets turnover ratio is acquisition cost of its fixed assets is recorded at historic values when the company bought its assets and has been depreciated since then Assuming that fixed assets prices (not book values) rose over the past six years due to inflation, Our Play paid a assets. amount for its fixed 3. The average total assets turnover in the electronic toys industry is 1.09x, which means that $1.09 of sales is being generated with every dollar of investment in assets. A are total assets turnover ratio indicates greater efficiency. Both companies' total assets turnover ratios than the industry average

Which of the following is a reason companies are hiring temporary workers more often than in the past?

A- Temporary employees work harder than permanent employees.

B- Temporary workers are more loyal to the company, thereby making them more productive.

C- Most companies provide temporary workers with very few, if any, benefits.

D- Workers seeking temporary employment are better educated than those seeking permanent employment​

Garcia Company issues 8.50%, 15-year bonds with a par value of $390,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 12.50%, which implies a selling price of 79. The effective interest method is used to allocate interest expense. 1. Using the implied selling price of 79, what are the issuer's cash proceeds from issuance of these bonds.

It is estimated that the annual sales of an energy saving device will be 20,000 the first year and increase by 10,000 per year unitl 50,000 units are sold during the fourth year. Proposal A is to purchase manufacturing equipment costing $120,000 with an estimated salvage value of $15,000 at the end of 4 years.Proposal B is to purchase equipment costing $280,000 with an estimated salvage value of $32,000 at the end of 4 years. The variable manufacturing cost per unit under proposal A is estimated to be $8,00, but is estimated to be only $2.60 under proposal B. If the interest rate is 9%, which proposal should be accepted for a 4-year production horizon?

Coronado Co. reports the following information for 2020: sales revenue $767,500, cost of goods sold $505,000, operating expenses $84,800, and an unrealized holding loss on available-for-sale debt securities for 2020 of $52,000. It declared and paid a cash dividend of $12,650 in 2020. Coronado Co. has January 1, 2020, balances in common stock $360,700; accumulated other comprehensive income $86,400; and retained earnings $91,890. It issued no stock during 2020. (Ignore income taxes.)

Required:
Prepare a statement of stockholders' equity.