A merchandising company is considering a $900,000 upgrade to its retail and warehousing facilities that will...

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A merchandising company is considering a $900,000 upgrade to its retail and warehousing facilities that will allow the company to handle more products and attract more customers. The company anticipates that sales will increase by $450,000 and operating income will increase by $180,000 per year. If the company has a minimum required return on investment of 11.0%, what would be the residual income resulting from the upgrade? Answer: A first-in, first-out (FIFO) process cost system is used to account for the cost of producing a chemical compound. As part of production, Material B is added when the goods are 64% complete. Beginning work-in-process inventory for the current month was 16,000 units, 80% complete. During the month, 56,000 units were started in process, and 52,000 of these units were completed. There were no lost or spoiled units. If the ending inventory was 59% complete, the total equivalent units for Material B for the month was: Answer: The data below are available for Xerbert Co.: Xerbert Co. Budget and Actual Income Statements For the Year Ending December 31 (000s omitted) Budget Actual Xenox Xeon Total Xenox Xeon Unit sales Net dollar sales 200 175 375 155 165 $ 900 $1,000 $1,900 $ 698 $ 959 Variable expenses (450) (750) (1,200) (390) (975) Contribution margin $ 450 $ 250 $ 700 $ 308 $ (16) Fixed expenses: Manufacturing Marketing Other fixed expenses Total fixed expenses $ 153 95 200 $ 448 $ 252 Income before taxes The variance of actual contribution margin from budgeted contribution margin attributable to sales price is: Favorable/Unfavorable Amount (with 000s) Zeta Company is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the information given in the next column: Units produced Material moves per product line Direct labor hours per unit Budgeted materials handling costs Wall Mirrors Specialty Windows 75 15 3 17 6 44 $25,000 Under a costing system that allocates overhead on the basis of direct labor hours, Zeta's materials handling costs allocated to one unit of wall mirrors would be Answer: Under activity-based costing (ABC) using material moves per product line, Zeta's materials handling costs allocated to one unit of wall mirrors would be Answer: A merchandising company is considering a $900,000 upgrade to its retail and warehousing facilities that will allow the company to handle more products and attract more customers. The company anticipates that sales will increase by $450,000 and operating income will increase by $180,000 per year. If the company has a minimum required return on investment of 11.0%, what would be the residual income resulting from the upgrade? Answer: A first-in, first-out (FIFO) process cost system is used to account for the cost of producing a chemical compound. As part of production, Material B is added when the goods are 64% complete. Beginning work-in-process inventory for the current month was 16,000 units, 80% complete. During the month, 56,000 units were started in process, and 52,000 of these units were completed. There were no lost or spoiled units. If the ending inventory was 59% complete, the total equivalent units for Material B for the month was: Answer: The data below are available for Xerbert Co.: Xerbert Co. Budget and Actual Income Statements For the Year Ending December 31 (000s omitted) Budget Actual Xenox Xeon Total Xenox Xeon Unit sales Net dollar sales 200 175 375 155 165 $ 900 $1,000 $1,900 $ 698 $ 959 Variable expenses (450) (750) (1,200) (390) (975) Contribution margin $ 450 $ 250 $ 700 $ 308 $ (16) Fixed expenses: Manufacturing Marketing Other fixed expenses Total fixed expenses $ 153 95 200 $ 448 $ 252 Income before taxes The variance of actual contribution margin from budgeted contribution margin attributable to sales price is: Favorable/Unfavorable Amount (with 000s) Zeta Company is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the information given in the next column: Units produced Material moves per product line Direct labor hours per unit Budgeted materials handling costs Wall Mirrors Specialty Windows 75 15 3 17 6 44 $25,000 Under a costing system that allocates overhead on the basis of direct labor hours, Zeta's materials handling costs allocated to one unit of wall mirrors would be Answer: Under activity-based costing (ABC) using material moves per product line, Zeta's materials handling costs allocated to one unit of wall mirrors would be Answer: