Accounting What the Numbers Mean 12th edition David Marshall, Wayne McManus, Daniel Viele - Solutions

In Exercise 1.1, you were asked to obtain the most recent annual report of a company that you were interested in reviewing throughout this term.Required:Liquidity:a. Calculate working capital, the
The following data have been collected by capital budgeting analysts at Sunset Beach Inc. concerning an investment in an expansion of the company’s product line. Analysts estimate that an
SureLock Manufacturing Co. makes and sells several models of locks. The cost records for the ZForce lock show that manufacturing costs total $23.25 per lock. An analysis of this amount indicates that
Each gallon of Old Guard, a popular aftershave lotion, requires two ounces of ocean scent. Budgeted production of Old Guard for the first three quarters of 2019 is as follows:Quarter I .............
Tablerock Corp. is interested in reviewing its method of evaluating capital expenditure proposals using the accounting rate of return method. A recent proposal involved a $100,000 investment in a
TopCap Co. is evaluating the purchase of another sewing machine that will be used to manufacture sport caps. The invoice price of the machine is $98,000. In addition, delivery and installation costs
The segmented income statement for XYZ Company for the year ended December 31, 2019, follows: The company is concerned about the performance of product A, and you have been asked to analyze the
Memorial Hospital is considering the acquisition of a new diagnostic scanning machine. The investment required to get the machine operational will be $1,895,000. The machine will be capable of
CarCare Garage Company is considering an investment in a new tune-up computer. The cost of the computer is $24,000. A cost analyst has calculated the discounted present value of the expected cash
Northern Manufacturing Ltd. is considering the investment of $85,000 in a new machine. The machine will generate cash flow of $14,000 per year for each year of its eight-year life and will have a
National Leasing is evaluating the cost of capital to use in its capital budgeting process. Over the recent past, the company has averaged a return on equity of 13% and a return on investment of
Use the appropriate factors from Table 6-4 or Table 6-5 to answer the following questions. Required: a. Spencer Co.?s common stock is expected to have a dividend of $5 per share for each of the
Redbud Company uses a certain part in its manufacturing process that it buys from an outside supplier for $36 per part plus another $5 for shipping and other purchasing-related costs. The company
Rainbow Cruises operates a weeklong cruise tour through the Hawaiian Islands. Passengers currently pay $1,500 for a two-person cabin, which is an all-inclusive price that includes food, beverages,
ADP Mining Company mines an iron ore called Alpha. During the month of August, 350,000 tons of Alpha were mined and processed at a cost of $675,000. As the Alpha ore is mined, it is processed into
Lakeside Inc. produces Product A and Product B that require special machining time. Machine time capacity is 10,000 machine hours per month. Lakeside estimates April demand for each product and
Lakeside Inc. is considering whether to enter the market to produce and sell Product X. The market selling price for Product X is well established at $300 per unit, and Lakeside requires a profit
In addition to the product cost information for Lakeside Inc. in Mini-Exercise 16.1, Lakeside has received an offer from a nonprofit organization to buy 8,000 units at $28 per unit. Lakeside
The chair of the Science Department of State University has a budget for laboratory supplies. Supplies have a variable cost behavior pattern that is a function of the number of students enrolled in
Colorado Business Tools manufactures calculators. Costs incurred in making 12,500 calculators in February included $42,500 of fixed manufacturing overhead. The total absorption cost per calculator
Silverstone’s production budget for July called for making 40,000 units of a single product. The firm’s production standards allow one-half of a machine hour per unit produced. The fixed overhead
Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some of the labor records were destroyed during a recent fire. The actual
Ackerman’s Garage uses standards to plan and control labor time and expense. The standard time for an engine tune-up is 3.5 hours, and the standard labor rate is $15 per hour. Last week, 24
For the stamping department of a manufacturing firm, the standard cost for direct labor is $15 per hour, and the production standard calls for 1,000 stampings per hour. During February, 198 hours
Western Manufacturing produces a single product. The original budget for April was based on expected production of 17,500 units; actual production for April was 16,600 units. The original budget and
ABC Company operates two divisions with the following operating information for the month of May:Division 1: sales, $120,000; operating income, $36,000; operating assets, $300,000.Division 2: sales,
ABC Company operates two divisions with the following sales and expense information for the month of August:Division 1: sales, $120,000; contribution margin ratio, 50%; direct fixed expenses,
In addition to the information for Acme Company in Mini-Exercises 15.1 and 15.2, the standard variable overhead rate per unit consists of $6 per machine hour and each unit is allowed a standard of 1
In addition to the information for Acme Company in Mini-Exercises 15.1 and 15.2, the standard direct labor cost per unit consists of 0.5 hour of labor time at $20 per hour. During August, $160,650 of
Acme Company’s production budget for August is 17,500 units and includes the following component unit costs: direct materials, $8; direct labor, $10; variable overhead, $6. Budgeted fixed overhead
Freese Inc. is in the process of preparing the fourth quarter budget for 2019, and the following data have been assembled:∙ The company sells a single product at a price of $50 per unit. The
Soprano Co. is in the process of preparing the second quarter budget for 2019, and the following data have been assembled: ? The company sells a single product at a selling price of $40 per unit. The
Following are the budgeted income statements for the second quarter of 2019 for SeaTech Inc.: The company expects about 40% of sales to be cash transactions. Of sales on account, 65% are expected
The monthly cash budgets for the second quarter of 2019 follow ($000 omitted) for Forest Hills Mfg. Co. A minimum cash balance of $30,000 is required to start each month, and a $100,000 line of
Precious Stones Ltd. is a retail jeweler. Most of the firm?s business is in jewelry and watches. The firm?s average gross profit ratio for jewelry and watches is 70% and 40%, respectively. The sales
A cost analyst for Stamper Manufacturing Co. has assembled the following data about the Model 24 stamp pad:The piece of sheet metal from which eight pad cases can be made costs $0.18.This amount is
DMA Inc. processes corn into corn starch and corn syrup. The company’s productivity and cost standards follow:From every bushel of corn processed, 12 pounds of starch and three pounds of syrup
Fox Trail Center’s sales are all made on account. The firm’s collection experience has been that 30% of a month’s sales are collected in the month the sale is made, 50% are collected in the
Osage Inc. has actual sales for May and June and forecast sales for July, August, September, and October as follows:Actual:May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gillman Co. is forecasting sales of 80,600 units of product for August. To make one unit of finished product, five pounds of raw materials are required. Actual beginning and desired ending
In addition to the information presented in Mini-Exercises 14.2 and 14.3, ABC Company currently pays a standard rate of $2 per pound for raw materials. Each unit should be produced in 15 minutes of
ABC Company has a cash balance of $25,000 on August 1 and requires a minimum ending cash balance of $20,000. Cash receipts from sales budgeted for August are $291,600. Cash disbursements budgeted for
ABC Company’s raw materials purchases for June, July, and August are budgeted at $35,000, $25,000, and $50,000, respectively. Based on past experience, ABC expects that 60% of a month’s raw
In addition to the information presented in Mini-Exercise 14.2, the selling price for each unit is $20. Based on past experience, ABC expects that 35% of a month’s sales will be collected in the
ABC Company’s actual unit sales in the current year for January, February, and March was 15,000, 12,000, and 18,000 units, respectively. Current year selling price is $20. An analysis of general
Campbell Soup Company provides access to its annual reports online at campbellsoup.com. The annual reports are found in the “All Campbell Brands/Investors/Financial Information/Annual Reports”
Morrison & Company incurred the following costs during August: Raw materials purchased ............................................................. $66,150 Direct labor ($15 per hour)
Williamson Inc. manufactures digital voice recorders. During 2019, total costs associated with manufacturing 52,000 of the new EZ 9900 model (introduced this year) were as follows:Raw materials
TroutPro Co. manufactures fishing equipment. During 2019, total costs associated with manufacturing 15,000 fly-cast fishing rods (a new product introduced this year) were as follows:Raw materials
Woodland Industries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated
MedTech Inc. manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activitybased costing approach. Direct materials and direct labor
Staley Toy Co. makes toy flutes. Two manufacturing overhead application bases are used; some overhead is applied on the basis of machine hours at a rate of $7.20 per machine hour, and the balance of
Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prist Co. had not provided a warranty on its products, but competitive pressures forced management to add this feature at the beginning of 2019. Based on an analysis of customer complaints made over
Set up a horizontal model in the following format: Required:a. Enter the beginning (July 31, 2016) and ending (July 30, 2017) account balances for Accounts Receivable, Inventories, and Payable to
Creative Lighting Inc. makes specialty table lamps. Manufacturing overhead is applied to production on a direct labor hours basis. During June, the first month of the company’s fiscal year,
Checker Inc. produces automobile bumpers. Overhead is applied on the basis of machine hours required for cutting and fabricating. A predetermined overhead application rate of $12.70 per machine hour
Nautical Footware Inc. manufactures women’s boating shoes. Manufacturing overhead is assigned to production on a machine-hour basis. For 2019, it was estimated that manufacturing overhead would
Clay Co. produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an application rate based on direct labor hours.Required:a. For 2019, the company’s
Brooklyn Cycles produces custom bicycles and has used a traditional manufacturing overhead application rate based on direct labor hours. Currently, overhead is applied at the rate of $42/DLH.
The following cost behavior pattern describes anticipated manufacturing overhead costs for 2019: $240,000 + $8/unit. During the year, 30,000 units were produced and 28,000 units were
The following cost behavior patterns describe anticipated manufacturing costs for 2019: raw material, $7/unit; direct labor, $10/unit; and manufacturing overhead, $240,000 + $8/unit.Required:If
The following information is from ABC Company’s general ledger for the month of February: Beginning and ending finished goods inventory, respectively, were 56,000 and 52,000. Cost of goods sold for
The following information is from ABC Company’s general ledger: Beginning and ending inventories, respectively, for raw materials were $12,000 and $15,000 and for work in process were $30,000 and
Bentley estimates manufacturing overhead of $1,200,000 for 2019 and will apply overhead to units produced based on 400,000 machine hours. During 2019, Bentley used $1,280,000 of raw materials, paid
HighTech Inc. and OldTime Co. compete within the same industry and had the following operating results in 2019: Required: a. Calculate the breakeven point for each firm in terms of revenue. b. What
Austin Inc. produces small-scale replicas of vintage automobiles for collectors and museums. Finished products are built on a 1/20 scale of originals. The firm’s income statement showed the
Muscle Beach Inc. makes three models of high-performance weight-training benches. Current operating data are summarized here: Required:a. Calculate the contribution margin ratio of each product. b.
Ozark Metal Co. makes a single product that sells for $42 per unit. Variable costs are $27.30 per unit, and fixed costs total $65,415 per month.Required:a. Calculate the number of units that must be
Presented here is the income statement for Fairchild Co. for March:Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Presented here is the income statement for Big Shot Inc. for the month of May:Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shown here is an income statement in the traditional format for a firm with a sales volume of 18,000 units:Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The following data have been extracted from the records of Puzzle Inc.: Required: a. Calculate the missing costs. b. Calculate the cost formula for mixed cost using the high?low method. c.
The management of Rocko’s Pizzeria is considering a special promotion for the last two weeks of May, which is normally a relatively low-demand period. The special promotion would involve selling
D&R Corp. has annual revenues of $375,000, an average contribution margin ratio of 32%, and fixed expenses of $150,000.Required:a. Management is considering adding a new product to the
The following informationprovides the amount of cost incurred in March for the cost items indicated. DuringMarch, 4,000 units of the firm’s single product were manufactured.Raw materials . . . . .
The cost structure of two firms competing in the same industry is represented by the following cost formulas:Company X = $1,350,000 + $37/unit;Company Z = $825,000 + $72/unit.The selling price is
Assume MIX Inc. has sales volume of $1,000,000 for two products with June sales and contribution margin ratios as follows:Product A: Sales $500,000; contribution margin Ratio 30%Product B: Sales
Assume MIX Inc. has sales volume of $1,000,000 for two products with May sales and contribution margin ratios as follows:Product A: Sales $400,000; contribution margin Ratio 30%Product B: Sales
Current operating income for Bay Area Cycles Co. is $74,000. Selling price per unit is $120, the contribution margin ratio is 30%, and fixed expense is $250,000.Required:Calculate Bay Area Cycle’s
During a year, Mark’s monthly sales compensation ranged between $18,000 and $24,000 per month and units sold ranged between 2,000 and 3,000 units for those same months.Required:Use the high–low
Please refer to Case 4.30 on pages 134?135 for the financial statement data needed for the analysis of this case. You should also review the solution to Case 4.30, provided by your instructor, before
The annual reports of the Coca-Cola Co. and PepsiCo Inc. indicate the following for the year ended December 31, 2017 (amounts in millions): Required: a. Calculate ROI and ROE for each company for
This problem is based on the 2017 annual report of Campbell Soup Company in the appendix.Required:a. Compute the following profitability measures for the year ended July 30, 2017:1. Return on
Presented here are summarized data from the balance sheets and income statements of Wiper Inc.: Required: a. Calculate return on investment, based on net income and average total assets, for 2020
Assume that the current ratio for Arch Company is 2.0, its acid-test ratio is 1.5, and its working capital is $900,000. Answer each of the following questions independently, always referring to the
The following information was available for the year ended December 31, 2019:Earnings before interest and taxes (operating income)...................... $120,000Interest
The following information was available for the year ended December 31, 2019:Sales........................................................................................................... $
The following information was available for the year ended December 31, 2019:Net sales .................................................................................................. $292,000Cost
The following amounts were reported on the December 31, 2019, balance sheet:Cash......................................................................................................... $
Write a paragraph describing your perceptions of what accounting is all about and the work that accountants do.
This problem is based on the 2017 annual report of Campbell Soup Company in the appendix.Required:Find in the Selected Financial Data (also known as the Five-Year Review), or calculate, the following
Evans Ltd. publishes a monthly newsletter for retail marketing managers and requires its subscribers to pay $60 in advance for a one-year subscription. During the month of August 2019, Evans Ltd.
Enter the following column headings across the top of a sheet of paper: Enter the transaction or adjustment letter in the first column and show the effect, if any, of each of the transactions or
Jim Sandrolini is an accountant for a local manufacturing company. Jim’s good friend, Dan Carruthers, has been operating a retail sporting goods store for about a year. The store has been
During the month of April, Riley Co. had cash receipts from customers of $780,000. Expenses totaled $624,000, and accrual basis net income was $218,000. There were no gains or losses during the
On April 1, 2019, Tabor Co. received an $18,000 note from a customer in settlement of an $18,000 account receivable from that customer. The note bore interest at the rate of 15% per annum, and the
Husemann Co.’s assets include notes receivable from customers. During fiscal 2019, the amount of notes receivable averaged $525,000, and the interest rate of the notes averaged 4.2%.Required:a.
Congratulations! You have just won $2 billion in the largest Powerball jackpot payoff ever! You will receive payments of $100,000,000 per year for the next 20 years.Required:Using a present value
For each of the following expenditures, indicate the type of account (asset or expense) in which the expenditure should be recorded. Explain your answers.a. $30,000 annual cost of routine repair and

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Accounting What the Numbers Mean 12th edition David Marshall, Wayne McManus, Daniel Viele - Solutions

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