Accounting Principles A Business Perspective Financial Accounting Chapters 9 To 18 1st Edition Bill Buxton, Amy Sibiga - Solutions

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Group project H In teams of two or three students, interview the manager of a campus print shop or a print shop in the area about how the company bids on prospective jobs. Does it use cost information from former jobs that are similar to prospective ones, for example? Does it have a specialist in
Group project G In teams of two or three students, interview in person or by speakerphone, a businessperson in your community who uses job costing (for example, businesses that produce custom products such as homes, signs, or landscape design, or business consultants). Ask how this person assigns
Group project – Ethical perspective F Refer to the “An ethical perspective”discussion of Comserv's activities. As a salesperson, suppose your boss asked you to write a side agreement that allowed a customer to back out of a contract, and insisted that you not reveal the side contract to
Ethics case E Suzie Garcia, an accountant for a consulting firm, had just received the monthly cost reports for the two jobs she supervises: one for Arrow Space, Inc., and one for the US government. She immediately called her boss after reading the figures for the Arrow Space job."We are going to
Ethics case – Writing experience D Refer to the Ethical Perspective discussion of Comserv's activities entitled “High pressure sales tactics and creative accounting”. As a salesperson, how would you respond if your boss asked you to backdate contracts from 2010 January 3, to 2009 December 28?
Writing assignment C Refer to Presley Manufacturing company, Problem C.Assume the newly hired executive is a whiz at marketing, but a person whose eyes glaze over at the sight of a number. The executive wants you to explain the financial results for the year in words. Essentially, assume the
Management is concerned about the relationship between costs incurred on jobs and the costs expected to be incurred, and has asked for your help. Here are the expected total costs (direct materials, direct labor, and overhead) for the three jobs:Job 100 $ 60,000 Job 101 120,000 Job 102 130,000
Business decision case B Quality Painters, Inc., uses a job cost system. As of 2010 January 1, its records showed the following inventory balances:Materials $ 7,000 Work in process 50,000 Finished goods 0 The work in process inventory consisted of two jobs:Job No. Direct Materials Direct Labor
Business decision case A Companies often do work on a cost-reimbursement basis. That is, Company B reimburses Company A for the cost of doing work for Company B. Suppose your company has a contract that calls for reimbursement of direct materials and direct labor, but not overhead. Following are
Alternate problem E Sullivan Company applied overhead to production using a predetermined overhead rate based on machine-hours. Budgeted data for 2010 are:Budgeted machine-hours 75,000 Budgeted manufacturing overhead $870,000a. Compute the predetermined overhead rate.b. Assume that in 2010, actual
Alternate problem D Cathy's Catering Company uses a job cost system. Its activities in November 2010, the first month of operations, were as follows:Job First-rate Universit yActive life home Precocious School Direct materials cost (food) $54,000 $36,000 $81,000 Direct labor cost $45,000 $40,500
Alternate problem C Presley Manufacturing Company is a producer of music compact discs (CDs) and tapes. The following account balances are for the year ended 2009 December 31 Administrative expenses $ 60,000 Depreciation expense – Manufacturing equipment 50,000 Direct labor 468,000 Manufacturing
Alternate problem B Classify the costs listed in Alternate problem A as either product costs or period costs.
Alternate problem A Pocket Umbrella, Inc., is considering producing a new type of umbrella. This new pocket-sized umbrella would fit into a coat pocket or purse. Classify the following costs of this new product as direct materials, direct labor, manufacturing overhead, selling, or administrative.a.
Problem G Costner Company uses an absorption costing system in accounting for the single product it manufactures. The following selected data are for the year 2009:Sales (10,000 units) $360,000 Direct materials used (variable cost) 129,600 Direct labor costs (variable cost) 43,200 Variable
Problem F Speedy Delivery, Inc., transports computer equipment for various computer manufacturers. Speedy applies overhead to jobs using a predetermined overhead rate based on truck miles. Estimated data for 2010 are:Estimated truck miles 20 million Estimated overhead for hauling
Problem E Green Thumb Landscaping Company uses a job cost system. As of 2010 January 1, its records showed the following inventory balances:Materials (shrubs, trees, etc.) $ 13,500 Work in process 25,800 Finished goods (Job No. 211) 30,000 The work in process inventory consisted of two jobs:Job No.
Problem D Log Cabin Homes, Inc., uses a job cost system to account for its jobs, which are prefabricated houses. As of 2010 January 1, its records showed inventories as follows:Materials and supplies $100,000 Work in process (Job Nos. 22 and 23) 180,000 Finished goods (Job No. 21) 140,000 The work
Problem C Good Vibrations, Inc., produces videotapes of musical performances.A newly hired executive of the company has asked you to sort through the records and prepare a statement of the company's cost of goods manufactured. You find the following data from records prepared by Good Vibrations,
Problem B Classify the costs listed in the previous problem as either product costs or period costs.
Problem A Total Block, Inc., is considering a new sunscreen packet that contains a skin wipe with sunscreen on it. These would be particularly useful for people who do not want to carry a bottle of sunscreen, according to Sunspot's marketing manager. Classify the following costs of this new product
Exercise I The following data relate to Socks Company for the year ended 2010 December 31:Cost of production:Direct materials (variable) $360,000 Direct labor (variable) 504,000 Manufacturing overhead:Variable 180,000 Fixed 360,000 Sales commissions (variable) 108,000 Sales salaries (fixed) 72,000
Exercise H Ernest Peat Consultants uses a job cost system and had the following activity during December:There were no jobs in beginning Work in Process or Finished Goods Inventory.Three jobs were started: No. 222, 223, and 224. Job No. 222 was completed and the customer was billed for USD 10,000
Exercise G Refer to the previous exercise. Assume the actual hours and cost data were:Actual Paper Rock Scissors Manufacturing overhead $450,000 $400,000 $375,000 Direct labor cost $850,000 $700,000 $400,000 Direct labor-hours 45,000 46,000 38,000 Machine-hours 105,000 200,000 130,000a. Compute
Exercise F Different companies use different bases in computing their predetermined overhead rates. From the following estimated data, compute the predetermined rate to be used by each company:Company Paper Rock Scissors Machine-hours 100,000 210,000 125,000 Direct labor-hours 50,000 48,000 39,000
Exercise E At the end of the second week in March, Job No. 710 has an accumulated total cost of USD 37,800. In the third week, USD 9,000 of direct materials were used on Job 710, 300 hours of direct labor were charged to the job at USD 40 per hour, and manufacturing overhead was applied on the
Exercise D In June, Sierra Company worked only on Job No. 100 and completed it on June 30. There were no prior costs accumulated on Job No. 100 before June 1.During the month, the company purchased and used USD 10,800 of direct materials, used 2,000 machine-hours, and incurred USD 19,200 of direct
Exercise C Gore Company makes products for sporting events. The following data are for the year ended 2010 December 31:Materials inventory, 2010 January 1 $ 45,000 Materials inventory, 2010 December 31 65,000 Materials purchases 175,000 Direct labor 225,000 Work in process inventory, 2010 January 1
Exercise B Classify the costs listed in the previous exercise as either product costs or period costs.
Exercise A The following costs are incurred by an electrical appliance manufacturer. Classify these costs as direct materials, direct labor, manufacturing overhead, selling, or administrative.a. President's salary.b. Cost of electrical wire used in making appliances.c. Cost of janitorial supplies
➢ (Appendix) Under what specific circumstances would you expect net income to be larger under variable costing than under absorption costing? What is the reason for this difference?
➢ Real world question Besides law firms and public accounting firms, name three service organizations that produce individual jobs and would use job costing.
➢ Real world question Why is it becoming more important that the managers of hospitals understand their product costs?
➢ Real world question Assume Domino's Pizza is considering offering a new product—a 6-inch (15.24 cm) pizza. Why would it matter if Domino's Pizza knows how much it costs to produce and deliver this 6-inch (15.24 cm) pizza?
➢ Record the direct and indirect materials issued in journal entry form.
➢ Direct materials were issued to the following jobs: Material A was issued to Job No. 101, USD 2,000; Job No. 102, USD 1,000; and Job No. 103, USD 5,000. Material B was issued to Job No. 101, USD 5,000;Job No. 102, USD 2,000; and Job No. 103, USD 3,000. A total of USD 3,000 in indirect materials
➢ What is underapplied and overapplied overhead? What type of balance does each have in the Overhead account?
➢ What is the formula for computing a predetermined overhead rate? If the expected level of activity in a production center is 50,000 machinehours and the estimated overhead costs are USD 750,000, what is the predetermined overhead rate? Show the calculation.
➢ What are the major reasons for using predetermined manufacturing overhead rates?
➢ Define a job cost system and give an example of a situation in which it can be used.
➢ What is the relationship between cost flows in the accounts and the flow of physical products through a factory?
➢ What is the general content of a statement of cost of goods manufactured? What is its relationship to the income statement?
➢ Explain why the income statement of a manufacturing company differs from the income statement of a merchandising company.
➢ Why are certain costs referred to as period costs? What are the major types of period costs incurred by a manufacturer?
➢ Why might a company claim that the total cost of employing a person is USD 15.30 per hour when the employee's wage rate is USD 10.50 per hour? How should this difference be classified and why?
➢ Identify the three elements of cost incurred in manufacturing a product and indicate the distinguishing characteristics of each.
➢ What are the major differences between managerial and financial accounting?
Which of the following are the correct journal entries for the preceding data?a. Manufacturing overhead 22,500 Various accounts 22,500 Work in process inventory 21,000 Manufacturing overhead 21,000b. Manufacturing overhead 22,500 Various accounts 22,500 Work in process inventory 15,428
You are given the following data relating to a company:Estimated manufacturing overhead per year USD 24,000 Expected level of activity per year 40,000 machine-hours Predetermined overhead rate USD 0.60 per machine-hour Actual overhead costs incurred during year USD 22,500 Actual machine-hours 35,000
The expected level of activity in a production center is 30,000 machine-hours.Estimated overhead costs are indirect materials and indirect labor, USD 360,000;other overhead, USD 90,000. Which of the following is the predetermined overhead rate per machine-hour?a. USD 3.b. USD 12.c. USD 15.d. USD 20.
Which of the following best describes the advantages of using a predetermined overhead rate?.a. Overhead costs are applied evenly throughout the year rather than fluctuating from month to month.b. Predetermined rates require managers to wait until long after the accounting period to get an estimate
A job cost system is used:a. When there are dissimilar products.b. By manufacturers and service companies.c. When goods are produced to meet a customer's particular needs.d. All of the above.
What are the differences between the cost of goods sold sections in a manufacturer's and a merchandiser's income statements?a. A merchandiser uses Merchandise Inventory and Direct Labor, whereas a manufacturer uses Finished Goods Inventory and Cost of Goods Manufactured.b. A merchandiser uses
For financial accounting and external reporting purposes, all selling and administrative expenses are treated as:a. Period costs.b. Selling costs.c. Manufacturing overhead costs.d. Product costs.
Under which cost category are indirect material costs included?a. Direct materials.b. Overhead.c. Direct labor.d. None of the above.
Selling and administrative expenses are part of period costs under both absorption and variable costing methods.true or false.
Overhead cannot be entered in Work in Process Inventory when using a predetermined overhead rate. Only when the actual overhead costs are determined is the overhead entered.true or false.
A predetermined overhead rate is calculated by dividing the expected level of activity by the estimated total overhead cost.true or false.
A Pepsi-Cola bottling plant is an example of a company that would use a job cost system.true or false.
A manufacturer produces speedboats, and each one requires a motor. The motors are considered direct materials and are product costs.true or false.
Managerial accounting is for external use and gives less detailed information than financial accounting.true or false.
• Describe the differences in net income under absorption costing and variable costing (appendix)
• Explain how and why predetermined overhead rates are computed.
• Describe job cost flows and determine the cost of jobs.
• Compare and contrast different production methods and accounting systems.
• Explain the pattern of cost flows for a company.
• Compare financial reporting by a merchandiser to that of a manufacturer and prepare a statement of cost of goods manufactured, an income statement, and a balance sheet for a manufacturer.
• Explain the difference between product costs and period costs.
• Describe the basic components of a products cost.
• Compare and contrast managerial accounting and financial accounting.
Group project G In a group of two or three students, obtain the annual report of a company of your choice Identify the major sections of the annual report and the order in which they appear. Would you recommend the order be changed to emphasize the most useful and important information? If so, how?
Group project F In a group of two or three students, go to the library and attempt to locate Dun & Bradstreet's Industry Norms and Key Business Ratios. You may have to ask the reference librarian for assistance to see if this item is available at your institution. If it is not available at your
Group project E Choose a company the class wants to know more about and obtain its annual report. In groups of two or three students, calculate either the liquidity, equity, profitability, or market test ratios. Each group should select a spokesperson to tell the rest of the class the results of
Annual Report analysis D The following selected financial data excerpted from the annual report of Appliance Corporation represents the summary information which management presented for interested parties to review:Appliance Corporation Selected Financial Data (USD thousands except per share
Business decision case C Wendy Prince has consulted you about the possibility of investing in one of three companies (Apple, Inc., Baker Company, or Cookie Corp.) by buying its common stock. The companies' investment shares are selling at about the same price. The long-term capital structures of
Business decision case B As Miller Manufacturing Company's internal auditor, you are reviewing the company's credit policy. The following information is from Miller's annual reports for 2008, 2009, 2010, and 2011:2008 2009 2010 2011 Nets accounts receivable $1,080,000$ 2,160,000 $ 2,700,000 $
Business decision case A The comparative balance sheets of the Darling Corporation for 2011 December 31, and 2010 follow:Darling Corporation Comparative balance sheets 2011 December 31, and 2010 (USD millions)2011 2010 Assets Cash $ 480,000 $ 96,000 Accounts receivable, net 86,400 115,200
Alternate problem H Paper Company is considering switching from the FIFO method to the LIFO method of accounting for its inventory before it closes its books for the year. The January 1 merchandise inventory was USD 864,000. Following are data compiled from the adjusted trial balance at the end of
Alternate problem G Parametric Technology Corporation is in the CAD/CAM/CAE industry and is the top supplier of software tools used to automate a manufacturing company. The following consolidated balance sheet and supplementary data are for Parametric for 2003:Parametric Technology Corporation
Alternate problem F One of the largest spice companies in the world, McCormick & Company, Inc., produces a diverse array of specialty foods. The following information is for McCormick & Company, Inc.:2000 1999(USD thousands)Net sales $2,123,500 $2,006,900 Income before interest and taxes 225,700
Alternate problem E The following selected data are for three companies:Operating Net Net Assets Operating Income Sales Company 1 $ 1,404,000 $ 187,200 $ 2,059,200 Company 2 8,424,000 608,400 18,720,000 Company 3 37,440,000 4,914,000 35,100,000a. Determine the operating margin, turnover of
Alternate problem D Tulip Products, Inc., has a current ratio on 2010 December 31, of 2:1 before the following transactions were completed:• Sold a building for cash.• Exchanged old equipment for new equipment. (No cash was involved.)• Declared a cash dividend on preferred stock.• Sold
Alternate problem C The following data are for Clock Company: Allowance for uncollectible accounts December 31 2011 2010 Notes payable (due in 90 days) $75,200 $60,000 Merchandise inventory 240,000 208,000 Cash 100,000 128,000 Marketable securities 49,600 30,000 Accrued liabilities 19,200 22,000
Alternate problem B Ford Motor Company is the world's second-largest producer of cars and trucks and ranks among the largest providers of financial services in the United States. The following information pertains to Ford: (in millions)(in millions) 1998 1999 2000 Sales $118.017 $135,073 $141,230
Alternate problem A Steel Corporation's comparative statements of income and retained earnings and consolidated balance sheet for 2010 and 2009 follow:Steel Corporation Consolidated statement of Earnings For the years ended 2010 December 31, 2009 (USD thousands)December31(1) (2)2010 2009 Net sales
Problem H Cooper Company currently uses the FIFO method to account for its inventory but is considering a switch to LIFO before the books are closed for the year. Selected data for the year are:Merchandise inventory, January 1 $1,430,000 Current assets 3,603,600 Total assets (operating) 5,720,000
Problem G The Walt Disney Company operates several ranges of products from theme parks and resorts to broadcasting and other creative content. The following balance sheet and supplementary data are for The Walt Disney Company for 2000.The Walt Disney Company Consolidated balance sheet For 2000
Problem F Polaroid Corporation designs, manufactures, and markets worldwide instant photographic cameras and films, electronic imaging recording devices, conventional films, and light polarizing filters and lenses. The following information is for Polaroid:(in millions) 2000 1999 Net sales $13,994
Problem E Digital Company has net operating income of USD 500,000 and operating assets of USD 2,000,000.Its net sales are USD 4,000,000.The accountant for the company computes the rate of return on operating assets after computing the operating margin and the turnover of operating assets.a. Show
Problem D On 2011 December 31, Energy Company's current ratio was 3:1 before the following transactions were completed:• Purchased merchandise on account.• Paid a cash dividend declared on 2011 November 15.• Sold equipment for cash.• Temporarily invested cash in trading securities.• Sold
Problem C The following data are for Toy Company:December 31 2011 2010 Allowance for uncollectible accounts $72,000 $57,000 Prepaid expenses 34,500 45,000 Accrued liabilities 210,000 186,000 Cash in Bank A 1,095,000 975,000 Wages payable -0- 37,500 Accounts payable 714,000 585,000 Merchandise
Problem B Deere & Company manufactures, distributes, and finances a full range of agricultural equipment; a broad range of industrial equipment for construction, forestry, and public works; and a variety of lawn and grounds care equipment. The company also provides credit, health care, and
Problem A Loom's comparative statements of income and retained earnings for 2010 and 2009 are given below.Loom Consolidated statement of earnings For the years ended 2010 December 31, and 2009 (USD thousands, except per data share)December 31(1) (2)2010 2009 Net sales $ 2,403,100 $ 2,297,800 Cost
Exercise M A company had 80,000 weighted-average number of shares of USD 320 par value common stock outstanding. The amount of earnings available to common stockholders was USD 800,000. Current market price per share is USD 720. Compute the EPS and the price-earnings ratio.
Exercise L John Company had 20,000 shares of USD 600 par value, 8 percent preferred stock outstanding. Net income after taxes was USD 5,760,000. The market price per share was USD 720.a. How many times were the preferred dividends earned?b. What was the dividend yield on the preferred stock
Exercise K A company paid interest of USD 32,000, incurred federal income taxes of USD 88,000, and had net income (after taxes) of USD 112,000. How many times was interest earned?
Exercise J A company reported EPS of USD 2 (or USD2,400,000 1,200,000shares ) for 2009, ending the year with 1,200,000 shares outstanding. In 2010, the company earned net income of USD 7,680,000, issued 320,000 shares of common stock for cash on September 30, and distributed a 100 percent stock
Exercise I Smith Company started 2011 with 800,000 shares of common stock outstanding. On March 31, it issued 96,000 shares for cash, and on September 30, it purchased 80,000 shares of its own stock for cash. Compute the weighted-average number of common shares outstanding for the year.
Exercise H Rogers Company had 60,000 shares of common stock outstanding on 2010 January 1. On 2010 April 1, it issued 20,000 additional shares for cash. The amount of earnings available for common stockholders for 2010 was USD 600,000.What amount of EPS of common stock should the company report?
Exercise F Eastern, Inc., had net sales of USD 3,520,000, gross margin of USD 1,496,000, and operating expenses of USD 904,000. Total assets (all operating) were USD 3,080,000. Compute Eastern's rate of return on operating assets.Exercise G Nelson Company began the year 2010 with total

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Accounting Principles A Business Perspective Financial Accounting Chapters 9 To 18 1st Edition Bill Buxton, Amy Sibiga - Solutions

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