3. Aquazona Pool Company is a custom pool builder (A+)

Aquazona Pool Company is a custom pool builder. It recently completed a pool for the Drayna family (Job 1324) as summarized on the following incomplete job cost sheet.

Job Cost Sheet

Job Number 1324

Date Started: 7/12/2010

Date Completed:

Description: Drayna Pool

Direct Material

Direct Labor

Applied Manufacturing Overhead

Req #

Amount

Ticket

Hours

Amount

Hours

Rate

Amount

MR 3345

$1,420

TT 335

37

$762.2

MR 3372

$970

TT 340

32

$659.2

MR 4251

$1,310

TT 385

22

$453.2

MR 4263

$1,720

TT 425

37

$762.2

MR 5236

$2,040

TT 445

19

$391.4

$7,460

147

$3,028.2

?

?

?

Cost Summary

Direct Materials Cost $7,460

Direct Labor Cost $3,028.2

Applied Manufacturing Overhead ?

Total Cost

The company applies overhead to jobs at a rate of $10.3 per direct labor hour.

Requirement 1:

Calculate how much overhead would be applied to Job 1324.

Requirement 2:

Compute the total cost of Job 1324.

Requirement 3:

Assume the company bids its pools at total manufacturing cost plus 22 percent. If actual costs were the same as estimated, determine how much revenue the company would report on the sale of Job 1324.

Requirement 4:

Calculate how much gross profit Aquazona made on the sale of the Drayna pool.

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2. Aquazona Pool Company is a custom pool builder (A+)

Aquazona Pool Company is a custom pool builder. It recently completed a pool for the Drayna family (Job 1324) as summarized on the following incomplete job cost sheet.

Job Cost Sheet

Job Number 1324

Date Started: 7/12/2010

Date Completed:

Description: Drayna Pool

Direct Material

Direct Labor

Applied Manufacturing Overhead

Req. No

Amount

Ticket

Hours

Amount

Hours

Rate

Amount

MR 3345

$1,430

TTT 335

29

$574.2

MR 3372

$960

TT 340

42

$831.6

MR 4251

$1,260

TT 385

35

$693

MR 4263

$1,720

TT 425

30

$594

MR 5236

$2,090

TT 445

28

$554.4

$7,460

164

$3,247.2

?

?

?

Cost Summary

Direct Materials Cost $7,460

Direct Labor Cost $3,247.2

Applied Manufacturing Overhead ?

Total Cost

The company applies overhead to jobs at a rate of $9.9 per direct labor hour.

Requirement 1:

Calculate how much overhead would be applied to Job 1324.

Requirement 2:

Compute the total cost of Job 1324.

Requirement 3:

Assume the company bids its pools at total manufacturing cost plus 39 percent. If actual costs were the same as estimated, determine how much revenue the company would report on the sale of Job 1324.

Requirement 4:

Calculate how much gross profit Aquazona made on the sale of the Drayna pool.

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Denair Fine Wines, Inc., is planning to bring out a higher-quality wine product (A+ Guaranteed)

Denair Fine Wines, Inc., is planning to bring out a higher-quality wine product than any currently available in Stanislaus county. They’ve decided on selling the blended, fortified wine in 750 ml bottles under the name “Chateau St. Stanislaus Moondoggie Reserve” and is aiming at introducing the product at this year’s Graffiti Week celebration at a unit price of $6.99. Bottles cost 15 cents apiece, the screw caps 3 cents apiece, the raw grape juice can be purchased in any quantity at 12 cents per liter, fermentation for one week in Tupperware casks will cost 2 cents per liter, and packing and shipping to the event will cost 20 cents per bottle. All overhead and salary for the project amounts to $8750. How many bottles do they need to sell to breakeven? Show all work for credit.

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Wenner Furnace Corp. purchased machinery for $524,520 on May 1, 2012 (A+ Guaranteed)

Wenner Furnace Corp. purchased machinery for $524,520 on May 1, 2012. It is estimated that it will have a useful life of 10 years, salvage value of $28,200, production of 451,200 units, and working hours of 25,000. During 2013, Wenner Corp. uses the machinery for 2,650 hours, and the machinery produces 47,940 units.

From the information given, compute the depreciation charge for 2013 under each of the following methods. (Round answers to 0 decimal places, e.g. $45,892.)

(a) Straight-line

(b) Units-of-output

(c) Working hours

(d) Sum-of-the-years’-digits

(e) Double-declining-balance

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Pastina Company manufactures and sells various types of pasta to grocery chains (A+ Guaranteed)

Problem 2-4 Accounting cycle; adjusting entries through post-closing trial balance [LO2-3, 2-5, 2-6, 2-7]

Pastina Company manufactures and sells various types of pasta to grocery chains as private label brands. The company’s fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2013, appears below.

Account Title Debits Credits
Cash 30,000
Accounts receivable 40,000
Supplies 1,500
Inventory 60,000
Note receivable 20,000
Interest receivable 0
Prepaid rent 2,000
Prepaid insurance 0
Equipment 80,000
Accumulated depreciation—equipment 30,000
Accounts payable 31,000
Wages payable 0
Note payable 50,000
Interest payable 0
Unearned revenue 0
Common stock 60,000
Retained earnings 24,500
Sales revenue 148,000
Interest revenue 0
Cost of goods sold 70,000
Wage expense 18,900
Rent expense 11,000
Depreciation expense 0
Interest expense 0
Supplies expense 1,100
Insurance expense 6,000
Advertising expense 3,000


Totals 343,500 343,500

Information necessary to prepare the year-end adjusting entries appears below.
1. Depreciation on the equipment for the year is $10,000.
2. Employee wages are paid twice a month, on the 22nd for wages earned from the 1st through the 15th, and on the 7th of the following month for wages earned from the 16th through the end of the month. Wages earned from December 16 through December 31, 2013, were $1,500.
3. On October 1, 2013, Pastina borrowed $50,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
4. On March 1, 2013, the company lent a supplier $20,000 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2014.
5. On April 1, 2013, the company paid an insurance company $6,000 for a two-year fire insurance policy. The entire $6,000 was debited to insurance expense.
6. $800 of supplies remained on hand at December 31, 2013.
7. A customer paid Pastina $2,000 in December for 1,500 pounds of spaghetti to be manufactured and delivered in January 2014. Pastina credited sales revenue.
8. On December 1, 2013, $2,000 rent was paid to the owner of the building. The payment represented rent for December and January 2014, at $1,000 per month.

Required:
1&2. Post the opening balances, transactons and adjusting entires into the appropriare t-accounts.

3. Prepare an adjusted trial balance. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Equity, Revenues, and Expenses.)

4. Assume that no common stock was issued during the year and that $4,000 in cash dividends were paid to shareholders during the year.

Prepare the income statement, statement of shareholders’ equity and classified balance sheet for the year ended December 31, 2011.

5. Prepare closing entries. (If no entry is required for a particular transaction, select “No journal entry required” in the first account field.)

6. Prepare a post-closing trial balance. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Equity, Revenues, and Expenses.)

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Shorewood Shoes Company makes and sells a variety of leather shoes for children (A+ Guaranteed)

Exercise 3-44 Special order pricing – Shorewood Shoes Company makes and sells a variety of leather shoes for children. For its current mix of different models and seizes, the average selling price and costs per pair of shoes are as follows:

Item                                                                                 Amount

Price                                                                                      $20

Costs:

                Direct materials                                                 $6

                Direct labor                                                         $4

                Variable manufacturing overhead                 $2

                Variable selling costs                                        $1

                Fixed overhead                                                  $3

Total Costs                                                                         $16

Shoes are manufacture in batch sizes of 100 pairs. Each bath required 5 machine hours to manufacture. The plant has a total capacity of 4,000 machine hours per month, but current monthly production consumes only about 80% of the capacity.
A discount store has approached Shorewood to buy 10,000 pairs of shoes next month. It has requested that the shoes bear its own private label. Embossing the private label will cost Shorewood an additional $0.50 per pair. However, no variable selling costs will be incurred for fulfilling this special order.

Determine the minimum (floor) price that Shorewood Shoes should charge for this order. What other considerations are relevant in this decision?

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Dropping a segment George’s Grill analyzes profitability of three operating units (A+ Guaranteed)

Exercise 3-42 Dropping a segment George’s Grill analyzes profitability of three operating units: restaurant, bar, and billiards room. Revenues, variable costs, and attributable fixed costs (which can be avoided if the unit is eliminated) for each unit are as follows:

_____________________Restaurant                          Bar                              Billiards Rm    

Revenue                                 $320,000                                 $150,000                     $40,000

Variable costs                           120,000                                     35,000                       10,000

Attributable fixed costs              80,000                                    25,000                        15,000

George the owner, is considering converting the billiards area into an expanded bar area.

a) Ignoring remodeling costs, by how much will the bar segment margin have to increase for the grill’s income to be at least as high as it is now?

b) What other considerations will George want to consider before making the decision to eliminate the billiards unit to expand the bar area?

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The assembly division of Davenport, Inc., is bidding on an order of 50,000 smart phones (A+ Guaranteed)

Exercise 3-38 Make-or buy and relevant costs

The assembly division of Davenport, Inc., is bidding on an order of 50,000 smart phones. The division is eager to get this order because it has a substantial amount of unused plant capacity. The variable cost for each smart phone if $140 in addition to the cost of the display and touchscreen component. The divisional purchasing manager has received two bids for the component. One is from Davenport’s electronics division. This bid if for $35 per unit, although its variable cost if only $30 per unit. The other is from an outside vendor for $34 per unit. Davenport’s electronics division has sufficient unused capacity for this order.

a) Determine the relevant costs for this order for the assembly division under both internal and outsourcing arrangements.

b) Determine the relevant costs for this order for Davenport as a company under each of the sourcing arrangements.

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Patterson parkas company’s sale revenue is $30 per unit, variable costs (A+ Guaranteed)

Chapter 3 – Exercises.

Breakeven analysis and target profit, taxes

Exercise 3-28 Patterson Parkas Company’s sales revenue is $30 per unit, variable costs are $19.50 per unit, and fixed costs are $147,000.

a) Compute Patterson’s contribution margin per unit and contribution margin ratio.

b) Determine the number of units Patterson must sell to break even.

c) Determine the sales revenue required to earn (pretax) income equal to 20% of revenue.

d) How many units must Patterson sell to generate an after-tax profit of $109,200 if the tax rate is 35%?

e) Patterson is considering increasing its advertising expenses by $38,500. How much of an increase in sales units is necessary from expanded advertising to justify this expenditure (generate an incremental contribution margin of $38,500)?

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XECO 212: (UoP) Full Week 3-CheckPoint w/ Ref. and Both D.Q.’s 1 & 2 (A+ Guaranteed)

XECO/212: (UoP) Full Week 3-CheckPoint w/ Ref. and Both D.Q.’s 1 & 2

3. CheckPoint: Historical Example of Labor Supply and Demand

~ Due: Day 5 (Post to Assignment section of eCampus)

~ Submit a 250- to 300-word response addressing one of the following historical events in terms of labor supply and demand: the Great Depression, the Luddite Revolt, the Black Death, or the technology boom of the 1990s. Include the following:

O What was the impact on the supply and demand of labor on one sector of the labor market?
O Explain the factors that affected labor demand and labor supply in the chosen historical example.

4. Discussion Questions & Participation (Due by Day 2 – Main Classroom Forum)

Discussion Question 1:

O Why do some workers make more money than others? Must everyone make the same wage? Explain your answers using labor market equilibrium.

Discussion Question 2:

O Imagine that you are a business owner. Choose whether to hire a new person in the marketing department or upgrade your computer system. Each choice requires the same amount of investment. Address the following topics: What factors do you use to determine whether to invest in the additional capital and labor?

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