Steelcase Inc. is one of the largest manufacturers of office furniture in the United States (A+ Guaranteed)

Steelcase Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Trim Assembly. Assume the following information for the Fabrication Department:

Steel per filing cabinet ……………………………………… 55 pounds

Direct labor per filing cabinet ……………………………….. 20 minutes

Supervisor salaries ………………………………………… $180,000 per month

Depreciation ……………………………………………… $28,000 per month

Direct labor rate…………………………………………… $21 per hour

Steel cost ………………………………………………… $0.40 per pound

Prepare a flexible budget for 12,000, 15,000, and 18,000 filing cabinets for the month of August 2014, similar to Exhibit 5, assuming that inventories are not significant.

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Gerber Inc has 5,200 machine hours available each month (A+ Guaranteed)

Gerber Inc has 5,200 machine hours available each month. The following information on the company’s three products is available:

Product 1 Product 2 Product 3
Contribution margin per unit $45.00 $54.00 $22.50
Machine hours per unit 3 2 1
Sales demand in units 900 1,000 3,000

Requirements:

 

 

What production schedule will maximize the company’s profits?

Product 1:     

Product 2:     

Product 3:     

What will be the maximum possible contribution margin?

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Phil Phoenix is paid monthly. For the month of January of the current year (A+ Guaranteed)

Phil Phoenix is paid monthly. For the month of January of the current year, he earned a total of $8,288. The FICA tax rate for social security is 6.2% and the FICA tax rate for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the total amount of taxes withheld from the Phoenix’s earnings?

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You are planning to take a spring break trip to Cancun your senior year (A+ Guaranteed)

You are planning to take a spring break trip to Cancun your senior year. The trip is exactly two years away, but you want to be prepared and have enough money when the time comes. Explain how you would determine the amount of money you will have to save in order to pay for the trip.

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Impossibilities, Inc. is considering the following investment (A+ Guaranteed)

Impossibilities, Inc. is considering the following investment. For financial reporting purposed the entire initial investment will be depreciation over 5 years by the straight-line method. For tax purposes, the entire initial investment will be depreciated by MACRS over 5 years. The investment will last 7 years.

investment at t=0 4,500,000 5-yr MACRS
working capital at t=0 75,000 1 20%
Revenue/year 1,575,000 2 32%
Expenses/year 525,000 3 19.20%
salvage value - 4 11.52%
residual value at term 50,000 5 11.52%
tax rate (ordinary & capital gains) 30% 6 5.76%
Cost of capital 10%

Requirements:

What is the net present value and IRR of the investment? (8%<IRR<12%)

Net Present Value (NPV)
Internal Rate of Return (IRR)

 

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The three accounts shown below appear in the general ledger of Chaudry Corp. during 2014 (A+ Guaranteed)

Exercise 13-6

The three accounts shown below appear in the general ledger of Chaudry Corp. during 2014.

Equipment
Date
Debit
Credit
Balance
Jan. 1 Balance 160,000
July 31 Purchase of equipment 70,000 230,000
Sept. 2 Cost of equipment constructed 53,000 283,000
Nov. 10 Cost of equipment sold 49,000 234,000
Accumulated Depreciation—Equipment
Date
Debit
Credit
Balance
Jan. 1 Balance 71,000
Nov. 10 Accumulated depreciation on equipment sold 28,000 43,000
Dec. 31 Depreciation for year 23,000 66,000
Retained Earnings
Date
Debit
Credit
Balance
Jan. 1 Balance 105,000
Aug. 23 Dividends (cash) 17,000 88,000
Dec. 31 Net income 67,000 155,000

From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of plant assets was $5,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.) (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)

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Bracewell Company reported net income of $195,000 for 2014 (A+ Guaranteed)

Exercise 13-4 Bracewell Company reported net income of $195,000 for 2014. Bracewell also reported depreciation expense of $40,000 and a gain of $5,000 on disposal of plant assets. The comparative balance sheet shows an increase in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses.

Prepare the operating activities section of the statement of cash flows for 2014. Use the indirect method. (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)

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Tim Latimer Corporation had the following transactions (A+ Guaranteed)

Exercise 13-3 Tim Latimer Corporation had the following transactions.

1.           Sold land (cost $12,000) for $10,000.
2.           Issued common stock at par value for $22,000.
3.           Recorded depreciation on buildings for $14,000.
4.           Paid salaries of $7,000.
5.           Issued 1,000 shares of $1 par value common stock for equipment worth $9,000.
6.           Sold equipment (cost $10,000, accumulated depreciation $8,000) for $3,200.

For each transaction above, prepare the journal entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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Bruce Industries manufactures 200,000 components per year (A+ Guaranteed)

Bruce Industries manufactures 200,000 components per year. The manufacturing cost of the components was determined as follows:

Direct materials $200,000

Direct labor 320,000

Variable manufacturing overhead 120,000

Fixed manufacturing overhead 160,000

An outside supplier has offered to sell the component for $3.40. If Bruce purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $20,000.

Requirements:

-If Bruce purchases the component from the supplier in-stead of manufacturing it, the effect on income would be

-What is the maximum price Bruce would be willing to pay the outside supplier?

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Serber, Inc., which uses a volume-based cost system, produces cat condos that sell for $180 each (A+ Guaranteed)

Serber, Inc., which uses a volume-based cost system, produces cat condos that sell for $180 each. Direct materials cost $24 per unit, and direct labor costs $13 per unit. Manufacturing overhead is applied at a rate of 130% of direct labor cost. Nonmanufacturing costs are $31 per unit. What is the gross profit margin for the cat condos?

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