HPC, Inc. has developed a standard pricing system for its products (A+ Guaranteed)

  1. HPC, Inc. has developed a standard pricing system for its products.The variable cost standards (based on expected output of 7000 units) are:

3# direct material per unit @ $6 per pound                          $ 18.00

2 hours direct labor @ $15 per hour                                            30.00

In January 20XX, the firm actually produced 7200 units and actual manufacturing costs were as follows:

Direct material purchased & used             21,700# for a total price of $129,115

Direct labor paid                                               14,250 hours @ $15.10 per hour

  1. Compute all direct material and direct labor variances (4 variances in total).Be sure to note if a variance is favorable (F) or unfavorable (U).Note that you need to consider the # of units actually produced when computing your efficiency variances.

Assume that all direct material was purchased on account and those purchases are only recorded at the end of the month. Also assume that the firm uses a standard cost accounting system (with variances recorded). Prepare the journal entry for direct materials purchased during the month.

  • Assume that all direct material used is only recorded at the end of the month. Also assume that the firm uses a standard cost accounting system (with variances recorded). Prepare the journal entry for direct materials used during the month.

Here’s the SOLUTION

Posted in Homework Help | Comments Off

Balls and Bats, Inc. purchased equipment on January 1, 2005, at a cost of $100,000 (A+ Guaranteed)

Balls and Bats, Inc. purchased equipment on January 1, 2005, at a cost of $100,000. The estimated useful life is 4 years with a salvage value of $10,000.

Complete the following tasks for this assignment:

  1. Prepare two different depreciation schedules for the equipment—one using the double-declining balance method, and the other using the straight-line method. (Round to the nearest dollar).
  2. Determine which method would result in the greatest net income for the year ending December 31, 2005.
  3. How would taxes affect management’s choice between these two methods for the financial statements?

Here’s the SOLUTION

Posted in Homework Help | Comments Off

X Inc has a project with 10 year life. The project requires a $1.2M investment (A+ Guaranteed)

X Inc has a project with 10 year life. The project requires a $1.2M investment in equipment. At the end of 10 years, the project is terminated and the equipment has no salvage value. NOI each year as follows: sales: 1.7M, Variable Costs: 1.2M, Contrib. Margin: 500K, Fixed Costs: 200K, Depreciation: 120K, total fixed: 320K, NOI: 180K. All of the above except deprec are cash flows. Company’s real rate of return is 12%.

4 things:

1) what is project’s net Present Value?

2) what is IRR to the nearest percent?

3) what is payback period?

4) Simple Rate of Return?

Here’s the SOLUTION

Posted in Homework Help | Comments Off

McGriff requires an estimate of the cost of goods lost by fire on March 9 (A+ Guaranteed)

McGriff requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $76,000. Purchases since January 1 were $144,000; freight-in, $6,800; purchase returns and allowances, $4,800. Sales are made at 25% above cost and totaled 200,000 to March 9. Goods costing $21,800 were left undamaged by the fire; remaining goods were destroyed.

Instructions

(a) Compute the cost of goods destroyed.

(b) Compute the cost of goods destroyed, assuming that the gross profit is 25% of sales.

Here’s the SOLUTION

Posted in Homework Help | Comments Off

Bellfont Company produces door stoppers. August production costs are below (A+ Guaranteed)

Bellfont Company produces door stoppers. August production costs are below:

Door Stoppers produced                    75,000

Direct material (variable)                                            $20,000

Direct labor (variable)                                               40,000

Supplies (variable)                                                      20,000

Supervision (fixed)                                                      27,200

Depreciation (fixed)                                                    22,700

Other (fixed) 4,800

In September, Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellfont’s production cost per door stopper for September?

Here’s the SOLUTION

Posted in Homework Help | Comments Off

Assume that at the beginning of 2009, a company purchased a used jet (A+)

Assume that at the beginning of 2009, a company purchased a used jet at a cost of $44,400,000. The plane expects to remain useful for five years (6.5 million miles) and to have a residual value of $5,400,000. Fast Delivery expects to fly the plane 725,000 miles the first year, 1,225,000 miles each year during the second, third, and fourth years, and 2,100,000 miles the last year.

Compute

a. Straight-line

  • b. Units-of-production
  • c. Double-declining-balance

Here’s the SOLUTION

Posted in Homework Help | Comments Off

At the beginning of 2014, Ovila Company estimated the following costs to produce (A+ Guaranteed)

At the beginning of 2014, Ovila Company estimated the following costs to produce one unit of product: 8 pounds of direct material costing $3 per pound; and, 2 hours of direct labor costing $12 per hour. Ovila also estimated annual factory overhead totaling $380,000, and 15,000 direct labor hours to be worked during the year.

Job 130, containing 400 identical units, was completed and sold during August of 2014. Job 130 required 2,500 pounds of direct material costing $4,500, and 680 hours of direct labor costing $8,700. At the end of 2014, Ovila determined that the total actual factory overhead was $480,000, and direct labor hours worked to have been 10,800.

(a) What was the estimated cost of Job 130?
(b) What is the “normal” cost of Job 130?
(c) What is the “prime” cost of Job 130?

Here’s the SOLUTION

Posted in Homework Help | Comments Off

Cato is a CMA working in a new assignment as an assistant to Rose (A+ Guaranteed)

Cato is a CMA working in a new assignment as an assistant to Rose. Rose is the head manager of a production department. Cato notices the department has over-applied factory overhead in each of the last ten years. Cato asks Rose about the pattern and is reminded that bonuses depend on meeting budgets. Rose further tells Cato not question estimates.

Required:
(a) Why would the Rose do this?
(b) What is the harm to the company?
(c) What should Cato do, and why?
(d) What actions should Cato avoid, and why?

Here’s the SOLUTION

Posted in Homework Help | Comments Off

FIN 350 WEEK 6 QUIZ 5 (A+ Guaranteed)

• Question 1
____ mortgages enabled more people with relatively lower income, or high existing debt, or a small down payment to purchase homes.

• Question 2
____ economic growth will probably ____ the risk premium on mortgages and ____ the price of

• Question 3
Rates for adjustable-rate mortgages are commonly tied to the

• Question 4
The interest rate on a second mortgage is ____ on a first mortgage created at the same time, because the second mortgage is ____ the existing first mortgage in priority claim against the property in the event of default.

• Question 5
Fannie Mae and Freddie Mac experienced financial problems during the credit crisis because they:

• Question 6
A financial institution has a higher degree of interest rate risk on a ____ than a ____.

• Question 7
Financial institutions that hold fixed-rate mortgages in their asset portfolios are exposed to ____ risk, because they commonly use funds obtained from short-term customer deposits to make long-term mortgage loans.

• Question 8
In a collateralized mortgage obligation (CMO), mortgages are segmented into ____ (or classes).
• Question 9
____ risk is the risk that a borrower may prepay the mortgage in response to a decline in interest rates.

• Question 10
For any given interest rate, the shorter the life of the mortgage, the ____ the monthly payment and the ____ the total payments over the life of the mortgage.

• Question 11
An institution that originates and holds a fixed-rate mortgage is adversely affected by ____ interest rates; the borrower who was provided the mortgage is adversely affected by ____ interest rates.

• Question 12
Which of the following is not true with respect to a growing-equity mortgage?

interest payments that result in full payment of the debt by maturity

• Question 13
From the perspective of the lending financial institution, interest rate risk is

Question 14
Collateralized mortgage obligations (CMOs) are generally perceived to have

• Question 15
Which of the following will typically require homeowners to ultimately request a new mortgage?

• Question 16
“Pink sheets” are traded on the

• Question 17
____ are portfolios of international stocks created and managed by various financial institutions.
• Question 18
The largest organized exchange, listing the largest firms, is the
• Question 19
A ____ requires that dividends cannot be paid on common stock until all current and previously omitted dividends are paid on preferred stock.

• Question 20
Shareholders can most easily measure a firm’s performance by monitoring changes in its ____ over time.
• Question 21
Managers of firms may consider a stock repurchase or even a leveraged buyout when they believe their stock is ____ by the market, or a secondary stock offering when they believe their stock is ____ by the market.

• Question 22
The prevailing price per share divided by the firm’s earnings per share is known as the

• Question 23
The transaction costs to the issuing firm in an IPO is usually ____ percent of the funds raised.
• Question 24
____ sell shares to investors and use the proceeds to invest in portfolios of international stocks created and managed by portfolio managers.

• Question 25
The ____ is a value-weighted index of stock prices of 500 large U.S. firms.

• Question 26
A new stock issuance by a specific firm that already has stock outstanding is referred to as a(n)

• Question 27
Which of the following is not a part of the over-the-counter market?

• Question 28
____ are acquisitions that require substantial amounts of borrowed funds.

• Question 29
Initial public offerings (IPOs) perform ____ on the day following the IPO and ____ for periods of a year or longer after the IPO.

• Question 30
When a firm buys some of its shares that it had previously issued, this is referred to as a:

Here’s the SOLUTION

Posted in Homework Help | Comments Off

Babcock Company estimates the following cash flows and depreciation (A+ Guaranteed)

Babcock Company estimates the following cash flows and depreciation on a project that will cost $200,000 and will last 10 years with no salvage value:

Instructions

a) Calculate the expected annual rate of return on this project showing calculations to support your answer.

b) Calculate the cash payback on this project showing calculations to support your answer.

Here’s the SOLUTION

Posted in Homework Help | Comments Off