Shares in Raven Products are selling for $78 per share (A+)

Shares in Raven Products are selling for $78 per share. There are 1 million shares outstanding. What will be the share price in each of the following situations? Ignore taxes.

Required:

a. The stock splits six for five.

b. The company pays a 20% stock dividend.

c. The company repurchases 100,000 shares.

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Santana Rey of Business Solutions is evaluating her inventory to determine whether it must be adjusted based on lower of cost or market rules (A+)

Santana Rey of Business Solutions is evaluating her inventory to determine whether it must be adjusted based on lower of cost or market rules. Business Solutions has three different types of software in its inventory and the following information is available for each.

Per Unit

Inventory Items Units Cost Market

Office productivity 8 $81 $79

Desktop publishing 7 108 105

Accounting 8 95 101

Required:

1(a). Compute the lower of cost or market for ending inventory assuming Rey applies the lower of cost or market rule to inventory as a whole. (

1(b). Must Rey adjust the reported inventory value?

2(a). Compute the lower of cost or market rule to each product in inventory.

2(b). Must Rey adjust the reported inventory value?

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Ripken Company’s ending inventory includes the following items (A+)

Ripken Company’s ending inventory includes the following items.

Per Unit

Product Units Cost Market

Helmets 41 $63 $59

Bats 34 81 113

Shoes 55 100 104

Uniforms 59 45 45

Required:

Compute the lower of cost or market for ending inventory applied separately to each product.

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Suppose you have been given a summer job at fairwings Avionics (A+)

Suppose you have been given a summer job at fairwings Avionics a company that manufactures sophisticated reader set for commercial aircraft. The company which is private owned has approached a bank for loan to help finance its tremendious growth.The bank requires financial statements before approving such a loan.

Required:

Classify each cost listed below as either a product cost or period cost for preparing financial statements for bank.

1. Cost of the memory chips used in a radar set.

2. Factory heating costs.

3. Factory equipment maintenance costs.

4. Training costs for new administrative costs.

5. The cost of the solder that is used is assembling the radar sets.

6. The travel cost of the company sales persons.

7. Wages and salaries of factory security personnels.

8. The cost of air conditioning executive offices.

9. Wages and salaries in the department that handles billing customers.

10. depreciation on the equipment in the fitness room used by factory worketrs

11. Telephone expense incurred by factory management.

12. The cost of shipping completed radar sets to customers.

13. The wages of the workers who assemble the radar sets.

14. The presidents Salary.

15. Health insurance premiums for factory personnels.

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Your boat inc assembles custom sailboats from component supplied by various manufacturers (A+)

Your boat inc assembles custom sailboats from component supplied by various manufacturers.

The Company is very small and its assembly shops and retail sale store are housed in a Gig Harbor,

Washington,Boat house,Below are listed some of the costs that are incurred at the company.

Required:

For each cost indicate whether it would most likely be classified as direct labor, Direct material,manufacturing overhead,selling,or an administrative cost.

1. The wages of employees who build the sailboats.

2. The cost of advertising in the local newspaper.

3. The cost of aluminum must install in a sailboat.

4. The wages of assembly shop supervisor.

5. Rent on the boathouse.

6. The wages of the company bookkeeper

7. Sales commission paid to the company salespeople

8. Depreciation on power tools.

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Selected accounts and balances for the three months ended March 31, 2012, for Business Solutions follow (A+)

Selected accounts and balances for the three months ended March 31, 2012, for Business Solutions follow.

January 1 beginning inventory $0

Cost of goods sold 48,690

March 31 ending inventory 2,164

Required:

Compute inventory turnover and days’ sales in inventory for the three months ended March 31, 2012. (Use 365 days a year. Do not round intermediate calculations.

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Koffee express operate a number of espresso coffee stands in busy suburban malls (A+)

Koffee express operate a number of espresso coffee stands in busy suburban malls. The fixed weekly expenses of coffee stand are $1,100.and variable cost per cup of coffee served is $0.26.

Required:

1. Fill in the following table with your estimate of total cost and aver cost of per cup of coffee at the indicated level of activities for a coffee stand. Round of the cost of the cup of the coffee to the nearest of the tenth of the cents.

Cups of Coffee served in a week

1,800 1,900 2,000

Fixed cost ? ? ?

Variable Cost ? ? ?

Total cost ? ? ?

Average cost per cup of coffee served ? ? ?

2. does the average cost per cup of coffee served increase,decrease or remain the same as the number of the cups of coffee served in a week increase? Explain

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House of the organs Inc, Purchases organs from well known manufacturers and sell them at the retail level (A+)

House of the organs Inc,Purchases organs from well known manufacturers and sell them at the retail level. The organ sells, on the average, for $2,500 each. The average cost of the organs from manufacturers is $1,500.The cost that the company incurs in a typical month are presented below:

Costs Costs Formula

Selling:

Advertising $950 per month

Delivery of organs $60 per Organ sold

Sales salaries and commissions $4,800 per month, Plus 4% of sales

Utilities $650 per month

Depreciations of Sales facilities $5,000 per month

Administrative:

Executive salaries $13,500 per month

Depreciation of office Equipment $900 per month

Clerical $2,500 per month plus $40 per organ sold

Insurance $700 per month

During the November the company sold and delivered 60 Organs.

Required:

1. Prepare a Traditional income statement for November.

2. Prepare a contribution format income statement for November.show cost and revenues on both a total and unit basis down through contribution margin.

3. Refer to the income statement you prepared in 2 above. Why might it be misleading to show the fixed cost on a per unit basis.

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Sedato Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis (A+)

Sedato Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.

Item No. Quantity Cost per Unit Cost to Replace Estimated Cost of Completion Normal

Selling Price and Disposal Profit

1320 1,200 $3.20 $3.00 $4.50 $0.35 $1.25

1333 900 2.70 2.30 3.40 0.50 0.50

1426 800 4.50 3.70 5.00 0.40 1.00

1437 1,000 3.60 3.10 3.20 0.45 0.90

1510 700 2.25 2.00 3.25 0.80 0.60

1522 500 3.00 2.70 3.90 0.40 0.50

1573 3,000 1.80 1.60 2.50 0.75 0.50

1626 1,000 4.70 5.20 6.00 0.50 1.00

Required:

From the information above, determine the amount of Sedato Company inventory.

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Belanna Corporation began operations on December 1, 2010 (A+)

Belanna Corporation began operations on December 1, 2010. The only inventory transaction in 2010 was the purchase of inventory on December 10, 2010, at a cost of $20 per unit. None of this inventory was sold in 2010. Relevant information is as follows.

Ending inventory in units

December 31, 2010 100

December 31, 2011, by purchase date

December 2, 2011 100

July 20, 2011 30 130

During the year the following purchases and sales were made.

Purchases Sales

March 15 300 units at $24 April 10 200

July 20 300 units at 25 August 20 300

September 4 200 units at 28 November 18 170

December 2 100 units at 30 December 12 200

The company uses the periodic inventory method.

Required:

Determine ending inventory under:

(1) Specific identification

(2) FIFO

(3) LIFO

(4) Average cost

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