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Macroeconomics Problem

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Garcia Company issues 10%, 15-year bonds with a par value of $240,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 117 ¼.

Confirm that the bonds’ selling price is approximately correct (within $100). Use the present value tables B.1 and B.3 in Appendix B.

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Macroeconomics Problem

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Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 ½.

Confirm that the bonds’ selling price is approximately correct (within $100). Use the present value tables B.1 and B.3 in Appendix B.

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activity based costing

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Problem 17-1A
FireOut, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multipurpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hrs. x (54,000 + 10,200)]. Expected annual manufacturing overhead is $1,554,580. Thus, the predetermined overhead rate is $16.14 or ($1,554,580 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models.

The company’s managers identified six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows.

Expected Use of
Drivers by Product
Activity Cost Pools
Cost Drivers
Estimated Overhead
Expected Use of
Cost Drivers
Home
Commercial
Receiving Pounds
$67,800
335,000
215,000
120,000
Forming Machine hours
147,000
35,000
27,000
8,000
Assembling Number of parts
411,500
217,000
165,000
52,000
Testing Number of tests
49,900
25,500
15,500
10,000
Painting Gallons
52,580
5,258
3,680
1,578
Packing and shipping Pounds
825,800
335,000
215,000
120,000
$1,554,580

Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. $12.25.)

Home Model
Commercial Model
Total unit cost
$
$

LINK TO TEXT

Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). (Round overhead rate to 2 decimal places, e.g. $12.25.)

Activity Cost Pool
Estimated
Overhead
Expected
Use of Cost Drivers
Activity-Based
Overhead Rate
Receiving
$

Pounds
$
per pound
Forming

Machine hours
$
per machine hour
Assembling

Parts
$
per part
Testing

Tests
$
per test
Painting

Gallons
$
per gallon
Packing and shipping

Pounds
$
per pound
$

LINK TO TEXT

Prepare a schedule assigning each activity’s overhead cost pool to each product based on the use of cost drivers. (Round overhead cost per unit to 2 decimal places, e.g. $12.25 and cost assigned to 0 decimal places, e.g. $2,500.)

Home Model
Commercial Model
Activity Cost Pool
Expected Use of
Drivers
Activity-Based
Overhead Rates
Cost Assigned
Expected Use of
Drivers
Activity-Based
Overhead Rates
Cost Assigned
Receiving

$
$

$
$
Forming

$
$

$
$
Assembling

$
$

$
$
Testing

$
$

$
$
Painting

$
$

$
$
Packing and shipping

$
$

$
$
Total costs assigned (a)
$
$
Units produced (b)

Overhead cost per unit [(a) ÷ (b)]
$
$

LINK TO TEXT

Compute the total cost per unit for each product under ABC. (Round answer to 2 decimal places, e.g. $12.25.)

Home Model
Commercial Model
Total cost per unit
$
$

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Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:

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Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:

Standard Quantity or Hours Standard Price
or Rate Standard Cost
Direct materials 7.0 pounds $ 3.00 per pound $ 21.00
Direct labor 0.4 hours $ 14.00 per hour $ 5.60

During the most recent month, the following activity was recorded:
a. Thirteen thousand six hundred pounds of material were purchased at a cost of $2.90 per pound.
b.

The company produced only 1,360 units, using 12,240 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
c. Six hundred and forty four hours of direct labor time were recorded at a total labor cost of $7,728.

Required:

Compute the materials price and quantity variances for the month.

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Timely Transport provides local delivery service for a number of downtown and suburban businesses.

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Timely Transport provides local delivery service for a number of downtown and suburban businesses. Delivery charges are based on distance and weight involved for each delivery: 30 cents per pound and 10 cents per mile. Also, there is a $30 handling fee per parcel.

a.

Develop an expression that summarizes delivery charges.

b.

Determine the delivery charge for transporting a 60-pound parcel 20 miles.

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A production department’s output for the most recent month consisted of

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A production department’s output for the most recent month consisted of 12,500 units completed and transferred to the next stage of production and 12,500 units in ending goods in process inventory. The unit in ending goods in process inventory were 65% complete with respect to both direct material and conversion costs. There were 1,500 units in beginning goods in process inventory, and they were 85% complete with respect to both direct materials and conversion costs. Calculate the equivalent unit of production for the month, assuming the company uses weight average method.

Kindly help me in it.

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The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems.

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The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems.
Jan. 3. Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note.
Feb. 10. Sold merchandise on account to Bradford & Co., $24,000. The cost of the merchandise sold was $14,400.
13. Sold merchandise on account to Dry Creek Co., $60,000. The cost of merchandise sold was $54,000.
Mar. 12. Accepted a 60-day, 7% note for $24,000 from Bradford & Co. on account.
14. Accepted a 60-day, 9% note for $60,000 from Dry Creek Co. on account.
Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.)
May 11. Received from Bradford & Co. the amount due on the note of March 12.
13. Dry Creek Co. dishonored its note dated March 14.

July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note.
Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3.
Oct. 5. Sold merchandise on account to Halloran Co., $13,500, net/30. The cost of the merchandise sold was $8,100.
15. Received from Halloran Co. the amount of the invoice of October 5.
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.