. If it outsources the navigation system, fixed costs could be reduced by half, and the vacant facilities could be rented out to earn $2000 per month of rental income. What is the maximum contract cost that Fruit Boat Company should pay for outsourcing

Answers

Answer 1

Answer: $2,425

Explanation:

Fruit Boat should not pay more for the contract than they would if they were producing the good themselves.

= Variable cost + Avoidable fixed costs + Opportunity cost per month

Avoidable fixed cost = (39,000 / 2) / 10 boats = 19,500 / 10 = $1,950

Opportunity cost per month = 2,000 / 10 boats

= $200

Contract price = 275 + 1,950 + 200

= $2,425


Related Questions

503,000 on November 1, 2021, and signed a 12-month note bearing interest at 8%. Interest is payable in full at maturity on October 31, 2022. In connection with this note, Universal Travel Inc. should report interest payable at December 31, 2021, in the amount of

Answers

Answer:

$6,707

Explanation:

Calculation to determine what Universal Travel Inc. should report interest payable at December 31, 2021,

Interest payable at Dec 31,2021= 503,000 * 8% * 2 months/12 months

Interest payable at Dec 31,2021= $6706.6

Interest payable at Dec 31,2021= $6707 Approximately)

(November 1 - December 31 = 2 months)

Therefore Universal Travel Inc. should report interest payable at December 31, 2021, in the amount of $6,707

About 1.4 billion pounds of​ American, cheddar and other kinds of cheese is socked away at​ cold-storage warehouses across the​ country, the biggest stockpile since federal​ record-keeping began a century ago...Many​ [cheese companies] are paying to store their excess cheese in hopes demand and prices will improve. ​Source: Heather​ Haddon, "America​ Can't Move Its​ Cheese," Wall Street Journal​, December​ 17, 2018. What effect did the strategy of warehousing cheese have on the supply of​ cheese? Using the line drawing​ tool, show the effect of cheese producers storing cheese in warehouses rather than offering it for sale. Properly label your line. Carefully follow the instructions​ above, and only draw the required object

Answers

Answer: See explanation

Explanation:

Since the cheese companies are paying to store their excess cheese in hopes demand and prices will improve, then this will bring about the reduction in the supply of cheese in the market but the demand for cheese will still be constant.

Due to the fact that there is shortage of supply, the supply curve will shift leftward and as a result of this, the price if cheese will increase and the quantity demanded by the customers will then decrease as a result of price increase.

Question 6 of 10
How does a low credit score affect a person who applies for a loan?
O A. It causes banks to charge the person higher interest rates on the
loan.
B. It makes it easier for the person to get a loan with a poor debt-to-
income ratio.
C. It allows banks to give the person a loan without checking his or
her tax records.
D. It makes banks more likely to give the person a large, long-term
loan.
SUBMIT.

Answers

Answer:

A. it causes Banks to charge the person higher interest rates on the loan

Mr. and Mrs. Hennesy met with their adviser and concluded that they would need $40,000 per year after they retire in order to live comfortably. They plan to retire 10 years from now and expect to enjoy 20-year of happy retirement before they go to the great beyond. How much should they deposit now in a bank account paying 9 percent to reach financial happiness during retirement

Answers

Answer:

Mr. and Mrs. Hennesy

They should deposit $337,928.65 now.

Explanation:

a) Data and Calculations:

Amount required per year after retirement = $40,000

Period of years during retirement = 20 years

Total amount required for 20 years = $800,000 ($40,000 * 20)

Interest rate = 9%

N (# of periods)  10

I/Y (Interest per year)  9

PMT (Periodic Payment)  0

FV (Future Value)  800000

Results

PV = $337,928.65

Total Interest $462,071.35

The following information relates to last year's operations at the Legumes Division of Gervani Corporation: Minimum required rate of return 12% Return on investment (ROI) 15% Sales $ 900,000 Turnover (on operating assets) 3 times What was the Legume Division's net operating income last year

Answers

Answer: $45000

Explanation:

Firstly, the operating asset will be calculated which will be:

Operating asset = Sales / Turnover

= 900,000/3

Operating assets = $300,000

Then, the net operating income will be: Return on investment × Operating assets

Net operating income = 300,000 × 15%

= 300,000*0.15

= $45,000

Therefore, Legume Division's net operating income last year is $45000

Zachary Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials $ 6,400 Unit-level labor 6,400 Unit-level overhead 3,800 Product-level costs* 8,400 Allocated facility-level costs 28,000 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Zachary for $2.70 each. Required Calculate the total relevant cost. Should Zachary continue to make the containers

Answers

Answer:

Zachary Electronics

Zachary should continue to make the containers.  It is cheaper to make than to buy from Russo Container Company.

Explanation:

a) Data and Calculations:

Production units = 9,100 containers

Unit-level materials                $ 6,400

Unit-level labor                          6,400

Unit-level overhead                  3,800

Total unit-level costs            $16,600

Product-level costs*                 8,400

Allocated facility-level costs  28,000

Relevant or avoidable costs:

Unit-level materials                $ 6,400

Unit-level labor                          6,400

Unit-level overhead                  3,800

Total unit-level costs            $16,600

Product-level costs*                 2,800 ($8,400 * 1/3)

Total relevant costs =          $19,400 (to make)

Relevant cost to buy:

Offer from Russo Container company = $2.70 per container

Total cost from outside supplier = $24,500 ($2.70 * 9,100)

g is considering eliminating the fruit product line. If this line is eliminated, Orange Company will be able to eliminate $74,000 of total fixed costs. By how much would this business decision increase operating income

Answers

The business decision increase the operating income by $16,000

Calculation of impact of net operating income:

The following formula should be used:

= Contribution margin lost + fixed cost savings

= -$58,000 + $74,000

= $16,000

Since fruit product contributed $58,000 so here we eliminated it due to this it has a loss of $58,000 for the orange company

Therefore we can conclude that that the business decision increase the operating income by $16,000

Learn more about the: operating income here: brainly.com/question/13872434

Accurate Metal Company sold 36,500 units of its product at a price of $340 per unit. Total variable cost per unit is $179, consisting of $172 in variable production cost and $7 in variable selling and administrative cost. Compute the manufacturing margin for the company under variable costing.

Answers

Answer: $6,132,000

Explanation:

The manufacturing margin for the company under variable costing will use the variable production costs only as these are the variable costs incurred during manufacturing:

Variable manufacturing margin = ( Sales price - Variable cost per unit) * number of units

= (340 - 172) * 36,500

= 168 * 36,500

= $6,132,000

Denise will receive annual payments of $10,000 for the next 25 years. The discount rate is 6.8 percent. What is the difference in the present value of these payments if they are paid at the beginning of each year rather than at the end of each year

Answers

Answer: $8,069.29

Explanation:

If it is paid at the beginning of the year, it accumulates an extra year of interest and would be an Annuity Due.

If it is paid at the end, it is an ordinary annuity.

Present value of annuity due = Annuity * Present value interest factor of Annuity due, 6.8%, 25 periods

= 10,000 * 12.673521

= $126,735.21

Present value of annuity = Annuity * Present value interest factor of annuity, 6.8%, 25 periods

= 10,000 * 11.866592

= $118,665.92

Difference :

= 126,735.21 - 118,665.92

= $8,069.29

Determining Market-Based and Negotiated Transfer Prices
Carreker, Inc., has a number of divisions, including the Alamosa Division, producer of surgical blades, and the Tavaris Division, a manufacturer of medical instruments.
Alamosa Division produces a 2.6 cm steel blade that can be used by Tavaris Division in the production of scalpels. The market price of the blade is $22.00. Cost information for the blade is:
Variable product cost $ 9.60
Fixed cost 6.00
Total product cost $15.60
Tavaris needs 15,000 units of the 2.6 cm blade per year. Alamosa Division is at full capacity (90,000 units of the blade).
Required:
Round your answers to the nearest cent.
If Carreker, Inc., has a transfer pricing policy that requires transfer at full product cost, what would the transfer price be?
$ per unit
Do you suppose that Alamosa and Tavaris divisions would choose to transfer at that price?
Alamosa
Tavaris

Answers

Answer:

Carreker, Inc.

The transfer price per unit is $15.60.

Travaris would choose to transfer at this full cost price of $15.60 per unit, while Alamosa would choose to transfer at the market price of $22.00 per unit.

Explanation:

a) Data and Calculations:

Divisions: Alamosa and Tavaris

Market price of blade per unit = $22

Production costs:

Variable product cost $ 9.60

Fixed cost                       6.00

Total product cost      $15.60

Units of the blade required by Tavaris = 15,000

Full product cost, transfer price = $15.60 per unit

Total transfer price = $234,000 (15,000 * $15.60)

Choice price per unit:

Alamosa = $22.00

Tavaris = $15.60

A company produces a single product. Variable production costs are $12.50 per unit and variable selling and administrative expenses are $3.50 per unit. Fixed manufacturing overhead totals $41,000 and fixed selling and administration expenses total $45,000. Assuming a beginning inventory of zero, production of 4,500 units and sales of 3,850 units, the dollar value of the ending inventory under variable costing would be: Multiple Choice $10,400 $5,850 $8,125 $13,975

Answers

Answer:

the third option is correct - $8,125

Explanation:

The calculation of the ending inventory under variable costing is given below:

Ending inventory value (Variable costing) os

= Variable production cost per unit × No. of units

= $12.50 × (4,500 - 3,850)  

= $8,125,

Hence, the ending inventory under variable costing is $8,125

Therefore the third option is correct

Starbooks Corporation provides an online bookstore for electronic books. The following is a simplified list of accounts and amounts reported in its accounting records. The accounts have normal debit or credit balances and the dollars are rounded to the nearest thousand. Assume the year ended on September 30, 2012.
Accounts Payable $ 219
Accounts Receivable 189
Accrued Liabilities 352
Accumulated Depreciation 298
Cash 305
Contributed Capital 149
Depreciation Expense 338
General and Administrative Expenses 355
Income Tax Expense 300
Interest Revenue 90
Long-term Debt 194
Other Current Assets 69
Other Noncurrent Assets 459
Other Expenses 195
Prepaid Expenses 92
Property and Equipment 2,140
Retained Earnings 1,443
Selling Expenses 2,603
Service Revenue 6,361
Short-term Bank Loan 474
Store Operating Expenses 2,164
Supplies 544
Unearned Revenue 173
Prepare an adjusted trial balance at September 30, 2012. (Enter your answers in thousands.)

Answers

Answer:

Trial Balance of Starbooks Corporation as on September 30, 2012

Particulars                        Debit     Credit

Accounts Payable                            $219

Accounts Receivable        $189

Accrued Liabilities                           $352

Accumulated Depreciation             $298

Cash                                    $305

Contributed Capital                          $149

Depreciation Expense        $338

General & Admin. Exp.       $355

Income Tax Expense          $300

Interest Revenue                               $90

Long-term Debt                                 $194

Other Current Assets          $69

Other Noncurrent Assets   $459

Other Expenses                  $195

Prepaid Expenses               $92

Property and Equipment    $2,140

Retained Earnings                            $1,443

Selling Expenses                $2,603

Service Revenue                               $6,361

Short-term Bank Loan                       $474

Store Operating Expenses $2,164

Supplies                               $544

Unearned Revenue                           $173

Total                                     $9753    $9753

Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows:

Job 201 $4,850
Job 202 2,420
Job 203 1,910
Job 204 3,570
Factory supervision 1,660

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $28 per direct labor hour. The direct labor rate is $17 per hour. If required, round final answers to the nearest dollar.

a. Journalize the entry to record the factory labor costs.
b. Journalize the entry to apply factory overhead to production for November.

Answers

Answer and Explanation:

The journal entry is given below:

a. Work in process ($4,850 + $2,420 + $1,910 + $3,570) $12,750

Factory overhead $1,660

         To wages payable $14,410

(being the factory labor cost is recorded)

b. Work in process Dr ($12,750 ÷ $17 × $28) $21,000

          To factory overhead $21,000

(being the factory overhead is applied)

These two entries should be recorded for an individual parts

A comparison of the severity and likelihood of a risk is called?

Answers

points ) Which of the following statements is true about interacting with people from different cultures ? a) Most people within a culture will think and act the same. b) It's important to treat people from different cultures as individuals. c) Some cultures are better than other cultures. Generalizations and stereotypes don't impact people's perceptions of cultures.

Southwestern Bank offers to lend you $50,000 at a nominal rate of 6.9%, compounded monthly. The loan (principal plus interest) must be repaid at the end of the year. Woodburn Bank also offers to lend you the $50,000, but it will charge an annual rate of 9.0%, with no interest due until the end of the year. How much higher or lower is the effective annual rate charged by Woodburn versus the rate charged by Southwestern?
a. 1.68%
b. 1.98%
c. 2.08%
d. 1.78%
e. 1.88%

Answers

Answer:

e. 1.88%

Explanation:

EAR = (1+APR/m)^m. M means compounding periods

For Southwestern Bank

EAR = (1 + 0.069/12)^12 - 1

EAR = 1.00575^12 - 1

EAR = 1.0712245 - 1

EAR = 0.0712245

EAR = 7.12%

So, the difference between the effective annual rate charged by Woodburn versus the rate charged by Southwestern is 1.88% (9% - 7.12%)

How is a monopolistically competitive market similar to a perfectly competitive​ market? A. Producers with market power set their own prices. B. Both have differentiated products with close substitutes. C. There are no restrictions on the entry of new firms. D. Both have homogeneous products with no close substitutes. Which of the following common features do monopolistically competitive markets and monopolies​ share? A. Barriers restrict new firms from entering. B. Consumers with market power set prices. C. Firms face​ downward-sloping demand curves. D. Producers with no market power set their own prices.

Answers

Answer:

c

c

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.  

In the long run, firms earn zero economic profit.  If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.  

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.  

A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopolistic competition has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

An example of monopolistic competition are restaurants  

When firms are earning positive economic profit, in the long run, firms enter into the industry. This drives economic profit to zero

If firms are earning negative economic profit, in the long run, firms leave the industry.  This drives economic profit to zero

in the long run, only normal profit is earned

A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.

An example of a monopoly is a utility company

An electronics store introduces three new types of music players to its customers. Each of the new music players are priced at $99, $79, and $59. Which psychological pricing approach is the store using to price the music players

Answers

Answer: The case of the number nine

Explanation:

Studies have shown that the human brain prefers to buy things whose prices end with the number 9 as opposed to zero such as 10 or 100.

The brain apparently interprets the number 9 at the end of a price to mean that the person is saving money and getting better value by buying the product. In making all three prices end in nine, the electronics store is using this psychological pricing strategy.

As CFO, one of your responsibilities is to maximize the profits obtained from your organization. How can the strategy review, evaluation and control practices used within your organization be used to assure this outcome

Answers

Answer:

The chief financial officer of an organization has the main objectives of maximizing the profits obtained from the organization. This is a task of great responsibility, and one that requires the joint efforts of the entire organizational system.

It is therefore necessary that there is constant management of the strategy, including review, evaluation and control, to monitor how the planned short and long-term action plans are being effective to achieve the financial objectives of a company.

A CFO's functions are to achieve total quality, through the improvement of organizational processes in the micro and macro environment of the company, aligning the company's strategy to achieve better results. Some essential actions of a CFO are to increase sales, reduce operating costs, achieve economies of scale, improve marketing, etc.

PET Co. owns 80% of the common shares of SAL Corp. PET has no other investments. Goodwill associated with the investment is nil, but there is a fair value increment of $62,500 relating to SAL's patent that is being amortized over 10 years. PET's and SAL's reported net income for 20X5 is as follows: PET Co. SAL Corp. Net income $200,000 $50,000 SAL declared $25,000 in dividends in 20X5. Assuming PET uses the cost method, what amount of consolidated net income attributable to the parent (ATP) would be reported in 20X5?
a) $210,000
b) $215,000
c) $223,750
d) $235,000

Answers

Co so the Anwser must be c

On June 30, 2021, Moran Corporation issued $9.0 million of its 8% bonds for $8.1 million. The bonds were priced to yield 10%. The bonds are dated June 30, 2021. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, by how much should the bond discount be reduced for the six months ended December 31, 202

Answers

Answer:

$45,000

Explanation:

Calculation to determine by how much should the bond discount be reduced for the six months ended December 31, 202

First step

Semiannual interest paid on 31.12.2021 = $9,000,000*8%*6/12

Semiannual interest paid on 31.12.2021= $360,000

Second step

Effective interest expense on 31.12.2021 = $8,100,000 * 10% * 6/12

Effective interest expense on 31.12.2021= $405,000

Last step

Bond discount to be reduced for 6 months ended 31.12.2021 = $405,000 - $360,000

Bond discount to be reduced for 6 months ended 31.12.2021=$45,000

Therefore by how much should the bond discount be reduced for the six months ended December 31, 202 will be $45,000

Inventory balances for the Jameson Company in October 2018 are as follows:

October 1, 2018 October 31, 2018

Raw materials $27,000 $21,000
Work in process 48,000 37,200
Finished goods 108,000 90,000

During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively. What are the total manufacturing costs added to production in the period?

Answers

Answer:

Total manufacturing costs added to production $186,000

Explanation:

The computation of the total manufacturing cost to be added is given below:

Raw materials,beginning $27,000  

Add: Purchases of direct materials $36,000  

Less: Raw materials,ending -$21,000  

Direct materials used $42,000

Direct labor             $60,000

Factory overhead costs $84,000

Total manufacturing costs added to production $186,000

The fastener division of Southern Fasteners manufactures zippers and then sells them to customers for $8 per unit. Its variable cost is $3 per unit, and its fixed cost per unit is $1.50. Management would like the fastener division to transfer 12,000 of these zippers to another division within the company at a price of $3. The fastener division could avoid $0.20 per zipper of variable packaging costs by selling internally.
Determine the minimum transfer price:
(a) Assuming the fastener division is not operating at full capacity, and
(b) Assuming the fastener division is operating at full capacity.

Answers

Answer:

a. $2.80b. $7.80

Explanation:

a.  Assuming the fastener division is not operating at full capacity

When the division is not operating at full capacity, they have space to take on the production requests for other divisions and so won't incur any opportunity costs from not producing for outside customers.

Minimum transfer price = Net Variable cost

= Variable cost - cost saving if sold internally

= 3 - 0.2

= $2.80

b. Assuming the fastener division is operating at full capacity.

At full capacity the division does not have space to produce for internal divisions without incurring losses from not selling outside. The transfer price will therefore be the selling price to customers less the variable cost savings:

= Selling price - variable cost savings

= 8 - 0.2

= $7.80

A stronger euro is less favorable for:

Answers

Group of answer choices.

A. German tourists traveling abroad.

B. American tourists traveling in France.

C. Canadian firms selling in Germany.

D. Canadian investors with money investments in Germany.

Answer:

B. American tourists traveling in France.

Explanation:

A foreign exchange market can be defined as a type of market where the currency of a country is converted to that of another country.

For example, the conversion of the United States of America dollars into naira, rands, yen, pounds, euros, etc., at the foreign exchange market.

In this context, a stronger euro is less favorable for American tourists traveling in France because the currency of the Americans, which is the U.S dollars would exchange at a far lesser rate to the euros.

However, a stronger euro would be more favorable for German tourists that are traveling abroad, Canadian firms that trade or sells its products in Germany, and Canadian investors who are having money investments in Germany.

Note: Euro is the official currency (legal tender or money) of Germany.

Considering the available options, a stronger euro is less favorable for "American tourists traveling in France."

This is because the United States of America uses the dollar as currency, while European countries, including France, are using Euro.

Thus, should an American carry dollar to France, and meets a stronger Euro, has a value of money (dollar) would be reduced, and therefore would be less favorable to him.

Option A is wrong because German tourists traveling abroad are favorable to the German as the Euro is stronger.

Option C is wrong because Canadian firms selling in Germany would earn in Euro, thereby getting money with more value.

Option D is wrong because Canadian investors with money investments in Germany would earn in Euro.

Hence, in this case, it is concluded that the correct answer is option B. "American tourists traveling in France."

Group of answer choices.

A. German tourists traveling abroad.

B. American tourists traveling in France.

C. Canadian firms selling in Germany.

D. Canadian investors with money investments in Germany.

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Ultimo Co. operates three production departments as profit centers. The following information is available for its most recent year. Which department has the greatest departmental contribution to overhead (in dollars) and what is the amount contributed

Answers

Answer: Department 3 had the greatest contribution to overhead of $362,000

Explanation:

Contribution to overhead = Sales - Cost of Goods sold - Direct expense

Department 1:

= 1,140,000 - 714,000 - 114,000

= $312,000

Department 2:

= 540,000 - 164,000 - 54,000

= $322,000

Department 3:

= 840,000 - 314,000 - 164,000

= $362,000

The Treaty of Maastricht and the Treaty of Lisbon were indications of __________ within the European Union (EU).
a. a shift toward common external policies.
b. greater political union.
c. increased sovereignty for member countries.
d. a harmonized trade system.
e. less economic structure.

Answers

Answer:

Option B

Explanation:

In simple words, The Lisbon Treaty, often known as the Treaty of Lisbon, revised European Union laws by providing a more centralized administration as well as foreign relations, a suitable mechanism for nations wishing to exit the Community, and a simplified method for implementing new legislation.

Thus, from the above we can conclude that the correct option is B.

The Treaty of Maastricht and the Treaty of Lisbon were indications of within the European Union (EU) is :

B) Greater political union.

European Union

The Treaty of Maastricht and the Treaty of Lisbon were indications of  Greater political union within the European Union (EU) .

The Lisbon Treaty is changed European Union laws by giving a more centralized organization as well as remote relations, a appropriate instrument for countries wishing to exit the Community, and a disentangled strategy for actualizing unused legislation.

Thus, the correct option is B.

Learn more about "Economic Union" :

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A company purchases 50 units of inventory for $3.50 on January 5 and 35 units for $3.00 on January 25. It sells a total of 65 units on January 31. If the company is following the FIFO method of inventory costing, what is the total cost of the inventory sold?

Answers

Answer:

COGS= $220

Explanation:

Giving the following information:

A company purchases 50 units of inventory for $3.50 on January 5 and 35 units for $3.00 on January 25.

Number of units sold= 65

First, we need to calculate the number of units in ending inventory:

Ending inventory in units= (50 + 35) - 65= 20

Now, under the FIFO (first-in, first-out) method, the cost of goods sold is calculated using the cost of the firsts units incorporated into inventory:

COGS= 50*3.5 + 15*3

COGS= $220

The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 33,000 $ 32,000 Work in process 9,400 20,800 Finished goods 50,000 34,600 Activities and information for May Raw materials purchases (paid with cash) 171,000 Factory payroll (paid with cash) 250,000 Factory overhead Indirect materials 12,000 Indirect labor 57,500 Other overhead costs 110,000 Sales (received in cash) 1,700,000 Predetermined overhead rate based on direct labor cost 55 % Exercise 19-7 Cost flows in a job order costing system LO P1, P2, P3, P4 Compute the following amounts for the month of May using T-accounts. Cost of direct materials used. Cost of direct labor used. Cost of goods manufactured. Cost of goods sold\.\* Gross profit. Overapplied or underapplied overhead. *Do not consider any underapplied or overapplied overhead.

Answers

Answer:

Lock-Tite Company

Cost of direct materials used = $160,000

Cost of direct labor used = $192,500 ($250,000 - $57,500)

Cost of goods manufactured = $446,975

Cost of goods sold = $462,375

* Gross profit = $1,237,625

Overapplied or underapplied overhead = $73,625

*Do not consider any underapplied or overapplied overhead.

Explanation:

a) Data and Calculations:

Inventories            April 30      May 31

Raw materials    $ 33,000   $ 32,000

Work in process      9,400      20,800

Finished goods    50,000       34,600

Activities and information for May:

Raw materials purchases (paid with cash) 171,000

Factory payroll (paid with cash) 250,000

Factory overhead:

Indirect materials 12,000

Indirect labor 57,500

Other overhead costs 110,000

Sales (received in cash) 1,700,000

Predetermined overhead rate based on direct labor cost 55 %

T-accounts:

Raw materials

Date       Account Titles         Debit        Credit

April 30 Inventory balance $ 33,000

May       Cash                         171,000

May       Factory overhead                     $12,000

May       Work in process                       160,000

May 31  Inventory balance                   $ 32,000

Work in process

Date       Account Titles         Debit        Credit

April 30 Inventory balance   $ 9,400

May       Raw materials         160,000

             Factory payroll       192,500

             Factory overhead  105,875

             Finished goods                    $446,975

May 31  Inventory balance                 $ 20,800

Finished goods

Date       Account Titles         Debit        Credit

April 30 Inventory balance $ 50,000

May       Work in process      446,975

May       Cost of goods sold                 $462,375

May 31  Inventory balance                    $ 34,600

Factory overhead

Date       Account Titles         Debit        Credit

May        Raw materials         12,000

              Payroll                    57,500

              Other expenses   110,000

May        Work in process                   $105,875

May        Underapplied overhead          73,625

Sales revenue  = $1,700,000

Cost of goods sold (462,375)

Gross profit         $1,237,625

Solstice Company determines on October 1 that it cannot collect $65,000 of its accounts receivable from its customer, P. Moore. Apply the direct write-off method to record this loss as of October 1.

Required:
Record the write off an account.

Answers

Answer:

Dr Bad Debt Expense $65,000

Cr Accoutn Receivable $65,000

Explanation:

Preparation of the journal entry to Record the write off an account.

Based on the information given the appropriate journal entry to Record the write off an account be is :

Dr Bad Debt Expense $65,000

Cr Accoutn Receivable $65,000

(To Record write off an account)

Suppose that an additional 350 hours per week can be obtained from the milling machines by working overtime. The incremental cost would be $2.00 per hour. What would be the allowable increase(from the excel sensitivity report) in overtime when compared to additional hours that can be obtained

Answers

Solution :

It is given that :

Additional time obtained per week from milling machines = 350

The incremental cost = $ 2 per hour

Therefore, the allowable increase for milling operation is 400.

This indicates that we can accommodate additional constraint RHS of [tex]200[/tex] hours.

Also we have to consider the impact on the profit of 2.25 which is an incremental cost of [tex]1.5[/tex] is well affordable.

The balance in a company's Cash account on August 31 was $18,800 before the bank reconciliation was prepared. After examining the August bank statement and items included with it, the company's accountant found: Checks outstanding $ 3,300 NSF check 110 Note collected by bank for the Colt Company 1,650 Deposits outstanding 2,800 Bank service fees 220 What is the amount of cash that should be reported in the balance sheet as of August 31

Answers

Answer:

$20,340

Explanation:

The amount of cash to be recognize is the adjusted amount after considering the transactions that were omitted from the bank statement and cash book and properly recognizing the erroneous entries into the two books.

Considering the reconciling items,

Checks outstanding $ 3,300 - This has been recognized in the company's Cash account and as such need no adjustment in the company's books

NSF check 110 - This has been deducted from the company's cash book but was not honored by the bank as such, it will be added back to the company's cash book balance

Note collected by bank for the Colt Company 1,650 - This has been recognized by the bank and as such will be added to the company's cash book balance

Deposits outstanding 2,800 - This has been recognized in the company's Cash account and as such need no adjustment in the company's books.

Bank service fees 220 - This has been recognized by the bank and as such will be deducted as a charge to the company's cash book balance

Hence the amount of cash that should be reported in the balance sheet as of August 31 will be

= $18,800 + $110 + $1650 - $220

= $20,340

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