Gene Simmons Company uses normal costing in each of its three manufacturing departments. Factory overhead is applied to production on the basis of machine hours in Department A, direct labor cost in Department B, and direct labor hours in Department C. The following annual, budgeted data is available for the year:
first column is dept a then b then c going left to right
Factory Overhead $380,000 $420,000 $510,000
Direct Labor Cost $480,000 $600,000 $600,000
Direct Labor Hours 40,000 18,000 25,000
Machine Hours 95,000 70,000 35,000
The following actual information is available for January of the current year for each department: first column is dept a then b then c going left to right
Direct Materials Used $31,700 $57,600 $44,600
Direct Labor Cost $28,125 $53,000 $50,400
Factory Overhead $35,640 $36,040 $38,220
Direct Labor Hours Used 1,250 2,300 2,100
Machine Hours Used 8,100 1,440 1,280
REQUIRED:
A. Assume that Gene Simmons Company uses actual costing.
1. Compute the actual overhead rate for January for each department. Dept A Dept B Dept C
2. If one of the units produced in Department A used 650 machine hours, how much overhead cost would be applied to that unit?
3. What two disadvantages are associated with actual costing?
Assume that Gene Simmons Company uses normal costing.
1. How does normal costing "solve" the two problems associated with actual costing?
2. Compute the pre-determined annual overhead rate for the current year for each department. Dept A Dept B Dept C
3. Compute the manufacturing overhead applied in January in each department. Dept A Dept B Dept C
4. Compute under- or over-applied overhead at the end of January in each department. Dept A Over or Under (circle one) Dept B Over or Under (circle one) Dept C Over or Under (circle one)
5. On January 31, how will the balances of the Factory Overhead accounts be reported on the financial statements?
6. On December 31 (the end of the year), how will the balances of the Factory Overhead accounts be reported on the financial statements?

Answer:

Required A

Part 1

Actual overhead rate = Actual Overheads ÷ Actual hours used

Therefore,

Dep A = $35,640 ÷ 8,100 = $4.40

Dep B = $36,040 ÷ 1,440 = $25.03

Dep C = $38,220 ÷ 1,280 = $29.86

Part 2

Overheads applied = Overhead rate × hours used

Therefore,

Overheads applied = $4.40 × 650 hours = $2,860

Part 3

1. Actual costing delays product costing as the information is only available after the period.

2. Difficult to deal with for fluctuating or seasonal sales as new rates always need to be calculated.

Required B

Part 1

1. Product Costing can be done on time hence price setting can also be done at an earlier stage.

2. Rates are determined consistently for fluctuating or seasonal sales

Part 2

Predetermined overhead rate = Budgeted Overheads ÷ Budgeted hours

Therefore,

Dep A = $380,000 ÷ 95,000 = $4.00

Dep B = $420,000 ÷ 70,000 = $6.00

Dep C = $510,000 ÷ 35,000 = $14.57

Part 3

Overheads applied = Predetermined overhead rate × hours used

Therefore,

Overheads applied for January,

Department A = $4.00 × 8,100 hours = $32,400

Department B = $6.00 × 1,440 hours = $8,640

Department C = $14.57 × 1,280 hours = $18,649.60

Part 4

If Actual Overheads > Applied Overheads, we say overheads are under-applied,

and

If Applied Overheads > Actual Overheads, we say overheads are over-applied.

Therefore,

Department A :

Actual Overheads = $35,640

Applied Overheads = $32,400

Therefore, overheads are under-applied by $3,240

Department B :

Actual Overheads = $36,040

Applied Overheads = $8,640

Therefore, overheads are under-applied by $27,400

Department C :

Actual Overheads = $38,220

Applied Overheads = $18,649.60

Therefore, overheads are under-applied by $19,570.40

Part 5

Department A

Cost of Sales = $3,240

Department B

Cost of Sales = $27,400

Department C

Cost of Sales = $19,570.40

Part 6

Department A

Cost of Sales = $3,240

Department B

Cost of Sales = $27,400

Department C

Cost of Sales = $19,570.40

Explanations :

See the formulas and calculations tied together with the solution above.

Note that :

If Actual Overheads > Applied Overheads, we say overheads are under-applied,

and

If Applied Overheads > Actual Overheads, we say overheads are over-applied.

Also that ,

Balances in the Overheads Account are closed off against the Cost of Goods Sold in the Income Statement.

Holly Company has the following information for December 1 to December 31. All direct materials are 100% complete.

Beginning balance December 200 units, 20% complete for conversion $14,000
Completed 800 units and transferred to finished goods inventory $131,182
Direct materials 54,000
Direct labor 34,000
Factory overhead Property taxes 6,000
Depreciation 32,000
Utilities 18,000
Indirect labor 4,000
Ending balance December 31, 300 units, 40% complete 30,818

Required:
Calculate equivalent units using the weighted-average and FIFO methods.

Which of the following is NOT a
characteristic of organizations with
significant political activity?
Select one:
a. Win-win approach to reward
allocations
b. Role ambiguity
c. Opportunities for promotion
an advancement
d. Declining or scarce resources

= Win-win approach to reward
allocations ​

Pre-Fab purchased some machinery two years ago for $337,600. These assets are classified as five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for years 1 to 6, respectively. The company is currently replacing this equipment with newer models at a cost of $528,000. The old equipment is being sold for $149,000. What is the aftertax salvage value from this sale if the tax rate is 35 percent

In the case of an expansionary_____policy, the interest rate rises, while in the case of an expansionary _____ policy, the interest rate falls.
Select one:
a. fiscal; monetary
b. monetary, monetary
c. monetary, fiscal
d. fiscal; fiscal

= fiscal; monetary​

Perceptual skills can be enhanced
by
Select one:
a. Knowing and perceiving on
self accurately
b. Being empathetic
c. Both are incorrect
d. Both are correct

= Both are correct ​

Differentiate domestic housekeeping from institutional housekeeping

Compute 2018 taxable income in each of the following independent situations.
a. Drew and Meg, ages 40 and 41, respectively, are married and file a joint return. In addition to four dependent children, they have AGI of $125,000 and itemized deductions of $27,000.
b. Sybil, age 40, is single and supports her dependent parents, who live with her. Sybil also supports her grandfather, who lives in a nursing home. She has AGI of $80,000 and itemized deductions of $8,000.
c. Scott, age 49, is a surviving spouse. His household includes two unmarried stepsons who qualify as his dependents. He has AGI of $75,000 and itemized deductions of $10,100.
d. Amelia, age 33, is an abandoned spouse and maintains a household for her three dependent children. She has AGI of $58,000 and itemized deductions of $10,650.
e. Dale, age 42, is divorced but maintains the home in which he and his daughter, Jill, live. Jill is single and qualifies as Dale’s dependent. Dale has AGI of $64,000 and itemized deductions of $9,900.

A new machine comes with 200 free service hours over the first year. Additional time costs $180 per hour. What are the average and marginal costs per hour for the following quantities?
a) 125.
b) 225.
c) 325.

Vicky Torres and Juanita Alva were the first in line at Best Buy during a Black Friday sale so that they could secure a large-screen TV, which was normally $499 and was advertised on sale at $199. Because they arrived three weeks early, they ended up waiting in line for a total of 500 hours! The authors of your textbook found their choice puzzling because of the high opportunity cost in this scenario. The authors say: "Saving $300 by spending 500 hours makes Vicky and Juanita's time worth 60 cents an hour. They could have spent 30 hours working an extra job at $10 an hour and each earned enough money to purchase the TV at full price-and still had 470 hours to do other things. In short, they don't seem to have been aware of the opportunity cost of waiting in line." But this is not the only conclusion one can draw from Vicky and Juanita's behavior. Choose the conclusion below that would be consistent with the idea that Vicky and Juanita were aware of the opportunity costs yet still found the three-week-wait to be worthwhile.
a. "However, they might have enjoyed the experience of camping out in line, meeting other customers, and gaining a degree of fame for their commitment to getting a good deal."
b. "Vicky and Juanita really enjoy their high paying jobs and don't like camping at all."
c. "If they are able to camp out for three weeks, they probably do not have full-time jobs, so earning 60 cents an hour is a good decision for the shoppers."

Cash flows is the most relevant variable to measure the returns on debt instruments, while GAAP net income is the most relevant variable to measure the returns on common stock.
a) true
b) false

Which of the following provides a statistical representation of survey data?
O diagram
O table
O graph
O chart

Rodgers Company gathered the following reconciling information in preparing its May bank reconciliation.
Calculate the adjusted cash balance per books on May 31.
Cash balance per books, 5/31 $3,170
Deposits in transit $215
Notes receivable and interest collected by bank $955
Bank charge for check printing $43
Outstanding checks $1,152
NSF check $173
A. $1,170
B. $3,015
C. $3,909
D. $2,233

An internal study by the Technology Services department at Lahey Electronics revealed company employees receive an average of two emails per hour. Assume the arrival of these emails is approximated by the Poisson distribution.
a. What is the probability Linda Lahey, company president, received exactly 1 email between 4 P.M. and 5 P.M. yesterday?
b. What is the probability she received 5 or more emails during the same period?
c. What is the probability she did not receive any emails during the period?

Brazil can produce 1 unit of sugarcane with 1 unit of labor and 1 iPod with 8 units of labor, and China can produce 1 unit of sugarcane with 2 units of labor and 1 iPod with 4 units of labor. Which of the following is TRUE?

a. Before trade, China's opportunity cost of one unit of sugar cane is two iPods.
b. China has an absolute advantage in sugar cane production.
c. Both parties benefit if they specialize and trade at terms of one unit of sugar cane for two iPods.
d. With trade, Brazil should specialize in sugar cane and China in iPods.

Assume that Nevermore, Inc., a U.S.-based subsidiary wants to raise $US 1 million by issuing a bond denominated in Pakistani rupees (PKR). The current exchange rate of the rupee is $.02
How many PKR does the MNC need to obtain the $US 1 million needed?

ReNew Corporation raises funds to build renewable energy systems by issuing 3-year bonds with a coupon rate of 5% and a face value of $1,800. Assume that the market interest rate for a 3-year bond issued by a firm like ReNew is currently the same as the coupon rate. The price of each of these bonds is , which means that the bonds sell at .

While managing political
behaviours
in organization, the manager
requires discouraging:
Select one:
a. Dialogue
b. Negotiation
c. Relationships
d. Self interest

= Self interest

​

Suppose your own demand curve for sweaters slopes downward. Suppose also that, for the last sweater you bought this week, you paid a price exactly equal to your willingness to pay. Then
Use letters in alphabetical order to select options
A your consumer surplus on the last sweater you bought is zero.
B you already have bought too many sweaters this week.
C your consumer surplus on all of the sweaters you have bought this week is zero.
D you should buy more sweaters before the end of the week.

Complete the steps you will use to create a document using a word processor.
Pick an existing template
Format the fonts of the text as required
Use Save As to save the document with
an appropriate name.
Open your word processing application.
Replace the placeholders with text and
images.

On June 1 of the current year, Chad Wilson established a business to manage rental property. He completed the following transactions during June:

a. Opened a business bank account with a deposit of $30,000 from personal funds.
b. Purchased office supplies on account, $1,800.
c. Received cash from fees earned for managing rental property, $10,000.
d. Paid rent on office and equipment for the month, $4,500.
e. Paid creditors on account, $1,250.
f. Billed customers for fees earned for managing rental property, $16,800.
g. Paid automobile expenses (including rental charges) for the month, $750, and miscellaneous expenses, $980.
h. Paid office salaries, $4,000.
i. Determined that the cost of supplies on hand was $680; therefore, the cost of supplies used was $1,120.
j. Withdrew cash for personal use, $7,500.

Required:
Indicate the effect of each transaction and the balances after each transaction.

You purchase a $1,000 asset for $800. It pays $60 a year for seven years at which time you receive the $1,000 principal. Prove that the annual return on this investment is not 9 percent.

Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 105,000 kilometers during a year, the average operating cost is 11.4 cents per kilometer. If a truck is driven only 70,000 kilometers during a year, the average operating cost increases to 13.4 cents per kilometer.(The Singapore dollar is the currency used in Singapore.)
Requirement 1:
Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation. (Round the variable cost per kilometer to 3 decimal places. Omit the "$" sign in your response.)
Variable cost per kilometer $
Fixed cost per year $
Requirement 2:
Express the variable and fixed costs in the form Y = a + bX. (Round the variable cost per kilometer to 3 decimal places. Omit the "$" sign in your response.)
Y = $ + $ X
Requirement 3:
If a truck were driven 80,000 kilometers during a year, what total cost would you expect to be incurred? (Omit the "$" sign in your response.)
Total annual cost $
Work done so far:
HIGH :11.4 * 105,000 = 1,197,000
LOW: 13.4 * 70,000 = 938,000
Total Variable cost = 105,000 * 7.4 = 777,000
Fixed cost = 1,197,000 - 777,000 = 420,000

Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow:

Division
Osaka Yokohama
Sales $3,000,000 $9,000,000
Net operating expenses $210,000 $720,000
Average operating assets $1,000,000 $4,000,000

Required:
a. For each divisions, compute the return on investment (ROI) in terms of margin and turnover. (Do not round intermediate calculations.)
b. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division.

Marginal Cost of Producing Pies
$1,60
$1.40
$1.20
Marginal Cost
$1.00
$0.80
$0.60
SO 40
S020
S0.00
O Pies
1 Pies
5 Pies
6 Pies
2 Pies 3 Pies 4 Pies
Quantity Supplied
According to the graph, the marginal cost begins to increase when the producer makes
O two pies
O three pies
O four pies
O five pies
Save and Exit
Next
Mark this and return
Su

Consider a two-good world: good x and good y. The ICC (income consumption curve) between good x and good y has a negative slope and the Engle curve of good x has a positive slope. Which of the following statements is false?

a. Good x is a normal good.
b. Goody is an inferior good.
c. The Engle curve for good y has a negative slope.
d. The income elasticity for good y is negative.
e. none of the above.

When making replacement decisions, the development of relevant cash flows is complicated when compared to expansion decisions.

a. True
b. False

A company issues $15700000, 5.8%, 20-year bonds to yield 6% on January 1, 2019. Interest is paid on June 30 and December 31. The proceeds from the bonds are $15337098. Using straight-line amortization, what is the carrying value of the bonds on December 31, 2021

Sam​ Snead, the owner of​ Snead's Fine Golf​ Wear, used $1800 of his personal funds to go on vacation. Which of the following is the most appropriate treatment regarding this​ transaction? A. Travel expense 1,800 Cash 1,800 B. Withdrawals 1,800 Cash 1,800 C. Record a memorandum in the general journal D. Do not record the transaction in the general journal

Mark works for a financial company. He has been tasked to protect customer data. He decides to install a mantrap and an HVAC system in the data center. Which of the following concepts has he addressed?
A. Availability.
B. Integrity.
C. Confidentiality.
D. Recovery.
E. Accountability.

Activity
After graduating from college, Susan decides to live with her parents for a year. She decides to live at home so that she could build up her savings
before renting a place on her own or with a roommate. She will pay her parents $500 per month to contribute to rent, laundry, cable, and food.
She earns $2500 every month after taxes and deductions for social security and insurance. She has a car payment of $300 per month, $150 for car
insurance, $500 for her student loans, and $100 for her cell phone. Her father convinces her to start saving for retirement at $50 per month.
Susan is fond of shopping and when she is out with her friends, they usually make a day of it. They usually dine out. She spends about $500 per
month on shopping and another $400 on dining out. When Susan takes sandwiches to work for lunch on those last few days before her next
paycheck, she wonders where all the money goes and why she doesn't seem to be able to save for her own place.
Use any online budgeting tool to record Susan's expenses and find out what can she do to save money for her place.