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Manal Elkhoshkhany
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Acct Homework needed

Customer Question

The management of Sharrar Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year. The company’s controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 45,000 machinehours. In addition, capacity is 52,000 machine-hours and the actual activity for the year is 47,100 machine-hours. All of the manufacturing overhead is fixed and is $1,029,600 per year. For simplicity, it’s assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity and the actual amount of manufacturing overhead for the year. Required: A. Determine the predetermined overhead rate if the predetermined overhead rate is based on the estimated amount of the allocation base. B. Determine the underapplied or overapplied overhead for the year if the predetermined overhead rate is based on the estimated amount of the allocation base. C. Determine the predetermined overhead rate if the predetermined overhead rate is based on the amount of the allocation base at capacity. D. Determine the underapplied or overapplied overhead for the year if the predetermined overhead rate is based on the amount of the allocation base at capacity. Question 2:

Fryer Corporation uses the weighted-average method in


its process costing system. This month, the beginning


inventory in the first processing department consisted of


700 units. The costs and percentage completion of these


units in beginning inventory were:


A total of 7,300 units were started and 6,200 units were


transferred to the second processing department during


the month. The following costs were incurred in the first


processing department during the month:


The ending inventory was 80% complete with respect to


materials and 45% complete with respect to conversion


costs.



Required:



The total cost transferred from the first processing


department to the next processing department during


the month is closest to what amount?



Note:



 



Cost



Material costs . . . . . . . . $132,200


Conversion costs . . . . . . $117,500



Cost Percent


Complete



Material costs . . . . . . . . . $12,600 75%


Conversion costs. . . . . . . . $8,900 60%



A total of 7,300 units were started and 6,200 units were


transferred to the second processing department during


the month. The following costs were incurred in the first


processing department during the month:


The ending inventory was 80% complete with respect to


materials and 45% complete with respect to conversion


costs.



Required:



The total cost transferred from the first processing


department to the next processing department during


the month is closest to what amount?



Note:



 



Cost



Material costs . . . . . . . . $132,200


Conversion costs . . . . . . $117,500



Your answers may differ from those offered due to

rounding error. To reduce rounding error, carry out all


computations to at least three decimal places.




Part B: Answer each of the following questions in one to


four sentences. Each answer is worth 4 points.


Use the following information to answer questions 1


through 10.



Financial statements for Praven Company appear below:



Praven Company


Statement of Financial Position


December 31, Year 2 and Year 1


(dollars in thousands)


Year 2 Year 1



Currrent assets:


Cash and marketable securities. . . . . . . . . . . . $1,150 $1,130


Accounts receivable, net . . . . . . . . . . . . . . . . . 190 160


Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 180


Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . 50 40


Total current assets. . . . . . . . . . . . . . . . . . . . . . 560 510


Noncurrent assets:


Plant & equipment, net . . . . . . . . . . . . . . . . . . 1,420 1,330


Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,980 $1,840


Current liabilities:


Accounts payable . . . . . . . . . . . . . . . . . . . . . . $1,110 $1,100


Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . 90 60


Notes payable, short term . . . . . . . . . . . . . . . . 260 260


Total current liabilities . . . . . . . . . . . . . . . . . . . 460 420


Noncurrent liabilities:


Bonds payable. . . . . . . . . . . . . . . . . . . . . . . . . 400 400


Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 860 820


Stockholder’s equity:


Preferred stock, $5 par, 15% . . . . . . . . . . . . . . 120 120


Common stock, $10 par . . . . . . . . . . . . . . . . . 240 240


Additional paid-in capital—common stock . . . . 210 210


Retained earnings . . . . . . . . . . . . . . . . . . . . . . 550 450


Total stockholders’ equity . . . . . . . . . . . . . . . . . 1,120 1,020


Total liabilities & stockholders’ equity . . . . . . . . $1,980 $1,840



Praven Company


Income Statement


For the Year Ended December 31, Year 2


(dollars in thousands)



Sales (all on account). . . . . . . . . . . . . . . . . . . . . $1,700


Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . 1,190


Gross margin. . . . . . . . . . . . . . . . . . . . . . . . . . . 510


Selling and administrative expense . . . . . . . . . . 200


Net operating income. . . . . . . . . . . . . . . . . . . . . 310


Interest expense . . . . . . . . . . . . . . . . . . . . . . . . 40


Net income before taxes. . . . . . . . . . . . . . . . . . . 270


Income taxes (30%) . . . . . . . . . . . . . . . . . . . . . . 81


Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 189



Dividends during Year 2 totaled $89 thousand, of which $18


thousand were preferred dividends. The market price of a


share of common stock on December 31, Year 2 was $130.



Required:



Compute the following for Year 2:


1. Book value per share


2. Working capital


3. Current ratio


4. Acid-test ratio


5. Accounts receivable turnover


6. Average collection period


7. Inventory turnover


8. Average sale period


9. Times interest earned


10. Debt-to-equity ratio



11. Porter Company has provided the following data for the


second quarter of the most recent year:


Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $300,000


Fixed manufacturing overhead. . . . . . . . . . . . . . 55,000


Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,500


Fixed selling expense . . . . . . . . . . . . . . . . . . . . . 46,250


Variable manufacturing overhead . . . . . . . . . . . 41,000


Variable administrative expense. . . . . . . . . . . . . 48,000


Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . 51,500


Fixed administrative expense. . . . . . . . . . . . . . . 44,500


Variable selling expense. . . . . . . . . . . . . . . . . . . $ 49,750


Assume that direct labor is a variable cost and that there


were no beginning or ending inventories.


What is the total contribution margin of Porter Company


for the second quarter?


12. Jatry Corporation’s budgeted sales are $300,000, its


budgeted variable expenses are $210,000, and its


budgeted fixed expenses are $60,000. What is the


company’s break-even in dollar sales amount?


13. Superior Industries’ sales budget shows quarterly sales


for the next year as follows:



Quarter Sales


(units)



First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000


Second . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000


Third . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000


Fourth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000


Company policy is to have a finished goods inventory at


the end of each quarter equal to 20% of the next quarter’s


sales. How much should the budgeted production for


the second quarter be?


14. The following information is available on Company A:


Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $900,000


Net operating income . . . . . . . . . . . . . . . . . $936,000


Stockholders’ equity . . . . . . . . . . . . . . . . . . $100,000


Average operating assets. . . . . . . . . . . . . . . $180,000


Minimum required rate of return . . . . . . . . 15%



What is Company A’s residual income amount?


15. Nordstrand Company’s net income last year was


$36,000. Changes in selected balance sheet accounts


for the year appear below:



Increases


(Decreases)



Debit balances:


Accounts receivable . . . . . . . . . . . . . . . . . . . . . $ (7,000)


Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (5,000)


Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . $ (3,000)


Credit balances:


Accumulated depreciation . . . . . . . . . . . . . . . . $18,000)


Accounts payable . . . . . . . . . . . . . . . . . . . . . . $13,000)


Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . $((9,000)


Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . $(((((((((0)


Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . $((1,000)


Based solely on this information, the net cash provided


by operations under the indirect method on the statement


of cash flows would be how much?



Your answers may differ from those offered due to

rounding error. To reduce rounding error, carry out all


computations to at least three decimal places.



Submitted: 3 years ago.
Category: Homework
Expert:  Manal Elkhoshkhany replied 3 years ago.

Hello and thank you for requesting me, but as you can see this is a very long post and $15 would not compensate for the work involved. I recommend that you offer a bonus (if you are willing to add a bonus, please tell me how much)

 

Thank you

Customer: replied 3 years ago.
Not a problem 30 total
Expert:  Manal Elkhoshkhany replied 3 years ago.
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Manal Elkhoshkhany, Tutor
Category: Homework
Satisfied Customers: 9481
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 2 other Homework Specialists are ready to help you
Expert:  Manal Elkhoshkhany replied 3 years ago.
Thanks a million mnever for the accept and the bonus

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