1. A department store apportions payroll costs on the basis of the number of payroll checks issued. Accounting costs are apportioned on the basis of the number of reports. The payroll costs for the year were $236,000 and the accounting costs for the year totaled $76,600. The departments and the average cost of store equipment and average cost of inventory for each are as follows: Determine the amount of (a) payroll cost and (b) accounting cost to be apportioned to each department. 2. A restaurant bakes its own bread for a cost of $165 per unit ( 100 loaves), including fixed costs of $43 per unit. A proposal is offered to purchase bread from an outside source for $110 per unit, plus $15 per unit for delivery. Prepare a differential analysis dated August 16 to determine whether the company should make or buy the bread. 3. Proposals L and K each cost $500,000, have 6-year lives, and have expected total cash flows of $720,000. Proposal L is expected to provide equal annual net cash flows of $120,000, while the net cash flows for Proposal K are as follows: Determine the cash payback period for each proposal. 4. Sunrise Inc. is considering a capital investment proposal that costs $227,500 and has an estimated life of four years and no residual value. The estimated net cash flows are as follows: The minimum desired rate of return for net present value analysis is 10%. The present value of $1 at compound interest rates of 10% for 1 , 2,3 , and 4 years is .909,.826,.751, and .683 , respectively. Determine the net present value. 5. A business operated at 100% capacity during its first month of operations, with the following results: Use this information to complete a variable costing income statement. 6. Smith Company was organized on August 1 of the current year. Projected sales for the next three months are: The company expects to sell 50% of its merchandise for cash and 50% for sales on account. Of the sales on account, 30% are expected to be collected in the month of the sale and the remainder in the following month. Prepare a schedule indicating cash collections from cash and accounts 7. Based on the following production and sales estimates for May, prepare the sales and production budgets: 8. Rough Riders Inc. manufactures jeans in the cutting and sewing process. Jeans are manufactured in 50 -jean batch sizes. The cutting time is 6 minutes and the sewing time is 15 minutes per jean. It takes 5 minutes to move a batch of jeans from cutting to sewing. (a) Compute the value-added, non-value-added, and total lead time of this process. (b) Compute the value-added ratio. Round to one decimal place. 9. Ryker Company produces a product that requires 2 standard gallons per unit. The standard price is $20.00 per gallon. If 4,000 units required 8,200 gallons, which were purchased at $19.75 per gallon, what is the direct materials (a) price variance, (b) quantity variance, and (c) total cost variance? 10. Ryker Company produces a product that requires 4 standard direct labor hours per unit at a standard hourly rate of $28.00 per hour. If 4,000 units required 16,750 direct labor hours at an hourly rate of $28.40 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance? 11. Briton Company has operating income of $36,000, invested assets of $180,000, and sales of $720,000. Use the DuPont formula to compute the return on investment and show (a) the profit margin, (b) the investment turnover, and (c) the return on investment
