Hi Again,

I have alot of stuff due this time. Sorry im just now telling you.

Question 1 options: The Washington Company has 100,000 shares of $10 par common stock outstanding. Management declares (not pays) a 10% stock dividend. The market value of a share of common stock was $30 immediately prior to the stock dividend declaration. The journal entry is: debit retained earnings, $300,000; credit stock dividend distributable, $100,000; credit paid in capital in excess of par, $200,000 .debit stock dividends distributable, $100,000; credit common stock, $100,000. debit stock dividends distributable, $300,000; credit common stock, $300,000. debit retained earnings, $300,000; credit stock dividend distributable, $10,000; credit paid in capital in excess of par, $290,000. Question 2 options: Spiffy Dress Company previously purchased 10,000 shares of treasury stock on the open market for $10 per share. Later, the company resells 6,000 shares for $12 per share. What is the journal entry for the sale? debit cash, $72,000; credit treasury stock, $12,000; credit additional paid-in capital, $60,000 debit cash, $72,000; credit treasury stock, $72,000 debit cash, $72,000; credit treasury stock, $60,000; credit retained earnings, $12,000 debit cash, $72,000; credit treasury stock, $60,000; credit additional paid-in capitaltreasury stock, $12,000 Question 3 options: Green Ventures Inc. purchased 10% of the outstanding stock of Jones Company. Green paid $15 per share to acquire 8,000 shares and will treat this purchase as available-for-sale securities. Par value of the stock is 50 cents. Green uses a calendar year, and on December 31, the market value of Jones stock is $17 per share. What is the entry Green needs to make on December 31? debit unrealized gain on available-for-sale securities, $16,000; credit available-for-sale securities, $16,000. debit available-for-sale securities, $16,000; credit unrealized gain on available-for-sale securities, $16,000. debit available-for-sale securities, $8,000; credit unrealized gain on available-for-sale securities, $8,000. no entry is required because the stock has not been sold. Question 4 options: On January 10, Bowie Ventures Inc. purchased 40% of the outstanding stock of Mighty Manufacturing Corp. The purchase was 30,000 shares at $10 per share. Bowie received dividends from Mighty in the amount of $20,000 on June 15 and again on December 15. Mighty reported net income for the year ended December 31 in the amount of $300,000. What is the journal entry, if any, that Bowie needs to make dated December 31? No entry on December 31 because the dividends were paid on different dates. Debit investment in Mighty Corp., $100,000; credit income from Mighty Corp., $100,000. Debit investment in Mighty Corp., $120,000; credit income from Mighty Corp., $120,000. Debit investment in Mighty Corp., $120,000; credit income from Mighty Corp., $100,000; credit dividends income, $20,000. Question 5 options: On January 1, 2017, Montgomery Inc. issued $250,000, 20-year, 5% bonds at 101. Interest is payable semiannually on January 1 and July 1. The journal entry to record this transaction on January 1, 2017, is: debit cash, $250,000; credit bonds payable, $200,000. debit cash, $250,000; debit premium on bonds payable, $5,000; credit bonds payable, $255,000. debit cash, $250,000; credit bonds payable, $200,000; credit premium on bonds payable, $5,000. debit cash, $255,000; credit bonds payable, $255,000. Question 6: Using the selected data below, calculate the net cash provided by operating activities: Net income Increase in accounts receivable Increase in accounts payable Loss on the sale of equipment Depreciation expense Purchase of new delivery truck Question 6 options: $276,000 $282,000 $260,000 $263,000 Question 7 options: $250,000 $13,000 $10,000 $8,000 $21,000 $40,000 A Corporation has 250,000 shares of $10 par common stock issued and outstanding. AA Corporation also has 50,000 shares of $100, 6% par cumulative preferred stock. In 2017, AA had net income of $3,500,000. The number of shares of both common and preferred stock has not changed during the year, and the preferred stock dividends were paid at the end of 2017. What are the common earnings per share (EPS) for 2017? Round to the nearest cent. $14.20 $14.00 $12.80 $13.73 Question 8 options: A manufacturing company allocates overhead at a fixed rate of $40 per hour based on direct labor hours. During the month, total overhead incurred was $280,000, and the total direct labor hours work was 4,000. Job number 5-23 had 500 hours of direct labor. What is the amount of overhead allocated to job 5-23? $20,000 $35,000 $27,500 $25,000 Question 9 options: The welding department had beginning work in process of 20,000 units, ending work in process of 26,000 units, and units transferred out of 60,000 units. What was the number of units started or transferred in? 58,000 66,000 62,000 70,000 Question 10 options: Ziggy Corp. is a job lot manufacturer. The budget for the month of May calls for 8,000 direct labor hours to be worked. Budgeted overhead is $88,000 with a predetermined rate of $11 per hour. Overhead is applied based on actual direct hours worked. Actual direct hours were 8,300 and actual overhead spending was $88,500. What was the under applied or over applied overhead for the month of May? Over applied is shown as a negative number. $3,500 $2,800 ($2,800) ($3,500) Question 11 options: This problem is worth 12.5 points. On July 1, 2017 Alpha Company issues $2,000,000 face value of 5% five year bonds which call for semiannual interest payments. The bonds are dated April 1, 2017 so these bonds are issued between interest dates. The market rate at the date of issue is also 5%. For simplicity, use a 360-day year and 30 day months for all calculations. 1. Record the journal entries for the issuance of the bonds 2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not been accrued at each month end. Question 12 options: On April 1, 2017 Alphaa Company sells $2,000,000 face value of 5% five year bonds at 101 which call for semiannual interest payments. The bonds are dated April 1, 2017 so these bonds are issued on an interest date. Use the straight line method of amortization of any bond premium or discount. For simplicity, use a 360-day year and 30 day months for all calculations. 1. Record the journal entries for the issuance of the bonds 2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not been accrued at each month end. Question 13 options: Problem 1 (12.5 POINTS) Mars Manufacturing produces a basic cellphone as a contract manufacturer. Overhead is applied at a rate of $42 per direct labor hour. The direct labor rate is $18 per hour. In March, there was no beginning or ending work in process, and the assembly department produced 20,000 finished phones. The materials cost was $120,000, and there were 2,500 direct labor hours worked during the month. Actual overhead spending was $103,400 during the month. Calculate the total cost of production in the month of March and the cost per unit for each phone produced. Determine if overhead was over applied or under applied and by what amount. Problem 2 (12.5 POINTS) Bewlay Brothers Manufacturing produces wooden chairs. The cutting department produces all of the component parts and transfers the parts to the assembly department. The assembly department had no work in process at the beginning of the month and had two jobs started during the month. Since materials are transferred in, all materials are charged to each job at the beginning of the job. The materials cost is $17.50 per chair. Assembly time is 20 minutes per chair and the direct labor rate is $15 per hour. Overhead is charged to a job only when a job is completed and ready to transfer to finished goods. The overhead is applied on a per-chair basis at a rate of $6 per chair. Job No. 1 was for 1,000 chairs, and it was started and completed during the month. Job No. 2 was for 1,500 chairs, and it was 60% complete at month end. Calculate the costs to complete Job No. 1 and the unit cost per chair. Calculate the costs charged as of month's end and the equivalent units of production for Job No. 2. B-18.01 Each of the cost "types" below should be matched to one of the descriptions that follow. Variable Fixed (committed) Fixed (discretionary) Mixed (a) Property taxes on land and building (b) Billboard advertising campaign (c) Raw material used in a manufacturing process (d) Employee picnic with band, food, and door prizes Name: Date: Section: (a) Property taxes on land and building (b) Billboard advertising campaign (c) Raw material used in a manufacturing process (d) Employee picnic with band, food, and door prizes B-18.01 B-18.05 Greg Morrison recently graduated from mortuary school. He is considering opening his own funeral home. A funeral home is a high-fixed cost business, as it requires considerable expenditures for facilities, labor, and equipment, no matter how many families are served. Assume the annual fixed cost of operations is $800,000. Further assume that the only significant variable cost relates to burial containers like urns and caskets. An average casket costs $1,200. Greg's banker has asked a variety of questions in contemplation of providing a loan for this business. (a) If the average family is charged $6,000 for services and a burial container, how many families must be served to clear the break-even point? (b) If the banker believes Greg will only serve 100 families during the first year in business, how much will the business lose during its first year of operation? (c) If Greg believes his profits will be at least $100,000 during the first year, how much is he anticipating for total revenue? (d) The banker has suggested that Greg can reduce his fixed costs by $150,000 if he will not buy any vehicles. Greg can instead rent vehicles as needed. The variable cost of renting is $700 per family served. Will this suggestion help Greg reach the break-even point sooner? Name: Date: (a) Section: Break-Even Point in Families = (b) (c) Sales for a Target Income = (d) New Break-Even Point in Families = B-18.05 B-20.08 Four of the following eight statements are patently false. Find the four false statements. The other statements are true. For the false statements, mark the words that make the statement false. 1. A simplified explanation of ABC is that it attempts to divide production into its core activities, define the costs for those activities, and then allocate those costs to products based on how much of a particular activity is needed to produce a product. 2. ABC maintains the traditional division between product and period costs. 3. ABC charges products with the costs of manufacturing and nonmanufacturing activities, and some manufacturing costs are not attached to products. 4. Under ABC, idle capacity is typically isolated and allocated to products and services. 5. ABC is suitable for public reporting. 6. With ABC, the "cost objects" are broadened to include not products/services, but other objects like customers, markets, and so on. only 7. The first step in implementing ABC is a detailed study of all business processes and costs. 8. The normal steps in an ABC implementation are (1) study processes and costs, (2) identify activities, (3) identify traceable costs, (4) assign remaining costs to activities, (5) apply costs to objects, and (6) determine per-activity allocation rates. Name: Date: Section: B-20.08 Four of the following eight statements are patently false. Find the four false statements. The other statements are true. For the false statements, mark the words that make the statement false. T 1. A simplified explanation of ABC is that it attempts to divide production into its core activities, define the costs for those activities, and then allocate those costs to products based on how much of a particular activity is needed to produce a product. F 2. ABC does not maintains the traditional division between product and period costs. 3. ABC charges products with the costs of manufacturing and nonmanufacturing activities, and some manufacturing costs are not attached to products. 4. Under ABC, idle capacity is typically isolated and allocated to products and services. 5. ABC is suitable for public reporting. 6. With ABC, the "cost objects" are broadened to include not only products/services, but other objects like customers, markets, and so on. 7. The first step in implementing ABC is a detailed study of all business processes and costs. 8. The normal steps in an ABC implementation are (1) study processes and costs, (2) identify activities, (3) identify traceable costs, (4) assign remaining costs to activities, (5) apply costs to objects, and (6) determine per-activity allocation rates. I-18.03 Anderson Metals manufactures and sells #3 steel rebar that is used in the construction of slabs and driveways. The steel bar not only strengthens the finished concrete product, but it also has unique properties such that its temperature related expansion and contraction matches that of concrete. The product is manufactured and sold in 20' long "sticks." The product is generally produced and sold to match customer demand, and there is not a significant amount of finished goods inventory at any point in time. Summary information for 20X6 is as follows: Sales were $20,000,000, consisting of 5,000,000 sticks. Total variable costs were $11,000,000. Total fixed costs were $8,000,000. Net income was $1,000,000. The general economic conditions appear to be deteriorating heading into 20X7, and there is some concern about a reduction in sales volume. The following questions should each be answered independent of one another. (a) What is the company's break-even point in "sticks?" Can the company sustain a 30% reduction in total volume, and remain profitable? (b) The company's sole shareholder, Doug Anderson, generally lives off of dividends paid by the business. The business typically declares and pays a dividend equal to 25% of net income. If Doug needs to receive $100,000 in dividends for normal living expenses, what total revenues must Anderson Metals produce in 20X7? (c) If total volume is expected to decrease by 20%, and the company wishes to continue to produce a $1,000,000 net income by raising the per unit selling price, what revised per stick price must be imposed? Will this strategy necessarily work? (d) If the company expects a drop in raw material prices to reduce total variable costs to $2 per stick, but all other revenue and cost factors to be unaffected, what will be the revised break-even point in sales and units? Name: Date: (a) (b) (c) Section: I-18.03 Name: Date: (d) Section: I-18.03 Answer Question 1 debit retained earnings, $300,000; credit stock dividend distributable, $100,000; credit paid in capital in e Answer Question 2 debit cash, $72,000; credit treasury stock, $60,000; credit additional paid-in capitaltreasury stock, $12 Answer Question 3 debit available-for-sale securities, $16,000; credit unrealized gain on available-for-sale securities, $16,00 Answer Question 4 Debit investment in Mighty Corp., $120,000; credit income from Mighty Corp., $120,000. Question 5 debit cash, $250,000; credit bonds payable, $200,000; credit premium on bonds payable, $5,000 Question 6: Answer 276000 Question 7: Answer 12.80 Question 8 Answer 20000 Question 9 Answer 66000 Question 10 Answer -2800 Question 11 1. Record the journal entries for the issuance of the bonds DR CR Cash 2,000,000 Bond Payable 2,000,000 2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not Interest Expense Interest Payable 50000 Question 12 1. Record the journal entries for the issuance of the bonds Cash 2020000 Bond Payable 50000 2020000 2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not Interest Expense 48000 Premium on bond Interest Payable 2000 50000 Question 13 Material Cost Direct Labor Overhead Applied cost of production in the month of March cost per unit for each phone 120000 45000 105000 270000 13.50 Determine if overhead was over applied or under applied and by what amount 1600 Over Applied Per unit Cost Material cost Direct Labor overhead cost costs to complete Job No. 1 the unit cost per chair 17.5 3.00 6.00 Material Cost Direct Labor overhead cost costs charged as of month's end Job 2 26.50 17500 3000 6000 26500 26.50 17.50 3.00 6.00 17500 2700 5400 Material Equivalent Units 1500 Conversion 900 100% 60% 60% 00,000; credit paid in capital in excess of par, $200,000 -in capitaltreasury stock, $12,000 lable-for-sale securities, $16,000 orp., $120,000. bonds payable, $5,000 11 017. Assume that interest has not been accrued at each month end. 017. Assume that interest has not been accrued at each month end B-18.01 Each of the cost "types" below should be matched to one of the descriptions that follow. Variable Fixed (committed) Fixed (discretionary) Mixed (a) Property taxes on land and building Fixed (committed) (b) Billboard advertising campaign Fixed (discretionary) (c) Raw material used in a manufacturing process Variable (d) Employee picnic with band, food, and door prizes Mixed B-18.05 Greg Morrison recently graduated from mortuary school. He is considering opening his own funeral home. A funeral home is a high-fixed cost business, as it requires considerable expenditures for facilities, labor, and equipment, no matter how many families are served. Assume the annual fixed cost of operations is $800,000. Further assume that the only significant variable cost relates to burial containers like urns and caskets. An average casket costs $1,200. Greg's banker has asked a variety of questions in contemplation of providing a loan for this business. (a) If the average family is charged $6,000 for services and a burial container, how many families must be served to clear the break-even point? (b) If the banker believes Greg will only serve 100 families during the first year in business, how much will the business lose during its first year of operation? (c) If Greg believes his profits will be at least $100,000 during the first year, how much is he anticipating for total revenue? (d) The banker has suggested that Greg can reduce his fixed costs by $150,000 if he will not buy any vehicles. Greg can instead rent vehicles as needed. The variable cost of renting is $700 per family served. Will this suggestion help Greg reach the break-even point sooner? Name: Date: (a) (b) (c) (d) Section: B-18.05 Name: Date: Section: Break-Even Point in Families = 167 families CalculationBreak-Even Point in Families = Fixed cost / (Selling price - variable cost) Annual fixed cost Variable cost Sales Breakeven in families If only 100 families are served Sales Casket cost Fixed cost Loss Sales for a Target Income = $1,125,000 CalculationSales for a Target Income = (fixed cost + target profit) / (selling price - variable cost) Target income Sales for target income New Break-Even Point in Families = 159 families CalculationNew Break-Even Point in Families = Total Fixed Costs / Contribution Margin Per Unit 1,538.46 patients = $650,000 ($6000 - $1200 - $700) = $650,000/4100 159 patients must be served which is reduces the breakeven point by 8 families B-18.05 Name: Date: $800,000 $1,200 $6,000 167 $600,000 $120,000 $800,000 ($320,000) $100,000 $1,125,000 Section: families B-18.05 B-20.08 Four of the following eight statements are patently false. Find the four false statements. The other statements are true. For the false statements, mark the words that make the statement false. 1. A simplified explanation of ABC is that it attempts to divide production into its core activities, define the costs for those activities, and then allocate those costs to products based on how much of a particular activity is needed to produce a product. 2. ABC maintains the traditional division between product and period costs. 3. ABC charges products with the costs of manufacturing and nonmanufacturing activities, and some manufacturing costs are not attached to products. 4. Under ABC, idle capacity is typically isolated and allocated to products and services. 5. ABC is suitable for public reporting. 6. With ABC, the "cost objects" are broadened to include not products/services, but other objects like customers, markets, and so on. only 7. The first step in implementing ABC is a detailed study of all business processes and costs. 8. The normal steps in an ABC implementation are (1) study processes and costs, (2) identify activities, (3) identify traceable costs, (4) assign remaining costs to activities, (5) apply costs to objects, and (6) determine per-activity allocation rates. Name: Date: Section: B-20.08 Four of the following eight statements are patently false. Find the four false statements. The other statements are true. For the false statements, mark the words that make the statement false. T 1. A simplified explanation of ABC is that it attempts to divide production into its core activities, define the costs for those activities, and then allocate those costs to products based on how much of a particular activity is needed to produce a product. F 2. ABC does not maintains the traditional division between product and period costs. T 3. ABC charges products with the costs of manufacturing and nonmanufacturing activities, and some manufacturing costs are not attached to products. F 4. Under ABC, idle capacity is typically isolated and allocated to products and services. F 5. ABC is suitable for public reporting. T 6. With ABC, the "cost objects" are broadened to include not only products/services, but other objects like customers, markets, and so on. T 7. The first step in implementing ABC is a detailed study of all business processes and costs. F 8. The normal steps in an ABC implementation are (1) study processes and costs, (2) identify activities, (3) identify traceable costs, (4) assign remaining costs to activities, (5) apply costs to objects, and (6) determine per-activity allocation rates. I-18.03 Anderson Metals manufactures and sells #3 steel rebar that is used in the construction of slabs and driveways. The steel bar not only strengthens the finished concrete product, but it also has unique properties such that its temperature related expansion and contraction matches that of concrete. The product is manufactured and sold in 20' long "sticks." The product is generally produced and sold to match customer demand, and there is not a significant amount of finished goods inventory at any point in time. Summary information for 20X6 is as follows: Sales were $20,000,000, consisting of 5,000,000 sticks. Total variable costs were $11,000,000. Total fixed costs were $8,000,000. Net income was $1,000,000. The general economic conditions appear to be deteriorating heading into 20X7, and there is some concern about a reduction in sales volume. The following questions should each be answered independent of one another. (a) What is the company's break-even point in "sticks?" Can the company sustain a 30% reduction in total volume, and remain profitable? (b) The company's sole shareholder, Doug Anderson, generally lives off of dividends paid by the business. The business typically declares and pays a dividend equal to 25% of net income. If Doug needs to receive $100,000 in dividends for normal living expenses, what total revenues must Anderson Metals produce in 20X7? (c) If total volume is expected to decrease by 20%, and the company wishes to continue to produce a $1,000,000 net income by raising the per unit selling price, what revised per stick price must be imposed? Will this strategy necessarily work? (d) If the company expects a drop in raw material prices to reduce total variable costs to $2 per stick, but all other revenue and cost factors to be unaffected, what will be the revised break-even point in sales and units? Name: Date: (a) Section: I-18.03 4,444,444 sticks = $8,000,000 ($20,000,000 - $11,000,000) 5,000,000 units) If there is 30% reduction in the volume then there will be a loss. (b) $18,666,667 = ($8,000,000 + $400,000) 0.45 they need to have a minimum $18,666,667 for order to susbtain the divended policy. (c) Variable Cost Per Unit ($2.20) + Per Unit Margin ($2.25) = $4.45 The strategy of sales price will not appropriate because it will reduce the sales price. Name: Date: (d) Section: $16,000,000 $4 per unit = 4,000,000 units I-18.03 Answer Question 1 debit retained earnings, $300,000; credit stock dividend distributable, $100,000; credit paid in capital in e Answer Question 2 debit cash, $72,000; credit treasury stock, $60,000; credit additional paid-in capitaltreasury stock, $12 Answer Question 3 debit available-for-sale securities, $16,000; credit unrealized gain on available-for-sale securities, $16,00 Answer Question 4 Debit investment in Mighty Corp., $120,000; credit income from Mighty Corp., $120,000. Question 5 debit cash, $250,000; credit bonds payable, $200,000; credit premium on bonds payable, $5,000 Question 6: Answer 276000 Question 7: Answer 12.80 Question 8 Answer 20000 Question 9 Answer 66000 Question 10 Answer -2800 Question 11 1. Record the journal entries for the issuance of the bonds DR CR Cash 2,000,000 Bond Payable 2,000,000 2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not Interest Expense Interest Payable 50000 50000 Question 12 1. Record the journal entries for the issuance of the bonds Cash 2020000 Premium on bond 20000 Bond Payable 2000000 2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not Interest Expense 48000 Premium on bond Interest Payable 2000 50000 Question 13 Material Cost Direct Labor Overhead Applied cost of production in the month of March cost per unit for each phone 120000 45000 105000 270000 13.50 Determine if overhead was over applied or under applied and by what amount 1600 Over Applied Per unit Cost Material cost Direct Labor overhead cost costs to complete Job No. 1 the unit cost per chair 17.5 3.00 6.00 Material Cost Direct Labor overhead cost costs charged as of month's end Job 2 26.50 17500 3000 6000 26500 26.50 17.50 3.00 6.00 17500 2700 5400 Material Equivalent Units 1500 Conversion 900 100% 60% 60% 00,000; credit paid in capital in excess of par, $200,000 -in capitaltreasury stock, $12,000 lable-for-sale securities, $16,000 orp., $120,000. bonds payable, $5,000 11 017. Assume that interest has not been accrued at each month end. 017. Assume that interest has not been accrued at each month end B-18.01 Each of the cost "types" below should be matched to one of the descriptions that follow. Variable Fixed (committed) Fixed (discretionary) Mixed (a) Property taxes on land and building Fixed (committed) (b) Billboard advertising campaign Fixed (discretionary) (c) Raw material used in a manufacturing process Variable (d) Employee picnic with band, food, and door prizes Mixed B-18.05 Greg Morrison recently graduated from mortuary school. He is considering opening his own funeral home. A funeral home is a high-fixed cost business, as it requires considerable expenditures for facilities, labor, and equipment, no matter how many families are served. Assume the annual fixed cost of operations is $800,000. Further assume that the only significant variable cost relates to burial containers like urns and caskets. An average casket costs $1,200. Greg's banker has asked a variety of questions in contemplation of providing a loan for this business. (a) If the average family is charged $6,000 for services and a burial container, how many families must be served to clear the break-even point? (b) If the banker believes Greg will only serve 100 families during the first year in business, how much will the business lose during its first year of operation? (c) If Greg believes his profits will be at least $100,000 during the first year, how much is he anticipating for total revenue? (d) The banker has suggested that Greg can reduce his fixed costs by $150,000 if he will not buy any vehicles. Greg can instead rent vehicles as needed. The variable cost of renting is $700 per family served. Will this suggestion help Greg reach the break-even point sooner? Name: Date: (a) (b) (c) (d) Section: B-18.05 Name: Date: Section: Break-Even Point in Families = 167 families CalculationBreak-Even Point in Families = Fixed cost / (Selling price - variable cost) Annual fixed cost Variable cost Sales Breakeven in families If only 100 families are served Sales Casket cost Fixed cost Loss Sales for a Target Income = $1,125,000 CalculationSales for a Target Income = (fixed cost + target profit) / (selling price - variable cost) Target income Sales for target income New Break-Even Point in Families = 159 families CalculationNew Break-Even Point in Families = Total Fixed Costs / Contribution Margin Per Unit 1,538.46 patients = $650,000 ($6000 - $1200 - $700) = $650,000/4100 159 patients must be served which is reduces the breakeven point by 8 families B-18.05 Name: Date: $800,000 $1,200 $6,000 167 $600,000 $120,000 $800,000 ($320,000) $100,000 $1,125,000 Section: families B-18.05 B-20.08 Four of the following eight statements are patently false. Find the four false statements. The other statements are true. For the false statements, mark the words that make the statement false. 1. A simplified explanation of ABC is that it attempts to divide production into its core activities, define the costs for those activities, and then allocate those costs to products based on how much of a particular activity is needed to produce a product. 2. ABC maintains the traditional division between product and period costs. 3. ABC charges products with the costs of manufacturing and nonmanufacturing activities, and some manufacturing costs are not attached to products. 4. Under ABC, idle capacity is typically isolated and allocated to products and services. 5. ABC is suitable for public reporting. 6. With ABC, the "cost objects" are broadened to include not products/services, but other objects like customers, markets, and so on. only 7. The first step in implementing ABC is a detailed study of all business processes and costs. 8. The normal steps in an ABC implementation are (1) study processes and costs, (2) identify activities, (3) identify traceable costs, (4) assign remaining costs to activities, (5) apply costs to objects, and (6) determine per-activity allocation rates. Name: Date: Section: B-20.08 Four of the following eight statements are patently false. Find the four false statements. The other statements are true. For the false statements, mark the words that make the statement false. T 1. A simplified explanation of ABC is that it attempts to divide production into its core activities, define the costs for those activities, and then allocate those costs to products based on how much of a particular activity is needed to produce a product. F 2. ABC does not maintains the traditional division between product and period costs. T 3. ABC charges products with the costs of manufacturing and nonmanufacturing activities, and some manufacturing costs are not attached to products. F 4. Under ABC, idle capacity is typically isolated and allocated to products and services. F 5. ABC is suitable for public reporting. T 6. With ABC, the "cost objects" are broadened to include not only products/services, but other objects like customers, markets, and so on. T 7. The first step in implementing ABC is a detailed study of all business processes and costs. F 8. The normal steps in an ABC implementation are (1) study processes and costs, (2) identify activities, (3) identify traceable costs, (4) assign remaining costs to activities, (5) apply costs to objects, and (6) determine per-activity allocation rates. I-18.03 Anderson Metals manufactures and sells #3 steel rebar that is used in the construction of slabs and driveways. The steel bar not only strengthens the finished concrete product, but it also has unique properties such that its temperature related expansion and contraction matches that of concrete. The product is manufactured and sold in 20' long "sticks." The product is generally produced and sold to match customer demand, and there is not a significant amount of finished goods inventory at any point in time. Summary information for 20X6 is as follows: Sales were $20,000,000, consisting of 5,000,000 sticks. Total variable costs were $11,000,000. Total fixed costs were $8,000,000. Net income was $1,000,000. The general economic conditions appear to be deteriorating heading into 20X7, and there is some concern about a reduction in sales volume. The following questions should each be answered independent of one another. (a) What is the company's break-even point in "sticks?" Can the company sustain a 30% reduction in total volume, and remain profitable? (b) The company's sole shareholder, Doug Anderson, generally lives off of dividends paid by the business. The business typically declares and pays a dividend equal to 25% of net income. If Doug needs to receive $100,000 in dividends for normal living expenses, what total revenues must Anderson Metals produce in 20X7? (c) If total volume is expected to decrease by 20%, and the company wishes to continue to produce a $1,000,000 net income by raising the per unit selling price, what revised per stick price must be imposed? Will this strategy necessarily work? (d) If the company expects a drop in raw material prices to reduce total variable costs to $2 per stick, but all other revenue and cost factors to be unaffected, what will be the revised break-even point in sales and units? Name: Date: (a) Section: I-18.03 4,444,444 sticks = $8,000,000 ($20,000,000 - $11,000,000) 5,000,000 units) If there is 30% reduction in the volume then there will be a loss. (b) $18,666,667 = ($8,000,000 + $400,000) 0.45 they need to have a minimum $18,666,667 for order to susbtain the divended policy. (c) Variable Cost Per Unit ($2.20) + Per Unit Margin ($2.25) = $4.45 The strategy of sales price will not appropriate because it will reduce the sales price. Name: Date: (d) Section: $16,000,000 $4 per unit = 4,000,000 units I-18.03 Answer Question 1 debit retained earnings, $300,000; credit stock dividend distributable, $100,000; credit paid in capital in e Answer Question 2 debit cash, $72,000; credit treasury stock, $60,000; credit additional paid-in capitaltreasury stock, $12 Answer Question 3 debit available-for-sale securities, $16,000; credit unrealized gain on available-for-sale securities, $16,00 Answer Question 4 Debit investment in Mighty Corp., $120,000; credit income from Mighty Corp., $120,000. Question 5 debit cash, $250,000; credit bonds payable, $200,000; credit premium on bonds payable, $5,000 Question 6: Answer 276000 Question 7: Answer 12.80 Question 8 Answer 20000 Question 9 Answer 66000 Question 10 Answer -2800 Question 11 1. Record the journal entries for the issuance of the bonds DR CR Cash 2,000,000 Bond Payable 2,000,000 2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not Interest Expense Interest Payable 50000 50000 Question 12 1. Record the journal entries for the issuance of the bonds Cash 2020000 Premium on bond 20000 Bond Payable 2000000 2. Record the journal entries for the first interest payment due on October 1, 2017. Assume that interest has not Interest Expense 48000 Premium on bond Interest Payable 2000 50000 Question 13 Material Cost Direct Labor Overhead Applied cost of production in the month of March cost per unit for each phone 120000 45000 105000 270000 13.50 Determine if overhead was over applied or under applied and by what amount 1600 Over Applied Per unit Cost Material cost Direct Labor overhead cost costs to complete Job No. 1 the unit cost per chair 17.5 3.00 6.00 Material Cost Direct Labor overhead cost costs charged as of month's end Job 2 26.50 17500 3000 6000 26500 26.50 17.50 3.00 6.00 17500 2700 5400 Material Equivalent Units 1500 Conversion 900 100% 60% 60% 00,000; credit paid in capital in excess of par, $200,000 -in capitaltreasury stock, $12,000 lable-for-sale securities, $16,000 orp., $120,000. bonds payable, $5,000 11 017. Assume that interest has not been accrued at each month end. 017. Assume that interest has not been accrued at each month end B-18.01 Each of the cost "types" below should be matched to one of the descriptions that follow. Variable Fixed (committed) Fixed (discretionary) Mixed (a) Property taxes on land and building Fixed (committed) (b) Billboard advertising campaign Fixed (discretionary) (c) Raw material used in a manufacturing process Variable (d) Employee picnic with band, food, and door prizes Mixed