Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $1,152,000 of total manufacturing overhead for an estimated activity level of 72,000 machine-hours.During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year:,Machine-hours 67,000Manufacturing overhead cost $551,000 Inventories at year-end: Raw materials $13,000 Work in process (includes overhead applied of $37,520) $139,300 Finished goods (includes overhead applied of $101,840) $378,100 Cost of goods sold (includes overhead applied of $396, 640) $1,472,600Required: 1. Compute the underapplied or overapplied overhead. 2. Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume that the company allocates any underapplied or over appliedoverhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry. 4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to Work in Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold?

Answer:

Answer:

1. Overhead over applied= $521,000

2. Factory Overhead   Dr.     $ 521,000

Cost Of Goods Sold Cr.    $ 521,000

3. Work in Process,  (ratio)   $521,000 *    7%=  36,470

Finished Goods,              $521,000   *     19%=  98,990

Cost of Goods Sold       $521,000    *    74%=  385,540

Total                        $521,000     100%

4. Difference between the two CGS= $ 136,060

Explanation:

Predetermined Overhead  Costs $1,152,000

Estimated activity level of 72,000 machine-hours

Overhead rate= $ 1152,000/ 72,000= $ 16 per hour

Manufacturing overhead cost $551,000

Actual hours = 67,000

Overhead applied to WIP = 67,000 * 16= $ 1072,000

Overhead over applied= $ 1072,000 - $551000= $521,000

Part 2:

Factory Overhead   Dr.     $ 521,000

Cost Of Goods Sold Cr.    $ 521,000

The Cost of Goods Sold is credited and Factory overhead is debited.

Part 3:

Suppose the overhead is applied in the following ratio

Work in Process,  (ratio)   $37,520          7%   (37520/536,00*100%)

Finished Goods,              $101,840         19%      (101840/536,00*100%)

Cost of Goods Sold       $396, 640        74%     (396,640/536,00*100%)

Total                        $536,000     100%

The  overhead over applied  would be allocated in the following way applying the same ratio as determined above.

Work in Process,  (ratio)   $521,000 *    7%=  36,470

Finished Goods,              $521,000   *     19%=  98,990

Cost of Goods Sold       $521,000    *    74%=  385,540

Total                        $521,000     100%

Part 4:

Cost of Goods Sold ( overhead applied of $396, 640) $1,472,600

Less    Overhead   overapplied      $ 521,000

CGS = $ 951,000

Cost of Goods Sold (overhead applied to WIP & FG) $1,472,600

Less   Overapplied Overhead $ 385,540

CGS=  $ 1087,060

Difference between the two CGS = $ 1087,060- $ 951,000= $ 136,060

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Yoyodyne is a multinational communications and information technology corporation. Its principal products are mobile telephones and tablets. It recently announced on its website that customers can suggest ideas for its upcoming product model. Contributors of short-listed ideas will be adequately rewarded. In this case, Yoyodyne is using ________ to generate new product ideas.

Omar Industries manufactures two products: Regular and Super. The results of operations for 20x1 follow. Regular Super Total Units 10,000 3,700 13,700 Sales revenue $ 240,000 $ 740,000 $ 980,000 Less: Cost of goods sold 180,000 481,000 661,000 Gross Margin $ 60,000 $ 259,000 $ 319,000 Less: Selling expenses 60,000 134,000 194,000 Operating income (loss) $ 0 $ 125,000 $ 125,000 Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed. Omar Industries wants to drop the Regular product line. If the line is dropped, company-wide fixed manufacturing costs would fall by 10% because there is no alternative use of the facilities. What would be the impact on operating income if Regular is discontinued

Which of the following defines core competency?

This activity is important because marketing students should be aware of career opportunities in sales, how sales people create value for customers, and how the sales function contributes to the overall success of the organization.
Mark will be a junior in college this fall, but is undecided about his major. Over the summer, he visited with an old family friend, Brad Donavan, who has had a lengthy and successful career selling business software and services. He suggests that sales might be a great match for Mark’s personality, interests, and lifestyle. Mark is encouraged and begins looking at job listings and responsibilities associated with various types of sales positions advertised in his area.
The goal of this exercise is to assist Mark by categorizing each of the eight (8) listed job descriptions into one of five sales job category types: (1) new business salesperson, (2) order-taker, (3) missionary salespeople, (4) sales management and support, and (5) other.
Select the appropriate sales job category for each example.
2. The goal of the Channel Sales Manager (CSM) position is to create and manage successful revenue-generating relationships with reseller partners who affect the movement of our products to end user customers.
(Click to select) New Business Salespeople Order-Takers Missionary Salespeople Sales Management and Support Other
4. A primary responsibility of the Route Sales Representative will be to drive a company vehicle to deliver coffee, tea, and other products to customers in assigned territory.
(Click to select) New Business Salespeople Order-Takers Missionary Salespeople Sales Management and Support Other
8. The Key Account Manager is responsible for nurturing key customer relationships and the development of account-specific promotional activities.
(Click to select) New Business Salespeople Order-Takers Missionary Salespeople Sales Management and Support Other

A Rhode Island company produces communion wafers for churches around the country and the world. The little company produces a lot of wafers, several hundred million per year. When in production, the process produces wafers at the rate of 48 per second. During this production process the wafers must spend 5 minutes in an oven and then 10 minutes passing through a cooling tunnel.

Required:
How many wafers does the cooling tube hold on average when in production?

Fuqua Company’s sales budget projects unit sales of part 198Z of 10,000 units in January, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $2 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month’s production requirements, and its ending finished goods inventory to equal 20% of the next month’s expected unit sales. These goals were met at December 31, 2019.

Requried:
a. Prepare a projected budget for Jan and Feb 2017.
b. Prepare a direct material budget for Jan 2017.

At the beginning of 2021, Terra Lumber Company purchased a timber tract from Boise Cantor for $2,950,000. After the timber is cleared, the land will have a residual value of $670,000. Roads to enable logging operations were constructed and completed on March 30, 2021. The cost of the roads, which have no residual value and no alternative use after the tract is cleared, was $228,000. During 2021, Terra logged 570,000 of the estimated 5.7 million board feet of timber. Required: Calculate the 2021 depletion of the timber tract and depreciation of the logging roads assuming the units-of-production method is used for both assets

On January 1, 2019, Lightfoot Corporation issues 10%, 5-year bonds with a face value of $275,000 when the effective interest rate is 9%. Interest is to be paid semiannually on June 30 and December 31. Prepare calculations to prove that the selling price of the bonds is $285,880.07. Click here to access the tables to use with this exercise. Round your answers to two decimal places, if necessary.

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Ben and Molly are married and will file jointly. Ben generates $300,000 of qualified business income from his single-member LLC (a law firm). He reports his business as a sole proprietorship. Wages paid by the law firm amount to $40,000; the law firm has no significant property. Molly is employed as a tax manager by a local CPA firm. Their modified taxable income is $386,600 (this is also their taxable income before the deduction for qualified business income). Determine their allowable QBI deduction for 2020. $fill in the blank 1

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Nash Incorporated factored $156,000 of accounts receivable with Crane Factors Inc. on a without-recourse basis. Crane assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Nash Incorporated and Crane Factors to record the factoring of the accounts receivable to Crane.

You've graduated from college and are now working in an investment firm where you advise clients on investment decisions. Here is the information on a proposed project. Up-front cost: $300,000 Next year's revenue: $15,000 Real interest rate: 8% Depreciation rate: 10% How much profit does the project yield, and should your client invest in the project

Assume that you are your friends are starting a small business painting houses in the summertime. You need to buy a software package that handles the financial transactions of the business. Create an alternatives matrix that compares three packaged systems (e.g., Quicken, Microsoft Money, Quickbooks). Which alternative appears to be the best choice

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Shining Cookie Company, Inc., in Murfreesboro, TN bought a new ice cream maker at the beginning of the year at a cost of $12,000. The estimated useful life was four years, and the residual value was $960. Assume that the estimated productive life of the machine was 9,200 hours. Actual annual usage was 3,680 hours in year 1; 2,760 hours in year 2; 1,840 hours in year 3; and 920 hours in year 4.
Required:
1. Complete a separate depreciation schedule for each of the alternative methods. (Do not round intermediate calculations.)
a. Straight-line.
b. Units-of-production (use four decimal places for the per unit output factor).
c. Double-declining-balance.

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A businessperson is setting up a new automatic car wash and is choosing between two fully automated machines. The first machine can process up to 2,000 cars per month at a marginal cost of $1 per car. The second machine can also process up to 2,000 cars per month but at a marginal cost of $0.50 per car. The monthly lease for the machine with the higher marginal cost is $1,200. The monthly lease for the machine with the lower marginal cost is $1,590 The car wash can sell car washes for $8 per car. 1. Suppose the businessperson chooses to lease the machine with the higher marginal cost for the first month and does indeed wash 2,000 cars that month. The businessperson earned profits of____________ $ in the first month. 2. Suppose now the businessperson chooses to lease the machine with the lower marginal cost for the second month and again washes 2,000 cars that month. The businessperson earned profits of __________$ in the second month. 3. The car wash would have to wash ____________cars or more per month in order to justify paying the higher-priced machine lease.

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I tell you that if you rake all the leaves in my yard, I will show up to Business Law class next week. You immediately come over and start raking the leaves. Halfway through the job you decide to leave to do some extra Business Law reading for fun. I run after you and say, "you didn’t finish, I will sue you for this!" Your best defense is:

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1. Cash balance according to the company's records at August 31, $16,760.
2. Cash balance according to the bank statement at August 31, $17,460.
3. Checks outstanding, $3,400.
4. Deposit in transit, not recorded by bank, $2,730.
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Required:
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