BUSINESS COLLEGE

Sunset Products manufactures skateboards. The following transactions occurred in March:1. Purchased $20,500 of materials on account.

2. Issued $1,050 of supplies from the materials inventory.

3. Purchased $25,100 of materials on account.

4. Paid for the materials purchased in the transaction (1) using cash.

5. Issued $30,100 in direct materials to the production department.

6. Incurred direct labor costs of $25,500, which were credited to Wages Payable.

7. Paid $21,600 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.

8. Applied overhead on the basis of 110 percent of direct labor costs.

9. Recognized depreciation on manufacturing property, plant, and equipment of $5,100.

The following balances appeared in the accounts of Sunset

Products for March:

Beginning Ending
Materials Inventory $9,150 _
Work-in-Process Inventory $16,600 _
Finished Goods Inventory $65,100 $36,600
cost of goods sold $73,100
Prepare T-Accounts to show the flow of costs during the period from materials inventory through the cost of goods sold.

Answers

Answer 1

Answer:

Sunset products

Journal entry

1. Dr Material 20500

Cr Account payable 20500

(Material purchased on account)

2. Dr work in process 1050

Cr Material 1050

(material issued)

3. Dr Material 25100

Cr Accounts payable 25100

( Material purchased on account )

4. Dr Accounts payable 20500

Cr Cash 20500

(Paid for material purchased on account)

5. Dr Work in process 30100

Cr Material 30100

( Direct material issued to production department)

6. Dr Work in process 25500

Cr Wages payable 25500

( Direct labor cost incurred)

7. Dr Factory overhead 21600

Cr Cash 21600

( Paid cash for utilities)

8. Dr Work in process (25500*110%) 28050

Cr Applied overhead 28050

(Applied overhead)

9. Dr Factory overhead 5100

Cr Accumulated depreciation 5100

(To record depreciation)

T-account

Work in process Material

Dr___________Cr____ DR ___________CR

16600------ 9150 -----

1050 ----- 20500 ---- 1050

30100 ----- 25100--- 30100

25500---

28050---

Accounts payable Cash

Dr____________Cr_ DR ___________Cr

--- 20500 ---- 20500

----- 25100 ----21600

20500-----

Factory overhead Wages payable

Dr ____________Cr Dr _____________Cr

21600---

-----25500

5100---

Applied factory overhead Accumulated depreciation

Dr_____________Cr Dr ___________Cr_

----28050 ---5100

Cost of goods sold Finished goods

Dr_____________Cr Dr ______________Cr

( open) 65100 ---

101300 --- 36600 (end)

Dr Finished goods 101300

Cr Work in process 101300

(move work in process to finished goods)

Dr Cost of goods sold 129800

Finishd goods 129800

(move finished goods to cost of goods sold)

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Rist Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation estimated that it would incur $255,000 in manufacturing overhead during the year and that it would work 100,000 machine-hours. The Corporation actually worked 105,000 machine-hours and incurred $270,000 in manufacturing overhead costs. By how much was manufacturing overhead underapplied or overapplied for the year? (Round your intermediate calculations to 2 decimal places.)

A corporation originally issued $13 par value common stock for $15 per share. Which of the following is included in the entry to record the purchase of 300 shares of treasury stock for $11 per share? A. Treasury Stock-Common is debited for $3,300.
B. Treasury Stock-Cormmon is debited for $1,650.
C. Retained Earnings is debited for $1,660.
D. Treasury Stock-Common is oodied for $46.

Answers

Answer:

A. Treasury Stock-Common is debited for $3,300.

Explanation:

Cost of the treasury stock purchased = 300 shares of treasury stock * $11 per share

Cost of the treasury stock purchased = $3,300

The owners of a chain of fast-food restaurants spend $ 25 million installing donut makers in all their restaurants. This is expected to increase cash flows by $ 12 million per year for the next five years. If the discount rate is 6.6%, were the owners correct in making the decision to install donut makers? Round answer to the nearest million.

Answers

Answer:

As the NPV of the project is $25 million and is positive, the owners made a correct decision to install donut makers.

Explanation:

An investment will add value when the Net Present Value of an investment is positive. The net Present Value (NPV) of an investment is the present value of all the future cash flows expected as a result of an investment less the initial cost of the project/investment.

As the cash flows from the investment will be a constant $12 million after equal intervals of time for a period of five years, this can be treated as an annuity and the NPV of the project can be calculated as the Present value of $12 million annuity less the initial cost of the investment of $25 million.

NPV = 12 * [ 1 - (1+0.066)^-5 / 0.066] - 25

NPV = $24.73 million or $25 million rounded off to the nearest million

Mira Mesa Appliances makes and sells kitchen equipment for offices and hotel rooms. Mira Mesa management believes that a new model of refrigerator made out of a synthetic material would sell well at a price of $260 per unit. Labor costs are estimated at $32 per unit and overhead costs would be $24 per unit. The major uncertainty is the price of the synthetic material. Mira Mesa is in negotiations with several suppliers for the material. Because of the risk associated with the new product, Mira Mesa will only proceed if the estimated return is at least 30 percent of the selling price.Required:
What is the most Mira Mesa can pay for the synthetic material per unit (refrigerator) and meet its profitability goal?

Answers

Answer:

$126

Explanation:

We can calculate the amount Mira can pay for the synthetic material per unit (refrigerator) and meet its profitability goal by deducting the estimated profit and then all the cost from the selling price per unit.

Selling price per unit $260

Less

estimated return (260x30%) = ($78)

Labor costs ($32)

Overhead costs ($24)

Material $126

Amount Mira can pay for Synthetic material per unit is $126

With an inflation rate of 9 percent, prices would double in how many years?

Answers

Answer:

8 years

Explanation:

the rule of 72 calculates how long it takes for an amount to double given interest rate

72 / 9% = 8 years

Final answer:

The 'Rule of 72' can be used to estimate how long it would take for prices to double with an inflation rate of 9 percent. According to this rule, it would take approximately 8 years.

Explanation:

In order to calculate how long it would take for prices to double with an inflation rate of 9 percent, you can use the 'Rule of 72'.

The Rule of 72 is a simplified way to estimate the number of years required to double the money at a given annual rate of return or inflation. According to this rule, you simply divide 72 by the annual rate of return or inflation. Therefore, using the Rule of 72, it would take approximately 8 years (72 divided by 9) for prices to double with an inflation rate of 9 percent.

Learn more about Inflation here:

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The Foxmoor Company produces three products, X, Y, and Z, from a single raw material input. Product Y can be sold at the split-off point for total revenues of $63,000 or it can be processed further at a total cost of $36,000 and then sold for $108,000. Product Y: Multiple Choice
Should be sold at the split-off point, rather than processed further.
Would increase the company's overall net income by $45,000 if processed further and then sold.
Would increase the company's overall net income by $108,000 if processed further and then sold.
Would increase the company's overall net income by $9,000 if processed further and then sold.

Answers

Answer: Would increase the company's overall net income by $9,000 if processed further and then sold.

Explanation:

The Revenue if sold at the split-off point is $63,000.

But if processed further, we can realize revenue of,

= $108,000 - 36,000

= $72,000

To find out the revenue difference then we will subtract the alternatives.

= $72,000 - 63,000

= $9,000

$9,000 extra will be gained if we process further as opposed to selling at the Split-off point. This shows that Option D or the last option is correct.

Find the account balance at the end of the second period for $3,000.00 invested at 9% compounded quarterly.