In addition to the product cost information for Lakeside Inc., product engineering has determined that a certain part of the product conversion process could be outsourced. Raw material costs would not be affected, but direct labor and variable overhead costs would be reduced by 30%. No other opportunity is currently feasible for unused production capacity. Required: Should Lakeside outsource part of the conversion process at a cost of $8 per unit?
> You were asked to obtain the most recent annual report of a company that you were interested in reviewing throughout this term. Required: Please review the note disclosures provided in your focus company’s annual report and discuss what you’ve learned ab
> Following are condensed income statements for Uncle Bill’s Home Improvement Center for the years ended December 31, 2023 and 2022: Uncle Bill was concerned about the operating results for 2023 and asked his recently hired accountant, &a
> a. If the beginning balance of the Inventory account and the cost of items purchased or made during the period are correct, but an error resulted in overstating the firm’s ending inventory balance by $12,000, how would the firm’s cost of goods sold be af
> The inventory records of Cushing Inc. reflected the following information for the year ended December 31, 2022: Required: a. Assume that Cushing, Inc., uses a periodic inventory system. Calculate cost of goods sold and ending inventory under FIFO and LIF
> The inventory records of Kuffel Co. reflected the following information for the year ended December 31, 2022: Required: a. Assume that Kuffel Co. uses a periodic inventory system. Calculate cost of goods sold and ending inventory under FIFO and LIFO. b.
> The following data are available for Sellco for the fiscal year ended on January 31, 2023: Required: a. Calculate cost of goods sold and ending inventory under the following cost flow assumptions (using a periodic inventory system): 1. FIFO. 2. LIFO. 3.
> Mower-Blower Sales Co. started business on January 20, 2022. Products sold were snow blowers and lawn mowers. Each product sold for $1,400. Purchases during 2022 were as follows: The December 31, 2022, inventory included 10 blowers and 20 mowers. Assume
> A portion of the current assets section of the December 31, 2022, balance sheet for Gibbs Co. is presented here: The company’s accounting records revealed the following information for the year ended December 31, 2023: Required: Calcula
> A portion of the current assets section of the December 31, 2023, balance sheet for Carr Co. is presented here: The company’s accounting records revealed the following information for the year ended December 31, 2023: Required: Using th
> The following is a portion of the current asset section of the balance sheets of HiROE Co., at December 31, 2023 and 2022: Required: a. Describe how the allowance amount at December 31, 2023, was most likely determined. b. If bad debts expense for 2023 t
> The following is a portion of the current assets section of the balance sheets of Avanti’s, Inc., at December 31, 2023 and 2022: Required: a. If $9,100 of accounts receivable were written off during 2023, what was the amount of bad debt
> HighTech Inc. and OldTime Co. compete within the same industry and had the following operating results in 2022: Required: a. Calculate the breakeven point for each firm in terms of revenue. b. What observations can you draw by examining the breakeven poi
> Branson Co. received its bank statement for the month ending May 31, 2022, and reconciled the statement balance to the May 31, 2022, balance in the Cash account. The reconciled balance was determined to be $36,400. The reconciliation recognized the follo
> Beckett Co. received its bank statement for the month ending June 30, 2022, and reconciled the statement balance to the June 30, 2022, balance in the Cash account. The reconciled balance was determined to be $5,800. The reconciliation recognized the foll
> Big Blue Rental Corp. provides rental agent services to apartment building owners. Big Blue Rental Corp.’s preliminary income statement for August 2022 and its August 31, 2022, preliminary balance sheet did not reflect the following: a.
> Set up a horizontal model in the following format: Required: a. Enter the beginning (July 28, 2019) and ending (August 2, 2020) account balances for Accounts Receivable, Inventories, and Payable to Suppliers and Others. Find these amounts on the Consolid
> Calco Inc. rents its store location. Rent is $9,000 per month, payable quarterly in advance. On July 1, a check for $27,000 was issued to the landlord for the July–September quarter. Required: Use the horizontal model to show the effects on the financia
> On January 10, 2022, the first day of the spring semester, the cafeteria of The Defiance College purchased for cash enough paper napkins to last the entire 16-week semester. The total cost was $3,600. Required: Use the horizontal model to show the effect
> Selected information taken from the financial statements of Fordstar Co. for the year ended December 31, 2022, follows: a. Calculate income from operations (operating income) for the year ended December 31, 2022. b. Calculate net income for the year ende
> Selected information taken from the financial statements of Verbeke Co. for the year ended December 31, 2022, follows: a. Calculate income from operations (operating income) for the year ended December 31, 2022. (Hint: You may want to review Exhibit 2-2.
> Use the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co. a. Issued 800,000 shares of $5-par-value common stock for $400,000 in cash. b. B
> Charlie’s Furniture Store has been in business for several years. The firm’s owners have described the store as a “high-price, high-service” operation that provides lots of assistance to its customers. Margin has averaged a relatively high 40% per year f
> The concept of financial leverage was introduced and expanded. You were asked to describe the risks associated with financial leverage. Required: a. Describe the risks associated with operating leverage. b. Outline the similarities and differences betwee
> Following are the current asset and current liability sections of the balance sheets for Around square Inc. at August 31, 2023 and 2022 (in millions): Required: a. Calculate the working capital and current ratio at each balance sheet date. Round your cur
> Following are the current asset and current liability sections of the balance sheets for Freedom Inc. at January 31, 2023 and 2022 (in millions): Required: a. Calculate the working capital and current ratio at each balance sheet date. Round your current
> Presented here are the comparative balance sheets of Hames Inc. at December 31, 2023 and 2022. Sales for the year ended December 31, 2023, totaled $1,700,000. Required: a. Calculate ROI for 2023. Round your percentage answer to two decimal places. b. Cal
> Calculate profitability measures using annual report data Using data from the financial statements of Campbell Soup Company in the appendix, calculate the following: a. ROI for 2020. Round your percentage answer to one decimal place. b. ROE for 2020. Rou
> Selected data from the September 26, 2020, and September 28, 2019, consolidated balance sheets and income statements (statements of operations) for the years then ended for Apple Inc. follow. All amounts are reported in millions. Required: a. Calculate t
> The following selected data are adapted from the February 2, 2020, and February 3, 2019, consolidated balance sheets and income statements for the years then ended for The Home Depot, Inc. All amounts are reported in millions. Required: Calculate the mis
> Following is a partially completed balance sheet for Epsico Inc. at December 31, 2022, together with comparative data for the year ended December 31, 2021. From the statement of cash flows for the year ended December 31, 2022, you determine the following
> A partially completed balance sheet for Blue Co. Inc. as of October 31, 2022, is presented. Where amounts are shown for various items, the amounts are correct. Required: Using the following data, complete the balance sheet. a. Blue Co.’
> Rudy Gandolfi owns and operates Rudy’s Furniture Emporium Inc. The balance sheet totals for assets, liabilities, and stockholders’ equity at August 1, 2022, are as indicated. Described here are several transactions ent
> Mindspin Labs Inc. is a manufacturing firm that has experienced strong competition in its traditional business. Management is considering joining the trend to the “service economy” by eliminating its manufacturing operations and concentrating on providin
> Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2022, financial statements: At December 31, 2021, total assets were $246,000 and total stockholders’ equi
> The following information was obtained from the records of Shae Inc.: / Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities that occurred
> The information on the following page was obtained from the records of Breanna Inc.: Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities
> Gary’s TV had the following accounts and amounts in its financial statements on December 31, 2022. Assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities
> Pope’s Garage had the following accounts and amounts in its financial statements on December 31, 2022. Assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activi
> Kimber Co. is in the process of liquidating and going out of business. The firm’s accountant has provided the following balance sheet and additional information: It is estimated that all but 20 percent of the accounts receivable can be
> Circle-Square Ltd. is in the process of liquidating and going out of business. The firm’s balance sheet shows $50,000 in cash, accounts receivable of $240,000, inventory totaling $110,000, plant and equipment of $500,000, and total liabilities of $620,00
> Selected balance sheet accounts for Tibbetts Company on September 30, 2022, are as follows: Required: a. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2022. b. Summarized here are the transacti
> During the year, cost of goods sold was $120,000; income from operations was $114,000; income tax expense was $24,000; interest expense was $18,000; and selling, general, and administrative expenses were $66,000. Required: Calculate net sales, gross prof
> During the year, net sales were $400,000; gross profit was $160,000; net income was $60,000; income tax expense was $15,000; and selling, general, and administrative expenses were $73,000. Required: Calculate cost of goods sold, income from operations, i
> Use the information presented for Lakeside Inc. Required: Calculate the payback period and the accounting rate of return for the new production equipment.
> DeBauge Realtors Inc. is a realty firm owned by Jeff and Kristi DeBauge. The DeBauge family owns 100% of the corporation’s stock. The following summarized data (in thousands) are taken from the December 31, 2022, financial statements: A
> Use the information presented for Lakeside Inc. and your calculation of the net present value of the new production equipment. Required: Calculate the present value ratio of the new production equipment, and comment on the internal rate of return of this
> Lakeside Inc. is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $7,500 per month. The new equipment will have a five-year life and cost $320,000, with an estimated salvage value
> Lakeside Inc. produces Product A and Product B that require special machining time. Machine time capacity is 10,000 machine hours per month. Lakeside estimates April demand for each product and provides additional information as follows: Required: Determ
> Lakeside Inc. is considering whether to enter the market to produce and sell Product X. The market selling price for Product X is well established at $300 per unit, and Lakeside requires a profit margin of 25% on product lines. Required: Calculate the ta
> In addition to the product cost information for Lakeside Inc. in Mini-Exercise 16.1, Lakeside has received an offer from a nonprofit organization to buy 6,000 units at $56 per unit. Lakeside currently has unused production capacity. Required: Should Lake
> Lakeside Inc. produces a product that currently sells for $72 per unit. Current production costs per unit include direct materials, $20; direct labor, $24; variable overhead, $10; and fixed overhead, $10. Product engineering has determined that certain p
> ABC Company operates two divisions with the following operating information for the month of May: Division 1: sales, $240,000; operating income, $72,000; operating assets, $600,000. Division 2: sales, $160,000; operating income, $80,000; operating assets
> ABC Company operates two divisions with the following sales and expense information for the month of May: Division 1: sales, $240,000; contribution margin ratio, 50%; direct fixed expenses, $48,000. Division 2: sales, $160,000; contribution margin ratio,
> In addition to the information for Acme Company, the standard fixed overhead application rate per unit consists of $2 per machine hour and each unit is allowed a standard of 1 hour of machine time. Required: Calculate the fixed overhead budget variance a
> Form a group of three or four students to research, evaluate, and report on software solutions available to support the budgeting needs of an organization. Choose three planning/budgeting products from the following list of company websites, and review t
> Refer to the corporate governance disclosures provided on Campbell Soup Company’s website. Visit campbellsoupcompany.com; select the “Investors” shortcut from the “About Us” menu, then click on “Governance Documents” from the “Governance” drop down menu.
> In addition to the information for Acme Company, the standard variable overhead rate per unit consists of $6 per machine hour and each unit is allowed a standard of 1 hour of machine time. During August, $115,940 of actual variable overhead cost was incu
> In addition to the information for Acme Company, the standard direct labor cost per unit consists of 0.5 hour of labor time at $20 per hour. During August, $160,650 of actual labor cost was incurred for 7,650 direct labor hours. Required: Calculate the l
> In addition to the information for Acme Company in Mini-Exercises 15.1 and 15.2, the standard direct material cost per unit consists of 10 pounds of raw material at $0.80 per pound. During August, 187,000 pounds of raw material were used that were purcha
> In addition to the information for Acme Company in Mini-Exercise 15.1, actual unit component costs incurred during August include direct materials, $8.25; direct labor, $9.45; variable overhead, $6.82. Actual fixed overhead was $33,500. Required: Prepare
> Acme Company’s production budget for August is 17,500 units and includes the following component unit costs: direct materials, $8; direct labor, $10; variable overhead, $6. Budgeted fixed overhead is $35,000. Actual production in August was 17,000 units.
> In addition to the information presented in Mini-Exercises 14.2 and 14.3, ABC Company currently pays a standard rate of $2 per pound for raw materials. Each unit should be produced in 15 minutes of direct labor time at a standard direct labor rate of $16
> ABC Company has a cash balance of $22,000 on August 1 and requires a minimum ending cash balance of $20,000. Cash receipts from sales budgeted for August are $306,180. Cash disbursements budgeted for August include inventory purchases, $40,000; other man
> ABC Company’s raw materials purchases for June, July, and August are budgeted at $35,000, $25,000, and $50,000, respectively. Based on past experience, ABC expects that 60% of a month’s raw material purchases will be paid in the month of purchase and 40%
> In addition to the information, the selling price for each unit is $21. Based on past experience, ABC expects that 35% of a month’s sales will be collected in the month of sale, 53% in the following month, and 10% in the second month following the sale.
> In addition to the information presented in Mini-Exercise 14.2, the following cost behavior patterns are budgeted for ABC Company’s operating expenses each month are Fixed costs: salaries, $2,000; rent, $5,000; depreciation, $2,400; advertising, $3,200 M
> Prepare a personal balance sheet and projected income statement; explain financial statement relationships. Required: a. Prepare a personal balance sheet for yourself as of today. Work at identifying your assets and liabilities; use rough estimates for a
> In addition to the information, each unit that ABC Company produces uses four pounds of raw material. ABC requires 20% of the next month’s budgeted production as raw material inventory each month. Required: Calculate the number of pounds of raw material
> ABC Company’s budgeted sales for June, July, and August are 12,000, 16,000, and 14,000 units, respectively. ABC requires 30% of the next month’s budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May
> ABC Company’s actual unit sales in the current year for January, February, and March were 20,000, 17,000, and 23,000 units, respectively. Current year selling price is $20. An analysis of general economic trends and specific initiatives at ABC forecasts
> Brooklyn Cycles produces custom bicycles and has used a traditional manufacturing overhead application rate based on direct labor hours. Currently, overhead is applied at the rate of $42/DLH. Brooklyn is now considering using activity-based driver rates
> The following cost behavior pattern describes anticipated manufacturing overhead costs for 2022: $240,000 + $8/unit. During the year, 30,000 units were produced and 28,000 units were sold. Required: Calculate the manufacturing overhead unit cost for 2022
> The following cost behavior patterns describe anticipated manufacturing costs for 2022: raw material, $7/unit; direct labor, $10/unit; and manufacturing overhead, $240,000 + $8/unit. Required: If anticipated production for 2022 is 30,000 units, calculate
> The following information is from ABC Company’s general ledger for the month of September: Beginning and ending finished goods inventory, respectively, were 168,000 and 156,000. Cost of goods sold for September was $408,000. Required: How much was ABC Co
> The following information is from ABC Company’s general ledger: Beginning and ending inventories, respectively, for raw materials were $12,000 and $15,000 and for work in process were $30,000 and $33,000. Raw material purchases and direct labor costs inc
> Coronado Company applies manufacturing overhead to production at the rate of $8 per direct labor hour and ended March with $24,000 underapplied overhead. Actual manufacturing overhead incurred for March amounted to $176,000. Required: How many direct lab
> Bentley estimates manufacturing overhead of $1,200,000 for 2022 and will apply overhead to units produced based on 400,000 machine hours. During 2022, Bentley used $1,280,000 of raw materials, paid $1,620,000 of direct labor, generated 420,000 machine ho
> The Office of Management and Budget (OMB) provides access to the budget of the United States government through the Discover U.S. Government Information website at www.govinfo.gov. At this site, you will find a link to the specific collection, the “Budge
> Acme Inc. incurs the following costs during July: Required: Calculate Acme’s total manufacturing costs for July.
> The cost structure of two firms competing in the same industry is represented by the following cost formulas: Company X = $1,350,000 + $37/unit; Company Z = $825,000 + $72/unit. The selling price is $140 per unit for both companies. Required: Calculate t
> Assume MIX Inc. has sales volume of $1,000,000 for two products with June sales and contribution margin ratios as follows: Product A: Sales $500,000; Contribution Margin Ratio 30% Product B: Sales $500,000; Contribution Margin Ratio 60% Required: Assume
> Assume MIX Inc. has sales volume of $1,000,000 for two products with May sales and contribution margin ratios as follows: Product A: Sales $400,000; Contribution Margin Ratio 30% Product B: Sales $600,000; Contribution Margin Ratio 60% Required: Assume
> Refer to the current information for Bay Area Cycle Co. in Mini-Exercise 12.4. Required: Calculate Bay Area Cycle’s breakeven point in units and total sales dollars. Calculate Bay Area Cycle’s margin of safety and margin of safety ratio. Data from Exerc
> Current operating income for Bay Area Cycles Co. is $74,000. Selling price per unit is $120, the contribution margin ratio is 30%, and fixed expense is $250,000. Required: Calculate Bay Area Cycle’s per unit variable expense and contribution margin. How
> Eastern Imports Inc. sold 12,000 units in August. Per unit selling price and variable expense were $30 and $15, respectively. Fixed expense incurred for August totaled $120,000. Required: Prepare the August income statement for Eastern Imports in the con
> During a year, Mark’s monthly sales compensation ranged between $18,000 and $24,000 per month and units sold ranged between 2,000 and 3,000 units for those same months. Required: Use the high–low method to determine Mark’s monthly salary and commission r
> Harris Company experiences the following cost behavior patterns each week: Fixed costs: supervisor’s salary $1,600; factory rent $4,000 Mixed costs: utilities $2,400 + $8.40 per unit Variable costs per unit: manufacturing labor wages $32; supplies used i
> The following information was available for the year ended December 31, 2022: Required: Calculate the times interest earned for the year ended December 31, 2022.
> The chair of the Science Department of State University has a budget for laboratory supplies. Supplies have a variable cost behavior pattern that is a function of the number of students enrolled in laboratory courses. For planning purposes, when the budg
> The following information was available for the year ended December 31, 2022: Total assets at year-end 600,000 Total liabilities at year-end 360,000 Required: a. Calculate the debt ratio at December 31, 2022. b. Calculate the debt/equity ratio at Decembe
> The following information was available for the year ended December 31, 2022: Required: a. Calculate the price/earnings ratio for 2022. b. Calculate the dividend payout ratio for 2022. c. Calculate the dividend yield for 2022.
> The following information was available for the year ended December 31, 2022: Sales $400,000 Net Income 64,000 Average total assets 800,000 Average total stockholders’ equity 640,000 Required: a. Calculate margin, turnover, and ROI for the year ended Dec
> The following information was available for the year ended December 31, 2022: Required: a. Calculate the accounts receivable turnover for 2022. b. Calculate the number of days’ sales in accounts receivable for 2022, using year-end accou
> The following information was available for the year ended December 31, 2022: Required: a. Calculate the inventory turnover for 2022. b. Calculate the number of days’ sales in inventory for 2022, using year-end inventories.
> Assume that a company’s current ratio is 3.0, working capital is $300,000, and the acid test ratio is 1.2. a. How much does the company have in current assets? b. If the only current assets shown on the balance sheet are Cash, Accounts Receivable, and Me
> The following amounts were reported on the December 31, 2022, balance sheet: Required: a. Calculate working capital at December 31, 2022. b. Calculate the current ratio at December 31, 2022. c. Calculate the acid-test ratio at December 31, 2022.
> During the fiscal year ended June 30, 2023, Jones Co. had a 4-for-1 stock split. In its annual report for 2023, the company reported earnings per share for the year ended June 30, 2022, on a restated basis, of $1.35. Required: Calculate the originally re
> For the year ended December 31, 2022, Spike Inc. reported earnings per share of $6.30. During 2023, the company had a 3-for-1 stock split. Required: Calculate the 2022 earnings per share that will be reported in Spike’s 2023 annual report for comparative
> Net income was $84,200; accounts receivable increased by $17,600; inventory decreased by $12,100; proceeds from the issuance of common stock were $22,500; accounts payable decreased by $7,400; purchase of land was $51,000; depreciation and amortization e
> The following summarized data (amounts in millions) are taken from the September 26, 2020, and September 28, 2019, comparative financial statements of Apple Inc., a company that designs, manufactures, and markets mobile communication and media devices an
