Required information Skip to question The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: Service Departments Operating Departments Administration Janitorial Maintenance Binding Printing Total Costs $163,800 $122,850 $56,160 $321,750 $503,100 $1,167,660 Number of employees 60 35 140 315 210 760 Square feet of space occupied 15,000 10,000 20,000 40,000 100,000 185,000 Hours of press time 30,000 60,000 90,000 Administration is allocated based on number of employees; Janitorial based on space occupied; and Maintenance based on hours of press time. Required: Assuming that the company uses the direct method to allocate service department costs, how much cost would be assigned to each operating department

Answer:

The Ferre Publishing Company

The cost assigned to each operating department:

Binding =  $463,320      

Printing = $704,340

Explanation:

a) Data and Calculations:

                           Service Departments                    Operating Departments

               Administration  Janitorial  Maintenance      Binding         Printing

Total Costs $163,800    $122,850      $56,160         $321,750     $503,100 $1,167,660

Number of

 employees    60                 35               140                315                 210   760

Square feet

 of space

 occupied     15,000        10,000         20,000            40,000      100,000 185,000

Hours of

 press time                                                                  30,000       60,000       90,000

Allocation of Service Departments' Costs to the Operating Departments;

                           Service Departments                    Operating Departments

               Administration  Janitorial  Maintenance      Binding         Printing

Total Costs $163,800    $122,850      $56,160         $321,750     $503,100 $1,167,660

Admin.        (163,800)           8,190        32,760              73,710          49,140     0

Janitorial                          (131,040)        16,380            32,760          81,900

0

Maintenance                                      (105,300)           35,100          70,200  0

Total                                                                        $463,320      $704,340  $1,167,660

Rate of Administration Cost to the other departments =$234  ($163,800/700)

Janitorial   35*$234 = $8,190

Maintenance  140*$234 = $32,760

Binding 315*$234 = $73,710  

Printing 210*$234 = $49,140

Janitorial cost:

Rate based on space occupied = $131,040/160,000 = $0.819

Maintenance  = 20,000*$0.819 = $16,380

Binding   = 40,000*$0.819 = $32,760

Printing =   100,000*$0.819 = $81,900

Maintenance Cost of $105,300

Rate = $1.17 ($105,300/90,000)

Binding = 30,000*$1.17 = $35,100

Printing = 60,000*$1.17 = $70,200

X Company's degree of operating leverage (DOL) at the current sales volume level is calculated to be:

Problem 4-8 Sales and Growth [LO2] The most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $ 42,950 Current assets $ 17,580 Long-term debt $ 37,070 Costs 35,550 Fixed assets 68,350 Equity 48,860 Taxable income $ 7,400 Total $ 85,930 Total $ 85,930 Taxes (21%) 1,554 Net income $ 5,846 Assets and costs are proportional to sales. The company maintains a constant 35 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued

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Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for $12,000 and at that price, Thad estimates 400 units would be sold each year. The variable cost to produce and sell the cycles would be $9,000 per unit. The annual fixed cost would be $960,000.
Show your calculation steps.
a. What is the break-even in unit sales?
Break-even in unit sales _____
b. What is the margin of safety in dollars?
Margin of safety in dollars _____
c. What is the degree of operating leverage? (Round your answer to 2 decimal places.)
Degree of operating leverage _____

Al is a medical doctor who conducts his practice as a sole proprietor. During 2017, he received cash of $280,000 for medical services. Of the amount collected, $40,000 was for services provided in 2016. At the end of 2017, Al had accounts receivable of $60,000, all for services rendered in 2017. In addition, at the end of the year, Al received $12,000 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2018. Compute Al’s gross income for 2017:
a. Using the cash basis of accounting.
b. Using the accrual basis of accounting.
c. Advise Al on which method of accounting he should use.

State and federal governments actively support education at the primary, secondary, and collegiate levels. But they mandate education at the primary and secondary levels, while merely providing subsidies and loan guarantees at the collegiate level. Of the key rationales for public provision of education described, which do you think underpins this differential treatment?

The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 34%. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.
Year 0 Year 1 Year 2 Year 3 Year 4
Investment $40,000
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs 4,300 4,400 4,500 3,700
Depreciation 10,000 10,000 10,000 10,000
Change in NWC 460 510 560 460 ?
Change in NWC in year 4 will be sum of all the NWC needed in year 0-3.
A. Compute the incremental net income of the investment for each year. Do not intermediate calculations.
Year 1 Year 2 Year 3 Year 4
Net income $ $ $ $
B. Compute the incremental cash flows of the investment for each year. Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.
Year 0 Year 1 Year 2 Year 3 Year 4
Cash Flow $ $ $ $ $
C. Suppose the appropriate discount rate is 12%. What is the NPV of the project? Do not Round intermediate calculations and round your final answer to 2 decimal places.
NPV $____

Wilson is expected to work 40 hours each week, be in the office for critical meetings, and to meet all agreed-upon deadlines. His manager, however, allows him to work flexible hours that best fit his personal commitments. This is an example of

The advantage of having many potential suppliers is their willingness to A. provide technical expertise. B. participate in JIT. C. provide innovations. D. offer lower prices in the short term.

Oslo Food Company distributes to consumers coupons which may be presented (on or before a stated expiration date) to grocers for discounts on certain products of Flavor. The grocers are reimbursed when they send the coupons to Oslo. In Oslo's experience, 55% of such coupons are redeemed, and generally one month elapses between the date a grocer receives a coupon from a consumer and the date Oslo receives it. During 2021 Oslo issued two separate series of coupons as follows:
Consumer Amount Disbursed
Issued On Total Value Expiration Date as of 12/31/18
1/1/18 $500,000 6/30/18 $236,000
7/1/18 840,000 12/31/18 350,000
The only journal entry recorded to date is: debit to coupon expense and credit to cash of $815,000. The December 31, 2018 balance sheet should include a liability for unredeemed coupons of:_____.
a) $0.
b) $70,000.
c) $184,000.
d) $420,000.

Jim recently joined the Austin Barter Club, an organization that facilitates the exchange of services between its members. This year Jim provided lawn-mowing services to other club members. Jim received the following from the barter club. Determine the amount, if any, Jim should include in his gross income in each of the following situations: (Leave no answers blank. Enter zero if applicable.)

a. Jim received $275 of car repair services from another member of the club.
b. Jim received a S150 credit that gave him the option of receiving a season pass at a local ski resort from another member of the club. However, he forgot to request the pass by the end of the ski season and his credit expired.
c. Jim received a S450 credit that can only be applied for goods or services from club members next year.

John lived in Zimbabwe in 2001. His boss told you that starting from this month, he will get paid in double, i.e. 100% raise. He has $(Zimbabwean)10,000 in his savings. Here was economic situation in Zimbabwe in 2001.
GDP growth rate: 1.4%
Unemployment rate: 5.41%
Inflation: 112%
Interest rate: 50%
Explain why(there are two correct possibilities).
A. John has nothing to worry about, Zimbabwean economy is doing well as GDP growth rate is positive.
B. John lost his savings as real interest rate is negative.
C. John should look for other jobs because unemployment rate is quite low. There might be other jobs who can pay more.
D. John must have not purchased the same as last month due to inflation.

Mutual funds that invest in mortgage-backed pass-through securities are exposed to which of the following risks and costs?
a. Credit risk
b. Liquidity risk
c. Interest rate risk
d. Capital adequacy requirements
e. Prepayment risk

In general, a larger R squared tends to suggest that:_______.
a. the estimated sample regression function explains a greater percentage of the total variation in y
b. the estimated sample regression function is more accurate
c. the estimated sample regression function explains a greater percentage of the explained variation in y
d. the estimated slope coefficient is more likely to equal the population slope coefficient

To complete your degree and then go through graduate school, you will need $95,000 at end of each of the next 8 years. Your Aunt offered to put you through school, and she will deposit in a bank paying 4.00% interest a sum of money that is sufficient to provide you with the needed 8 withdrawals of $95,000 each.

Required:
a. How large of a deposit must she make today?
b. How much will be in the account immediately after you make the 3rd $95,000 withdrawal?
c. How much will be in the account immediately after you make all the withdrawals including the last one in 8 years?
d. Now, if you decide to drop out of school today and not make any of the withdrawal, but instead keep your auntâs money, that she deposited today, in the account that is earning 4.00%, how much would you have at the end of 8 years?

Charles Lackey operates a bakery in Idaho​ Falls, Idaho. Because of its excellent product and excellent​ location, demand has increased by 55​% in the last year. On far too many​ occasions, customers have not been able to purchase the bread of their choice. Because of the size of the​ store, no new ovens can be added. At a staff​ meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be baked at one time. This new process will require that the ovens be loaded by​ hand, requiring additional manpower. This is the only thing to be changed.​ (Productivity remains the​ same.) ​The bakery makes 1,500 loaves per month with a labor productivity of 2.344 loaves per labor-hour, how many workers will lackey need to add? (hint: each worker works 160 hours per month).

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Journalize the December 31 adjusting entry required if the amount of unearned fees at the end of the year is $12,530. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
ASSETS
11 Cash
12 Accounts Receivable
13 Supplies
14 Prepaid Insurance
15 Land
16 Equipment
17 Accumulated Depreciation-Equipment
LIABILITIES
21 Accounts Payable
22 Unearned Fees
23 Salaries Payable
24 Taxes Payable
EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
REVENUE
41 Fees Earned
EXPENSES
51 Advertising Expense
52 Insurance Expense
53 Rent Expense
54 Salary Expense
55 Supplies Expense
56 Utilities Expense
57 Depreciation Expense
59 Miscellaneous Expense

List the name of the inventory method that best fits the description. Assume that the cost of inventory is rising.

_________Maximizes reported income
_________ Used to account for automobiles, jewelry, and art objects
_________Results in a cost of ending inventory that is close to the current cost of replacing the inventory
_________Generally associated with saving income taxes
_________Enables a company to buy high-cost inventory at year-end and thereby decrease reported income and income tax
_________Results in an old measure of the cost of ending inventory
_________Provides a middle-ground measure of ending inventory and cost of goods sold
_________Enables a company to keep reported income from dropping lower by liquidating older layers of inventory
_________Writes inventory down when current replacement cost drops below historical cost
_________Matches the most current cost of goods sold against sales revenue

The following information is available for Barnes Company for the fiscal year ended December 31: Beginning finished goods inventory in units 0 Units produced 7,800 Units sold 5,500 Sales $ 1,100,000 Materials cost $ 156,000 Variable conversion cost used $ 78,000 Fixed manufacturing cost $ 702,000 Indirect operating costs (fixed) $ 110,000 The absorption costing operating income is:

What is the first step in the standard purchasing process practiced by most companies

A rational buyer will: buy a product until the marginal benefit of consuming the product is less than the price of the product. buy the product only when the marginal benefit of consuming the product is twice as much as the price of the product. not consider costs versus benefits when purchasing a product. keep buying a product until marginal benefit equals price.

Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $20,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 8 percent on her investments

Required:
a. What is the after-tax cost if Isabel pays the $19,000 bill in December?
b. What is the after-tax cost if Isabel pays the $19,000 bill in January?
c. Based on requirement a and b, should Isabel pay the $19,000 bill in December or January?

At his new job, Carlos notices that everyone places high values on their families and each others' families, birthdays are always celebrated, and flexible schedules are permitted to facilitate family involvement as long as the work is still getting done. Everyone is very relaxed and friendly. Carlos has made several observations about the:________

a. organizational structure.
b. ethical climate.
c. morale and performance programs.
d. codes of conduct.
e. corporate culture.

Whitch of the following is required to be considered an entrepreneur?

On the last day of December 2021, Coaster Trucks entered into a transaction that resulted in a receipt of $300,000 cash in advance related to services that will be provided during January 2022. During December of 2021, the company also performed $165,000 of services which were neither billed nor paid. Prior to December adjustments and before these two transactions were recorded, the company’s trial balance showed service revenue of $1,425,790 at December 31, 2021. There are no other prepaid services yet to be delivered, and during the month all outstanding accounts receivable from prior months were collected. If Coaster Trucks makes the appropriate adjusting entry, how much service revenue will be reflected on the December 31, 2021 income statement?

The following information is available for Trinkle Company for the month of June:

a. The unadjusted balance per the bank statement on June 30 was $56,037.
b. Deposits in transit on June 30 were $2,215.
c. A debit memo was included with the bank statement for a service charge of $11. A $5,281 check written in June had not been paid by the bank.
d. The bank statement included a $950 credit memo for the collection of a note. The principal of the note was $920, and the interest collected amounted to $30.

Required:
Determine the true cash balance as of June 30.

Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct labor-hours. Listed below is cost driver information used in the product-costing system:

Overhead Cost Pool Budgeted Overhead Cost Driver Estimated Cost Driver Level
Machine setups $120,000 # of setups 120 setups
Materials handling 104,400 # of barrels 8,700 barrels
Quality control 264,000 # of inspections 1,100 inspections
Other overhead cost 144,000 # of machine hours 12,000 machine hours
Total overhead $632,400

A current product order has the following requirements:

Machine setups 8 setups
Materials handling 606 barrels
Quality inspections 80 inspections
Machine hours 830 machine hours
Direct labor hour 336 hours

Using ABC, how much other overhead is assigned to the order?

a. $9,960.
b. $8,000.
c. $11,108.
d. $45,992.
e. $19,200.

Grove Co. acquired a production machine on January 1, 2019, at a cost of $575,000. The machine is expected to have a four-year useful life, with a salvage value of $118,000. The machine is capable of producing 88,000 units of product in its lifetime. Actual production was as follows: 19,360 units in 2019; 28,160 units in 2020; 24,640 units in 2021; 15,840 units in 2022. Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each year of the asset’s life, using three alternative depreciation methods (items a–c):
Productiom Machine Net of Accumulated Depreciation
At December 31
Depreciation Method 2019 2018 2017 2016
a. 80000 152000 264000 392000
b. 80000 80000 120000 240000
c. 80000 180000 280000 380000
Required:
Identify the depreciation method used for each of the preceding comparative balance sheet presentations.If a declinining balance method is used be sure to indicate the percentage.

PROJECT FOCUS: One day, a sophisticated business man walks into the cafe and asks to speak to the owner. He introduces himself as Brawner Smith and says that he would like to talk to you in private. Brawner has just opened a local record store down the street and would like to purchase your customer lists from music events. Brawner is offering you a rather large sum of money for the e-mail addresses and phone numbers for all of the customers who have attended concerts at the cafe over the past five years. What do you do