Arena Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead.The standard cost card for the company’s only product is as follows:Inputs Standard Quantityor Hours Standard Price or Rate Standard CostDirect materials 1.2 pounds $ 5.50 per pound $ 6.60Direct labor 0.90 hours $ 21.00 per hour 18.90Fixed manufacturing overhead 0.90 hours $ 4.50 per hour 4.05Total standard cost per unit $ 29.55The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $81,000 and budgeted activity of 18,000 hours.During the year, the company completed the following transactions:Purchased 35,400 pounds of raw material at a price of $4.60 per pound.Used 32,180 pounds of the raw material to produce 26,900 units of work in process.Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 23,810 hours at an average cost of $20.60 per hour.Applied fixed overhead to the 26,900 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $67,800. Of this total, $3,800 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $64,000 related to depreciation of manufacturing equipment.Completed and transferred 26,900 units from work in process to finished goods.Sold (for cash) 27,100 units to customers at a price of $36.60 per unit.Transferred the standard cost associated with the 27,100 units sold from finished goods to cost of goods sold.Paid $149,000 of selling and administrative expenses.Closed all standard cost variances to cost of goods sold.The company calculated the following variances for the year:Materials price variance $ 31,860 FMaterials quantity variance $ 550 FLabor rate variance $ 9,524 FLabor efficiency variance $ 8,400 FFixed manufacturing overhead budget variance $ 13,200 FFixed manufacturing overhead volume variance $ 27,945 FTo answer the following questions, you will need to record transactions a through i in the worksheet below. This worksheet is similar to the worksheets in your text except that it has been split into two parts to fit on the page. PP&E (net) stands for Property, Plant, and Equipment net of depreciation.Cash Raw Materials Work in Process Finished Goods PP&E (net) = Materials Price Variance Materials Quantity Variance Labor Rate Variance Labor Efficiency Variance FOH Budget Variance FOH Volume Variance Retained Earnings 1/1 $1,200,000 $29,700 $0 $70,920 $505,400 = $0 $0 $0 $0 $0 $0 $1,806,020 a. = b. = c. = d. = e. = f. = g. = h. = i. = 12/31 = The ending balance in the PP&E (net) account will be closest to:A. $505,400B. $441,400C. $396,455D. $501,600

Answer: B.) $441,400

Explanation:

The ending balance in the Property, Plant and Equipment (net) account will be closest to:

The PP&E (net) is the Property, Plant and Equipment net of depreciation.

The sum of the capital balance and capital expenditure during the year, Less the Depreciation during the year.

Opening balance + Capital expenditure during the year - depreciation during the year = $(505,400 + 0 - 64,000) = $441,400

The following transactions were completed by the company.

a. The company completed consulting work for a client and immediately collected $5,500 cash earned
b. The company completed commission work for a client and sent a bill for $4,000 to be received within 30 days
c. The company paid an assistant $1,400 cash as wages for the period
d. The company collected $1,000 cash as a partial payment for the amount owed by the client in transaction b
e. The company paid $700 cash for this period's cleaning services.

Enter the impact of each transaction on individual items of the accounting equation. (Enter decreases to account balances with a minus sign.)

Kingbird Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lease be for 9 years. The equipment has a useful life of 10 years. Kingbird wants a guarantee that the residual value of the equipment at the end of the lease is at least $4,000. MTBA agrees to guarantee a residual value of this amount though it expects the residual value of the equipment to be only $2,000 at the end of the lease term. If the fair value of the equipment at lease commencement is $60,000, what would be the amount of the annual rental payments Kingbird demands of MTBA, assuming each payment will be made at the beginning of each year and Kingbird wishes to earn a rate of return on the lease of 6%? (

Rafa runs a profit maximizing firm. It turns out that for Rafa his fixed costs are $1,000 and his avoidable fixed costs are $600. In his current short run situation when he has successfully set his marginal revenue equal to his marginal cost where marginal costs are rising, he is disappointed to discover that his economics profits are negative. In fact at this production level his profits are $- 500.
Required:
1. Which one of the following statements is TRUE?
A) Rafa's accounting profits must also be negative in the short run.
B) Rafa should shut down in the short run.
C) Rafa should continue to produce at a loss in the short run.
D) If Rafa is a monopolist, he should continue to operate in the short run, otherwise he should shut down.

Merck & Co., Inc. is a global, research-driven pharmaceutical company that discovers, develops, manufactures, and markets a broad range of human and animal health products. The following are excerpts from the financial review section of the company’s annual report.
MERCK & CO., INC.
Financial Review Section (partial).
In the United States, the Company has been working with private and governmental employers to slow the increase of health care costs.
Outside of the United States, in difficult environments encumbered by government cost containment actions, the Company has worked with payers to help them allocate scarce resources to optimize health care outcomes, limiting potentially detrimental effects of government actions on sales growth.
Several products face expiration of product patents in the near term.
The Company, along with other pharmaceutical manufacturers, received a notice from the Federal Trade Commission (FTC) that it was conducting an investigation into pricing practices.
Required:
1. In light of the above excerpts from Merck's annual report, discuss some unique pricing issues faced by companies that operate in the pharmaceutical industry.
2. What are some reasons why the same company often sells identical drugs for dramatically different prices in different countries? How can the same drug used for both humans and animals cost significantly different prices?
3. Suppose that Merck has just developed a revolutionary new drug. Discuss the steps it would go through in setting a price. Include a discussion of the information it would need to gather, and the issues it would need to consider.

​A-Plus Appliances sells dishwashers with a​ four-year warranty. In​ 2019, sales revenue for dishwashers is​ $94,000. The company estimates warranty expense at​ 4.5% of revenues. What is the total estimated warranty payable of​ A-Plus Appliances as of December​ 31,2019? A-Plus Appliances began operating in 2019.​ (Round your final answer to the nearest​ dollar.)

Company incurred the following costs while producing 400 ​units: direct​ materials, $ 6 per​ unit; direct​ labor, $ 27 per​ unit; variable manufacturing​ overhead, $ 19 per​ unit; total fixed manufacturing overhead​ costs, $ 4 comma 000​; variable selling and administrative​ costs, $ 10 per​ unit; total fixed selling and administrative​ costs, $ 3 comma 200. There are no beginning inventories. What is the operating income using absorption costing if 400 units are sold for $ 180 ​each?

The before-tax income for Ivanhoe Co. for 2020 was $104,000 and $81,200 for 2021. However, the accountant noted that the following errors had been made:

1. Sales for 2020 included amounts of $39,000 which had been received in cash during 2020, but for which the related products were delivered in 2021. Title did not pass to the purchaser until 2021.
2. The inventory on December 31, 2020, was understated by $9,400.
3. The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an annual basis.
Interest Expense 14,400 Cash 14,400 The bonds have a face value of $240,000 and pay a stated interest rate of 6%. They were issued at a discount of $16,000 on January 1, 2020, to yield an effective-interest rate of 7%.
4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and 20221. Repairs in the amount of $8,600 in 2021 and $9,300 in 2022 were so charged. The company applies a rate of 10% to the balance in the Equipment account at the end of the year in its determination of depreciation charges.

Prepare a schedule showing the determination of corrected income before taxes for 2020 and 2021.

Given the following diagrams: Q1 = 12 bags. Q2 = 7 bags. Q3 = 19 bags. The market equilibrium price is $46 per bag. The price at point a is $70 per bag. The price at point c is $10 per bag. The price at point d is $56 per bag. The price at point e is $31 per bag. The price at point f is $67 per bag. The price at point g is $32 per bag. Apply the formula for the area of a triangle (Area = ½ × Base × Height) to answer the following questions.

What is the dollar value of the total surplus (producer surplus plus consumer surplus) when the allocatively efficient output level Q1 is being produced?

Units of production data for the two departments of Continental Cable and Wire Company for November of the current fiscal year are as follows: Drawing Department Winding Department Work in process, November 1 6,000 units, 50% completed 2,200 units, 70% completed Completed and transferred to next processing department during November 82,200 units 81,400 units Work in process, November 30 4,600 units, 65% completed 3,000 units, 25% completed a. If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for November for the Drawing Department. If an amount is zero, enter in "0".

An insurance company monitors customer complaints. There are several possible problem categories including wrong bill sent, charges too high, failure to add new coverage, deletion of existing coverage and incorrect address. Determine the percentage that each problem contributes to customer complaints.

Just before the outbreak of the Corona virus you bought a stock expected to pay a constant dividend (without growth) once every year for the foreseen future. Right after the outbreak you revalue the stock. Due to fact that the company will make zero profits this year, you expect that the dividend at the end of the year cannot be paid. However, you expect the previous dividend schedule to resume in 2 years from now. According to the Dividend Growth Model, how much did your stock lose in value (in percent) due to the corona virus outbreak? Assume that the required return for this stock is 5%.

Rose is a human resources manager for a rapidly growing corporation. The firm recently hired 100 new workers, 10 of whom were involved in workplace accidents soon after they were hired. It was determined that alcohol usage was the cause of these accidents. Top management has asked Rose to do a better job in screening potential workers for alcohol abuse to avoid this in the future. Rose should point out that in fact the 10 percent of the recent hires with alcohol issues is actually much lower than the overall percentage of employees with alcohol issues that are involved in industrial injuries and fatalities in the U.S. True or False

Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $480,000 Number of setups 600 Ordering costs 360,000 Number of orders 18,000 Machine costs 840,000 Machine hours 42,000 Receiving 400,000 Receiving hours 10,000 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $600,000 $800,000 Direct labor $480,000 $480,000 Units completed 16,000 8,000 Direct labor hours 6,000 2,000 Number of setups 400 200 Number of orders 6,000 12,000 Machine hours 24,000 18,000 Receiving hours 3,000 7,000 The company's normal activity is 8,000 direct labor hours. Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Unit Cost Model A $ Model B $ 2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent. Unit Cost Model A $ Model B $ 3. Which method produces the more accurate cost assignment?

Sarbanes-Oxley does not require:

A) companies and their independent accountants to report on the effectiveness of the companies' internal controls.
B) companies to turn over responsibility for establishing and maintaining internal controls for financial reporting to auditors.
C) all publicly held companies to comply with the act.
D) companies to file their internal control reports with the 10-K report with the Securities and Exchange Commission.

Waldo consumes only apples and bananas and bananas are an inferior good for him. The price of apples increases, but there is an increase in his income that keeps him on the same indifference curve as before. (Waldo has convex preferences, and he prefers more to less of either good.)

a After the change, Waldo will buy fewer of both goods.
b After the change, Waldo will buy more of both goods.
c After the change, Waldo will buy more bananas and fewer apples.
d After the change, Waldo will buy fewer bananas and more apples.
e We would need to know his utility function to determine whether any of the above statements are true.

The rock cycle is an example of the ______ of energy and matter?

On April 1, Quality Corporation, a U.S. company, expects to sell merchandise to a French customer in three months, denominating the transaction in euros. On April 1, the spot rate is $1.41 per euro, and Quality enters into a three-month forward contract cash flow hedge to sell 400,000 euros at a rate of $1.36. At the end of three months, the spot rate is $1.37 per euro, and Quality delivers the merchandise, collecting 400,000 euros. What are the effects on net income from these transactions?
a. $8,000 Discount Expense plus a $12,000 negative Adjustment to Net Income when the merchandise is delivered.
b. $8,000 Discount Expense plus a $12,000 positive Adjustment to Net Income when the merchandise is delivered.
c. $8,000 Discount Expense plus a $20,000 negative Adjustment to Net Income when the merchandise is delivered.
d. $8,000 Discount Expense plus a $20,000 positive Adjustment to Net Income when the merchandise is delivered.
e. $8,000 Discount Expense plus an $8,000 positive Adjustment to Net Income when the merchandise is delivered.

he following information was taken from the 2018 financial statements of Jenny Gardner Corporation: Inventory, January 1, 2018 $ 180,000 Inventory, December 31, 2018 240,000 Accounts payable, January 1, 2018 150,000 Accounts payable, December 31, 2018 240,000 Sales revenue 1,200,000 Cost of goods sold 800,000 If the direct method is used in the 2018 statement of cash flows, what amount should Jenny Gardner report as cash payments to suppliers

On January 1, 20X8, Polo Corporation acquired 75 percent of Stallion Company's voting common stock for $300,000. At the time of the combination, Stallion reported common stock outstanding of $200,000 and retained earnings of $150,000, and the fair value of the noncontrolling interest was $100,000. The book value of Stallion's net assets approximated market value except for patents that had a market value of $50,000 more than their book value. The patents had a remaining economic life of ten years at the date of the business combination. Stallion reported net income of $40,000 and paid dividends of $10,000 during 20X8.

a) Provide the journal entries recorded by Polo at December 31, 20X8 on its book if it accounts for its investment in Stallion using equity method.

b) Provide all consolidation entries needed at December 31, 20X8, to prepare consolidated financial statements.

Tulip growing is a perfectly competitive industry, and all tulip growers have the same cost curves. The market price of tulips is $25 a bunch, and each grower maximizes profit by producing 2,000 bunches a week. The average total cost of producing tulips is $20 a bunch, and the average variable cost is $15 a bunch. Minimum average variable cost is $12 a bunch.

Draw a graph representing a tulip grower’s short-run cost curves (ATC, AVC, and MC curves). On the vertical axis, label the $25.00 price, average total cost ($20.00) and average variable cost ($15.00) of producing 2,000 tulips, and the lowest possible average variable cost of $12.00.

a. What is the economic profit that each tulip grower is making in the short run? Please show your calculations.
b. What is the lowest price at which the tulip grower will produce (instead of shutting down)?
c. What is each grower’s profit at the shutdown point?
d. At a price of $25.00 per bunch, would we expect entry or exit in the long run?

MJ Logistics has decided to build a new warehouse to support its supply chain activities. They have the option of building either a large warehouse or a small one. Construction costs for the large facility are $15 million versus $5 million for the small facility. The present value of the after tax profit (excluding construction costs) over the expected life of the warehouses depends on the volume of demand. In the large warehouse, if there is high demand, the company will make $35 million, and if there is low demand, the company will make $20 million. In the small warehouse, if there is high demand, the company will make $15 million, and if there is low demand, the company will make $ 9 million. The probability of high demand has been estimated to be 40% by the VP of Marketing for MJ Logistics. This estimate holds true regardless of whether a large or small warehouse is built.Construct a decision tree reflecting the components of the decision facing MJ Logistics. Be sure to clearly state the decision MJ Logistics should make as a risk-neutral company.

On January 1, 20X8, Polo Corporation acquired 75 percent of Stallion Company's voting common stock for $300,000. At the time of the combination, Stallion reported common stock outstanding of $200,000 and retained earnings of $150,000, and the fair value of the noncontrolling interest was $100,000. The book value of Stallion's net assets approximated market value except for patents that had a market value of $50,000 more than their book value. The patents had a remaining economic life of ten years at the date of the business combination. Stallion reported net income of $40,000 and paid dividends of $10,000 during 20X8.
Required:
a) Based on the preceding information, what balance will Polo report as its investment in Stallion at December 31, 20X8, assuming Polo uses the equity method in accounting for its investment?

Coast-to-Coast Inc. is considering the purchase of an additional delivery vehicle for $70,000 on January 1, 20Y1. The truck is expected to have a five-year life with an expected residual value of $15,000 at the end of five years. The expected additional revenues from the added delivery capacity are anticipated to be $65,000 per year for each of the next five years. A driver will cost $40,000 in 20Y1, with an expected annual salary increase of $2,000 for each year thereafter. The annual operating costs for the truck are estimated to be $6,000 per year.
Determine the expected annual net cash flows from the delivery truck investment for 20Y1.

Financial data for Safety Hire as of 30 June 2019 are:
Required:
Prepare an income statement for the month of June and a balance sheet in account format for Safety
Hire as at 30 June 2019

The management at Dime Corporation is investigating purchasing equipment that would increase sales revenues by $527,000 per year and cash operating expenses by $339,800 per year. The equipment would cost $425,000 and have a 10 year life with no salvage value. Dime Corporation uses straight-line depreciation for all fixed assets. The simple rate of return on the investment is closest to (ignore income taxes): A. 44.05% B. 54.05% C. 27.46% D. 34.05%

You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: penguin patties, raskels, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together.
As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods.
Run-of-the-Mills provides your marketing firm with the following data: When the price of penguin patties increases by 5%, the quantity of raskels sold decreases by 4% and the quantity of kipples sold increases by 5%.
Your job is to use the cross-price elasticity between penguin patties and the other goods to determine which goods your marketing firm should advertise together.
1. Complete the first column of the following table by computing the cross-price elasticity between penguin patties and raskels, and then between penguin patties and kipples. In the second column, determine if penguin patties are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with penguin patties.
Relative to Penguin Patties
Cross-Price Elasticity of Demand Complement or Substitute Recommend Marketing with Penguin Patties (Yes or No)
Raskels
Kipples

On January 1, 2021, Tabitha Designs purchased a patent for $402,000 giving it exclusive rights to manufacture a new type of synthetic clothing. While the patent had a remaining legal life of 15 years at the time of purchase, Tabitha expects the useful life to be only eight more years. In addition, Tabitha purchased equipment related to production of the new clothing for $158,000. The equipment has a physical life of 10 years, but Tabitha plans to use the equipment only over the patent's service life and then sell it for an estimated $52,000. Tabitha uses straight-line for all long-term assets. The amount to expense in 2024 related to the patent and equipment should be: Multiple Choice $104,000. $98,800. $63,500. $40,050.

You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: penguin patties, raskels, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of penguin patties decreases by 5%, the quantity of raskels sold decreases by 4% and the quantity of kipples sold increases by 6%. Your job is to use the cross-price elasticity between penguin patties and the other goods to determine which goods your marketing firm should advertise together.

Complete the first column of the following table by computing the cross-price elasticity between penguin patties and raskels, and then between penguin patties and kipples. In the second column, determine if penguin patties are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with penguin patties.


Relative to Penguin Patties

Cross-Price Elasticity of Demand Complement or Substitute Recommend Marketing with Penguin Patties (Yes or No)
Raskels
Kipples

A company's planned activity level for next year is expected to be 100,000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs:

Variable Fixed

Indirect materials $90,000 Depreciation $37,500

Indirect labor 120,000 Taxes 7,500

Factory supplies 15,000 Supervision 30,000

A flexible budget prepared at the 90,000 machine hours level of activity would show total manufacturing overhead costs of

$277,500.

$202,500.

$270,000.

$225,000.

The following information pertains to JAE Corp. at January 1, 2018:

Common stock, $11 par, 12,000 shares authorized, 2,400 shares issued and outstanding: $26,400
Paid-in capital in excess of par, common stock 16,700
Retained earnings 74,600

JAE Corp. completed the following transactions during 2018:

Issued 1,200 shares of $11 par common stock for $29 per share.
Repurchased 230 shares of its own common stock for $26 per share.
Resold 50 shares of treasury stock for $27 per share.

Required:
a. How many shares of common stock were outstanding at the end of the period?
b. How many shares of common stock had been issued at the end of the period?
c. Organize the transactions data in accounts under the accounting equation.
d. Prepare the stockholders' equity section Of the balance sheet reflecting these transactions. Include the number Of shares authorized, issued, and outstanding in the description of the common stock.