Homework Week 3 7. Differentiate between the following: active income, passive income, and portfolio income. Active income( which is interchangable with earned income) comes from direct efforts of the taxpayer. Examples is wages, salaries, and commissions. Passive Income is income that is earned through a trade or investments where the taxpayer does not spend much time or effort.
The most recent financial statements for Williamson, Inc., are shown here (assuming no income taxes): Income Statement Balance Sheet Sales $ 6,700 Assets $22,050 Debt $ 8,050 Costs 3,850 Equity 14,000 Net income $ 2,850 Total $22,050 Total $22,050 Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be $7,906. What is the external financing needed?
2. The first step is to estimate the unit cost of services extended by the company on its value adding processes. Sl. No Activity No. of Table 1 operations Cost Incurred (USD) Ref of cost given in column: 4 Unit Cost (USD) 1 2 3 4 5 6 A Handling of cartons B Shipping of cartons C Desktop delivery 2000 dly 440000 Para 3(c) 220/ dly D Set up of manual E Enter individual F Validate EDI orders 8000 orders 40000 Para 3(d) G General & Selling in Warehouse by freight 80000 cartons 75000 cartons 16000 orders 150000 lines 600000 Para 3(d) 4160000 Para 3(a) 52/ 450000 Para 3(b) 6/ carton Carton 160000 Para 3(d) order lines of each order (i) (ii) (iii) 10/order 4/line 5 / order Expense USD 42500000 of Annual Sales 200000 Para 3(e) 0.47% of sales 3.
Case Homework for Seligram, Inc. The biggest issue with Seligram, Inc. is the obsolescence of its labor-based burden allocation process. Since there are two alternative systems that have been promoted, we need to examine and figure out which system works better. First of all, clearly the labor-based burden allocation system is not working because it is using a single cost pool. As we can see from Exhibit 6, ICA’s Direct Labor Cost is 83.8% of CAPACITOR’s while ICA’s Total Machine Hours are 246% of CAPACITOR’s.
ETO’s existing cost system contains only one cost center (the entire facility). All overhead is collected into a single cost pool, and the total overhead cost is divided by the total number of direct labor dollars consumed to give a single direct labor dollar burden rate. The major flaw in ETO’s existing system is that it assumes that all products consume direct labor and overhead in the same proportion. However, some products are produced on simple labor intensive equipment while others require very expensive automated equipment. Therefore, it is extremely unlikely that all products consume direct labor and overhead in the same proportion.
freJHJSBJH Case : Bill French The Workings have been attached in the following Excel Sheet : Q1) Assumptions : | | | | 1) He has done the calculation using Average Figures of Product A, B & C. [Cooper's Concern] | 2) He also assumed that the ratio of Products A,B & C will remain constant next year. [Cooper's Concern] | 3) There would be no increase in Fixed assets/Fixed costs | | 4) There would be no change in Salary Structure and other variable costs | 5) There would be no change in the Dividend policy of the company | 6) When represented graphically, the behaviors of total revenues and total costs are linear in relation to units sold in a time period | 7) Selling price, variable cost per unit and total fixed costs are known and constant | Q2) Break even analysis by considering individual products A) Not taking into account Union Demand i.e no effect on Variable Cost | | Product A | Product B | Product C | Sales at Full Capacity | 2,000,000 | | | | | | | | | Actual Sales volume | 1,750,000 | 400,000 | 400,000 | 950,000 | Unit Sales price | 1.158857143 | 1.67 | 1.5 | 0.8 | Total sales revenue | 2028000 | 668000 | 600000 | 760000 | Variable Cost/Unit | 0.564285714 | 1.25 | 0.625 | 0.25 | Total Fixed Cost | 640000 | 170000.0000 | 275000.0000 | 195000.0000 | | | | | | Net Profit | 400500 | -2000 | 75000 | 327500 | Tax(0.5) | 200250.0000 | | | | Profit After tax | 200250.0000 | | | | Ratio | | | | | Variable Cost to Sales | 0.4869 | 0.7485 | 0.4167 | 0.3125 | Variable Income to Sales | 0.5131 | 0.2515 | 0.5833 | 0.6875 | Utilization of Capacity | 0.8750 | 0.2 | 0.2 | 0.4750 | B) Taking into Account Union Demand i.e. Variable Cost increases by 10% Sales at Full Capacity | 2,000,000 | | | | | | | | | Actual Sales
Unit 2 Codification Case Assignment AC551: Accounting Research Professor: Jerry Kreuze Student: Irina Madison FASB Codification Case 2014 1. a. Firm Fixed-Price Contract – A contract in which the price is not subject to any adjustment by reason of the cost experience of the contractor or his performance under the contract. b. Amortized Cost – The sum of the initial investment less cash collected less write-downs plus yield accreted to date. c. Impairment – Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value. 2.
What is the budgeted fixed cost per unit? $1.06 $1.44 $4.49 $1.94 5. Question : (TCO 1) Which of the following costs is not part of manufacturing overhead? electricity for the factory depreciation of factory equipment salaries for the production supervisors health insurance for sales staff 6. Question : (TCO 1) Product costs are also called manufacturing costs.
Mock Mid Term Test October 2013 Please note the actual exam may contain a different number of questions. Boston Manufacturing Company had the following cost information for May. The labor rate in Department 1 is $10.50 and in Department 2 is $9.50. The overhead rate in Department 1 is based on direct labor-hours, at $4.50 per hour; in Department 2 the rate is 125 percent of direct labor cost. Boston had no beginning work-in-process inventory for May.