Business
Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted operations for the current year. Commercial Residential Revenues $328,000 $514,000 Direct materials costs $45,000 $50,000 Direct labor costs 110,000 290,000 Overhead costs 108,000 263,000 199,000 539,000 Operating income (loss) $65,000 $(25,000) The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers. In addition, the residential client base resides in close proximity to the company office, so travel costs are not as expensive on a per client visit for residential customers. As a result, she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate product costing model can be developed. Here are the three activity cost pools and related information she developed: Activity Cost Pools Estimated Overhead Cost Drivers Scheduling and travel $108,000 Hours of travel Setup time 119,000 Number of setups Supervision 80,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 800 550 Setup time 450 250Compute the activity-based overhead rates for each of the three cost pools. (Round overhead rate for supervision to 2 decimal places, e.g. 0.38.)Overhead RatesScheduling and travel $enter a dollar amount per dollar rounded to 2 decimal placesper hourSetup time $enter a dollar amount per setup rounded to 2 decimal placesper setupSupervision $enter a dollar amount per dollar rounded to 2 decimal places
Determining Amounts to be Paid on Invoices Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Merchandise Freight Paid by Seller Terms Returns and Allowances a. $14,200 - FOB shipping point, 1/10, n/30 $700 b. 10,700 $400 FOB shipping point, 2/10, n/30 1,300 c. 5,700 - FOB destination, 1/10, n/30 500 d. 3,800 200 FOB shipping point, 2/10, n/30 500 e. 1,500 - FOB destination, 2/10, n/30 -
Stoney Brook Company produces two products (X and Y) from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Joint manufacturing costs for the year were $60,000. Sales values and costs were as follows: If Processed Further Product Units Made Sales Price at Split-Off Sales Value Separable Cost X 9,000 $ 40,000 $ 78,000 $ 10,500 Y 6,000 80,000 90,000 7,500 If the joint production costs are allocated based on the net-realizable-value method, the amount of joint cost assigned to product Y would be:
On January 1, 20X1, the Dallas Auto Parts Company acquired nine identical assembly robots for a total of $594,000 cash. The robots had an expected useful life of 10 years and an expected residual value of $54,000 in total. Dallas uses straight-line depreciation. 1. Set up T-accounts and prepare the journal entries for the acquisition and for the first annual depreciation charge. Post to T-accounts. B. On December 31, 20X3, Dallas sold one of the robots for $40,000 in cash. The robot had an original cost of $66,000 and an expected residual value of $6,000. Prepare the journal entry for the sale. Refer to requirement 2. Suppose Dallas had sold the robot for $62,000 cash instead of $40.000. Prepare the journal entry for the sale.