Derrald Company manufactures snowboards.Estimated costs for Year 1 were as follows:
Directlabor...........................................................................................$31,000
Bonuses paid to factorysupervisors....................................................9,000
Interestexpense.....................................................................................32,000
Depreciation on manufacturingequipment..................................... 18,000
Indirectlabor..........................................................................................11,000
Directmaterials......................................................................................36,000
Income taxexpense..............................................................................26,000
Indirectmaterials...................................................................................14,000
Property taxes on the corporate officebuilding............................... 18,000
Estimated direct labor hours were 40,000.
Actual data for Year 1 are as follows:
Total manufacturing overhead: $120,000
Direct labor hours: 60,000 hours
The predetermined manufacturing overhead rate is determined onthe basis of direct labor hours. What is the overhead rate and howmuch more or less is it then the actual overhead.
Applied overhead was MORE than actual overhead by $68,000
Applied overhead was MORE than actual overhead by $42,000
Applied overhead was LESS than actual overhead by $22,000
Applied overhead was LESS than actual overhead by $42,000
Applied overhead was LESS than actual overhead by $68,000
Applied overhead was MORE than actual overhead by $52,000
Applied overhead was MORE than actual overhead by $22,000
Applied overhead was LESS than actual overhead by $52,000
Derrald Company manufactures snowboards.Estimated costs for Year 1 were as follows:
Directlabor...........................................................................................$31,000
Bonuses paid to factorysupervisors....................................................9,000
Interestexpense.....................................................................................32,000
Depreciation on manufacturingequipment..................................... 18,000
Indirectlabor..........................................................................................11,000
Directmaterials......................................................................................36,000
Income taxexpense..............................................................................26,000
Indirectmaterials...................................................................................14,000
Property taxes on the corporate officebuilding............................... 18,000
Estimated direct labor hours were 40,000.
Actual data for Year 1 are as follows:
Total manufacturing overhead: $120,000
Direct labor hours: 60,000 hours
The predetermined manufacturing overhead rate is determined onthe basis of direct labor hours. What is the overhead rate and howmuch more or less is it then the actual overhead.
| Applied overhead was MORE than actual overhead by $68,000 Applied overhead was MORE than actual overhead by $42,000 Applied overhead was LESS than actual overhead by $22,000 Applied overhead was LESS than actual overhead by $42,000 Applied overhead was LESS than actual overhead by $68,000 Applied overhead was MORE than actual overhead by $52,000 Applied overhead was MORE than actual overhead by $22,000 Applied overhead was LESS than actual overhead by $52,000 |
Related questions
The controller of Sonoma Housewares Inc. instructs you toprepare a monthly cash budget for the next three months. You arepresented with the following budget information:
| May | June | July | ||||
| Sales | $86,000 | $90,000 | $95,000 | |||
| Manufacturing costs | 34,000 | 39,000 | 44,000 | |||
| Selling and administrative expenses | 15,000 | 16,000 | 22,000 | |||
| Capital expenditures | _ | _ | 80,000 | |||
The company expects to sell about 10% of its merchandise forcash. Of sales on account, 70% are expected to be collected in themonth following the sale and the remainder the following month(second month following sale). Depreciation, insurance, andproperty tax expense represent $3,500 of the estimated monthlymanufacturing costs. The annual insurance premium is paid inSeptember, and the annual property taxes are paid in November. Ofthe remainder of the manufacturing costs, 80% are expected to bepaid in the month in which they are incurred and the balance in thefollowing month.
Current assets as of May 1 include cash of $33,000, marketablesecurities of $40,000, and accounts receivable of $90,000 ($72,000from April sales and $18,000 from March sales). Sales on accountfor March and April were $60,000 and $72,000, respectively. Currentliabilities as of May 1 include $6,000 of accounts payable incurredin April for manufacturing costs. All selling and administrativeexpenses are paid in cash in the period they are incurred. Anestimated income tax payment of $14,000 will be made in June.Sonomaâs regular quarterly dividend of $5,000 is expected to bedeclared in June and paid in July. Management desires to maintain aminimum cash balance of $30,000.
| May | June | July | |
| Estimated cash receipts from: | |||
| Cash sales | 8,600 | 9,000 | 9,500 |
| Collection of accounts receivable | ? | ? | ? |
| Total cash receipts | ? | ? | ? |
| Estimated cash payments for: | |||
| Manufacturing costs | 30,400 | 34,500 | 39,500 |
| Selling and administrative expenses | 15,000 | 16,000 | 22,000 |
| Capital expenditures | - | - | 80,000 |
| Other purposes: | - | - | - |
| Income tax | - | 14,000 | - |
| Dividends | - | - | 5,000 |
| Total cash payments | 45,000 | 64,500 | 146,500 |
| Cash increase or (decrease) | ? | ? | ? |
| Cash balance at beginning of month | 33,000 | ? | ? |
| Cash balance at end of month | ? | ? | ? |
| Minimum cash balance | 30,000 | 30,000 | 30,000 |
| Excess or (deficiency) | ? | ? | ? |
I filled in the table the best i could but the ? are the ones Igot wrong and couldn't figure it out.
Recording Transactions (Including Adjusting and Closing Entries), Preparing Financial Statements, and Performing Ratio Analysis
Josh and Kelly McKay began operations of their furniture repair shop (Furniture Refinishers, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2017, was as follows:
| Account Titles | Debit | Credit |
| Cash | â5,000 | |
| Accounts receivable | â4,000 | |
| Supplies | â2,000 | |
| Small tools | â6,000 | |
| Equipment | ||
| Accumulated depreciation (on equipment) | ||
| Other assets (not detailed to simplify) | â9,000 | |
| Accounts payable | â7,000 | |
| Notes payable | ||
| Wages payable | ||
| Interest payable | ||
| Income taxes payable | ||
| Unearned revenue | ||
| Common stock (60,000 shares, $0.10 par value) | â6,000 | |
| Additional paid-in capital | â9,000 | |
| Retained earnings | â4,000 | |
| Service revenue | ||
| Depreciation expense | ||
| Wages expense | ||
| Interest expense | ||
| Income tax expense | ||
| Remaining expenses (not detailed to simplify) | ||
| âTotals | 26,000 | 26,000 |
Transactions during 2017 follow:
A.Borrowed $20,000 cash on July 1, 2017, signing a one-year, 10 percent note payable.
B.Purchased equipment for $18,000 cash on July 1, 2017.
C.Sold 10,000 additional shares of capital stock for cash at $0.50 market value per share at the beginning of the year.
D.Earned $70,000 in revenues for 2017, including $14,000 on credit and the rest in cash.
E.Incurred remaining expenses of $35,000 for 2017, including $7,000 on credit and the rest paid with cash.
F.Purchased additional small tools, $3,000 cash.
G.Collected accounts receivable, $8,000.
H.Paid accounts payable, $11,000.
I..Purchased $10,000 of supplies on account.
J.Received a $3,000 deposit on work to start January 15, 2018.
K.Declared and paid a cash dividend, $10,000.
Data for adjusting entries:
L.Supplies of $4,000 and small tools of $8,000 were counted on December 31, 2017 (debit Remaining Expenses).
M.Depreciation for 2017, $2,000.
N.Interest accrued on notes payable (to be computed).
O.Wages earned since the December 24 payroll but not yet paid, $3,000.
P.Income tax expense was $4,000, payable in 2018.
Required:
1.Set up T-accounts for the accounts on the trial balance and enter beginning balances.
2.Prepare journal entries for transactions (a) through (k) and post them to the T-accounts.
3.Journalize and post the adjusting entries (l) through (p).
4.Prepare an income statement (including earnings per share rounded to two decimal places), statement of stockholdersâ equity, and balance sheet.
5.Identify the type of transaction for (a) through (k) for the statement of cash flows (O for operating, I for investing, F for financing), and the direction and amount of the effect.
6.Journalize and post the closing entry.
7.Compute the following ratios (rounded to two decimal places) for 2017 and explain what the results suggest about the company:
a,Current ratio
b,Total asset turnover
c,Net profit margin
