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6 Pages

### HW6_7_8_9sol

Course: ACG 2071, Spring 2011
School: UNF
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Word Count: 363

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2071 ACG Homework Problems Problem 6 A. TC = VC x + FC Product FC = \$0.60*1,800 = \$1,080 at 1800 units. Period FC = \$1.30*1,800 = \$2,340 at 1800 units. Product FC Period FC Product VC (\$4.00*1,800) Period VC (\$1.10*1,800) Total cost B. Sales (\$15*1,800) CGS: VC product FC product (see part A) Gross profit \$1,080 2,340 7,200 1,980 \$12,600 \$27,000 \$7,200 1,080 C. Sales (\$15*1,800) VC product VC period Contribution...

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2071 ACG Homework Problems Problem 6 A. TC = VC x + FC Product FC = \$0.60*1,800 = \$1,080 at 1800 units. Period FC = \$1.30*1,800 = \$2,340 at 1800 units. Product FC Period FC Product VC (\$4.00*1,800) Period VC (\$1.10*1,800) Total cost B. Sales (\$15*1,800) CGS: VC product FC product (see part A) Gross profit \$1,080 2,340 7,200 1,980 \$12,600 \$27,000 \$7,200 1,080 C. Sales (\$15*1,800) VC product VC period Contribution margin 8,280 \$18,720 \$27,000 \$7,200 1,980 9,180 \$17,820 D. Income before taxes is the same as operating income which is the same regardless if the full costing or variable costing approach is used. Sales (\$15*1,800) VC product VC period Contribution margin FC product FC period Operating income (income before taxes) \$27,000 \$7,200 1,980 1,080 2,340 9,180 \$17,820 3,420 \$14,400 Problem 7 Utilties: March \$7,650/5,100 = \$1.50 April \$8,700/5,800 = \$1.50 Utilities cannot be fixed because the total costs differ at the two activity levels. This cost is variable because the cost per unit is the same at each activity level. Shipping March April \$13,000/2,500 = \$14,000/3,100 = \$5.20 \$4.52 Shipping cannot be fixed because the total costs differ at the two activity levels. Cannot be variable because the cost per unit is not the same at each activity level. So, it defaults to a mixed cost. Problem 8 A Account analysis because there is only one level of activity. B Car wash labor Soap, cloth, and supplies Water Electric power to move conveyor belt Total variable cost Variable cost per unit = \$292,000/70,000 = \$161,000 32,000 28,000 72,000 \$293,000 \$4.18571 C FC Total = \$64,000 + \$46,000 = \$110,000 D TC = FC + VC x y = 110,000 + 4.19x E y = 110,000 + \$4.18571*74,000 TC = Problem 9 1. A High activity = October Low activity = July B \$419,743 Cost per unit = VC y1- y2 / x1 - x2 =VC [208,000 - 164,000] / [14,000 - 9,000] = \$8.80 per unit To get FC: TC = FC + VC x \$208,000 = 14,000*8.80 + FC so FC = \$84,800 C Equation: y = 84,800 + 8.80x D The only cost that will increase is the variable cost: 1 x \$8.80 = \$8.80 2 \$250,000 \$200,000 \$150,000 \$100,000 \$250,000 \$200,000 \$150,000 \$100,000 \$50,000 \$8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 Y intercept and slope will vary depending on accuracy of drawing. This graph looks as if the y-intercept is about \$75,000. Rise over run can be used to determine variable cost per unit. Miles per month 3 June July August September October 13,000 9,000 9,500 11,500 14,000 Total cost per month \$210,000 164,000 160,000 180,000 208,000 SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.96 0.93 0.9 7385.49 5 ANOVA df Regression Residual Total SS 1 ### 3 ### 4 2243200000 Coefficients Intercept X Variable 1 64181.82 10.55 Standard Error 19748.05 1.71 MS ### ### t Stat 3.25 6.17 A y = 10.55X + 64,182 B y = 10.5454545*10,080 + 64,181.82 y= \$170,480 Do not round in the interim. F Significance F 38.13 P-value 0.05 0.01 0.01 Lower 95%Upper 95% ### ### 5.11 15.98 . This cost is ls. Cannot be defaults to a .80 per unit Lower 95.0% Upper 95.0% ### ### 5.11 15.98
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UNF - ACG - 2071
ACG 2071Problem 10A.[\$21 - \$6] / \$21 =71.43%BFixed costs = \$3.20 x 10,400 = \$33,28021X - 6X - 33,280 = 0x = 2,219 units = BEP in unitsBEP in sales = 2,219 units x \$21 = \$46,599CCM ratio * increase in sales = 71.42857% x \$1,000 = \$714D. If vari
UNF - ACG - 2071
Problem 13A.Units:1200 : 18002:3Revenue:48000 : 360004:3B[\$84,000 - \$35,400] / \$84,000 = 57.85714%57.86%Note: 'Rate' always means a percentage answer with two decimal places displayedC. WACM/unit = [\$84,000 - \$35,400] / 3,000 =\$16.20SP x - VC
UNF - ACG - 2071
Homework ProblemsProblem 15A.Produce the product with the larger CM per constrained resource, in this case, hours.Big MoeLittle JoeContribution margin per unit\$29.00\$14.00Hours need to produce each unit1.45 hrs.0.50 hrs.CM per hour\$20.00\$28.
UNF - ACG - 2071
Problem 19A.CF0-47000C013050C0219100C0316800C04168000234(47000)B.13050191001680016800C039700C049700CF0-41000C019700C029700C0512500C05 = 9,700 + 2,800 = 12,5000(41000)C.CF0-310000C013000019700C025400029700C0
UNF - ACG - 2071
Problem 20A.BAII plus dataProblem 21CF0-47000C013050NPV =IRR =B.BAII plus dataC0219100C03C0416800 16800\$(1,907)6.23%CF0-41000C019700NPV =IRR =NPV =IRR =C029700C039700=NPV(0.0782,D7:G7)+C7=IRR(C7:G7)=NPV(0.1028,D16:H16)+C16
UNF - ACG - 2071
Problem 22A.B.Incremental revenueIncremental expenses:DriverOperatingDepreciationIncome before taxesIncome tax expenseNet incomeAdd depreciationOperating cash flows\$113,150(64,800)(19,400)(12,560)16,390(5,737)10,65412,560\$23,214Depre
UNF - ACG - 2071
Problem 24From problem 22 solution:Incremental revenueIncremental expenses:DriverOperatingDepreciationIncome before taxesIncome tax expenseNet incomeAdd depreciationOperating cash flows\$113,150(64,800)(19,400)(12,560)16,390(5,737)10,654
UNF - ACG - 2071
Problem 33Incremental revenue decreaseIncremental variable cost savingsIncremental direct fixed costs savedIncremental decrease in profit if tigers are discontinuedEffect on Profit\$(30,000)17,8006,000\$(6,200)Do not discontinue since profits will
UNF - ACG - 2071
Problem 36A Assets are economic resources that will benefit the company in the future.Expenses are resources that have been used up to produce income.They are both costs and differ in whether they are used up or not.BA cost incurred that will be capi
UNF - ACG - 2071
Problem 39A. Net incomeAdd interest expense, net of taxes:\$540,000 x (1-34%)NOPAT\$1,020,000B. AssetsLess non-interest bearing current liabilitiesInvested capital\$8,500,000712,000\$7,788,000C.356,400\$1,376,400\$1,376,400NOPAT==\$7,788,0001
UNF - ACG - 2071
Problem 44AssetsLess non-interest bearing current liabilitiesInvested capital\$9,100,000500,000\$8,600,000Net incomeAdd interest expense, net of taxes:\$240,000 x (1-35%)NOPAT\$1,060,000156,000\$1,216,000EVA = NOPAT +/- Acctg. Distortions - CC [I
UNF - ACG - 2071
Problem 46Part ATrans#CashBB12345214,00067Assets35,00095,060700LiabilitiesAccts. PayableInventory22,80098,00035,000OERevenueSalesCGSExpensesSelling Exp.Gen. Adm. Exp.98,0002,940 *98,000700136,000240,000136,00022,0001
UNF - ACG - 2071
Problem 47Actual CostingTrans#Raw MaterialsBB4,000150,000212,000341,200558,0002,600678AssetsWork in Process9,000Finished Goods8,000CGSExpensesSelling Exp.Gen. Adm. Exp.58,0002,60014,0003,0004,0002,0001,0002,0006,0009
UNF - ACG - 2071
Problem 50Normal CostingTrans#Raw MaterialsBB4,000150,000212,000341,200558,0002,600678appliedAssetsWork in Process9,000Finished Goods8,000ExpensesCGSMOHSelling Exp.Gen. Adm. Exp.58,0002,60014,0003,0004,0002,0001,0002,
UNF - ACG - 2071
Problem 51End. Bal.175,40072,40056,100End. Bal.Beg. Bal.+ Mat. PurchRaw Materials5,100Beg. Bal.178,0003,200175,400 + DM4,500+ DL+ MOHWork In Process10,50012,800302,300301,600Cost of Goods Sold302,300Beg. Bal.Finished Goods12,300
UNF - ACG - 2071
Problem 54Beg. Bal.+ Mat. PurchEnd. Bal.Raw Materials5,100Beg. Bal.178,0003,200175,400 + DM4,500+ DL+ MOHWork In Process10,500175,40072,40056,100End. Bal.12,800Beg. Bal.302,300301,600Cost of Goods Sold302,300Finished Goods12,300
UNF - ACG - 2071
Problem 55Which jobs were completed and transferred out during July?Which jobs are in work in process at July 31?Which jobs are in finished goods at July 31?BeginningBeginningBeginningStartedStartedStartedStartedWork In Process31313333343
UNF - ACG - 2071
Problem 57ABCList which items are cost objects:Bert and ErnieList which items are cost pools.Machine setups, maintenance, storeroomList which items are cost drivers:# of setups, # of square feet, # of crates, DL hoursD. Costs of Ernie using trad
UNF - ACG - 2071
Problem 59Because the problem is asking for sales, and you know the number of units to be sold,inventory levels are not relevant.Units to be sold: 35,000*1.1*1.1 =Sales price per unitBudgeted sales revenue42,350\$1.40\$59,290Problem 60Sales (units
UNF - ACG - 2071
Problem 62Budgeted salesBudgeted purchasesBudgeted income taxesMay\$320,000104,00027,200June\$300,000110,00028,400July\$288,000102,00025,600A. Cash receipts for July:Cash received from July sales within discount period\$288,000*30%*80%*97%C
UNF - ACG - 2071
Problem 64A. 1,040 because that is the actual production achieved and the managershould be allowed to spend based on that level of activity.B.Orr CorporationFlexible Budget at 1,040 UnitsMonth Ending August 31, 2009Variable costs:Direct Materials
UNF - ACG - 2071
Problem 65AFOH = \$62,000/2,000 = \$31 per unitB.(\$31 + \$11)*2,060 =C.Determine the standard cost per unitDM: 1/2 lb. * \$15/lb. =\$7.50DL: 1.2 hrs * \$12/hr. =14.40FOH31.00VOH11.00Total standard cost\$63.90Problem 66A.Direct materialsDirect
UNF - ACG - 2071
Problem 67Material variancesPA\$14.00xQAp1,050=14,700S\$15.00xAp1,050=15,750S\$15.00xAu1,080=16,200\$1,050 FMPVS\$15.00xS1,030 (1/2 lb.*2,060)=15,450\$750 UMQV\$300 FTMV2% Threshhold2%*\$15,450 = \$309Investigate MQV - produ
UNF - ACG - 2071
Problem 69A. Determine how much overhead the company applied during the year,Variable overhead:Ratex ActualApplied\$22,000=\$11.00 x 2,060 =\$22,6602,000Fixed overhead:\$62,000=\$31.00 x 2,060 =\$63,8602,000\$86,520B. Calculate all overhead var
UNF - ACG - 2071
Problem 71ATransfer price should be incremental cost plus opportunity cost.B\$23Profit will stay the same for WilsonCosts will drop by \$10 per unit for a total of \$200,000 for SportsC\$35There is an opportunity cost of \$12 per unit for Wilson (\$35
UNF - ACG - 2071
Homework ProblemsProblem 16A. Jeb = CM/Operating income =George = CM/Operating income =\$230,000 - \$110,00050,000=2.40\$420,000 - \$240,00080,000=2.25B. Jeb, because operating leverage is higher which indicates more risk due to the degreeto whic
UNF - ACG - 2071
Problem 28Case 1Incremental revenueIncremental costs:DMDLEffect on Profit Calculations:\$30,000 \$3*10,000(15,000) (\$54,000/36,000) x 10,000(10,000) (\$36,000/36,000) x 10,000Incremental increase in profit if order is accepted\$5,000The order shou
UNF - ACG - 2071
Problem 29Incremental cost to buyIncremental cost savings:DMVOHDLFOHOpportunity cost: Lease revenueIncremental decrease in profits if outsourcedEffect on Profit Calculations:\$(96,000) \$2.40*40,00050,4008,80020,4001,7603,700\$(10,940)\$1.26*
UNF - ACG - 2071
Problem 31Incremental revenueEffectOn Profit\$7,500 (\$2.20-\$1.70)*15,000)Incremental costs:Candy piecesRental cost(6,300) (\$0.42*15000)(1,100)Incremental increase in profit if processed further\$100The bloizzard treats should be processed since
UNF - ACG - 2071
ACG 2071 Managerial AccountingParticipation Quiz 8 points March 31, 2011Version A SOLUTIONFlyer, Inc. produces rulers from plastic resin. Flyerfor the next 4 months as:March AprilMayEstimated24,800 24,000 32,100productionEstimated sales25,000 2
UNF - ACG - 2071
ACG 2071 Participation Quiz Version A1. (1 point-1 minute) Watson provided the following information for June.Sales\$900,000Variable expenses511,650Fixed expenses280,250Show the calculation of the contribution margin ratio. Circle your answer and
UNF - ACG - 2071
1. Points:0.5The purpose of recording amortization expense is toprovide cash necessary to replace intangible assets when they are used uprecord the balance sheet amount of amortizable assets at replacement valuematch expenses with revenues using a rea
UNF - FIN - 3233
INTEREST RATE PROBLEM SETYIELD FORMULAS: There are a number of different ways of calculating different yields. A fewof these formulas are shown below.1.Current yield of a bond:annual coupon interest in dollars = CCurrent yield =Current PriceP2.Y
UNF - FIN - 3233
DURATIONYou must use LOTUS or another Spreadsheet software. You must turn in your diskette with theworksheet and your printed results.The Merchant's Bank and Trust Co. has \$750,000 in bonds maturing from the existing portfolio. Youhave received intere
UNF - FIN - 3233
UNF - FIN - 3233
Chapter 2The Role of Money in the MacroeconomyIntroduction- What is finance- Dimension of finance- Sectors of economy- Importance of financial system- Govt. interest in financial sector*- What is money- Why hold financial assetsWhat is Finance?
UNF - FIN - 3233
Chapter 3Financial Instruments, Markets, and InstitutionsFederal Reserveaffects the supply of moneyQuantitative1. Open Market Operations2. Reserves3. Discount Rateaffects aggregate levels of income, production, employment, priceQualitative1. Reg
UNF - FIN - 3233
Chapter 4Interest Rate Measurement and BehaviorChapter 5The Risk and Term Structure of Interest RatesLEVEL OF INTEREST RATESFisher Effect (risk-free rate)Interest rate has 2 components:(1) real rate(2) inflation premiumI = r+ IPSTRUCTURE OF INTE
UNF - FIN - 3233
Chapter 18Who's In Charge Here?FEDERAL RESERVEFed's Long Term Goals :Full employmentEconomic GrowthStable PricesStability in Balance of TradeEquitable distribution of income &amp; wealthEfficiencyFull Employment-What is it?Natural unemployment ra
UNF - FIN - 3233
1Chapter 19Bank Reserves and the Money SupplyPayment SystemProcessPayments are made by:Coin &amp; currencyChecksElectronic transferCoins-Dependent on the value of the underlying metalGovt tried to standardize the value by accepting coins with spec
UNF - FIN - 3233
Chapter 20The Instruments of Central BankingFederal Reserve ToolsTransmission MechanismToolsCEconomy Recognition Lag*-O.M.OD.R.?R.R.Action Lag/RE ?MS ? I ?W?Y?/MultiplierI Capital InvestmentImpact LagQuantitative toolsReserve Requ
UNF - FIN - 3233
Chapter 21Understanding Movements in Bank ReservesBalance SheetAssetsGold Certificate &amp; SDRLoansSecurities- U.S. Government- Agencies- B.A.CIPCOtherLiabilitiesFederal Reserve NotesDeposits- Treasury (TD)- Foreign (FD)- Banks (R)D.A.C.IO
UNF - FIN - 3233
Chapter 22Monetary Policy StrategyIndicators of MonetaryPolicyNominal (usually short-termFed Funds) interest ratesMoney supplySince have time lags between policy action and its effect on the ultimate goals, if theultimate goals are the only index w
UNF - FIN - 3233
Chapter 23The Classical FoundationsMonetary Theory and PolicyClassic System of Economics:1.Says Lawssupply creates its own demandTotal spending (demand) would always be sufficient to justify productionat full employment (supply).Production functi
UNF - FIN - 3233
Chapter 24The Keynesian FrameworkChapter 25The IS-LM WorldKeynesian TheoryAdvocates active role of the federal government in correcting economic problemsManipulate money supply to adjust interest rates to induce borrowing or decreaseborrowingLooks
UNF - FIN - 3233
Chapter 26Money and Economic Stability in the ISLM WorldCHAPTER OUTLINEI. Monetary Policy, Fiscal Policy, and Crowding Out.II. Is the Private Sector Inherently Unstable?III. Flexible Prices, the Natural Rate of Interest, and Real Crowding Out.Append
University of Florida - FIN - 4504
Understanding InvestmentsChapter 1Jones, Investments: Analysis and ManagementWhy study Investments To understand the investments field as currently practiced To help you make investment decisions that will enhance your economic welfare To create rea
University of Florida - FIN - 4504
1Investment AlternativesCategories of Financial Markets: Marketable NonmarketableTypes of investing: Direct IndirectNonmarketable Financial AssetsRepresent personal transactions between the owner and issuerUsually very liquid (ie. savings accts)
University of Florida - FIN - 4504
Investment CompaniesIn 1992 for first time in U.S. financial history, individuals no longer held a majority of all publicly traded U.S.stocks. However, if one counts indirect ownership, the individual investor controls more than 50% of the stock.Assets
University of Florida - FIN - 4504
Securities MarketFinancial Markets: Chief function: allocate resources optimally Allocationally efficient Channeling of funds to those who can make the best use of them Operationally efficient Lowest possible prices for transactions servicesPrimary
University of Florida - FIN - 4504
How Securities Are TradedBrokerage Firms Types: Full Service Discount Income Only 15% come from commission paid by investorsBrokers Income Less than 50% customer commissions Selling mutual funds owned by their firm Load funds-commission Princip
University of Florida - FIN - 4504
Returns and RiskRealized Returnsexpect (after the fact) returnExpected Return- estimated returnInvestment Decisiontrade off between risk (expected) and return (expected)Trade-Off Between Risk and ReturnRequired Return = Risk free rate + Risk premium
University of Florida - FIN - 4504
Bond Yields and PricesChapter 8Interest Rateso Interest rates measure the price paid by a borrower to a lender for the useof resources over timeoInterest rates are the price for loanable funds Price varies due to supply and demand for these fundsR
University of Florida - FIN - 4504
Common Stock ValuationChapter 10Fundamental Analysis ApproachesPresent value approach Capitalization of expected income Intrinsic value based on the discounted value of the expectedstream of cash flowsMultiple of earnings (P/E) approach Stock wort
University of Florida - FIN - 4504
Common Stocks: Analysis and StrategyChapter 11Impact of the MarketThe single most important risk affecting the price movement of commonstocks is the market Particularly true for a diversified portfolio of stocks In diversified portfolio, market risk
University of Florida - FIN - 4504
MarketEfficiencyEfficient Marketso How well do markets respond to new information?o If the market is efficient, should it be possible to decide between aprofitable and unprofitable investment given current information?o Efficient Markets The prices
University of Florida - FIN - 4504
Economy/Market AnalysisChapter 13Top-down Approacho Analyze economy-stock market first then industries and finally individualcompanies Need to understand economic factors that affect stock prices Need to understand the current and the future state o
University of Florida - FIN - 4504
Industry AnalysisChapter 14Industry Analysiso Second step in the fundamental analysis of common stocks Industries promising the most opportunity in the future should be consideredo Concepts of industry analysis related to valuation principleso Conti
University of Florida - FIN - 4504
Company AnalysisChapter 15-Fundamental AnalysisLast step in top-down approach is company analysisGoal: estimate shares intrinsic value Constant growth version of dividend discount model--Value justified by fundamentalsFundamental AnalysisEarnin
University of Florida - FIN - 4504
Technical AnalysisChapter 16What is Technical Analysis?o Use of published market data for analysis of both aggregate stock prices andindividual stockso May produce insight into the psychological dimensions of the marketo Used by investors and invest
University of Florida - FIN - 4504
Option MarketChapter 17Why Options Markets?o Financial derivative securities: derive all or part of their value from another(underlying) securityo Options are created by investors, sold to other investorso Why trade these indirect claims? Expand in