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1. The following is a list of activities that occur for a company that sells many different types of products. Please classify each as either unit-level (U), batch-level (B), product-level (P), or organization-sustaining activity (O):packing labor wagesmaterials-handling labor wagespart administrators’ salaries plant management salariesproduction scheduling staff salariescost of servicing production equipment, based on hours usedproperty […]

Note: All interest rates are to be assumed to be yearly interest rates.   Question 1 (10 points) 1. You wish to deposit $500 per month into an account for 36 months. Assume your interest rate is equal to the prime interest rate.               a) How much do you have (total) in the account […]

Annuities and Sinking Funds 1. You need to know how annuities work because many financial planners advise their clients to have them for retirement planning. Do you think that you need them? If so, then how old should you be when you buy one? What part does the stock market play in an annuity? There […]

Condensed financial data of Arma Inc. follow.     ARMA INC. Comparative Balance Sheets December 31 Assets 2011   2010 Cash $90,800    $48,400  Accounts receivable 92,800    33,000  Inventories 112,500    102,850  Prepaid expenses 28,400    26,000  Investments 138,000    114,000  Plant assets 270,000    242,500  Accumulated depreciation (50,000)   (52,000)      Total $682,500   […]

E8-6: Nova Co. On December 31, 2011, when its Allowance for Doubtful Accounts had a debit balance of $1,400, Nova Co. estimates that 9% of its accounts receivable balance of $90,000 will become uncollectible and records the necessary adjustment to the Allowance for Doubtful Accounts. On May 11, 2012, Nova Co. determined that J. Rast’s […]

Indicate whether each of the following transactions records an operating activity, an investing activity, a financing activity, or a noncash investing and financing activity. a. Depreciation Expense 11,000             Accumulated Depreciation 11,000b. Treasury Stock 7,800            Cash 7,800c. Land 83,000           Cash […]

The following selected accounts and their current balances appear in the ledger of Black Lab Co. for the fiscal year ended April 30, 2012:Cash $ 42,000 Sales Returns and Allowances $ 40,000Accounts Receivable 150,000 Sales Discounts 15,000Merchandise Inventory 180,000 Cost of Merchandise Sold 1,855,000Offi ce Supplies 5,000 Sales Salaries Expense 400,000Prepaid Insurance 12,000 Advertising Expense […]

1. Dalian Company provides the following information: Price per unit: $20Variable cost per unit: $8Fixed costs per month: $15,000 What is the breakeven point in terms of units sold? 1,1501,2001,8751,250  2. A traditional costing system employs multiple allocation rates, but an activity-based costing system uses only one single allocation rate.  True   False   3. Formosa […]

Comparative financial statement data of Danfield, Inc. , follow:   Danfield, Inc.  Comparative Income Statement   Years Ended December 31, 2012 and 2011    20122011  Net sales 467,000 428,000   Cost of goods sold 237,000 218,000   Gross profit 230,000 2 10,000   Operating expenses 136,000 134,000   Income from operations 94,000 76,000   Interest […]

The Web site Amazon.com once aimed to be the world’s largest bookseller. Now the company offers a wide range of products and services to consumers, operating online retail storefronts for partners and developing and selling its own manufactured products (such as Kindle). Can a company like Amazon.com have a strong business model but a weak […]