Reference no: EM132215856

Question 1

Josh Donaldson is employed by Bringer of Rain Inc. and is directly involved in preparing and packaging the MLB official baseballs. The basic wage rate is $15 per hour and he is paid time-and-a-half for any work in excess of 40 hours per week. Additionally, Bringer of Rain Inc. provides a fringe benefit package that costs the company $5 for each hour of employee time (regular or overtime). During a recent week, Donaldson worked 49 hours but was idle for 3 hours due to a materials shortage.

Assume that Bringer of Rain Inc. treats all fringe benefits as part of manufacturing overhead. Compute Donaldson's total wages and fringe benefits for the week and indicate how much of his wages and fringe benefits for the week would be allocated to direct labour and how much would be allocated to manufacturing overhead.

Prepare a schedule of cost of goods manufactured in good form.

The following costs relate to one month's activity in Nutcracker Company:

Question 2

Suppose that you have been given a summer job as an intern at Electronic Waves, a company that manufactures portable two-way radio transceivers for radio enthusiasts. The privately owned company has approached a bank for a loan to help finance its tremendous growth. The bank requires financial statements before approving such a loan. You have been asked to help prepare the financial statements and were given the following list of costs.

Classify the following lists of costs as either product (inventoriable) costs or period (non-inventoriable) costs for purposes of preparing the financial statements for the bank.

Question 3

Last month Mont Tremblant Biking, a mountain sporting goods retailer, had total sales of $3,200,000, selling expenses of $110,000, and administrative expenses of $470,000. The company had beginning merchandise inventory of $140,000, purchased additional merchandise inventory for $2,550,000, and had ending merchandise inventory of $180,000.

Prepare an income statement for the company for the month.

Question 4

The Trump International Hotel & Tower is a five-star hotel located in downtown Toronto. The hotel's operations vice president would like to replace the hotel's legacy computer terminals at the registration desk with attractive state-of-the-art flat-panel displays. The new displays would take less space, consume less power than the old computer terminals, and provide additional security since they can be viewed only from a restrictive angle. The new computer displays would not require any new wiring. However, the hotel's chef believes the funds would be better spent on a new bulk freezer for the kitchen.

Classify each item as a differential cost, an opportunity cost, or a sunk cost in the decision to replace the old computer terminals with new flat-panel displays. If none of the categories apply for a particular item, select "None."

Question 5

The Trump International Hotel & Tower is a five-star hotel located in downtown Toronto. The hotel's operations vice president would like to replace the hotel's legacy computer terminals at the registration desk with attractive state-of-the-art flat-panel displays. The new displays would take less space, consume less power than the old computer terminals, and provide additional security since they can be viewed only from a restrictive angle. The new computer displays would not require any new wiring. However, the hotel's chef believes the funds would be better spent on a new bulk freezer for the kitchen.

Classify each item as a differential cost, an opportunity cost, or a sunk cost in the decision to replace the old computer terminals with new flat-panel displays. If none of the categories apply for a particular item, select "None."