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CLO Assignment 1
Michael Ayala Coba
Westcliff University
FIN500: Financial & Accounting Skills for Managers
Professor Blount
May 22, 2024
2
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CLO Assignment 1
Cost of Goods Sold in Manufacturing vs Merchandising Companies
The calculation of the cost of goods sold (COGS) in manufacturing companies differs from that in merchandising companies due to the nature of their operations. Manufacturing companies produce goods from raw materials, so their COGS includes raw materials, direct labor, and manufacturing overhead. The formula for manufacturing COGS is: Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory. Cost of Goods Manufactured encompasses all production costs incurred during the period, making the calculation more complex.
(Wild & Shaw, 2022) (Ross et al., 2021)
In contrast, merchandising companies buy finished goods for resale without altering them. Their COGS calculation is simpler, focusing on the cost of purchases and any freight-in costs. The formula for merchandising COGS is: Beginning Inventory + Purchases - Ending Inventory. The key differences lie in the components of costs and the complexity of the calculation, with manufacturing companies needing to account for multiple stages of inventory (raw materials, work-in-progress, and finished goods) and production costs, whereas merchandising companies primarily manage merchandise inventory. (Wild & Shaw, 2022) (Ross
et al., 2021)
Calculation
The annual financial data at December 31, 2017, taken from two different companies are shown below:
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Content
O Managerial Accounting, Fifteenth x
Answered: Exercise 4-2 Equivalen x
O File | C:/Users/pse/Documents/managerial-accounting-15th-edition.pdf
Managerial Accounting, Fifteenth Edition
203 / 795
Tiepare journar CnnCS to Tecoru iems (a) urougn (T) avove.
EXERCISE 4-2 Computation of Equivalent Units-Weighted-Average Method [LO4-2]
Clonex Labs, Inc., uses a process costing system. The following data are available for one depart-
ment for October:
Percent Completed
Units
Materials
Conversion
Work in process, October 1
30,000
65%
30%
Work in process, October 31
15,000
80%
40%
The department started 175,000 units into production during the month and transferred
190,000 completed units to the next department.
Required:
Compute the equivalent units of production for October assuming that the company uses the
weighted-average method of accounting for units and costs.
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G Trading Platform C.
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Time left 1:46:33
An allocation base:
O a can be units of output if the company has a single product
O b. All the given answers are NOT correct.
Oc is determined at the end of the period.
O d. isameasure used to assign conversion costs to products and services
O e isameasure used to assign prime costs to products and services
ר
A Company uses job order costing and has chosen direct labor hours to allocate its manufacturing overhead. The company estimates
that total direct labor hours to be operated next year are 250,000 hours. The estimated variable overhead is $15 per hour and the
estimated fixed overhead costs are $750,000. The predetermined overhead rate is:
O a $6
O b. None of the answers given
Oc $45
Od. $3
Oe $18
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ACCT2121
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Current Position Analysis
The following items are reported on a company's balance sheet:
$365,600
Marketable securities
285,700
Accounts receivable (net)
254,900
Inventory
236,400
Accounts payable
394,000
Determine (a) the current ratio and (b) the quick ratio. Round to one declmal place.
a. Current ratio
b. Quick ratio
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a. Divide current assets by current liabilities.
b. Divide quick assets by current liabilities. Quick assets are cash, temporary investments, and receivables.
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Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost, decide whether it is for
direct materials (DM), direct labor (DL), or manufacturing overhead (MOH) and also identify each of the preceding costs as
variable or fixed cost. (Select "NA" wherever necessary.)
Cost
Costs
Type of cost
Cost head
classification
Product
Factory rent
Company advertising
Wages paid to assembly workers
Depreciation for salespersons' vehicles
Screws
Period
Product
Period
Product
Product
Product
Utilities for factory
Assembly supervisor's salary
Sandpaper
President's salary
Plastic tubing
Product
Period
Product
Product
Period
Paint
Sales commissions
Factory insurance
Depreciation on cutting machines
Wages paid to…
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Return on Total Assets
A company reports the following income statement and balance sheet information for the current year:
Net income
$224,540
Interest expense
39,620
000'080
Determine the return on total assets. If required, round the answer to one decimal place.
Average total assets
Feedback
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Divide the sum of net income and interest expense by average total assets.
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ACCT-1170-017-Fall 2024-Principles of Managerial Accounting
Question Completion Status:
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QUESTION 1
Take Test: Unit 4 Homework
Relaunch to update:
Freeman Furnishings has summarized its data as shown. Direct labor hours will be used as the activity
base to allocate overhead:
Raw materials purchased
$ 320,000
Raw materials, beginning inventory
Raw materials, ending inventory
15,000
14,000
Work in process, beginning inventory
35,000
0
Work in process, ending inventory
37,000
Estimated overhead
300,000
Depreciation of factory building
50,000
Factory real estate taxes
Factory utility expenses
Indirect materials
7,382
45,000
20,000
Indirect labor
Direct labor cost
Direct labor hours incurred
11,000
100,000
24,000
Estimated direct labor hours
25,000
Compute the cost of goods manufactured.
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Click Submit to complete this assessment.
Question 4
When the gross profit percentage of costs is 32%, the gross profit percentage of sales is equal to:
O 24.24%
30.07%
O 26.78%
O 28.65%
A Click Submit to complete this assessment.
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Question #6
Describe the difference between direct and step-down methods to
allocate service department costs to user departments.
Respond
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What is the difference between a revenue and a gain?
O a.
Revenue results from internal transactions, whereas gains result from external transactions.
O b. Revenues result from transactions related to central operations, whereas gains result from transactions retated to
peripheral operations.
O c. Revenue results from transactions related to peripheral operations, whereas gains result from transactions related to
central operations.
O d. Revenue results from external transactions. whereas gains result from internal transactions.
Nex
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Changes in Current Operating Assets and Liabilities-Indirect Method
Covington Corporation's comparative balance sheet for current assets and liabilities was as follows:
Dec. 31, 20Y2
Dec. 31, 20Y1
Accounts receivable
$15,300
Inventory
66,500
67,200
Accounts payable
20,100
0098
Dividends payable
000'
Adjust net income of $84,200 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.
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ESTIMATED PROFIT AND LOSS ACCOUNT (INCOME STATEMENT) FOR KARACHI
TRADERS LTD
$
Revenue (5000 units @ $3.00)
15000
Cost of goods sold (@ $1.00 per unit)
Gross profit
5000
10000
Overhead expenses
4000
Operating profit (profit before tax and interest)
6000
Finance costs (interest)
2000
Profit before tax
4000
Corporation tax @ 20%
Profit for the year
800
3200
Dividends paid
1200
Retained profit
2000
Profit and loss account for Karachi Traders Ltd for the year ending 31 December 2014
20 marks, 40 minutes
1. By amending this profit and loss account (income statement), calculate the new
level of retained profits if the following changes actually occurred:
• each unit was sold…
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Wage and Tax Statement Data on Employer FICA Tax
Ehrlich Co. began business on January 2, 20Y8. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal
income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All
required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 20Y9, before the Wage
and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees' earnings
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Costs per Equivalent Unit
The following information concerns production in the Baking Department for December. All direct materials are placed in process at the beginning of production.
ACCOUNT Work In Process-Baking Department
ACCOUNT NO.
Date
Item
Balance
Debit
Credit
Debit
Credit
Dec.
1 Bal., 8,700 units, 2/5 completed
19,140
31 Direct materials, 156,600 units
297,540
316,680
31 Direct labor
82,180
398,860
31 Factory overhead
46,220
445,080
31 Goods finished, 158,700 units
428,316
16,764
31 Bal., ? units, 4/5 completed
* 16,764
a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit answers to the nearest cent.
1. Direct materials cost per equivalent unit
2. Conversion cost…
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Vertical Analysis
Income statement information for Einsworth Corporation follows:
000'
101,400
Sales
Cost of goods sold
Gross profit
009 9
Prepare a vertical analysis of the income statement for Einsworth Corporation. If required, round percentage answers to the nearest whole number.
Einsworth Corporation
Vertical Analysis of the Income Statement,
Amount Percentage
Sales
$338,000
Cost of goods sold
101,400
0.3
Gross profit
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Divide each element by sales to determine the vertical analysis percentage.
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Depending on the specific needs of a business, a separate special journal is
designed for each:
O
OA. type of transaction the business normally undertakes.
O
B. major repetitive activity or event.
C. product or service marketed.
O D. account classification.
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Discussion Question 1
by Najay Murray - Thursday, 21 January 2021, 12:12 AM
Number of replies: 9
Within the costing system of a manufacturing company the following types of expenses were incurred:
Cost of oils used to lubricate production machinery
Motor vehicle licenses for lorries
Depreciation of factory plant and equipment
Cost of chemicals used in the laboratory
Commission paid to sales representatives
Salary of the secretary to the finance director
Trade discount given…
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Question : 6 a
Which of the following statements is correct?
Total elimination is consistent with the parent company concept.
Partial elimination is consistent with the economic unit concept.
Past accounting standards required the total elimination of unrealized intercompany profit in assets acquired from affiliated companies.
none of these.
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Objective #
Ma
Q4: Solve the following 2 problems related to employee compensation
CLR 1-Obj. 4
L2
a. Jon is employed at annual salary of $41995. His regular work week is 38 hours and he is paid
semi-monthly
i.
What is Jon's Gross pay per period?
ii.
What is hourly rate of pay?
iii.
What is his gross pay for a period in which work 12 hours of overtime and he is paid overtime at time and a half of
What is a salesperson's commission on net sales of $17800 if the commission is paid on a
sliding scale of 7%% on the first $7000, 8%% on the next $8000 and 12.5% on sales over $15000?
b.
CLR 1- Obj. 5
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Q5: Solve the following 3 problems related to GST, HST, PST,
公 四
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SQU PORTAL ATTENDANCE - elalles
الوقت المتيقي 56:/1:4
OMR 252,000 bO
OMR 258,000 cO
OMR 257,000 dO
OMR 247,000 e O
:XYZ Company had the following information for the year
110,000 OMR
Direct materials used
150.000 OMR
Direct labor incurred (4,000 hours)
166,000 OMR
Actual manufacturing overhead incurred
The Company used a predetermined overhead rate of OMR 30 per direct labor hour for the year. Assume the only inventory balance is
Pan ending Work in Process Inventory balance of OMR 17,000. What was cost of goods manufactured
OMR 393,000
.a O
OMR 363,000.b O
OMR 383,000
.c O
None of the given answer is correct d O
OMR 418,000 .e O
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Salaries
Materials
Insurance
Utilities
Cost of inspection of materials for quality control
Promotion expenses
Advertising
Equipment depreciation
Cost of market survey
Problem 7-39 (LO. 5)
Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2022. Blue had the
following expenditures in connection with the project, all incurred in the U.S.:
Amount of the deduction
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49
2023
$500,000 $600,000
90,000 70,000
8,000
11,000
6,000
8,000
7,000
6,000
11,000
18,000
20,000
14,000
144
2022
$
f
The new product will be introduced for sale beginning in April 2024.
If an amount is zero, enter "0". Calculate the monthly expense to the nearest dollar and use in subsequent computations.
a. Determine Blue Corporation's research and experimental…
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Chapter 11 Homework (Application)
Product Pricing using the Cost-Plus Approach Methods; Differential Analysis for Accepting Additional Business
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows:
Maps
Dashboard
Variable costs per unit:
Direct materials
Direct labor
Factory overhead
Selling and administrative expenses
Total variable cost per unit
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$120
30
50
35
$235
Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product…
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Exercise 17-22
Whispering Company has the following investments as of December 31, 2017:
$1,570,000
Investments in common stock of Laser Company
Investment in debt securities of FourSquare Company
$3,180,000
In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2017.
Whispering's stock investments does not result in significant influence on the operations of Laser Company. Whispering's
debt investment is considered held-to-maturity. At December 31, 2018, the shares in Laser Company are valued at
$1,120,000; the debt investment securities of FourSquare are valued at $2,310,000. Assume that these…
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- 6 MyPath Home Content O Managerial Accounting, Fifteenth x Answered: Exercise 4-2 Equivalen x O File | C:/Users/pse/Documents/managerial-accounting-15th-edition.pdf Managerial Accounting, Fifteenth Edition 203 / 795 Tiepare journar CnnCS to Tecoru iems (a) urougn (T) avove. EXERCISE 4-2 Computation of Equivalent Units-Weighted-Average Method [LO4-2] Clonex Labs, Inc., uses a process costing system. The following data are available for one depart- ment for October: Percent Completed Units Materials Conversion Work in process, October 1 30,000 65% 30% Work in process, October 31 15,000 80% 40% The department started 175,000 units into production during the month and transferred 190,000 completed units to the next department. Required: Compute the equivalent units of production for October assuming that the company uses the weighted-average method of accounting for units and costs. 1:43 PM e Type here to search 3/31/2020 124arrow_forwardmpt=17649928cmid=8751838page=D9 wio a https//alternativet A SQUCOFFEE - Goog A BCOM2911-Busines O Sultan Caboos Univ. G Trading Platform C. Accounting Club DEMIC) E-LEARNING SERVICES- SQU LIBRARIES - SQU PORTAL ATTENDANCE Time left 1:46:33 An allocation base: O a can be units of output if the company has a single product O b. All the given answers are NOT correct. Oc is determined at the end of the period. O d. isameasure used to assign conversion costs to products and services O e isameasure used to assign prime costs to products and services ר A Company uses job order costing and has chosen direct labor hours to allocate its manufacturing overhead. The company estimates that total direct labor hours to be operated next year are 250,000 hours. The estimated variable overhead is $15 per hour and the estimated fixed overhead costs are $750,000. The predetermined overhead rate is: O a $6 O b. None of the answers given Oc $45 Od. $3 Oe $18 NEXT PAGE OUS PAGE ACCT2121 general-chat Origin…arrow_forward2 Project: Company Accour X D21. 7-1 Problem Set: Module Sev X CengageNOWv2 | Online tea X Cengage Learning +| x Dw.com/ilm/takeAssignment/takeAssignmentMain.do?invoker3&takeAssignmentSessionLocator3D&inprogress%3Dfalse eBook Show Me How Current Position Analysis The following items are reported on a company's balance sheet: $365,600 Marketable securities 285,700 Accounts receivable (net) 254,900 Inventory 236,400 Accounts payable 394,000 Determine (a) the current ratio and (b) the quick ratio. Round to one declmal place. a. Current ratio b. Quick ratio Check My Work a. Divide current assets by current liabilities. b. Divide quick assets by current liabilities. Quick assets are cash, temporary investments, and receivables. Check My Work Previous ELE AD dy f4 f12 prt sc 米arrow_forward
- M (no subject) - redmond.vicki@gn X A Role of Cost in Managerial Accou X D Question 4 - Practice Exam 1 - C x+ Ô https://ezto.mheducation.com/ext/map/index.html?_con3Dcon&external_browser%3D0&launchUrl=https%253A%252F%252Fnewconnect.m Saved H kam 1 G Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost, decide whether it is for direct materials (DM), direct labor (DL), or manufacturing overhead (MOH) and also identify each of the preceding costs as variable or fixed cost. (Select "NA" wherever necessary.) Cost Costs Type of cost Cost head classification Product Factory rent Company advertising Wages paid to assembly workers Depreciation for salespersons' vehicles Screws Period Product Period Product Product Product Utilities for factory Assembly supervisor's salary Sandpaper President's salary Plastic tubing Product Period Product Product Period Paint Sales commissions Factory insurance Depreciation on cutting machines Wages paid to…arrow_forwardNot yet answered Marked out of 2.00 P Flag question Write in your own words about the main functions of Cost Accounting. A B I |=而arrow_forwardpject: Company Accour X DEL. Project Guidelines and Rubric x DEL 7-1 Problem Set: Module Sev X CengageNOWv2 |Online tea x com/ilm/takeAssignment/takeAssignmentMain.do?invoker3D&takeAssignmentSessionLocator3D&inprogress=false eBook 4Show Me How Return on Total Assets A company reports the following income statement and balance sheet information for the current year: Net income $224,540 Interest expense 39,620 000'080 Determine the return on total assets. If required, round the answer to one decimal place. Average total assets Feedback Check My Work Divide the sum of net income and interest expense by average total assets. Check My Work ( Previous *AD dyarrow_forward
- > A Blackboard Learn A My Grades - ACCT-1170-017-F X | + 1 U CA k 个 N = X myCT ctccs.blackboard.com/ultra/courses/_209880_1/cl/outline Λ P* ACCT-1170-017-Fall 2024-Principles of Managerial Accounting Question Completion Status: > QUESTION 1 Take Test: Unit 4 Homework Relaunch to update: Freeman Furnishings has summarized its data as shown. Direct labor hours will be used as the activity base to allocate overhead: Raw materials purchased $ 320,000 Raw materials, beginning inventory Raw materials, ending inventory 15,000 14,000 Work in process, beginning inventory 35,000 0 Work in process, ending inventory 37,000 Estimated overhead 300,000 Depreciation of factory building 50,000 Factory real estate taxes Factory utility expenses Indirect materials 7,382 45,000 20,000 Indirect labor Direct labor cost Direct labor hours incurred 11,000 100,000 24,000 Estimated direct labor hours 25,000 Compute the cost of goods manufactured. ہے Click Save and Submit to save and submit. Click Save All…arrow_forwardClick Submit to complete this assessment. Question 4 When the gross profit percentage of costs is 32%, the gross profit percentage of sales is equal to: O 24.24% 30.07% O 26.78% O 28.65% A Click Submit to complete this assessment. O Type here to search aarrow_forwardQuestion #6 Describe the difference between direct and step-down methods to allocate service department costs to user departments. Respond Responses for this topic are hidden from you until you make a response. Pearson Copyright © 2021 Pearson Education Inc. All rights reserved.I Terms of Use l Privacy Policy I Permissions I Contact UsI 9:20 ENG 4/22/20 hp prt sc delete home backspace Vock Parrow_forward
- mid%3D1526&page%3D2 R PROGRAMS SELF-DEVELOPMENT E-LIBRARY ZAIN HANDBOOKS What is the difference between a revenue and a gain? O a. Revenue results from internal transactions, whereas gains result from external transactions. O b. Revenues result from transactions related to central operations, whereas gains result from transactions retated to peripheral operations. O c. Revenue results from transactions related to peripheral operations, whereas gains result from transactions related to central operations. O d. Revenue results from external transactions. whereas gains result from internal transactions. Nex POCOPHONE SHOT ON POCOPHONE F1arrow_forwardDon’t understandarrow_forwardplease dear expert need answer for all requirements with calculation, explanation , formulation with steps for better understanding answer in text not image please show calculation how you get the numbers please double underline answer allarrow_forward
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