Picture10

During year 1, Perez Manufacturing Company incurred $117,500,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $64 per unit. Packaging, shipping, and sales commissions are expected to be $11 per unit. Perez expects to sell 2,500,000 batteries before new research renders the battery design technologically obsolete. During year 1, Perez made 434,000 batteries and sold 395,000 of them. Fill in the GAAP-based income statement for year 1. Use the sales price = 93.75 PEREZ MANUFACTURING COMPANY Income Statement Sales revenue Cost of goods sold Gross margin Depreciation expense Inventory holding expense Research & development expense Net income (loss) 0 $0 F

During year 1, Adams Manufacturing Company incurred $118,900,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $40 per unit. Packaging, shipping, and sales commissions are expected to be $19 per unit. Adams expects to sell 2,900,000 batteries before new research renders the battery design technologically obsolete. During year 1, Adams made 432,000 batteries and sold 393,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the year 1 amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Adams desires to earn a profit margin that is equal to 25 percent of the total cost of developing, making, and…

During year 1, Baird Manufacturing Company Incurred $65,800,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $78 per unit. Packaging, shipping, and sales commissions are expected to be $7 per unit. Baird expects to sell 1,400,000 batteries before new research renders the battery design technologically obsolete. During year 1, Baird made 432,000 batteries and sold 405,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the year 1 amount of cost of goods sold and the ending Inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Baird desires to earn a profit margin that is equal to 30 percent of the total cost of developing, making, and…

During Year 2, Fanning Manufacturing Company incurred $147,000,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in Year 2. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $52 per unit. Packaging, shipping, and sales commissions are expected to be $16 per unit. Fanning expects to sell 3,000,000 batteries before new research renders the battery design technologically obsolete. During Year 2, Fanning made 446,000 batteries and sold 400,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the Year 2 amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Fanning desires to earn a profit margin that is equal to 30 percent of the total cost of developing, making,…

During Year 2, Baird Manufacturing Company incurred $112,500,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in Year 2. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $74 per unit. Packaging, shipping, and sales commissions are expected to be $14 per unit. Baird expects to sell 2,500,000 batteries before new research renders the battery design technologically obsolete. During Year 2, Baird made 448,000 batteries and sold 400,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the Year 2 amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Baird desires to earn a profit margin that is equal to 25 percent of the total cost of developing, making, and…

Pares

all I need is cost of goods sold, it's not 36,704,000

On March 17, Advanced Technologies developed a patent related to laser surgery techniques. They spent $1,200,000 to develop the patent internally, consisting of personnel ($800,000), equipment ($300,000), and materials ($100,000). The company also had the following additional costs: $20,000 in legal fees associated with the purchase and filing of the patent, $35,000 to advertise its new laser surgery techniques, and $45,000 to train employees. What is the recorded cost of the patent?

During 2017, Thornton Manufacturing Company incurred $70,000,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in 2017. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $52 per unit. Packaging, shipping, and sales commissions are expected to be $10 per unit. Thornton expects to sell 1,400,000 batteries before new research renders the battery design technologically obsolete. During 2017, Thornton made 449,000 batteries and sold 392,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the 2017 amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Thornton desires to earn a profit margin that is equal to 20 percent of the total cost of developing, making, and…

Spacely Sprockets, Inc. invested $4,996,000 for new manufacturing equipment for its plant in Jetson, NY. The equipment was anticipated to have a useful life of 11 years, or 31,800 machine hours and a residual value of $496,000. In its first year in operation the equipment was used for 2,130 hours and an additional 2,990 hours in its second year of usage.The Income Statement for years 1 and 2 of Spacely Sprockets, Inc. are shown below.All items rounded to nearest whole dollar. Spacely Sprockets, Inc. Year 1 Year 2 Net Sales $34,491,000 $36,106,000 COGS $22,202,000 $22,388,000 Gross Profit $12,289,000 $13,718,000 Operating Expenses(before adding in Depreciation) $7,663,000 $8,113,000 Income from Operations $4,626,000 $5,605,000 Income Tax Expense (at 30%) $1,387,800 $1,681,500 Net Income $3,238,200 $3,923,500   Round all items to the nearest whole dollar and use rounded values for all future calculations.

Spacely Sprockets, Inc. invested $4,995,000 for new manufacturing equipment for its plant in Jetson, NY. The equipment was anticipated to have a useful life of 11 years, or 29,800 machine hours and a residual value of $507,000. In its first year in operation the equipment was used for 2,180 hours and an additional 2,700 hours in its second year of usage.The Income Statement for years 1 and 2 of Spacely Sprockets, Inc. are shown below.All items rounded to nearest whole dollar. Spacely Sprockets, Inc. Year 1 Year 2 Net Sales $35,590,000 $36,164,000 COGS $23,120,000 $22,978,000 Gross Profit $12,470,000 $13,186,000 Operating Expenses(before adding in Depreciation) $7,650,000 $8,152,000 Income from Operations $4,820,000 $5,034,000 Income Tax Expense (at 30%) $1,446,000 $1,510,200 Net Income $3,374,000 $3,523,800   Round all items to the nearest whole dollar and use rounded values for all future calculations.1. Calculate the depreciation expense for year 1 and 2 using…

On March 1, Bartholomew Company purchased a new stamping machine with a list price of $88,000. The company paid cash for the machine; therefore, it was allowed a 5% discount. Other costs associated with the machine were: transportation costs, $3100; sales tax paid, $6,720, installation costs, $1,900; routine maintenance during the first month of operation, $3,000. The cost recorded for the machine was:

DJ Builders Company began operations on January 1, 2008. During the year, DJ Builders Company entered into a contract with Joey Company to construct a manufacturing facility. At that time, DJ Builders estimated that it would take five years to complete the facility at a total cost of P 4,800,000. The contract price for construction of the facility is P 5,800,000. During 2008, DJ Builders incurred P 1,250,000 in construction costs related to the project because of rising material and labor costs, the estimated cost to complete the contract at the end of 2008 is P 3,750,000. Joey Company was billed for and paid 30% of the contract price in accordance with the contract agreement. It is further agreed, that any costs incurred is expected to be recoverable. Compute the amount of construction in progress (net) – due from customers or progress billings (net) – due to customers:             (Zero profit approach)                                                   Percentage of Completion…

Enjoy It Industries manufactures custom-designed playground equipment for schools and city parks. Enjoy It expected to incur $750,600 of manufacturing overhead cost, 41,700 of direct labor hours, and $1,000,800 of direct labor cost during the year (the cost of direct labor required $14,200 of direct materials. The City of Adams has contracted to purchase the playground equipment at a price of 27% over manufacturing cost. $24 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During July, Enjoy It completed Job 309. The job used 165 direct labor hours and Read the equirement Requirement 1. Calculate the manufacturing cost of Job 309. First identify the formula, then calculate the predetermined overhead rate. = Predetermined overhead rate per hour

Larkspur Utilities Corporation incurred the following costs in constructing a new maintenance building during the fiscal period: Direct labour costs incurred up to the point when the building is in a condition necessary for use as management intended, but before Larkspur begins operating in the building, $81,700 Additional direct labour costs incurred before Larkspur begins operating in the building, $5,770 Material purchased for the building, $82,500 Interest on the loan to finance construction until completion, $2,890 Allocation of variable plant overhead based on labour hours worked on the building, $34,000 f. Architectural drawings for the building, $7,750 Allocation of the president's salary, $56,700 a. b. C. d. e. g. What costs should be included in the cost of the new building if Larkspur prepares financial statements in accordance with IFRS? With ASPE? (Assume that, if there is no specific guidance from GAAP, Larkspur's management would consider a building ready for productive…

Prior to installing a JIT system, Grindstone Company used machine hours to assign maintenance costs to its three products of 4-inch, 6-inch, and 9-inch insulation. The maintenance costs totaled $432,000 per year. The machine hours used by each product and the quantity produced of each product are as follows:   Machine Hours Quantity Produced 4-inch 5,000   15,000 rolls   6-inch 12,000 12,500 rolls 9-inch 7,000 11,200 rolls After installing JIT, three manufacturing cells were created and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $432,000; however, these costs are now traceable to each cell. Cell, 4-inch $125,000 Cell, 6-inch 175,000 Cell, 9-inch 165,000 After installing JIT, the maintenance cost per roll of 6-inch insulation is a. $12.85. b. $8.67. c. $14.00. d. $17.00.

Western Wholesale Foods incurs the following expenditures during the current fiscal year. Required: How should Western account for each of these expenditures? 1. Salaries for the repair technicians, $147,000 2. Remodeling of the executive offices, $81,600 3. Annual maintenance costs related to its machinery, $73,400 4. Improvement of the production line resulting in an increase in productivity, $31,000 5. Addition of a sprinkler system to the manufacturing facility to reduce the risk of fire damage, $44,700

Oakville Corp. incurred the following costs during 2020 in connection with its research and development phase activities: Cost of equipment acquired for use in research and development projects over the next 5 years (straight-line depreciation used)   $277,000 Materials consumed in research projects   62,800 Materials consumed in the development of a product committed for manufacturing in the first quarter 2021   31,300 Consulting fees paid in the last quarter of 2020 to outsiders for research and development projects, including $5,000 for advice related to the $31,300 of materials used above   89,100 Personnel costs of persons involved in research and development projects   111,500 Indirect costs reasonably allocated to research and development projects   24,900 General borrowing costs on the company’s line of credit   15,200 Training costs for a new customer service software program   21,800   Calculate the amount to be reported as research and development…

On January 1, Manning Co. purchases and installs a new machine costing $324,000 with a five-year life and an estimated $30,000 salvage value. Management estimates the machine will produce 1,470,000 units of product during its life. Actual production of units is as follows: 355,600 in Year 1, 320,400 in Year 2, 317,000 in Year 3, 343,600 in Year 4, and 138,500 in Year 5. The total number of units produced by the end of Year 5 exceeds the original estimate—this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required:  Prepare a table  Units-of-production: Year Number of Units  Depreciation per Unit   Depreciation Expense  1       2       3       4       5       Totals       Double-declining-balance:                 Year Beginning Book Value Annual Depreciation (40% of book value) Accumulated Depreciation at Year-End Ending Book Value ($324,000 Cost less Accumulated Depreciation) 1         2…

On March 17, Advanced Technologies purchased a patent related to laser surgery techniques. The purchase price of the patent is $1,220,000. The patent is expected to benefit the company for the next five years. The company had the following additional costs: $22,000 in legal fees associated with the purchase and filing of the patent, $37,000 to advertise its new laser surgery techniques, and $47,000 to train employees. None of these additional costs were included in the purchase price or paid to the seller. Now assume that instead of purchasing the patent, Advanced Technologies spent $1,220,000 to develop the patent internally, consisting of personnel ($810,000), equipment ($306,000), and materials ($104,000). All additional costs were incurred for the same amount. What is the recorded cost of the patent? total capitalized cost=