S Homework ASavedAntioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and tax purposes. The followingselected costs were incurred in December, the low point of activity, when 1,100 tons of ore were extracted:Straight-line depreciationCharitable contributions*Mining labor/fringe benefitsRoyaltiesTrucking and hauling$ 23,0006,000159,500149,000165,960*Incurred only in December.Peak activity of 2,400 tons occurred in June, resulting in mining labor/fringe benefit costs of $348,000, royalties of $292,000, andtrucking and hauling outlays of $205,960. The trucking and hauling outlays exhibit the following behavior:Less than 1,100 tonsFrom 1,100-1,599 tonsFrom 1,600-2,099 tonsFrom 2,100-2,599 tons$145,960165,960185,960205,960Antioch uses the high-low method to analyze costs.Required:1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, orsemivariable.2. Calculate the total cost for next February when 1,400 tons are expected to be extracted.3-a. Is hauling 1,100 tons with respect to Antioch's trucking/hauling cost behavior cost-effective?3-b. If the company plans to extract 1,100 tons, at what number of tons can cost-effectiveness be achieved?4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe economic difficulties, which ofthe two types of fixed costs should management try to cut?5. Speculate as to why the company's charitable contribution cost arises only in December.Complete this question by entering your answers in the tabs below.< Prev3 of 3Next>MacBook Pro回く※#3243.4.6.78.ERYব Antioch uses the high-low method to analyze costs.Required:1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fisemivariable.2. Calculate the total cost for next February when 1,400 tons are expected to be extracted.3-a. Is hauling 1,100 tons with respect to Antioch's trucking/hauling cost behavior cost-effective?3-b. If the company plans to extract 1,100 tons, at what number of tons can cost-effectiveness be achieved?4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe economicthe two types of fixed costs should management try to cut?5. Speculate as to why the company's charitable contribution cost arises only in December.pokntComplete this question by entering your answers in the tabs below.Reg 1Reg 2Reg 3AReq 3BReq 4Req 5Calculate the total cost for next February when 1,400 tons are expected to be extracted.Total cost< Req 1Req 3A< Prev3 of 3NextМacВook Pro2$&6.78WERY# 32.

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Answered: Antioch Extraction, which mines ore in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $800,000 and with an expected useful life of four years and no residual value. Assume that, for tax purposes, the deduction is 40%, 30%, 20%, and 10% in those years. Pretax accounting income the first year the equipment was used was $900,000, which includes interest revenue of $20,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income. The enacted tax rate is 25%. Prepare the journal entry to record income taxes.
Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and tax purposes. The following selected costs were incurred in December, the low point of activity, when 1,500 tons of ore were extracted: Straight-line depreciation ..........................$ 25,000. Royalties .....................................$135,000 Charitable contributions* ...........................11,000. Trucking and hauling ..................275,000 Mining labor/fringe benefits .......................345,000 *Incurred only in December. Peak activity of 2,600 tons occurred in June, resulting in mining labor/fringe benefit costs of $598,000, royalties of $201,000, and trucking and hauling outlays of $325,000. The trucking and hauling outlays exhibit the following behavior: Less than 1,500 tons .................................................................................$250,000 From 1,500–1,899 tons…
12. On July 23 of the current year, Dakota Mining Company pays $7,398,720 for land estimated to contain 8,808,000 tons of recoverable ore. It installs and pays for machinery costing $968,880 on July 25. The company removes and sells 451,000 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required:Prepare entries to record the following.(a) The purchase of the land.(b) The cost and installation of machinery.(c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.(d) The first five months' depreciation on the machinery.
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Champion Contractors completed the following transactions Involving equipment. Year 1 January 1 Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $4,800 to install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,400. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $5,400 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $820 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. View transaction list Journal entry…
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PR 6-37 (Algo) Cost Behavior and Analysis; High-Low Method (LO 6-2, 6-4, 6-5) Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and tax purposes. The following selected costs were incurred in December, the low point of activity, when 1,800 tons of ore were extracted: Straight-line depreciation Charitable contributions* Mining labor/fringe benefits Royalties Trucking and hauling *Incurred only in December. Peak activity of 3,100 tons occurred in June, resulting in mining labor/fringe benefit costs of $666,500, royalties of $173,000, and trucking and hauling outlays of $495,385. The trucking and hauling outlays exhibit the following behavior: Less than 1,800 tons From 1,800 to 2,299 tons From 2,300 to 2,799 tons From 2,800 to 3,299 tons Antioch uses the high-low method to analyze costs. Required: 1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, or…

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