During the current year, Pitt Company incurred costs to develop and produce a routine, low-risk computer software product. 1,300,000 Completion of detailed program design Costs incurred for coding and testing to establish technological feasibility Other coding costs after establishment of technological feasibility 1,000,000 2,400,000

During the current year, Pitt Company incurred costs to develop and produce a routine, low-risk computer software product. 1,300,000 Completion of detailed program design Costs incurred for coding and testing to establish technological feasibility Other coding costs after establishment of technological feasibility 1,000,000 2,400,000

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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Algo Identifying upstream and downstream cost LO During year 2, Thornton's manufacturing company incurred $115,200,000 of research and development (R&D) cost 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 $60 per unit. Packaging shipping, and sales commissions are expected to be $17 per unit. Thornton expects to sell 2,4000,000 batteries before new research renders the battery design technologically obsolete. During year 2, Thornton made 432,000 batteries and sold 407,000 of them Required a) Identify the upstream and downstream costs b) Determine the year 2 amount 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…
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Loring Company incurred the following costs last year: Direct materials$216,000Sales salaries$65,000Factory rent24,000Advertising37,000Direct labor120,000Depreciation on the headquarters building10,000Factory utilities6,300Salary of the corporate receptionist30,000Supervision in the factory50,000Other administrative costs175,000Indirect labor in the factory30,000Salary of the factory receptionist28,000Depreciation on factory equipment9,000Sales commissions27,000 Required: Classify each of the costs using the following table format. Be sure to total the amounts in each column. Example: Direct materials, $216,000. Product CostPeriod CostCostsDirect MaterialsDirect LaborManufacturing OverheadSelling ExpenseAdministrative ExpenseDirect materials$216,000 What was the total product cost for last year? What was the total period cost for last year? If 30,000 units were produced last year, what was the unit product cost?
A4
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Current Attempt in Progress Skysong, Inc., has made a name for itself in the exquisitely fragrant candle market. It incurred a variety of costs over the past year as part of its manufacturing, selling, and administrative functions. The following is a partial list of the costs incurred: Marketing Direct labor Production supervisor salary Production utilities Sales supervisor salary Direct materials Depreciation on production equipment Prime costs $ $1,200 14,000 Conversion costs $ 3,000 1,500 2,400 9,000 What were the prime costs for Skysong this year? 8,000 What were the conversion costs for Skysong this year?
Prevention costs Appraisal costs Internal failure costs: External failure costs Last Year $ 389, 100 $ 467, 300 $ 837,400 $1,100,000 This Year $ 669,500 $ 545,000 $ 465,000 $ 612,000 Required: 1. Calculate the total cost of quality last year and this year. 2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality. 3. For this year, calculate the cost in each of the four categories as a percent of the total cost of quality. 4-a. Calculate the change in total cost of quality over the two-year period. 4-b. Is performance trending in a favorable or unfavorable direction? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4A Required 48 Calculate the change in total cost of quality over the two-year period. Prevention and appraisal activities Internal and external failure costs The total cost of quality Increased Decreased 502,300 Decreased < Prev 4 of 5 ⠀⠀ Next
A9
Management of Ellen Software Services (ESS) has recently implemented a TQM program to eliminate a serous level of "program bugs" that plagued its recent product releases. The following activities and their costs were taken from ESS's records. The data are for 2019 (the year prior to the TQM program) and 2021 (the year after the start of the TQM program). 2019 2021 Design documentation standards development 100,000 Documentation of customer training process 20,000 Documentation of changes to software 5,000 20,000 Customer training 100,000 130,000 Software testing - Customer site 130,000 80,000 Software – testing – pre-release 50,000 140,000 Telephone "on-line" customer problem support 90,000 60,000 Software corrections and redesign 50,000 20,000 Field "trouble shooting" for customer support 140,000 80,000 Costs of Contract cancellations 180,000 30,000 Revenues lost due to delivery date delays 120,000 Training for systems designers/programmers 100,000 250,000 Training for sales staff…
Nonvalue-Added Costs Lemmons Inc. has the following two activities: (1) Retesting reworked products, cost: $446,000. The retesting cost of the most efficient competitor is $225,000. (2) Welding subassemblies, cost: $1,080,000 (67,500 welding hours). A benchmarking study reveals that the most efficient level for Lemmons would use 54,000 welding hours and entail a cost of $864,000. Required: Determine the nonvalue-added cost of each activity. Nonvalue-added cost: Retesting $ 221,000 X Welding $216,000 ✓
puestion 5.4 Stark and Company's has the following cost data: Systems development Final product testing and inspection Quality data gathering, analysis, and reporting Net cost of scrap Customer returns arising from quality problems Amortization of testing equipment $29,000 $12,000 $9,000 $58,000 $56,000 553,000 $16,000 $38,000 $33,000 Rework labour and overhead Testing and inspection of incoming materials Product recalls Submission Instructions: 1. Determine the total prevention costs? 2. Determine total appraisal costs? 3. Determine the total internal failure costs?