Nato Costs or Locating in an FT2 Aranda Company is an import-export company that relocated earlier this year in a foreign trade zone (PTZ) in a southwestern city. The company imports $760,000 of fabric from overseas for resale to clothing companies located in the United States. Aranda purchases and receives the fabric about four months before it is sold and shipped to customers; customers are billed and pay in two months. Duty is assessed at 15 percent of cost, and Aranda faces a 6 percent carrying cost Required: 1. What is the amount of duty paid by Arande last year (before locating in the PTZ) and for this year after relocating to the FTZ? Last Year This Year Duty 2. What is the amount of carrying cost associated with the duty paid by Aranda last year and for this year after relocating to the FTZ? Last Year This Year Carrying cost of duty 3. What is the total duty-related cost for Aranda last year and for this year after relocating to the FTZ? Last Year This Year Total duty related cost

Nato Costs or Locating in an FT2 Aranda Company is an import-export company that relocated earlier this year in a foreign trade zone (PTZ) in a southwestern city. The company imports $760,000 of fabric from overseas for resale to clothing companies located in the United States. Aranda purchases and receives the fabric about four months before it is sold and shipped to customers; customers are billed and pay in two months. Duty is assessed at 15 percent of cost, and Aranda faces a 6 percent carrying cost Required: 1. What is the amount of duty paid by Arande last year (before locating in the PTZ) and for this year after relocating to the FTZ? Last Year This Year Duty 2. What is the amount of carrying cost associated with the duty paid by Aranda last year and for this year after relocating to the FTZ? Last Year This Year Carrying cost of duty 3. What is the total duty-related cost for Aranda last year and for this year after relocating to the FTZ? Last Year This Year Total duty related cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sam's Auto Shop services and repairs a particular brand of foreign automobile. Sam uses oil filters throughout the year. The shop operates 52 weeks per year and weekly demand is 130 filters. Sam estimates that it costs $20 to place an order and his annual holding cost rate is $3 per oil filter. Currently, Sam orders in quantities of 650 filters. Calculate the total annual costs associated with Sam's current ordering policy. Total annual costs = $
Required information [The following information applies to the questions displayed below.] Shadee Corporation expects to sell 640 sun shades in May and 330 in June. Each shade sells for $141. Shadee's beginning and ending finished goods inventories for May are 90 and 45 shades, respectively. Ending finished goods inventory for June will be 60 shades. Each shade requires a total of $45.00 in direct materials that includes 4 adjustable poles that cost $10.00 each. Shadee expects to have 120 in direct materials inventory on May 1, 80 poles in inventory on May 31, and 100 poles in inventory on June 30. Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $14 per hour. Additionally, Shadee's fixed manufacturing overhead is $11,000 per month, and variable manufacturing overhead is $14 per unit produced. Additional information: • Selling costs are expected to be 8 percent of sales. • Fixed administrative expenses per month total $1,400. Required:…
Decision on Accepting Additional Business Talladega Tire and Rubber Company has capacity to produce 170,000 tires. Talladega presently produces and sells 130,000 tires for the North American market at a price of $108 per tire. Talladega is evaluating a special order from a European automobile company, Autobahn Motors. Autobahn is offering to buy 20,000 tires for $90.1 per tire. Talladega’s accounting system indicates that the total cost per tire is as follows: Direct materials $41 Direct labor 15 Factory overhead (60% variable) 25 Selling and administrative expenses (40% variable) 22 Total $103 Talladega pays a selling commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $6 per tire. In addition, Autobahn has…
A merchandising company sells a particular product that is estimated to have approximately 1,500 sales this year. The purchasing department estimates that it will cost approximately $200 to place an order for this product: $180 fixed and $20 variable. The total annual carrying cost for this product is $1,500. What is the product’s EOQ? A. 775 B. 19 C. 735 D. 20
A British-made component costs 151 U.K. pounds. A company in the United States needs to buy these components and the current indirect quote indicates that one dollar will buy 0.89 pounds. Ignoring transactions costs, how much will one component cost in U.S. dollars? Instruction: Type your answer in dollars, and round to two decimal places.
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,502 per unit and then sells them to retail customers for an average price of $2,400 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $944 per month $4,810 per month, plus 5% of sales $61 per piano sold $638 per month $4,920 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos. $13,534 per month $685 per month $2,492 per month, plus $39 per piano sold $945 per month Required: 1. Prepare a traditional format income statement for August. 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution…
Golden Gate Novelties (GGN) sells souvenir key chains at the local airport. GGN charges $13.00 per chain. The variable cost for a chain, including the wholesale cost of the chain, packaging, the commission paid to the airport operator, and so on, is $11.40. The annual fixed cost for GGN is $15,120. Required: How many cases must Golden Gate Novelties sell every year to break even? Note: Do not round intermediate calculations. The owner of GGN believes that the company can sell 12,600 chains a year. What is the margin of safety in terms of the number of chains?
Decision on Accepting Additional Business Miramar Tire and Rubber Company has capacity to produce 204,000 tires. Miramar presently produces and sells 156,000 tires for the North American market at a price of $102.00 per tire. Miramar is evaluating a special order from a South American automobile company, Rio Motors. Rio Motors is offering to buy 24,000 tires for $82.40 per tire. Miramar’s accounting system indicates that the total cost per tire is as follows: Direct materials $39 Direct labor 14 Factory overhead (60% variable) 23 Selling and administrative expenses (30% variable) 20 Total $96 Miramar pays a sales commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $6.00 per tire. In addition, Rio has…
Hult Games buys electronic components for manufacturing from two suppliers, Milan Components and Dundee Parts. If the components are delivered late, the shipment to the customer is delayed. Delayed shipments lead to contractual penalties that call for Hult to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following. Milan Dundee Total Total purchases (cartons) 98,000 42,000 140,000 Average purchase price (per carton) $ 20.00 $ 22 $ 20.60 Number of deliveries 80 20…
Annie's Homemade is deciding whether to retain or drop a 700-square feet satellite shop location. The company makes the ice cream sold at the satellite location at its larger main shop location. Twice a month the company transports ice cream from its main shop to the satellite location. The company gathered the following additional information to assist in making the decision: Annual sales at the satellite location i Ingredient costs as a percent of sales Monthly rent at satellite location (the lease is cancelable). Average monthly utility expense at satellite location. Part-time store managers' combined annual wages at satellite location Annual hourly wages paid to additional employees at satellite location Annual hours spent by salaried managers at the main shop location supporting the satellite location i Other annual expenses: Annual depreciation expense on satellite store's equipment (no salvage value) Annual pickup truck and cargo trailer depreciation, insurance, registration,…
Nepal Co. requires advance payments with special orders for machinery constructed to customer specifications. These advances are nonrefundable. Information for Year 2 is as follows: Customer advances--balance 12/31/Year 1 Advances received with orders in Year 2 $236,000 $368,000 Advances applied to orders shipped in Year 2 $328,000 Advances applicable to orders canceled in Year 2 $100,000 In Nepal's December 31, Year 2, balance sheet, what amount should be reported as a current liability for advances from customers? Select one: a. $0 b. $176,000 c. $276.000 d. $296,000
United States Motors Inc. (USMI) manufactures automobiles and light trucks and distributes them for sale to consumers through franchised retail outlets. As part of the franchise agreement, dealerships must provide monthly financial statements following the USMI accounting procedures manual. USMI has developed the following financial profile of an average dealership that sells 1,500 new vehicles annually: Sales Cost of goods sold AVERAGE DEALERSHIP FINANCIAL PROFILE Composite Income Statement Gross profit Operating costs Variable Mixed Fixed Operating income $30,000,000 24,750,000 $ 5,250,000 $ USMI is considering a major expansion of its dealership network. The vice president of marketing has asked Jack Snyder, corporate controller, to develop some measure of the risk associated with the addition of these franchises. Jack estimates that 90% of the mixed costs shown are variable for purposes of this analysis. He also suggests performing regression analyses on the various components of…