Explain the four basis criteria for determining whether revenue is realized or realizable.

Question

Bodhi Company has three cost pools and two doggie products (leashes and collars). The activity cost pool of ordering has the cost drive of purchase orders. The activity cost pool of assembly has a cost driver of parts. The activity cost pool of supervising has the cost driver of labor hours. The accumulated data relative to those cost drivers is as follows: Expected Use of Estimated Cost Drivers by Product Cost Drivers Overhead Leashes Collars Purchase orders $260,000 70,000 60,000 Parts 400,000 300,000 500,000 Labor hours 300,000 15,000 10,000 $960,000 Instructions: (a) Compute the activity-based overhead rates. (b) Compute the costs assigned to leashes and collars for each activity cost pool. (c) Compute the total costs assigned to each product.

Answer 1

Question

Chapter 16, Problem 23DQP

a.

To determine

Explain the four basis criteria for determining whether revenue is realized or realizable.

b.

To determine

Explain the term “bill and hold” transaction.

c.

To determine

Justify the reason for a bill and hold transactions not qualify as a sale and justify the reason for recording a bill and hold transactions as a sale with related receivables.

d.

To determine

Identify the important criteria states by SEC.

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Bodhi Company has three cost pools and two doggie products (leashes and collars). The activity cost pool of ordering has the cost drive of purchase orders. The activity cost pool of assembly has a cost driver of parts. The activity cost pool of supervising has the cost driver of labor hours. The accumulated data relative to those cost drivers is as follows: Expected Use of Estimated Cost Drivers by Product Cost Drivers Overhead Leashes Collars Purchase orders $260,000 70,000 60,000 Parts 400,000 300,000 500,000 Labor hours 300,000 15,000 10,000 $960,000 Instructions: (a) Compute the activity-based overhead rates. (b) Compute the costs assigned to leashes and collars for each activity cost pool. (c) Compute the total costs assigned to each product.

Torre Corporation incurred the following transactions. 1. Purchased raw materials on account $46,300. 2. Raw Materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials. 3. Factory labor costs incurred were $55,900, of which $51,000 pertained to factory wages payable and $4,900 pertained to employer payroll taxes payable. 4. Time tickets indicated that $50,000 was direct labor and $5,900 was indirect labor. 5. Overhead costs incurred on account were $80,500. 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $88,000 were completed and transferred to finished goods. 8. Finished goods costing $75,000 to manufacture were sold on account for $103,000. Instructions Journalize the transactions.

Chapter 15 Assignment of direct materials, direct labor and manufacturing overhead Stine Company uses a job order cost system. During May, a summary of source documents reveals the following. Job Number Materials Requisition Slips Labor Time Tickets 429 430 $2,500 3,500 $1,900 3,000 431 4,400 $10,400 7,600 $12,500 General use 800 1,200 $11,200 $13,700 Stine Company applies manufacturing overhead to jobs at an overhead rate of 60% of direct labor cost. Instructions Prepare summary journal entries to record (i) the requisition slips, (ii) the time tickets, (iii) the assignment of manufacturing overhead to jobs,

Answer 2

Question

Chapter 16, Problem 23DQP

a.

To determine

Explain the four basis criteria for determining whether revenue is realized or realizable.

b.

To determine

Explain the term “bill and hold” transaction.

c.

To determine

Justify the reason for a bill and hold transactions not qualify as a sale and justify the reason for recording a bill and hold transactions as a sale with related receivables.

d.

To determine

Identify the important criteria states by SEC.

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Answer 3

Question

Chapter 16, Problem 23DQP

a.

To determine

Explain the four basis criteria for determining whether revenue is realized or realizable.

b.

To determine

Explain the term “bill and hold” transaction.

c.

To determine

Justify the reason for a bill and hold transactions not qualify as a sale and justify the reason for recording a bill and hold transactions as a sale with related receivables.

d.

To determine

Identify the important criteria states by SEC.

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Answer 4

Question

Chapter 16, Problem 23DQP

a.

To determine

Explain the four basis criteria for determining whether revenue is realized or realizable.

b.

To determine

Explain the term “bill and hold” transaction.

c.

To determine

Justify the reason for a bill and hold transactions not qualify as a sale and justify the reason for recording a bill and hold transactions as a sale with related receivables.

d.

To determine

Identify the important criteria states by SEC.

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Answer 5

Chapter 16, Problem 23DQP

a.

To determine

Explain the four basis criteria for determining whether revenue is realized or realizable.

b.

To determine

Explain the term “bill and hold” transaction.

c.

To determine

Justify the reason for a bill and hold transactions not qualify as a sale and justify the reason for recording a bill and hold transactions as a sale with related receivables.

d.

To determine

Identify the important criteria states by SEC.

Answer 6

Chapter 16, Problem 23DQP

a.

To determine

Explain the four basis criteria for determining whether revenue is realized or realizable.

Answer 7

Chapter 16, Problem 23DQP

a.

To determine

Explain the four basis criteria for determining whether revenue is realized or realizable.

Answer 8

b.

To determine

Explain the term “bill and hold” transaction.

Answer 9

b.

To determine

Explain the term “bill and hold” transaction.

Answer 10

c.

To determine

Justify the reason for a bill and hold transactions not qualify as a sale and justify the reason for recording a bill and hold transactions as a sale with related receivables.

Answer 11

c.

To determine

Justify the reason for a bill and hold transactions not qualify as a sale and justify the reason for recording a bill and hold transactions as a sale with related receivables.

Answer 12

d.

To determine

Identify the important criteria states by SEC.

Answer 13

d.

To determine

Identify the important criteria states by SEC.

Answer 14

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Ch. 16 - Prob. 1RQ Ch. 16 - Prob. 2RQ Ch. 16 - Prob. 3RQ Ch. 16 - Explain why you agree or disagree with the...Ch. 16 - Prob. 5RQ Ch. 16 - Prob. 6RQ Ch. 16 - Prob. 7RQ Ch. 16 - Prob. 8RQ Ch. 16 - Prob. 9RQ Ch. 16 - Prob. 10RQ

Explain the four basis criteria for determining whether revenue is realized or realizable.

Solution Summary: The author explains the four basis criteria for determining whether revenue is realized or realizable.

Explain the four basis criteria for determining whether revenue is realized or realizable.

Explain the term “bill and hold” transaction.

Justify the reason for a bill and hold transactions not qualify as a sale and justify the reason for recording a bill and hold transactions as a sale with related receivables.

Identify the important criteria states by SEC.

Chapter 16 Solutions