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TruGreen is the world’s largest lawn and landscape company, employing over 10,000 employees and serving more than 1.7 million customers.
The Pawtucket Red Sox is a minor league baseball affiliate of the Boston Red Sox. The team’s current roster consists of 25 active players, along with the team’s manager, coaches, and mascots.
Hock It To Me is a privately owned pawn shop. The company has annual revenue of less than $500,000 and employs a staff of one to four people.
Even though each of these businesses has a unique payroll due to different amounts of salaries or wages, benefits, and withholdings, explain why each business needs to (a) accurately calculate the amount of payroll for each employee, (b) determine the amount of payroll taxes for which the employer is liable, (c) make the payroll tax deposits as required, and (d) file the appropriate payroll tax returns on a timely basis.
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College Accounting (Book Only): A Career Approach
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- Speed Racer in Victoria makes bicycles for people of all ages. The frames division makes and paints the frames and supplies them to the assembly division where the bicycles are assembled. Speed Racer is a successful and profitable corporation that attributes much of its success to its decentralized operating style. Each division manager is compensated on the basis of division operating income. The assembly division currently acquires all its frames from the frames division. The assembly division manager could purchase similar frames in the market for $480. The frames division is currently operating at 80% of its capacity of 4,000 frames (units) and has the following details: Voltage Regulator Direct materials ($150 per unit x 320 units) $480,000 Direct manufacturing labour ($60 per unit x 3,200 units) 192,000 Variable manufacturing overhead costs ($30 per unit × 3,200 units) 96,000 Fixed manufacturing overhead costs $624,000 All the frames…arrow_forwardPhanatix, Inc. produces a variety of products that carry the logos of teams in the Southern Football League (SFL). The company recently paid the league $85,000 for the rights to market a popular player jersey and immediately began production. Anticipated selling price per jersey is $42, Currently all 25,000 jerseys have been produced but there have been none sold. Cost of jerseys manufactured is $625,000 but costs paid to-date are $410,000. Estimated future marketing costs: $330,000.The SFL is about to file a lawsuit to stop jersey sales and is demanding another $50,000 from Phanatix for the manufacturing rights. Conversations with Phanatix's attorneys indicate that the league has a strong case and is likely to win the suit. If this situation arises, Phanatix will be unable to recover any amounts paid to the SFL. What are the relevant costs?arrow_forwardCPT incorporated is a local manufacturer of conveyor systems. Last year, CPT sold over $2 million worth of conveyor systems that netted the company $100,000 in profits. Raw materials and labor are CPT's biggest expenses. Spending on structural steel alone amounted to over $500,000, or 25 percent of total sales. In an effort to reduce costs, CPT now uses an online procurement procedure that is best described as a first-price, sealed-bid auction. The bidders in these auctions utilize the steel for a wide variety of purposes. ranging from art to skyscrapers. This suggests that bidders value the steel independently, although it is perceived that bidder valuations are evenly distributed between $7,000 and $26,000. You are the purchasing manager at CPT and are bidding on three tons of six-inch hot-rolled channel steel against four other bidders Your company values the three tons of channel steel at $18,000. What is your optimal bid?arrow_forward
- Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of$25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk usesa PC and laser printer in processing orders. Time available on each PC system is sufficient toprocess 6,500 orders per year. The cost of each PC system is $1,100 per year. In addition to thesalaries, Elliott spends $27,560 for forms, postage, and other supplies (assuming 26,000 purchaseorders are processed). During the year, 25,350 orders were processed.Required:1. Classify the resources associated with purchasing as (1) flexible or (2) committed.2. Compute the total activity availability, and break this into activity usage and unused activity.3. Calculate the total cost of resources supplied (activity cost), and break this into the cost ofactivity used and the cost of unused activity.4. (a) Suppose that a large special order will cause an additional 500 purchase orders. Whatpurchasing costs are…arrow_forwardCPT Inc. is a local manufacturer of conveyor systems. Last year, CPT sold over $2 million worth of conveyor systems that netted the company $100,000 in profits. Raw materials and labor are CPT’s biggest expenses. Spending on structural steel alone amounted to over $500,000, or 25 percent of total sales. In an effort to reduce costs, CPT now uses an online procurement procedure that is best described as a first-price, sealed-bid auction. The bidders in these auctions utilize the steel for a wide variety of purposes, ranging from art to skyscrapers. This suggests that bidders value the steel independently, although it is perceived that bidder valuations are evenly distributed between $4,000 and $21,000. You are the purchasing manager at CPT and are bidding on three tons of six-inch hot-rolled channel steel against 5 other bidders. Your company values the three tons of channel steel at $12,000. What is your optimal bid? Enter your response rounded to the nearest penny (two decimal…arrow_forwardCPT Inc. is a local manufacturer of conveyor systems. Last year, CPT sold over $2 million worth of conveyor systems that netted the company $100,000 in profits. Raw materials and labor are CPT’s biggest expenses. Spending on structural steel alone amounted to over $500,000, or 25 percent of total sales. In an effort to reduce costs, CPT now uses an online procurement procedure that is best described as a first-price, sealed-bid auction. The bidders in these auctions utilize the steel for a wide variety of purposes, ranging from art to skyscrapers. This suggests that bidders value the steel independently, although it is perceived that bidder valuations are evenly distributed between $5,000 and $27,000. You are the purchasing manager at CPT and are bidding on three tons of six-inch hot-rolled channel steel against 4 other bidders. Your company values the three tons of channel steel at $16,000. What is your optimal bid? Instruction: Enter your response rounded to the nearest penny (two…arrow_forward
- Tau Limited is a manufacturing business that sales high quality kitchen electronic products. Tau Limited has just entered into 25 lucrative contracts with customers in the SADC region. Each of the contacts includes the sale of one product for P3,000. To manufacture each of these products it cost Tau P2 000 a product. In the contacts, one of the terms is that cash is received upfront and control of the product transfers on delivery. Furthermore, customers can return the product within 30 days to receive a full refund. Tau still has an option of selling the returned products for profit. Tau Limited has been in business for many years and from his experience he can estimate returns for this product quite accurately. Tau has estimated that that 23 products will not be returned. Required: How should the above transaction be accounted for?arrow_forwardCrane Industries manufactures sump-pumps. Its most popular product is called the Super Soaker, which has a retail price of $1,230 and costs $570 to manufacture. It sells the Super Soaker on a standalone basis directly to businesses. Crane also provides installation services for these commercial customers, who want an emergency pumping capability (with regular and back-up generator power) at their businesses. Crane also distributes the Super Soaker through a consignment agreement with Menards. Income data for the first quarter of 2025 from operations other than the Super Soaker are as follows. Revenues Expenses $9.571,000 7,122,000 Crane has the following information related to two Super Soaker revenue arrangements during the first quarter of 2025. 1. Crane sells 30 Super Soakers to businesses in flood-prone areas for a total contract price of $59,100. In addition to the pumps, Crane also provides installation (at a cost of $160 per pump). On a standalone basis, the fair value of this…arrow_forwardElliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?arrow_forward
- Company W manufactures equipment that is used to make widgets. The widget-making process involves two pieces of equipment, both of which Company W manufactures. In an arrangement with a new customer, Company W sells both pieces of equipment, along with 10 days of training for the customer's employees, for a total fee of $400,000. Title to each machine transfers upon shipment. Company W does not grant general or specific refund rights to its customers. Company W also sells each piece of equipment separately. In addition, competitors manufacture machines that perform the same functions as Machine 1 and 2, and machines from different manufacturers are interchangeable. Company W sells Machine 1 separately for $200,000, and Machine 2 separately for $250,000. No amount of the arrangement consideration is contingent upon performance of undelivered components. Company W sells training services separately to customers who already have equipment installed and want additional training for new…arrow_forwardWord Wizard is a publishing company with a number of different book lines. Each line has contracts with a number of different authors. The company also owns a printing operation called Quick Press. The book lines and the printing operation each operate as a separate profit center. The printing operation earns revenue by printing books by authors under contract with the book lines owned by Word Wizard, as well as authors under contract with other companies. The printing operation bills out at $0.01 per page, and a typical book requires 390 pages of print. A manager from Business Books, one of the Word Wizard’s book lines, has approached the manager of the printing operation offering to pay $0.007 per page for 1,500 copies of a 390-page book. The book line pays outside printers $0.008 per page. The printing operation's variable cost per page is $0.003.Determine whether the printing should be done internally or externally, and the appropriate transfer price, under each of the following…arrow_forwardWord Wizard is a publishing company with a number of different book lines. Each line has contracts with a number of different authors. The company also owns a printing operation called Quick Press. The book lines and the printing operation each operate as a separate profit center. The printing operation earns revenue by printing books by authors under contract with the book lines owned by Word Wizard, as well as authors under contract with other companies. The printing operation bills out at $0.01 per page, and a typical book requires 390 pages of print. A manager from Business Books, one of the Word Wizard’s book lines, has approached the manager of the printing operation offering to pay $0.007 per page for 1,500 copies of a 390-page book. The book line pays outside printers $0.008 per page. The printing operation's variable cost per page is $0.003.Determine whether the printing should be done internally or externally, and the appropriate transfer price, under each of the following…arrow_forward
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