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ACC 561 Week 6 Wiley Plus Assignment

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ACC 561 Week 6 Wiley Plus Assignment

Exercise 20-3Garza and Neely, CPAs, are preparing their service revenue (sales) budget for the coming year (2012). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Department

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Average hourly billing rates are: auditing $81, tax $94, and consulting $102.

Prepare the service revenue (sales) budget for 2012 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

GARZA AND NEELY, CPAs

Sales Revenue Budget

For the Year Ending December 31, 2012

Quarter 1

Quarter 2

Dept.

Billable Hours

Billable Rate

Total Rev.

Billable Hours

Billable Rate

Total Rev.

 

GARZA AND NEELY, CPAs

Sales Revenue Budget

For the Year Ending December 31, 2012

Quarter 3

Quarter 4

Dept.

Billable Hours

Billable Rate

Total Rev.

Billable Hours

Billable Rate

Total Rev.

 

GARZA AND NEELY, CPAs

Sales Revenue Budget

For the Year Ending December 31, 2012

Year

Dept.

Billable Hours

Billable Rate

Total Rev.

 

Exercise 22-1

(b) Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 2.75.)

Standard cost

$ 22.89

 

Brief Exercise 23-3

In Harley Company it costs $28 per unit ($19 variable and $9 fixed) to make a product that normally sells for $46. A foreign wholesaler offers to buy 4,450 units at $27 each. Harley will incur special shipping costs of $2 per unit. Assuming that Harley has excess operating capacity.

Indicate the net income (loss) Harley would realize by accepting the special order. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

RejectOrder AcceptOrder

Net Income

Increase

(Decrease)

 

The special order should be accepted.

 

 

Brief Exercise 23-4

Your answer is correct.

Vintech Manufacturing incurs unit costs of $7 ($5 variable and $2 fixed) in making a subassembly part for its finished product. A supplier offers to make 15,500 of the part at $5.90 per unit. If the offer is accepted, Vintech will save all variable costs but no fixed costs.

Prepare an analysis showing the total cost saving, if any, Vintech will realize by buying the part. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

Make Buy

Net Income

Increase

(Decrease)

Variable manufacturing costs
Fixed manufacturing costs
Purchase price
    Total annual cost

 

The decision should be to make the part.

 

Brief Exercise 23-6

Your answer is correct.

Ridley Company has a factory machine with a book value of $80,300 and a remaining useful life of 5 years. A new machine is available at a cost of $192,400. This machine will have a 5-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $552,400 to $364,800.

Prepare an analysis showing whether the old machine should be retained or replaced. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

RetainEquipment ReplaceEquipment

Net 5-Year

Income

Increase

(Decrease)

Variable manufacturing costs
New machine cost
    Total

 

The old factory machine should be replaced.

Question Attempts: 1 of 3 used

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