Interim Reports Falcon Amusements, Inc. chose September 30 as its year-end. Reported below are its quarterly income statements for fiscal 2000 and its annual income statement.       Quarterly       10/1/99 1/1/00 4/1/00 7/1/00 Annual at   12/31/99 3/31/00 6/30/00 9/30/00 9/30/00 Net sales $577,441 $571,930 $698,432 $818,034 $2,665,837 Cost of goods 118,563 126,471 134,587 174,259 553,880 Gross profit 458,878 445,459 563,845 […]

Possible Violation of Debt/Asset Covenant Assume you have just conducted a preliminary analysis of your firm’s 1999 financial statements. The firm has not prospered in recent years, and you are particularly concerned about violating a provision of a loan agreement you have with a local bank. Your firm has a $200,000, nine percent bank loan due in 2001. One provision of the loan agreement is […]

Interim Reporting International Dairy Queen’s annual income statement for the year ended November 30, 1994, and its four quarterly income statements are presented below.   ending           11/30/94 11/30/94 2/24/95 5/26/95 8/25/95 Net sales $340,833 $76,070 $67,530 $106,150 $115,361 Cost of goods           sold 249,985 55,140 47,556 79,220 83,010 Gross profit 90,848 20,930 19,974 26,930 32,351 Selling, […]

Avanti Manufacturing Company has two production departments: Molding and Assembly. March 1 inventories are Raw Materials $3,600, Work in Process—Molding $2,200, Work in Process—Assembly $8,800 and Finished Goods $26,000. During March, the following transactions occurred: 1. Purchased $28,400 of raw materials on account. 2. Incurred $48,000 of factory labor. (Credit Wages Payable.) 3. Incurred $62,000 of manufacturing overhead; $39,000 was paid and the remainder is […]

John Hasty opened his bakery on March 1, 1999. The following transactions took place in early March: 1. Deposited $10,000 into a checking account in the name of the Hasty Bakery. 2. Leased a small kitchen for one year at $500 per month. One month’s rent was paid at this time. 3. Purchased kitchen equipment for $3,000 cash. 4. Purchased baking ingredients for $6,000 on […]

Sismondi Company has a process cost accounting system. During May, the Assembly and Finishing Departments had the following data concerning physical units: Assembly: Work in process, May 1 3,000 Started into process during the month 65,000 Work in process, May 31 7,000 Finishing: Work in process, May 1 6,000 Transferred in from Assembly Department during the month ? Work in process, May 31 4,000 Instructions […]

The Muller Company reports the following physical units for its Polishing Department for the month ended July 31, 2014. Units to be accounted for Physical Units Work in process. Jury • 1,000 Transferred in 11 .000 Total units 12.000 Units accounted for Completed and transferred out 10:500 Work in process, July 31 (301–i complete) .1.500 Total units accounted for 12.000 Work in process July 1 […]

Fastchip, Inc. manufactures two computers: the FC-PC which sells for $2,000, and the FC-laptop, which sells for $4,200. The production cost per unit for each computer in 2014 was as follows:   FC-PC FC-laptop Direct Nlaterials $1.260 $3,040 Direct labor ($25 per hour) 200 300 Manufacturing overhead ($10 per DLH) 80 120 Total per unit cost $1,540 $3,460 In 2014, Fastchip manufactured 20,000 units of […]

In the Gabbana Company, maintenance costs are a mixed cost. At the low level of activity (40 direct labor hours), maintenance costs are $600. At the high level of activity (100 direct labor hours), maintenance costs are $1,100. Using the high-low method, what is the variable maintenance cost per unit and the total fixed maintenance cost? Variable Cost Total Per Unit Fixed Cost a $8.33 […]

In the Klein Company, 50,000 units are produced and 40,000 units are sold. Variable manufacturing costs per unit are $8 and fixed manufacturing costs are $160,000. The cost of the ending finished goods inventory under each costing approach is: Absorption Variable Costing Costing a $112,000 $ 80,000 b. 112:000 ‘100,000 c. 120:000 80,000 d. 120,000 ‘100,000