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ACC 543 Flexible Budgets Team Paper ACC 543 Capital Budget Recommendation ACC 543 Aspects of Employment and Environment Paper and PowerPoint ACC 543 Exercise 24-1 Net Present Value/Present Value Index ACC 543 Exercise 24-8A: Determining the Internal Rate of Return ACC 543 Exercise 24-6A: Determining Net Present Value ACC 543 Exercise 24-5B: Purchase of Popcorn Machine ACC 543 Exercise 24-5A Determining net present value – PowerPoint PPT presentation

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Title: ACC 543 Reading feeds the Imagination/Uophelpdotcom


1
ACC 543 Reading feeds the Imagination
Uophelpdotcom
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2
ACC 543 Aspects of Employment and Environment
Paper and PowerPoint
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  • Aspects of Employment and Environment Paper and
    PowerPoint You are an accountant at a small
    accounting firm. One of your clients is looking
    to open a small river-rafting business. Your
    client will run the business operations from a
    mobile home office on a piece of land on the
    riverbank. Your client must decide the best
    location to start this business and has asked you
    to explain the accounting advantages of choosing
    the best location. Your client is also wondering
    if the business should build a permanent
    structure on the land, or use the mobile home
    they already own. Additionally, your client wants
    to know the insurance implications of this
    decision. How would the insurance implications of
    the location decision change the companys risks
    and how might your client use insurance to better
    manage those risks?
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ACC 543 Capital Budget Recommendation
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  • Capital Budget Recommendation Guillermo
    Furniture, a company that manufactures midgrade
    and high-end sofas, has just hired you as an
    accountant. The owner, Guillermo Navallez, has
    assigned you the tasks of determining which
    decisions provide the greatest returns. Read the
    Guillermo Furniture Scenario and review the
    Guillermo Furniture Data Sheets on your student
    Web site. Enter your name in cell A3 of the
    Income Information tab in the Guillermo Furniture
    Data Sheets. Submit the exact name you entered to
    your instructor. Obtain the number that is shown
    as a result for total assets on the Assets,
    Liabilities, and Equity In tab. Submit the number
    for total assets to your instructor.
    Differentiate among the various capital budget
    evaluation techniques. Explain how these
    different techniques would help you make your
    recommendation to Guillermo. Recommend a course
    of action based on a capital budget evaluation
    technique and include present value calculations
    as part of your recommendation. Submit your
    assignment as an attachment of no more than 1,050
    words.
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ACC 543 Entire Course
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  •  
  • ACC 543 Flexible Budgets Team Paper
  • ACC 543 Capital Budget Recommendation
  • ACC 543 Aspects of Employment and Environment
    Paper and PowerPoint
  • ACC 543 Exercise 24-1 Net Present Value/Present
    Value Index
  • ACC 543 Exercise 24-8A Determining the Internal
    Rate of Return
  • ACC 543 Exercise 24-6A Determining Net Present
    Value
  • ACC 543 Exercise 24-5B Purchase of Popcorn
    Machine
  • ACC 543 Exercise 24-5A Determining net present
    value
  • ACC 543 Exercise 24-4A Determining the present
    value of an annuity
  • ACC 543 Exercise 24-3A Present Value Analysis
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5
ACC 543 Exercise 15-6B
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  • Exercise 15-6B Fixed versus variable cost
    behavior Professional Chairs Corporation produces
    ergonomically designed chairs favored by
    architects. The company normally produces and
    sells from 5,000 to 8,000 chairs per year. The
    following cost data apply to various production
    activity levels. Required a. Complete the
    preceding table by filling in the missing amounts
    for the levels of activity shown in the first row
    of the table. b. Explain why the total cost per
    chair decreases as the number of chairs increases

6
ACC 543 Exercise 15-12B
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  • Exercise 15-12B Effect of cost structure on
    projected profits Logan and Martin compete in the
    same market. The following budgeted income
    statements illustrate their cost structures.
    Required a. Assume that Logan can lure all 80
    customers away from Martin by lowering its sales
    price to 75 per customer. Reconstruct Logans
    income statement based on 160 customers. b.
    Assume that Martin can lure all 80 customers away
    from Logan by lowering its sales price to 75 per
    customer. Reconstruct Martins income statement
    based on 160 customers. c. Why does the
    price-cutting strategy increase Logans profits
    but result in a net loss for Martin?
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ACC 543 Exercise 15-17A Identifying Cost Behavior
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  • Exercise 15-17A Identifying Cost Behavior
    Identify the following costs as fixed or
    variable. Costs related to plane trips between
    San Diego, California, and Orlando, Florida,
    follow. Pilots are paid on a per trip basis. a.
    Pilots salaries relative to the number of trips
    flown. b. Depreciation relative to the number of
    planes in service. c. Cost of refreshments
    relative to the number of passengers. d. Pilots
    salaries relative to the number of passengers on
    a particular trip. e. Cost of a maintenance check
    relative to the number of passengers on a
    particular trip. f. Fuel costs relative to the
    number of trips. National Union Bank operates
    several branch offices in grocery stores. Each
    branch employs a supervisor and two tellers. g.
    Tellers salaries relative to the number of
    tellers in a particular district.  
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8
ACC 543 Exercise 16-9A
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  • Exercise 16-9A Mimosa Corporation expects to
    incur indirect overhead costs of 72,000 per
    month and direct manufacturing costs of 11 per
    unit. The expected production activity for the
    first four months of 2007 is as follows. Required
    a. Calculate a predetermined overhead rate based
    on the number of units of product expected to be
    made during the first four months of the year. b.
    Allocate overhead costs to each month using the
    overhead rate computed in Requirement a. c.
    Calculate the total cost per unit for each month
    using the overhead allocated in Requirement b.
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ACC 543 Exercise 18 17B Process Cost System Cost
of Production Report
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  • Exercise 18-17B Process Cost System Cost of
    Production Report At the beginning of 2004,
    Dozier Company had 1,800 units of product in its
    work in process inventory, and it started 19,200
    additional units of product during the year. At
    the end of the year, 6,000 units of product were
    in the work in process inventory. The ending work
    in process inventory was estimated to be 50
    percent complete. The cost of work in process
    inventory at the beginning of the period was
    9,000, and 108,000 of product costs was added
    during the period. Required Prepare a cost of
    production report showing the following. a. The
    number of equivalent units of production. b. The
    product cost per equivalent unit. c. The total
    cost allocated between the ending Work in Process
    Inventory and Finished Goods Inventory accounts.

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ACC 543 Exercise 18-17A
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  • Exercise 18-17A Hamby Company had 250 units of
    product in its work in process inventory at the
    beginning of the period and started 2,000
    additional units during the period. At the end of
    the period, 750 units were in work in process
    inventory. The ending work in process inventory
    was estimated to be 60 percent complete. The cost
    of work in process inventory at the beginning of
    the period was 3,420, and 27,000 of product
    costs was added during the period

11
ACC 543 Exercise 19 24A Assessing Simultaneous
Changes in CVP Relationships
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  • Exercise 19-24A Assessing Simultaneous Changes
    in CVP Relationships Green Shades Inc. (GSI)
    sells hammocks variable costs are 75 each, and
    the hammocks are sold for 125 each. GSI incurs
    250,000 of fixed operating expenses annually.
    Required a. Determine the sales volume in units
    and dollars required to attain a 50,000 profit.
    Verify your answer by preparing an income
    statement using the contribution margin format.
    b. GSI is considering implementing a quality
    improvement program. The program will require a
    10 increase in the variable cost per unit. To
    inform its customers of the quality improvements,
    the company plans to spend an additional 20,000
    for advertising. Assuming that the improvement
    program will increase sales to a level that is
    3,000 units above the amount computed in
    Requirement a, should GSI proceed with plans to
    improve product quality? Support your answer by
    preparing a budgeted income statement. c.
    Determine the new break-even point in units and
    sales dollars as well as the margin of safety
    percentage, assuming that the quality improvement
    program is implemented.
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12
ACC 543 Exercise 22 6A Using a flexible budget to
accommodate market uncertainty
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  • Exercise 22-6A Using a flexible budget to
    accommodate market uncertainty According to its
    original plan, Katta Consulting Services Company
    would charge its customers for service at 200
    per hour in 2006. The company president expects
    consulting services provided to customers to
    reach 40,000 hours at that rate. The marketing
    manager, however, argues that actual results may
    range from 35,000 hours to 45,000 hours because
    of market uncertainty. Kattas standard variable
    cost is 90 per hour, and its standard fixed cost
    is 3,000,000.
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ACC 543 Exercise 22-6A Using a flexible budget to
accommodate market uncertainty
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  • Exercise 22-6A Using a flexible budget to
    accommodate market uncertainty According to its
    original plan, Katta Consulting Services Company
    would charge its customers for service at 200
    per hour in 2006. The company president expects
    consulting services provided to customers to
    reach 40,000 hours at that rate. The marketing
    manager, however, argues that actual results may
    range from 35,000 hours to 45,000 hours because
    of market uncertainty. Kattas standard variable
    cost is 90 per hour, and its standard fixed cost
    is 3,000,0
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14
ACC 543 Exercise 24 3A Present Value Analysis
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  • Exercise 24-3A Present Value Analysis Ginger
    Smalley expects to receive a 300,000 cash
    benefit when she retires five years from today.
    Ms. Smalleys employer has offered an early
    retirement incentive by agreeing to pay her
    180,000 today if she agrees to retire
    immediately. Ms. Smalley desires to earn a rate
    of return of 12 percent. Required a. Assuming
    that the retirement benefit is the only
    consideration in making the retirement decision,
    should Ms. Smalley accept her employers offer?
    b. Identify the factors that cause the present
    value of the retirement benefit to be less than
    300,000.
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15
ACC 543 Exercise 24 5B Purchase of Popcorn Machine
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  • Exercise 24-5B Purchase of Popcorn Machine Heidi
    Kahn, manager of the Grand Music Hall, is
    considering the opportunity to expand the
    companys concession revenues. Specifically, she
    is considering whether to install a popcorn
    machine. Based on market research, she believes
    that the machine could produce incremental cash
    inflows of 1,600 per year. The purchase price of
    the machine is 5,000. It is expected to have a
    useful life of three years and a 1,000 salvage
    value. Ms. Kahn has established a desired rate of
    return of 16 percent.

16
ACC 543 Exercise 24 6A Determining Net Present
Value
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  • Exercise 24-6A Determining Net Present Value
    Travis Vintor is seeking part-time employment
    while he attends school. He is considering
    purchasing technical equipment that will enable
    him to start a small training services company
    that will offer tutorial services over the
    Internet. Travis expects demand for the service
    to grow rapidly in the first two years of
    operation as customers learn about the
    availability of the Internet assistance.
    Thereafter, he expects demand to stabilize. The
    following table presents the expected cash flows.
    In addition to these cash flows, Mr. Vintor
    expects to pay 8,400 for the equipment.

17
ACC 543 Exercise 24 8A Determining the Internal
Rate of Return
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  • Exercise 24-8A Determining the Internal Rate of
    Return Medina Manufacturing Company has an
    opportunity to purchase some technologically
    advanced equipment that will reduce the companys
    cash outflow for operating expenses by 1,280,000
    per year. The cost of the equipment is
    6,186,530.56. Medina expects it to have a
    10-year useful life and a zero salvage value. The
    company has established an investment opportunity
    hurdle rate of 15 percent and uses the
    straight-line method for depreciation. Required
    a. Calculate the internal rate of return of the
    investment opportunity. b. Indicate whether the
    investment opportunity should be accepted.
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18
ACC 543 Exercise 24-4A Determining the present
value of an annuity
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  • Exercise 24-4A Determining the present value of
    an annuity The dean of the School of Social
    Science is trying to decide whether to purchase a
    copy machine to place in the lobby of the
    building. The machine would add to student
    convenience, but the dean feels compelled to earn
    an 8 percent return on the investment of funds.
    Estimates of cash inflows from copy machines that
    have been placed in other university buildings
    indicate that the copy machine would probably
    produce incremental cash inflows of approximately
    8,000 per year. The machine is expected to have
    a three-year useful life with a zero salvage
    value. Required a. Use Present Value Table 1 in
    Appendix A to determine the maximum amount of
    cash the dean should be willing to pay for a copy
    machine. b. Use Present Value Table 2 in Appendix
    A to determine the maximum amount of cash the
    dean should be willing to pay for a copy machine.
    c. Explain the consistency or lack of consistency
    in the answers to Requirements a b.
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19
ACC 543 Exercise 24-5A Determining net present
value
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  • Exercise 24-5A Determining net present value
    Transit Shuttle Inc. is considering investing in
    two new vans that are expected to generate
    combined cash inflows of 20,000 per year. The
    vans combined purchase price is 65,000. The
    expected life and salvage value of each are four
    years and 15,000, respectively. Transit Shuttle
    has an average cost of capital of 14 percent.
    Required a. Calculate the net present value of
    the investment opportunity. b. Indicate whether
    the investment opportunity is expected to earn a
    return that is above or below the cost of capital
    and whether it should be accepted.
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20
ACC 543 Flexible Budgets Team Paper
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  •  
  • Flexible Budgets Team Paper Write a paper of no
    more than 1,050 words in which you discuss
    flexible budgets. Explain the relationship
    between fixed and variable costs used in a
    flexible budget. Discuss the differences between
    static and flexible budgets and how a flexible
    budget lends itself to a cost-volume-profit
    analysis. Format your paper consistent with APA
    guidelines
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21
ACC 543 Reading feeds the Imagination
Uophelpdotcom
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