[11] Roy Company manufactures Product X in a two-stage production cycle in Departments A and B. Materials are added at the beginning of the process in Department B. Roy uses the weighted-average method. BWIP (6,000 units) for Department B was 50% complete as to conversion costs. EWIP (8,000 units) was 75% complete. During February, 12,000 units were completed and transferred out of Department B. An analysis of the costs relating to WIP and production activity in Department B for February follows: Transferred- Materials Conversion In Costs Costs Costs WIP, February 1: Costs attached $12,000 $1,000 29,000 5,500 5,000 The total cost per equivalent unit transferred out for February of Product X, rounded to the nearest penny, was Feb. activity: Costs added $2,500 A. $2.75 B. $2.78 C. $2.82 D. $3.01

You are the newly hired Controller for Retro Vinyl. The proprietors of RV hired you due to your vast experience in the furniture industry, which now spans almost 25 years. Your first task is to create a master budget for the four quarters of the 2023 fiscal year, which begins January 1st and ends December 31st. The master budget must include the following detailed budgets: 1. A sales budget with a schedule of expected cash collections from sales. Show the budget by quarter and in total. 2. A production budget. Show the budget by quarter and in total. 3. A direct material purchase budget with expected cash disbursements for material purchases. Show the budget by quarter and in total. 4. A direct labor budget in dollars. Show the budget by quarter and in total. 5. A manufacturing overhead budget in dollars. Show the budget by quarter and in total. 6. An ending finished goods inventory budget. Show the budget by quarter and in total. 7. A selling, general, and administrative budget. Show the budget by quarter and in total. 8. A cash budget. Show the budget by quarter and in total. 9. A budgeted income statement for the period ending December 31. Use the absorption costing approach. 10.A budgeted balance sheet as of December 31.

PART 2 (25 marks) Better Value produces brass handles for the furniture industry in a four-stage process -Mixing, Forming, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: January 1 Bal. Transfer from Forming Direct Materials Added Direct Labour Manufacturing Overhead WIP - Polishing Process A/C $0 1,310,000 391,600 638,000 307,400 20,000 Normal losses are estimated to be 2½% of input during the period. Inspection takes place during the processing operation, at which point imperfect handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Forming Direct material added Conversion costs Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Forming Direct material added Conversion costs (b) Compute the: 100% 40% 20% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: ☐ cost of the unexpected losses 100% 80% 50% (a) Compute the equivalent units and cost per equivalent units for direct materials (From Forming & Direct materials added) and conversion costs. (10 marks) total cost of the handles completed and transferred out of the Packaging Department *cost of ending work in process inventory in the Polishing Department (3 marks) (c) Complete the Work in Process Inventory - Polishing Process T-account, clearly showing the ending balance. (5 marks) (d) Prepare the journal entries for the: assignment of direct materials, direct labour incurred, and the manufacturing overhead applied to the Polishing Process *cost of the units completed and transferred out to the Packaging Process (5 marks) (e) After completing the physical count, it was determined that 30% of the unexpected losses were because of pilferage. In view of this finding, determine Better Value's true loss associated with the Polishing Process. (2 marks) "Don't wait for your boat of success to come in; row out to meet it" Uriel Salmon Page 3

9. Let's say that our company makes chairs. I make $1 million in sales for the year. All the sales happen on ONE DAY... December 28th. Half of the customers pay me in cash. The other half tell me that they will be paying me next week. According to GAAP, how much sales will I show on my income statement and WHY?

3. Maheera can get a certificate of deposit (CD) at his bank that will pay 3.5% annually for 10 years. If he places $2442 in this CD, how much will it be worth when it 24 matures? ^ (a) Use the formula. (b) Use the interest tables and interpolation. (c) Use a calculator or spreadsheet for a 5-button solution.

[3] An equivalent unit of direct materials or conversion cost is equal to A. The amount of direct materials or conversion cost necessary to complete one unit of production. B. A unit of work-in-process inventory. C. The amount of direct materials or conversion cost necessary to start a unit of production in work-in-process. D. Fifty percent of the direct materials or conversion cost of a unit of finished goods inventory (assuming a linear production pattern).

11. My company manufactures and sells chairs. On our balance sheet we show $1,000,000 in finished-goods inventory. In plain English (that means without any fancy accounting terms) what does this mean? In real life, how would we come up with this number?

Question 1. a. Assume that you are a managing director of a company, generally instruct your accountants to prepare financial statements for the company's stakeholders. Who are the main stakeholders of the firm. Do these stakeholders really care about this information. Why or why not? How does stock market react to announce of accounting information including earnings and dividends?/nb. The company's credit officer recently approached a local bank for a loan arrangement. However, the credit department of the bank declined to sanction the loan. Critically explore at least three factors why such decision was made by the bank?/nC. As a managing director of the company, with the objective to improve shareholders' wealth, how does a firm improve shareholder equity with clear example? From Financial Accounting perspective, why does accounting equation is matter for firm's management and its stakeholders?

PART 1 (25 marks) Kirpalani Stores manufactures customized household furnishings. The company uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost Kirpalani expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2019. At the end of December 2018, Kirpalani reported work in process inventory (Job 551) of $93,000 The following events occurred during January 2019. i) Purchased materials on account $392,000. ii) Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing. Job 551 Job 552 Job 553 Job 554 Direct Materials $70,200 97,500 105,300 117,000 Direct Labour $61,200 115,600 78,200 85,000 iv) Issued indirect materials to production, $30,000. v) Charged indirect manufacturing wages to production, $60,000. vi) Depreciation of production machinery, $85,000 (c) (d) vii) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $49,000. viii) Allocated overheads to jobs at the predetermined rate ix) Units completed: 551, 552 & 554. x) Sold units 551 & 554 (billed customers at a margin of 33/3% on sales) Required: Compute Kirpalani s predetermined manufacturing overhead rate for 2019. (a) (b) Calculate the total manufacturing costs for each job. Using the total figures, record the above transactions in the general journal. (1½ marks) (4¹ marks) (9% marks) Post the manufacturing overhead transactions to the Manufacturing Overhead T- account, clearly showing the balance before closing the account. State the journal entries necessary to dispose of the variance. Assume that the manufacturing overhead variance is immaterial. (3 marks) (e) What is the balance in the Cost of Goods Sold account after the adjustment? (2 marks) (f) Compute Kirpalani's gross profit earned on the jobs, after adjusting for the manufacturing overhead variance (2 marks) (g) Post the appropriate entries to Work in Process Inventory Control account & determine the account balance on January 31. (2¹ marks) "Don't wait for your boat of success to come in; row out to meet it" Uriel Salmon Page 2

ALABAMA CORPORATION Goals and Objectives Review of basic terminology Review basic accounting and journal entries to reflect the flow of costs Review preparation of income statement and supporting schedules for manufacturer given end-of-year information The company manufactures a single product, cleverly named Product X. The following information is available for the calendar year 2018 just completed, during which they produced and sold 200,000 units. Sales for the year was $2,400,000. During the year, the company paid a sales commission of 5 percent of sales. The corporate income tax rate was 20%. Direct materials purchases Direct labor Depreciation - factory equipment Depreciation - factory building Depreciation - headquarters building Factory insurance Property taxes: Factory Headquarters Utilities - factory Utilities - sales Administrative salaries Indirect labor salaries Sales office salaries Inventory Information Raw materials Work in process Finished Goods $300,000 140,000 45,000 30,000 50,000 15,000 20,000 18,000 34,000 1,800 150,000 156,000 90,000 12/31/2017 12/31/2018 $124,000 $152,000 124,000 130,000 109,000 118,904/nREQUIRED: 1. Post all of the above a summary entries in T accounts. 2. Compute the direct materials used in production. 3. Compute the prime cost. 4. Compute the conversion cost. 5. Prepare the Schedule of Direct Materials Used 6. Prepare the Schedule of Cost of Goods Manufactured 7. Prepare the Schedule of Cost of Goods Sold 8. Prepare an income statement for 2018, acceptable for GAAP in good form. 9. How many finished units of Product X do you thing were in the ending FG inventory?