Wave Wake Marine Company has total estimated factory overhead for the year of $1,200,000, divided into four activities

Wave Wake Marine Company has total estimated factory overhead for the year of $1,200,000, divided into four activities: fabrication, $450,000; assembly, $210,000; setup, $240,000; and inspection, $300,000. Wave Wake manufactures two types of boats: a speedboat and a bass boat. The activity-base usage quantities for each product by each activity are as follows:

Fabrication Assembly      Setup      Inspection

Speedboat   800 dlh 1,200 dlh  60 setups 600 inspections

Bass boat 1,200   800 100 200

2,000 dlh 2,000 dlh 160 setups 800 inspections

Each product is budgeted for 200 units of production for the year. Determine (a) the activity rates for each activity and (b) the factory overhead cost per unit for each product, using activity-based costing.

Answer:

a. Fabrication: $450,000 ÷ 2,000 direct labor hours = $225 per dlh 

Assembly: $210,000 ÷ 2,000 direct labor hours = $105 per dlh 

Setup: $240,000 ÷ 160 setups = $1,500 per setup 

Inspection: $300,000 ÷ 800 inspections = $375 per inspection 

b. Speedboat Bass Boat 

Activity- 

Base Activity Activity 

Usage × Rate = Cost 

Activity- 

Base Activity Activity 

Usage × Rate = Cost 

Fabrication 800  dlh $225  /dlh $180,000 1,200  dlh $225  /dlh $270,000 

Assembly 1,200  dlh $105  /dlh 126,000 800  dlh $105  /dlh 84,000 

Setup 60  setups $1,500  /setup 90,000 100  setups $1,500  /setup 150,000 

Inspection 600  insp. $375  /insp. 225,000 200  insp. $375  /insp. 75,000 

Total $621,000  $579,000 

÷ Budgeted units to be produced ÷ 200  ÷ 200 

Factory overhead per unit $ 3,105  $ 2,895 

Casual Cuts Inc. has total estimated factory overhead for the year of $225,000, divided into four activities: cutting, $90,000

Casual Cuts Inc. has total estimated factory overhead for the year of $225,000, divided into four activities: cutting, $90,000; sewing, $22,500; setup, $80,000; and inspection, $32,500. Casual Cuts manufactures two types of men’s pants: jeans and khakis. The activity-base usage quantities for each product by each activity are as follows:

  Cutting Sewing Setup Inspection

Jeans   500 dlh 1,000 dlh   250 setups 100 inspections

Khakis 1,000   500   750 400

1,500 dlh 1,500 dlh 1,000 setups 500 inspections

Each product is budgeted for 10,000 units of production for the year.  Determine (a) the activity rates for each activity and (b) the factory overhead cost per unit for each product, using activity-based costing.

Answer:

a. Cutting: $90,000 ÷ 1,500 direct labor hours = $60 per dlh 

Sewing: $22,500 ÷ 1,500 direct labor hours = $15 per dlh 

Setup: $80,000 ÷ 1,000 setups = $80 per setup 

Inspection: $32,500 ÷ 500 inspections = $65 per inspection 

b. Jeans Khakis 

Activity- 

Base Activity Activity 

Usage × Rate = Cost 

Activity- 

Base Activity Activity 

Usage × Rate = Cost 

Cutting 500  dlh $60  /dlh $30,000 1,000  dlh $60  /dlh $ 60,000 

Sewing 1,000  dlh $15  /dlh 15,000 500  dlh $15  /dlh 7,500 

Setup 250  setups $80  /setup 20,000 750  setups $80  /setup 60,000 

Inspection 100  insp. $65  /insp. 6,500 400  insp. $65  /insp. 26,000 

Total $71,500  $153,500 

÷ Budgeted units to be produced ÷  10,000  ÷  10,000 

Factory overhead per unit $ 7.15  $ 15.35 

Determine the average rate of return for a project that is estimated to yield total income of $148,500 over five years

Determine the average rate of return for a project that is estimated to yield total income of $148,500 over five years, has a cost of $300,000, and has a $30,000 residual value.

Answer:

Estimate average annual income $29,700 

($148,500 ÷ 5 years) 

Average investment $165,000 

[($300,000 + $30,000) ÷ 2] 

Average rate of return 18% 

($29,700 ÷ $165,000) 

Determine the average rate of return for a project that is estimated to yield total income of $36,000 over three years, has a cost of $70,000

Determine the average rate of return for a project that is estimated to yield total income of $36,000 over three years, has a cost of $70,000, and has a $10,000 residual value.

Answer:
Estimate average annual income $12,000
($36,000 ÷ 3 years)

Average investment $40,000
[($70,000 + $10,000) ÷ 2]

Average rate of return 30%
($12,000 ÷ $40,000)




A project has estimated annual net cash flows of $9,300. It is estimated to cost $41,850. Determine the cash payback period. Round to one decimal place.

Answer:
4.5 years ($41,850 ÷ $9,300)



A project has estimated annual net cash flows of $135,800. It is estimated to cost $787,640. Determine the cash payback period. Round to one decimal place.

Answer:
5.8 years ($787,640 ÷ $135,800)

If you were required to give a speech identifying the risks of using computers and digital devices

What is product activation?

 

the method used by some software companies to guarantee that software purchased on the web will work on the computer on which the software was downloaded

 

a term used to describe starting application software purchased in a retail store

 

the process of entering registration information so that users of the software will receive newsletters and other marketing materials regarding purchased software

 

a technique to ensure software is not installed on more computers than legally licensed

If you were required to give a speech identifying the risks of using computers and digital devices, which group of items would you include?

 

Impact on labor force risks, environmental risks, speed risks, information sharing risks

 

Privacy risks, environmental risks, reliability risks, communication risks

 

Health risks, privacy risks, environmental risks

 

Unreliability risks, mental health risks, behavioral risks, computer crime risks

Which of the following is the code of acceptable behaviors users should follow while on the Internet; that is, it is the conduct expected of individuals while online?

 

web politesse

 

Internet behavior

 

web civility

 

netiquette

Which of the following is a collection of computers and devices connected together, as shown in the accompanying figure, often wirelessly, via communications devices and transmission media?

 

network

 

client base

 

server farm

 

baseline

Your electric service has been failing with some frequency lately because of a lot of storms, and you are looking for more peace of mind when it comes to a reliable power source for your computer. Which of the following could help?

 

Wi-Fi

 

GPS

 

server virtualization

 

UPS

Which of the following is a special-purpose computer that functions as a component in a larger product?

 

embedded computer

 

indexed computer

 

soft computer

 

hard-coded computer

Bonita Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for two levels of production.

Bonita Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for two levels of production.

		Costs Incurred
Production in Units		5,000				10,000
Production Costs		Total Cost		Cost/Unit		Total Cost		Cost/Unit
Direct materials		$8,000		$1.60		$16,000		$1.60
Direct labor		9,500		1.90		19,000		1.90
Utilities		2,000		0.40		3,300		0.33
Rent		4,000		0.80		4,000		0.40
Maintenance		800		0.16		1,400		0.14
Supervisory salaries		1,000		0.20		1,000		0.10

(b)

Classify each cost above as either variable, fixed, or mixed.

Production Costs
Direct materials		Variable Mixed Fixed
Direct labor		Mixed Variable Fixed
Utilities		Variable Mixed Fixed
Rent		Mixed Fixed Variable
Maintenance		Mixed Variable Fixed
Supervisory salaries		Fixed Variable Mixed

Family Furniture Corporation incurred the following costs.

Identify the costs as variable, fixed, or mixed.

1.		Wood used in the production of furniture.		Variable Fixed Mixed
2.		Fuel used in delivery trucks.		Mixed Variable Fixed
3.		Straight-line depreciation on factory building.		Mixed Fixed Variable
4.		Screws used in the production of furniture.		Fixed Mixed Variable
5.		Sales staff salaries.		Fixed Mixed Variable
6.		Sales commissions.		Mixed Fixed Variable
7.		Property taxes.		Fixed Mixed Variable
8.		Insurance on buildings.		Mixed Variable Fixed
9.		Hourly wages of furniture craftsmen.		Variable Fixed Mixed
10.		Salaries of factory supervisors.		Mixed Fixed Variable
11.		Utilities expense.		Variable Mixed Fixed
12.		Telephone bill.		Variable Fixed Mixed