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Choose a company from the EDGAR database and then respond to the four questions in the research case in Chapter 6. Make sure to choose any company

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Choose a company from the EDGAR database and then respond to the four questions in the research case in Chapter 6. Make sure to choose any company with consolidated financial statements other than Compaq or GE. Give an opinion on whether you would have used the same method to present the statement of cash flows. What changes would have been made if the company had chosen to use the other method available?

Use your readings from the text and at least one additional academic resource to provide support for your response. The following resources can be used, along with any others that are considered authoritative on the subject:

  • EDGAR Database (U.S. Securities and Exchange Commission)
  • FASB Accounting Standards Codification Use the username and password provided to access this resource. Username: AAA52882, Password: 2F5BNjt 
  • American Institute of CPAs (AICPA)
  • International Accounting Standards Board (IASB)

Find a recent annual report for a firm with business acquisitions (e.g., Compaq, GE). Locate the firm’s consolidated statement of cash flows and answer the following:

 
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ACC 646 Module Two Activity Guidelines and Rubric Common Fraud Schemes Overview: Review the Federal Bureau of Investigation’s (FBI’s) Common Fraud

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ACC 646 Module Two Activity Guidelines and Rubric Common Fraud Schemes Overview: Review the Federal Bureau of Investigation’s (FBI’s) Common Fraud Schemes webpage. Select one of the fraud schemes listed. Explain how the fraud could be conducted and discuss the FBI’s tips for preventing the fraud from occurring. Use the fraud triangle to evaluate the fraud and prepare a description of the characteristics of the typical fraudster who might commit this fraud. Guidelines for Submission: Your submission should be a 1–2 page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins. Use at least one scholarly source to support your ideas and cite using APA format. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Assessment of Fraud Meets “Proficient” and the explanation is substantiated by scholarly evidence Explains how fraud could be conducted and the FBI’s tips for preventing it Explains how fraud could be conducted but does not explain how the FBI’s tips could be used to prevent it from occurring Does not explain how fraud could be conducted or the FBI’s tips for preventing it 30 Evaluation of Fraud Meets “Proficient” and the evaluation is substantiated by scholarly evidence Evaluates the fraud using all elements of the fraud triangle Does not apply all elements of the fraud triangle in evaluating the fraud Does not evaluate the fraud using the fraud triangle 30 Fraudster Description Meets “Proficient” criteria and categorizes the characteristics in a clear and concise manner Provides a detailed description of the typical fraudster who might commit this fraud Provides a description of the fraudster but description is lacking or does not match the fraud type Does not provide description of the typical fraudster who might commit this fraud 30 Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy to read format Submission has no major errors related to citations, grammar, spelling, syntax, or organization Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 10 Earned Total 100%

 
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Cost-volume-profit relationships (15 points) The following data are available for a product manufactured and sold by Logan Company

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1. Cost-volume-profit relationships(15 points)

The following data are available for a product manufactured and sold by Logan Company:

Compute the following:

(a) Contribution margin per unit: $_______________

(b) Number of units that must be sold to break-even: _______________ units

(c) Dollar sales volume to produce income of $864,000 before taxes: $_______________

Computations:

2. Incremental analysis(20 points)

Information regarding current operations of the Farrell Corporation is given below:

A proposed addition to Farrell’s factory is estimated by the sales manager to increase sales by a maximum of $750,000. The company’s accountants have determined that the proposed addition will add $320,000 to fixed costs each year. Variable costs are expected to be at the same percentage as they currently are before the proposed addition.

(a) Explain why the existing $310,000 of fixed costs is a sunk cost while the $320,000 of fixed costs associated with the proposed addition is an out-of-pocket cost.

(b) Calculate by how much the proposed addition will either increase or reduce operating income. Show all work.

3. Responsibility income statement-preparation (20 points)

Gameland Village is segmented into two sales departments: software and video games. During April, these two departments reported the following operating results:

In addition, fixed costs common to both departments amounted to $42,000.

Complete the following segmented income statement for Gameland Village. Follow the contribution margin approach, and show percentages as well as dollar amounts. Conclude your income statement with the company’s income from operations.

GAMELAND VILLAGE 
Income Statement by Product Lines
For the Month Ended April 30, 20__

Segments
Gameland VillageSoftwareVideo Games
Dollars %Dollars %Dollars %
Sales$ $400,000 100$200,000 100
Variable Costs  65 56
$ $ $

4. Standard cost system labor variance(25 points)

The following computations of March labor variances for Sam’s Supply Company are incomplete. The missing items are labeled (a) through (d).

Labor rate variance = 4,800 hours ´ [(a) – $8.50] = $350 favorable
Labor efficiency variance = (b) ´ [(c) – 5,000 hours] = $(d)

On the appropriately labeled line, identify each missing item by name (a through c) and show the missing value (a through d). Show supporting computations in the space provided.

(a) _________________________ $_______________

(b) _________________________ $_______________

(c) _________________________ ____________________ hours

(d) $______________ F or U [Choose the correct term.]

(e) During March, the supervisor left for vacation without arranging for a replacement. Which variances would have been most affected by this situation? _________________________

Computations:

5. Capital budgeting(20 points)

Flynn Corporation is debating whether to purchase a new computerized production system. The system will cost $450,000, and have an estimated 10-year life with a salvage value of $70,000. The estimated operating results from the new production system are as follows:

All revenue and expenses other than depreciation will be received and paid in cash. Compute the following for this proposal:

(a) Annual net cash flow: $__________

(b) Payback period: __________ years

(c) Return on average investment: __________%

(d) Net present value, discounted at an annual rate of 6% (present value of $1 due in 10 years, discounted at 6%, is 0.558; present value of $1 received annually for 10 years, discounted at 6%, is 7.360): $__________

 
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Fixed cost per unit is $9 when 20,000 units are produced and $6 when 30,000 units are produced.

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6. Fixed cost per unit is $9 when 20,000 units are produced and $6 when 30,000 units are produced.

What is the total fixed cost when nothing is produced?

a. $150,000
b. $360,000
c. $180,000
d. $240,000 7. Operating income equals: a. Sales revenue – cost of goods sold b. Gross margin – selling expenses c. Sales revenue – cost of goods sold – selling and administrative expense d. Sales revenue – selling and administrative expenses   8. Lonborg Co. had the following beginning and ending inventory balances for the year ended December 31, 2011:

In addition, direct labor costs of $30,000 were incurred, overhead equaled $42,000, materials purchased were $27,000 and selling and administrative costs were $22,000. Lonborg Co. sold 25,000 units of product during the year at a sales price of $5.00 per unit. Refer to Figure 2-2. What was the amount of cost of goods sold for the year? a. $128,500 b. $102,000 c. $106,500 d. $97,500 9. On a cost-volume-profit graph, the break-even point is where a. The revenue line intersects the total cost line. b. The contribution margin line intersects the fixed cost line. c. The revenue line intersects the profit line. d. The fixed cost line intersects the variable cost line. e. All of these choices are correct.   10. Shorter Company had originally expected to earn operating income of $130,000 in the coming year. Shorter’s degree of operating leverage is 2.4. Recently, Shorter revised its plans and now expects to increase sales by 20% next year. Refer to Figure 4-6. What is the percent change in operating income expected by Shorter in the coming year? a. 54.17% b. 48.0% c. 30.0% d. 20.0% e. 8.33%    

A variable cost in total

a. Remains constant no matter the level of output.
b. Increases as output decreases and decreases as output increases.
c. Increases as output increases and decreases as output decreases.
d. Increases as output increases and/or decreases.

Per-unit variable costs:

a. Remain constant within the relevant range.
b. Can be misleading and lead to poor decisions.
c. Decrease as output decreases.
d. Increase as output increases.

The margin of safety in dollars is:

a. Costs at break-even minus expected profit.
b. Expected sales minus expected profit.
c. Expected costs minus costs at break-even.
d. Expected sales minus sales at break-even.
e. Expected profit minus actual profit.

Which of the following would be a variable cost for a dentist’s office?

a. Depreciation on equipment
b. Cost of teeth cleaning material
c. Cost of renting office space
d. Salary of dentist

A fixed cost within the relevant range

a. Does not change in total as output changes.
b. Increases in total as output decreases.
c. Decreases in total as output increases.
d. All of these choices are correct.

Conversion cost is the sum of

a. Direct labor cost and overhead costs.
b. Product costs and period costs.
c. Direct labor cost and direct materials costs.
d. Selling cost and administrative costs.

An indirect cost

a. Can be easily and accurately traced to a cost object.
b. Should never be assigned to a cost object.
c. Is hard to trace.
d. Do none of these.

Sarah Smith, a sole proprietor, has the following projected figures for next year:


What is the contribution margin ratio?

a. 3.333
b. 0.429
c. 1.429
d. 0.300

The unit cost

a. Includes period costs.
b. Is the total product costs divided by the number of units produced.
c. Is the total conversion costs divided by the number of units produced.
d. Is the total prime costs divided by the number of units produced. Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected.

Refer to Figure 3-3. Using the high-low method calculate the variable rate for the lease cost a. $38.18 b. $61.50 c. $37.25 d. $38.20  

If fixed costs increase, the break-even point in units will

a. Remain the same.
b. Remain the same; however, contribution per unit will decrease.
c. Increase.
d. Decrease.

The relevant range

a. Is the normal range of output.
b. Is the range of output where cost relationships are valid.
c. May change from period to period.
d. All of these choices are correct.

Clean Company sells its product for $80. In addition, it has a variable cost ratio of 60% and total fixed costs of $8,000. What is the break-even point in sales dollars for Baker Company?

a. $4,800
b. $20,000
c. $32,000
d. $8,000

Cost of goods manufactured equals:

a. Total product costs incurred during the current period + beginning work in process – ending work in process.
b. Sales – cost of goods sold.
c. Direct materials cost + direct labor cost + overhead cost.
d. None of these choices are correct.

Product costs consist of

a. Direct materials, direct labor, and overhead.
b. Indirect materials, indirect labor, and administrative costs.
c. Period costs.
d. Direct materials, direct labor, and selling costs.
Paney Company makes calendars. Information on cost per unit is as follows:

Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10.

Refer to Figure 4-3. How many units must be sold to yield targeted income of $36,000?

a. 5,833
b. 8,167
c. 12,000
d. 14,000
e. 6,000

Which of the following would probably be a discretionary fixed cost for a law firm?

a. Salary of receptionist
b. Depreciation on furniture and equipment
c. Advertising
d. Cost of legal forms
Standlar Company makes wireless speakers. The standard model price is $360 and variable expenses are $210. The deluxe model price is $500 and variable expenses are $300. The superior model price is $1,600 and variable expense per unit is $600. Total fixed expenses are $300,000. Generally, Standlar sells 8 standard models and 4 deluxe models for every superior model sold.  
 

Using the sales mix stated in the facts from Figure 4-5 to form a package, what is the total package contribution margin?

a. $1,200
b. $2,000
c. $900
d. $3,000
e. $1,110
Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected.

Refer to Figure 3-3. What would the estimate of Okafor Company’s total lease cost be at a level of 500 machine hours?

a. $16,464
b. $18,546
c. $19,556
d. $19,606

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At the break-even point,

a. Total sales equals total fixed cost.
b. Total fixed cost equals variable cost.
c. Total contribution margin equals total fixed cost.
d. Total revenue equals variable cost.
e. Total margin of safety equals variable cost.

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