Ginny decided to try her hand at beekeeping. The costs that went into the harvesting process included the cost of the beehives, the original bee colony, and her own time and equipment. This past year, she harvested 160 pounds of honey and 40 pounds of honeycomb for a total cost of $2,000. She has several outlets for selling her organic honey. The average sales price at these outlets is $4 per 8 oz. jar. The honeycomb can be sold as well, for $3 per pound. (a) How much of the joint harvesting cost will Ginny allocate to each product if she uses the sales value at split-off method? (Round proportion to 4 decimal places, e.g. 0.2516 and final answers to 2 decimal places, e.g. 5,125.25.) Honeycomb Allocated joint costs $ Honey $
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- My neighbor, Mrs. Dubois, is the accountant for the cranberry processing plant. The plant has a piece of equipment, nicknamed Harvey that is used to clean and prepare the harvested cranberries. Mrs. Dubois needs to determine if Harvey should be replaced with a newer, better version. Using the NPV tool, we will provide her a recommendation. Facts provided: 1. Old Cranberry Cleaner (Nickname: Harvey) Cost $260,000 2. Harvey’s Accumulated Depreciation $150,000 3. Cash Sales Price for Harvey $60,000 4. New Equipment Cost $448,000 5. New Equipment Depreciation (Each Year) $44,800 6. New Equipment Net Cash Revenues (Each Year) $482,000 7. New Equipment Net Cash Expenses (Each Year) $365,000 8. New Equipment Estimated Useful Life 10 Years 9. Tax Rate 40% 10. Cost of Capital 10% Step 1 A: Identify both the timing and amount of cash inflows and cash outflows (A) Compute the inflows & outflows for any…Rae Dunn makes coffee cups and salad plates out of pottery. It can take her 6 minutes to produce a coffee cup and 3 minutes to produce a salad plate. When making the cups, she will need 34 lb of clay. To make a plate, she will need one lb of clay. She only wants to spend 20 hours a week making the cups and plates. She only found that she had 250 lbs of clay for this project. Rae Dunn does make a profit of $2.00 for each coffee cup and $1.50 for each plate. Let's help Rae Dunn determine what her maximum profit will be.Lisa owns a small apple orchard and press operation. After picking and selling the high-grade apples in their fresh state, she presses the remaining apples into juice. This process also yields pomace (a pulp like product). There is a market for both the juice and the pomace immediately after this joint pressing process is complete. The joint processing costs are $32,000. Both of these products can be processed further: the juice can be turned into hard cider, while the pomace can be turned into jam. The values of each product at different stages of completion, along with the additional costs that will be incurred if the products are processed further, are as follows. Apple juice/hard cider Apple pomace/jam (a) Sales Value at Split-Off Additional Processing Cost Final Sales Value $39,950 $15,132 $93,000 7.050 5.168 20,000 If Lisa uses the sales value at split-off method to allocate the joint costs, how much will be allocated to each product? (Round
- Maria owns a small apple orchard and press operation. After picking and selling the high-grade apples in their fresh state, she presses the remaining apples into juice. This process also yields pomace (a pulp like product). There is a market for both the juice and the pomace immediately after this joint pressing process is complete. The joint processing costs are $28,000. Both of these products can be processed further: the juice can be turned into hard cider, while the pomace can be turned into jam. The values of each product at different stages of completion, along with the additional costs that will be incurred if the products are processed further, are as follows. Apple juice/hard cider Apple pomace/jam Sales Value at Split-Off Additional Processing Cost Final Sales Value $37,600 $13,692 $108,000 9,400 4,908 19,000 (a) If Maria uses the sales value at split-off method to allocate the joint costs, how much will be allocated to each product? (Round proportion to 2 decimal places,…Staci Valek began dabbling in pottery several years ago as a hobby. Her work is quite creative, and it hasbeen so popular with friends and others that she has decided to quit her job with an aerospace company andmanufacture pottery full time. The salary from Staci’s aerospace job is $3,800 per month.Staci will rent a small building near her home to use as a place for manufacturing the pottery. Therent will be $500 per month. She estimates that the cost of clay and glaze will be $2 for each finishedpiece of pottery. She will hire workers to produce the pottery at a labor rate of $8 per pot. To sell herpots, Staci feels that she must advertise heavily in the local area. An advertising agency states that it willhandle all advertising for a fee of $600 per month. Staci’s brother will sell the pots; he will be paid acommission of $4 for each pot sold. Equipment needed to manufacture the pots will be rented at a costof $300 per month.Staci has already paid the legal and filing fees…Whispering Winds's Christmas Tree Farm Ltd. grows pine, fir, and spruce trees. The farm cuts and sells trees during the Christmas season and exports most of the trees to the United States. The remaining trees are sold to local tree-lot operators. It normally takes 12 years for a tree to grow to a suitable size, and the average selling price of a tree is $29. The biggest costs to the business are pest control, fertilizer, and pruning trees over the 12-year period. These costs average $12 per tree (assume these are incurred evenly over the 12-year growing cycle). Assume IFRS is used. Assume that the fair value less cost to sell (net realizable value) at the end of 2020 is $12 and the opening value was $7. Assume that the cost to sell are nil. Prepare the journal entries if the costs are capitalized each year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O…
- Baby Doll Shop currently manufactures wooden parts for dollhouses. Itssole worker is paid $8.10 an hour and, using a handsaw, can produce a year's required production (1,600 parts) in just eight weeks of 40 hours per week. That is, the worker averages five parts per hour when working by hand. The shop is considering the purchase of a power band saw with associated fixtures in order to improve the productivity of this operation. Three models of power saw could be purchased: Model A (economy version), Model B (high-powered version), and Model C (deluxe high-end version). The major operating difference between these models is their speed of operation. The investment costs, including the required fixtures and other operating characteristics, are summarized as follows: Assume that MARR = 10%. Are there enough potential savings to make iteconomical to purchase any of the power band saws? Which model is most economical according to the rate-of-return principle? (Assume that any effect of…Natalie is thinking of buying a van that will be used only for business. The cost of the van is estimated at $36,500. Natalie would spend an additional $2,500 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,500. She expects the van to last about 5 years, and she expects to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,400. Natalie estimates that at the end of the 5-year useful life the van will sell for $7,500. Assume that she will buy the van on August 15, 2023, and it will be ready for use on September 1, 2023. Natalie is concerned about the impact of the van’s cost on her income statement and balance sheet. She has come to you for advice on calculating the van’s depreciation. Instructions (a) Determine the cost of the van. (b) Prepare…Natalie is thinking of buying a van that will be used only for business. The cost of the van is estimated at $36,500. Natalie would spend an additional $2,500 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,500. She expects the van to last about 5 years, and she expects to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,400. Natalie estimates that at the end of the 5-year useful life the van will sell for $7,500. Assume that she will buy the van on August 15, 2023, and it will be ready for use on September 1, 2023. Natalie is concerned about the impact of the van’s cost on her income statement and balance sheet. She has come to you for advice on calculating the van’s depreciation. Instructions (a) Determine the cost of the van. (b) Prepare…
- Quality Clothing, Inc., produces skorts and jumper uniforms for school children. In the process of cutting out the cloth pieces for each product, a certain amount of scrap cloth is produced. Quality has been selling this cloth scrap to Jorge's Scrap Warehouse for $3.15 per pound. Last year, the company sold 40,000 lb. of scrap, which would be enough to make 10,000 teddy bears that the management of Quality is now interested in producing. Their processes would need some reprogramming, particularly in the cutting and stitching processes, but it would require no additional worker training. However, new packaging would be needed. The total variable cost to produce the teddy bears $3.85. Fixed costs would increase by $95,000 per year for the lease of the packaging equipment and Quality estimates it could produce and sell 10,000 teddy bears per year. Finished teddy bears could be sold for $18.00 each. Calculate the effect on operating income. Round your answers to the nearest dollar. Sell at…The Cloths of Heaven purchases old tires and recycles them to produce rubber floor mats and car mats. The company washes, shreds, and molds the recycled tires into sheets. The floor and car mats are cut from these sheets. A small amount of rubber shred remains after the mats are cut. The rubber shreds can be sold to use as cover for paths and playgrounds. The company can produce 25 floor mats, 75 car mats, and 40 pounds of rubber shreds from 100 old tires. In May, The Cloths of Heaven, which had no beginning inventory, processed 125,000 tires and had joint production costs of $600,000. The Cloths of Heaven sold 25,000 floor mats, 85,000 car mats, and 43,000 pounds of rubber shreds. The company sells each floor mat for $12 and each car mat for $6. The company treats the rubber shreds as a byproduct that can be sold for $0.70 per pound Required: Assume that The Cloths of Heaven allocates the joint costs to floor mats and car mats using the sales value at splitoff method and accounts…Carol’s Cupcakes sells cupcakes and other desserts through its retail store. The company has always made all of its ingredients from scratch, but has recently been approached by a supplier that specializes in icing. Carol believes that the supplier’s icing is of equal quality to her own, and believes their offer of $3.00 per liter may enable her to save money. Carol is evaluating her own cost of producing icing: Per Liter 5,000 liters per year Direct materials $1.00 $5,000 Direct labour 0.50 2,500 Variable manufacturing overhead 0.25 1,250 Fixed manufacturing overhead – traceable* 1.00 5,000 Fixed manufacturing overhead - allocated 1.75 8,750 Total $4.50 $22,500 *40% relates to cleaning and maintenance of the icing equipment and 60% relates to depreciation of icing equipment (with no resale value) Examining the report, Carol says, “Their icing is just as good, and it would save me $1.50 per…