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Question
u200b
Kooper Co.
Income Statement
For the Year Ended December 31, Year 1
Revenues: u200b u200b
Net sales u200b $383,000
Less: Cost of goods sold u200b 121,700
Gross margin u200b $261,300
Less Operating expenses: u200b u200b
Selling expenses $41,500 u200b
Administrative expenses 56,500 u200b
Interest expense 12,000 u200b
Total expenses u200b 100,000
Net income u200b $151,300
Kooper Co.
Balance Sheet
December 31,Year 1
Assets
Current assets: u200b u200b u200b
Cash u200b $53,000 u200b
Accounts receivable u200b 64,300 u200b
Marketable securities u200b 10,500 u200b
Inventory u200b 93,250 u200b
Total current assets u200b u200b $221,050
Property, plant, and equipment: u200b u200b u200b
Store equipment $325,000 u200b u200b
Less Accumulated depreciation 162,100 $162,900 u200b
Office equipment $149,750 u200b u200b
Less Accumulated depreciation 72,750 77,000 u200b
Total property, plant, and equipment u200b u200b 239,900
Total assets u200b u200b $460,950
Liabilities
Current liabilities: u200b u200b u200b
Accounts payable u200b $97,200 u200b
Salaries payable u200b 28,700 u200b
Total current liabilities u200b u200b $125,900
Long-term liabilities: u200b u200b u200b
Note payable (due Year 1) u200b u200b 154,000
Total liabilities u200b u200b $279,900
Stockholders Equity
Total stockholders equity u200b u200b 181,050
Total liabilities and equity u200b u200b $460,950
There were 30,000 shares of common stock outstanding throughout Year 1. Dividends on common stock amounted to $21,000 and dividends on preferred stock amounted to $30,000. The market value of a share of common stock was $36 at the end of Year 1. The income tax rate is 40%. The accounts receivable and inventory accounts had beginning balances of $58,500 and $101,400 respectively. Total assets at the beginning of the year were $430,500.
Required: Calculate the following ratios:
A. Debt ratio
B. Debt-to-equity ratio
State what information each ratio is providing to the company.
Answer
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Related questions
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Year 3 Year 2 Year 1
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Net credit sales 800,000 650,000 720,000
Accounts receivable 85,000 79,000 74,000
A. Calculate eMonstore.com's accounts receivable turnover ratio for years 2 and 3.
B. Calculate the number of days the average balance of receivables is outstanding before being converted into cash (turnover in days) for years 2 and 3.
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Year 3 Year 2 Year 1
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Net income 65,000 25,000 16,000
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Q:
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Nickel Store had net credit sales of $15,000,000 and cost of goods sold of $5,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $875,000 and $375,000 respectively. The accounts receivable turnover ratio was:
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The accounts receivable turnover ratio is calculated by dividing:
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c. net sales by average accounts receivable.
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Q:
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Q:
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b. personnel must consider payroll taxes, fringe benefits, and qualifications.
c. it is the joint responsibility of operations, purchasing, personnel, and accounting.
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Q:
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d. historical experience, engineering studies, and input from operating personnel.
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Q:
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The total budget variance is the difference between the actual cost of the input and its planned cost.
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The unit standard quantity of inputs is vital to the computation of total amount of inputs allowed for the actual output and efficiency variances.
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Q:
The standard quantity of materials allowed can be calculated by multiplying the unit labor standard by the actual output.
a. True
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Managers develop quantity standards when they decide what amount of input should be used per unit of output.
a. True
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Q:
Gallant Company uses standard costing. Overhead is applied to products on the basis of standard direct labor hours for actual production. Data for Gallant follows:
Standard direct labor hours allowed for actual output 110,000
Actual direct labor hours 115,000
Direct labor hours budgeted in the master budget 120,000
Budgeted total variable overhead cost $360,000
Actual variable overhead cost $328,000
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B. Calculate the total variable overhead applied to production.
C. Calculate the variable overhead spending variance.
D. Calculate the variable overhead efficiency variance.
E. Calculate the total variable overhead variance.
Q:
Mills Company uses standard costing for direct materials and direct labor. Management would like to use standard costing for variable and fixed overhead.
The following monthly cost functions were developed for overhead items:
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Indirect materials $1.00 per DLH
Indirect labor $1.25 per DLH
Utilities $0.50 per DLH
Insurance $10,000
Depreciation $40,000
The cost functions are considered reliable within a relevant range of 20,000 to 40,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month.
Information for the month of June is as follows:
Actual overhead costs incurred:
Indirect materials $ 20,000
Indirect labor 30,000
Utilities 12,000
Insurance 11,000
Depreciation 40,000
Total $113,000
Actual direct labor hours worked: 24,000
Standard direct labor hours allowed for production achieved: 27,000
Required:
A. Calculate the following overhead rates based upon expected capacity:
1. Variable overhead
2. Fixed overhead rate
3. Total overhead rate
B. Calculate the following variances:
1. Variable overhead spending variance
2. Variable overhead efficiency variance
3. Fixed overhead spending variance
4. Fixed overhead volume variance
Q:
At the beginning of the year, Folsom Company had the following standard cost sheet for one of its food products:
Direct materials (10 lb @ 3.20) $32.00
Direct labor (4 hr @ $9.00) 36.00
Fixed overhead (4 hr @ $4.00) 16.00
Variable overhead (4 hr @ $0.75) 3.00
Standard cost per unit $87.00
Folsom computes its overhead rates using practical capacity, which is 72,000 units. The actual results for the year are:
Units produced 70,000
Direct labor hours 290,000
Actual wage per hour $9.05
Fixed overhead $1,160,000
Variable overhead $218,000
A. Compute the fixed overhead spending and volume variances.
B. Compute the variable overhead spending and efficiency variances.
Q:
The following standard overhead costs were developed for one of the products of Mildey Company:
Variable overhead: 5 hours $4.00 per hour 20.00
Fixed overhead: 5 hours $15.00 per hour 75.00
Total standard overhead cost per unit $95.00
The following information is available regarding the company's operations for the period:
Units produced 20,000
Direct labor 115,000 hours
Overhead incurred:
Variable $437,500
Fixed $1,320,000
Budgeted fixed overhead for the period is $1,350,000, and the standard fixed overhead rate is based on expected capacity of 90,000 direct labor hours.
Required:
A. Calculate the variable overhead spending variance and indicate whether it is favorable or unfavorable.
B. Calculate the variable overhead efficiency variance and indicate whether it is favorable or unfavorable.
C. Calculate the fixed overhead spending variance and indicate whether it is favorable or unfavorable.
D. Calculate the fixed overhead volume variance and indicate whether it is favorable or unfavorable.