Toby wants to calculate her COGS for a fertilizing job she did last week. She used 40 pounds of fertilizer that she bought in bulk ($1,000 for 2,000 pounds). It took her employee 1.5 hours to spread the fertilizer (she is paid $15/hour) with the motorized spreader. Toby paid $4,000 for the spreader three years ago and it is estimated to last 10 years or 10,000 pounds. To get to the job site, a company truck and trailer was used (cost: $40,000 expected to last 10 years or 200,000 miles, the site visit was 30 miles round trip). This was the only use of the truck, trailer, and spreader for that day. Additional employee costs include 10% payroll tax and $730 per year in worker’s compensation insurance. You may assume an employee works 2000 hours per year. Separate and label the parts of the calculation as Direct Material (DM), Direct Labor (DL), or Overhead (OH). Please make two calculations comparing the straight-line depreciation method with the units of production method. Your work should be professionally presented.
Calculation of Cost of Goods Sold.
Under Straight Line Method
Direct Material
Fertilizers = $100
Direct Labour
Labour 2000 hours x $ 15 per hour = $30,000
Worker's Insurance = $ 730
Overheads
Depreciation on spreader = $ 1,400
Depreciation on truck = $4,000
Payroll Tax = $ 3,000
--------------------------------------------------------------
Total of Cost of goods sold = $39,230
------------------------------------------------------------
Under units of production method
Direct Material
Fertilizers = $100
Direct Labour
Labour 2000 hours x $ 15 per hour = $30,000
Worker's Insurance = $ 730
Overheads
Depreciation on spreader = $ 800
Depreciation on truck = $4,380
Payroll Tax = $ 3,000
--------------------------------------------------------------
Total of Cost of goods sold = $39,010
------------------------------------------------------------
Toby wants to calculate her COGS for a fertilizing job she did last week. She used...
Toby invested $30,000 from her retirement account, borrowed $20,000 from the bank and opened her landscaping business by buying $10,000 in equipment (expected to last 10 years) and $5,000 in inventory (lime, sod, stones, loam, etc.). Set up the balance sheet for this point in the formation. During the year, Toby made $100,000 in sales (30% for cash) and collected $60,000 in AR. She paid $20,000 in wages for a part time employee, sold $3,000 of inventory (included in the...
Toby invested $30,000 from her retirement account, borrowed $20,000 from the bank and opened her landscaping business by buying $10,000 in equipment (expected to last 10 years) and $5,000 in inventory (lime, sod, stones, loam, etc.). Set up the balance sheet for this point in the formation. During the year, Toby made $100,000 in sales (30% for cash) and collected $60,000 in AR. She paid $20,000 in wages for a part time employee, sold $3,000 of inventory (included in the...
Although Goldman Sachs paid Heather $110,000.00 per year, she was not satisfied with her job. She had loved going white-water rafting and skiing with her family in Utah since she was a little girl. So last year, she decided to open her own business: Family Adventures. During the summer, she takes families on different white-water trips, and in the winter, she leads clients on skiing trips. To start her business, Heather borrowed $100,000 from a bank and used $100,000.00 of...
Although Goldman Sachs paid Heather $90,000.00 per year, she was not satisfied with her job. She had loved going white-water rafting and skiing with her family in Utah since she was a little girl. So last year, she decided to open her own business: Family Adventures. During the summer, she takes families on different white-water trips, and in the winter, she leads clients on skiing trips. To start her business, Heather borrowed $100,000 from a bank and used $120,000.00 of...
Although Goldman Sachs paid Heather $120,000.00 per year, she was not satisfied with her job. She had loved going white-water rafting and skiing with her family in Utah since she was a little girl. So last year, she decided to open her own business: Family Adventures. During the summer, she takes families on different white-water trips, and in the winter, she leads clients on skiing trips. To start her business, Heather borrowed $100,000 from a bank and used $90,000.00 of...
*Problem 6-30 Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 270 cases off the production line before the end of the month. But as she glanced over the rest of numbers, Lexi couldn't help but wonder if there were errors in...
What is Taxable? Learning Objectives: sort out taxable/no ntaxable income streams and calculate taxable income We return to Emerson and Nevada who are betwe make ends meet, they are working a number of part-time jobs and have en career jobs. They are now married, and in order to some additional income streams. They have both sat down and written out a general picture of everything they an ticipate needing for tax season Emerson is still working full-time as a manager...
Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 300 cases off the production line before the end of the month. But as she glanced over the rest of numbers, Lexi couldn't help but wonder if there were errors in some of...
Jeri Cooper, the sales manager of Brunners Corporation, is getting worried. Her last three bids were rejected in favor of a bid from a new competitor to the market. Now, she is putting together a bid for a potential new customer, and she wants to make sure the price is competitive, but still profitable. As the managerial accountant at Brunners, your job is to help Jeri prepare bids by providing the most accurate cost estimates. Brunners is a plastic injection...
Jeri Cooper, the sales manager of Brunners Corporation, is getting worried. Her last three bids were rejected in favor of a bid from a new competitor to the market. Now, she is putting together a bid for a potential new customer, and she wants to make sure the price is competitive, but still profitable. As the managerial accountant at Brunners, your job is to help Jeri prepare bids by providing the most accurate cost estimates. Brunners is a plastic injection...