None Current Attempt in ProgressThe Appraisal Department of Riverbed Bank performs appraisals of business properties for loans being considered by the bank anappraisals for home buyers that are financing their purchase through some other financial institution. The department charges $1per home appraisal, and its variable costs are $143 per appraisal.Recently, Riverbed Bank has opened its own Home-Loan Department and wants the Appraisal Department to perform 1,272appraisals on all Riverbed Bank-financed home loans. Bank management feels that the cost of these appraisals to the Home-LoanDepartment should be $159. The variable cost per appraisal to the Home-Loan Department would be $7 less than those performeoutside customers due to savings in administrative costs.(a)Determine the minimum transfer price, assuming the Appraisal Department has excess capacity.Minimum transfer price$(b)Determine the minimum transfer price, assuming the Appraisal Department has no excess capacity.Minimum transfer price$(c)Assuming the Appraisal Department has no excess capacity, should management force the department to charge the Home-LoanDepartment only $159?

Setting transfer prices within an organization involves determining the cost at which one department…

Answered: Current Attempt in Progress The…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 84PSA

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A mortgage service office has the following four activities involved in approving a loan application. Note that a working day is 8 hours and there are 60 minutes in one hour. Activity A Property survey B. Credit report C. Title search D. Final decision Time (minutes) 24 37 27 37 Activities B and C are combined together and assigned to two employees, while the other two employees are responsible for activities A and D respectively. What is the mortgage office's direct labor utilization (DLU) under this setting? Numbers only (eg.. 0.445 is acceptable, but NOT 44.5%), keep three decimals if not exact, either round up or down is ok
A mortgage service office has the following four activities involved in approving a loan application. Note that a working day is 8 hours and there are 60 minutes in one hour. Activity Time (minutes) A. Property survey 23 B. Credit report 21 C. Title search 42 D. Final decision 20 Activities B and Care combined together and assigned to two emplayees, while the other two employees are responsible for activities A and D respectively. What is the mortgage office's direct labor utilization (DLU) under this setting? Numbers only (e.g. 0.445 is acce either round up or down is ok ble, but NOT 44.5%), keep three decimals if nOt exact.
Required information [The following information applies to the questions displayed below.] Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month's rent for this service. For August 2022, Phoenix expects to find renters for 100 apartments with an average first month's rent of $700. Budgeted cost data per tenant application for 2022 follow: • Professional labor: 1.5 hours at $20.00 per hour • Credit checks: $50.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,000 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2022 were 270. Phoenix paid $9,500 for 400 hours of professional labor. Credit checks went up to $55 per application. Other costs in August 2022 (lease, secretarial help, and utilities) were $3,600. The average first monthly rentals for August 2022 were $800 per apartment…
Required information [The following information applies to the questions displayed below.] Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month's rent for this service. For August 2022, Phoenix expects to find rerters for 100 apartments with an average first month's rent of $760. Budgeted cost data per tenant application for 2022 follow: Professional labor: 2.0 hours at $15.00 per hour . . Credit checks: $53.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,600 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2022 were 270. Phoenix paid $9,300 for 480 hours of professional labor. Credit checks went up to $58 per application. Other costs in August 2022 (lease, secretarial help. and utilities) were $3.900. The average first monthly rentals for August 2022 were $860 per apartment…
A local regional credit union, Metro Credit Union, has identified the major activities of the credit union, traceable costs, and physical flow of driver units: Activities Traceable Costs Driver Units Open new accounts $30,000 1,000 accounts Process deposits 26,000 400,000 deposits Process withdrawals 10,000 200,000 withdrawals Process loan applications 36,000 900 applications The following activities are used by the Downtown branch and the East branch: - Downtown East New accounts 200 400 Deposits 40,000 20,000 Withdrawals 15,000 18,000 Loan applications 100 160 How much of the deposit cost will be assigned to the East branch? Group of answer choices $36,000 $1,800 $1,300 $ 5,400
Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its growth. The bank requires financial statements before approving the loan. Required: Classify each cost listed below as either a product cost or a period cost for the purpose of preparing financial statements for the bank. 8 00-45-49 Costs Product Cost / Period Cost 1. Depreciation on salespersons' cars. 2. Rent on equipment used in the factory. 3 lubricants used for machine maintenance Salaries of personnel who work in the finished goods warehouse 5. Soap and paper towels used by factory workers at the end of a shift. 6. Factory supervisors' salaries. 7. Heat, water, and power consumed in the factory. 8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.) 9. Advertising…
Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its growth. The bank requires financial statements before approving the loan. Required: Classify each cost listed below as either a product cost or a period cost for the purpose of preparing financial statements for the bank. Costs Product Cost / Period Cost 1. Depreciation on salespersons’ cars. 2. Rent on equipment used in the factory. 3. Lubricants used for machine maintenance. 4. Salaries of personnel who work in the finished goods warehouse. 5. Soap and paper towels used by factory workers at the end of a shift. 6. Factory supervisors’ salaries. 7. Heat, water, and power consumed in the factory. 8. Materials used for boxing products for shipment overseas. (Units are…
Suppose that Demont has been given a summer job as an intern at Isaac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help it finance its growth. The bank requires financial statements before approving such a loan. Classify each cost listed below as either product costs or period costs for the purpose of preparing the financial statements for the bank. Costs Product Cost/Period Cost 1. Depreciated on salesperson's cars 2. Rent on equipment used in the factory 3. Lubricants used for machine maintenance 4. Salaries of personnel who work in the finished goods warehouse 5. Soap and paper towels used by factory workers at the end of a shift
When a company has post-acquisition expenditures related to Property, Plant, and Equipment it must determine whether the amount should be expensed as an ordinary repair or capitalized as a major repair, addition, or betterment. This requires considering the nature of the expenditure and the use of judgment. Many companies use a threshold amount. Any expenditure below the threshold is expensed. Items over the threshold are examined and a decision is made about whether to expense or capitalize the item. This approach is justified by both materiality and considering costs and benefits. For example, a company with $94 million in net property, plant, and equipment and $250 million of operating expenses would not consider a $100 repair as material. Plus, if the company had to spend thousands of dollars examining every repair expenditure, the costs of doing the analysis could easily outweigh the benefits. SouthEast Equipment has a large number of machines and equipment that are available for…
Suppose that Demont has been given a summer job as an intern at Isaac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help it finance its growth. The bank requires financial statements before approving such a loan. Classify each cost listed below as either product costs or period costs for the purpose of preparing the financial statements for the bank. Cost Product Cost/Period Cost 1. Factory supervisors' salaries 2. Heat, water, and power consumed in the factory 3. Materials used for boxing products for shipment overseas. Units are normally boxed. 4. Advertising costs 5. Workers' compensation insurance for factory employee
Suppose that Demont has been given a summer job as an intern at Isaac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help it finance its growth. The bank requires financial statements before approving such a loan. Classify each cost listed below as either product costs or period costs for the purpose of preparing the financial statements for the bank. Cost Product Cost/Period Cost1. Depreciation on chairs and tables in the factory lunchroom 2. The wages of the receptionist in the administrative offices 3. Cost of leasing the corporate jet used by the company's executives 4. The cost of renting rooms at a Florida resort for the annual sales conference 5. The cost of packaging the company's product
Required information [The following information applies to the questions displayed below.] Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month's rent for this service. For August 2022, Phoenix expects to find renters for 100 apartments with an average first month's rent of $700. Budgeted cost data per tenant application for 2022 follow: • Professional labor: 1.5 hours at $18.00 per hour Credit checks: $52.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,300 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2022 were 240. Phoenix paid $6,900 for 350 hours of professional labor. Credit checks went up to $57 per application. Other costs in August 2022 (lease, secretarial help, and utilities) were $3,800. The average first monthly rentals for August 2022 were $840 per apartment…

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