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ACC 543 Potential Instructors / snaptutorial ACC 543 Entire Course ACC 543 Aspects of Employment and Environment Paper and PowerPoint ACC 543 Capital Budget Recommendation ACC 543 Aspects of Employment and Environment Paper and PowerPoint ACC 543 Exercise 24-1 Net Present Value/Present Value Index ACC 543 Exercise 24-8A: Determining the Internal Rate of Return ACC 543 Exercise 24-6A: Determining Net Present Value ACC 543 Exercise 24-5B: Purchase of Popcorn Machine ACC 543 Exercise 24-5A Determining net present value Aspects of Employment and Environment Paper and PowerPoint You are an accountant at a small accounting firm. One of your clients is looking to open a small river-rafting business. Your client will run the business operations from a mobile home office on a piece of land on the riverbank. Your client must decide the best location to start this business and has asked you to explain the accounting advantages of choosing the best location.

ACC 543 Potential Instructors / snaptutorial ACC 543 Capital Budget Recommendation ACC 543 Exercise 15-6B Capital Budget Recommendation Guillermo Furniture, a company that manufactures midgrade and high-end sofas, has just hired you as an accountant. The owner, Guillermo Navallez, has assigned you the tasks of determining which decisions provide the greatest returns. Read the Guillermo Furniture Scenario and review the Guillermo Furniture Data Sheets on your student Web site. Enter your name in cell A3 of the Income Information tab in the Guillermo Furniture Data Sheets. Submit the exact name you entered to your instructor. Exercise 15-6B Fixed versus variable cost behavior Professional Chairs Corporation produces ergonomically designed chairs favored by architects. The company normally produces and sells from 5,000 to 8,000 chairs per year. The following cost data apply to various production activity levels. Required a. Complete the preceding table by filling in the missing amounts for the levels of activity shown in the first row of the table. b. Explain why the total cost per chair decreases as the number of chairs increases

ACC 543 Potential Instructors / snaptutorial ACC 543 Exercise 15-12B ACC 543 Exercise 15-17A Identifying Cost Behavior Exercise 15-12B Effect of cost structure on projected profits Logan and Martin compete in the same market. The following budgeted income statements illustrate their cost structures. Required a. Assume that Logan can lure all 80 customers away from Martin by lowering its sales price to $75 per customer. Reconstruct Logan’s income statement based on 160 customers. b. Assume that Martin can lure all 80 customers away from Logan by lowering its sales price to $75 per customer. Reconstruct Martin’s income statement based on 160 customers. c. Why does the price-cutting strategy increase Logan’s profits but result in a net loss for Martin? Exercise 15-17A: Identifying Cost Behavior Identify the following costs as fixed or variable. Costs related to plane trips between San Diego, California, and Orlando, Florida, follow. Pilots are paid on a per trip basis. a. Pilots’ salaries relative to the number of trips flown. b. Depreciation relative to the number of planes in service. c. Cost of refreshments relative to the number of passengers. d. Pilots’ salaries relative to the number of passengers on a particular trip. e. Cost of a maintenance check relative to the number of passengers on a particular trip. f. Fuel costs relative to the number of trips. National Union Bank operates several branch offices in grocery stores.

ACC 543 Potential Instructors / snaptutorial ACC 543 Exercise 16-9A ACC 543 Exercise 18-17A Exercise 16-9A Mimosa Corporation expects to incur indirect overhead costs of $72,000 per month and direct manufacturing costs of $11 per unit. The expected production activity for the first four months of 2007 is as follows. Required a. Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year. b. Allocate overhead costs to each month using the overhead rate computed in Requirement a. c. Calculate the total cost per unit for each month using the overhead allocated in Requirement b. Exercise 18-17A Hamby Company had 250 units of product in its work in process inventory at the beginning of the period and started 2,000 additional units during the period. At the end of the period, 750 units were in work in process inventory. The ending work in process inventory was estimated to be 60 percent complete. The cost of work in process inventory at the beginning of the period was $3,420, and $27,000 of product costs was added during the period

ACC 543 Potential Instructors / snaptutorial ACC 543 Exercise 18-17B-- Process Cost System Cost of Production Report ACC 543 Exercise 19-24A -- Assessing Simultaneous Changes in CVP Relationships Exercise 18-17B: Process Cost System Cost of Production Report At the beginning of 2004, Dozier Company had 1,800 units of product in its work in process inventory, and it started 19,200 additional units of product during the year. At the end of the year, 6,000 units of product were in the work in process inventory. The ending work in process inventory was estimated to be 50 percent complete. Exercise 19-24A: Assessing Simultaneous Changes in CVP Relationships Green Shades Inc. (GSI) sells hammocks; variable costs are $75 each, and the hammocks are sold for $125 each. GSI incurs $250,000 of fixed operating expenses annually. Required a. Determine the sales volume in units and dollars required to attain a $50,000 profit. Verify your answer by preparing an income statement using the contribution margin format.

ACC 543 Potential Instructors / snaptutorial ACC 543 Exercise 22-6A Using a flexible budget to accommodate market uncertainty ACC 543 Exercise 24-1 Net Present Value Present Value Index Exercise 22-6A Using a flexible budget to accommodate market uncertainty According to its original plan, Katta Consulting Services Company would charge its customers for service at $200 per hour in The company president expects consulting services provided to customers to reach 40,000 hours at that rate. The marketing manager, however, argues that actual results may range from 35,000 hours to 45,000 hours because of market uncertainty. Katta’s standard variable cost is $90 per hour, and its standard fixed cost is $3,000,000. Exercise 24-1 Net Present Value/Present Value Index The management team at Savage Corporation is evaluating two alternative capital investment opportunities. The first alternative, modernizing the company’s current machinery, costs $45,000. Management estimates the modernization project will reduce annual net cash outflows by $12,500 per year for the next five years. The second alternative, purchasing a new machine, costs $56,500.

ACC 543 Potential Instructors / snaptutorial ACC 543 Exercise 24-3A= Present Value Analysis ACC 543 Exercise 24-4A Determining the present value of an annuity Exercise 24-3A: Present Value Analysis Ginger Smalley expects to receive a $300,000 cash benefit when she retires five years from today. Ms. Smalley’s employer has offered an early retirement incentive by agreeing to pay her $180,000 today if she agrees to retire immediately. Ms. Smalley desires to earn a rate of return of 12 percent. Required a. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Smalley accept her employer’s offer? b. Identify the factors that cause the present value of the retirement benefit to be less than $300,000. Exercise 24-4A Determining the present value of an annuity The dean of the School of Social Science is trying to decide whether to purchase a copy machine to place in the lobby of the building. The machine would add to student convenience, but the dean feels compelled to earn an 8 percent return on the investment of funds. Estimates of cash inflows from copy machines that have been placed in other university buildings indicate that the copy machine would probably produce incremental cash inflows of approximately $8,000 per year.

ACC 543 Potential Instructors / snaptutorial ACC 543 Exercise 24-5A Determining net present value ACC 543 Exercise 24-5B= Purchase of Popcorn Machine Exercise 24-5A Determining net present value Transit Shuttle Inc. is considering investing in two new vans that are expected to generate combined cash inflows of $20,000 per year. The vans’ combined purchase price is $65,000. The expected life and salvage value of each are four years and $15,000, respectively. Transit Shuttle has an average cost of capital of 14 percent. Required a. Exercise 24-5B: Purchase of Popcorn Machine Heidi Kahn, manager of the Grand Music Hall, is considering the opportunity to expand the company’s concession revenues. Specifically, she is considering whether to install a popcorn machine. Based on market research, she believes that the machine could produce incremental cash inflows of $1,600 per year. The purchase price of the machine is $5,000. It is expected to have a useful life of three years and a $1,000 salvage value. Ms. Kahn has established a desired rate of return of 16 percent.

ACC 543 Potential Instructors / snaptutorial ACC 543 Exercise 24-6A= Determining Net Present Value ACC 543 Exercise 24-8A= Determining the Internal Rate of Return Exercise 24-6A: Determining Net Present Value Travis Vintor is seeking part-time employment while he attends school. He is considering purchasing technical equipment that will enable him to start a small training services company that will offer tutorial services over the Internet. Travis expects demand for the service to grow rapidly in the first two years of operation as customers learn about the availability of the Internet assistance. Thereafter, he expects demand to stabilize. The following table presents the expected cash flows. In Exercise 24-8A: Determining the Internal Rate of Return Medina Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company’s cash outflow for operating expenses by $1,280,000 per year. The cost of the equipment is $6,186, Medina expects it to have a 10-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the straight-line method for depreciation. Required a. Calculate the internal rate of return of the investment opportunity. b. Indicate whether the investment opportunity should be accepted.

ACC 543 Potential Instructors / snaptutorial ACC 543 Flexible Budgets Team Paper Flexible Budgets Team Paper Write a paper of no more than 1,050 words in which you discuss flexible budgets. Explain the relationship between fixed and variable costs used in a flexible budget. Discuss the differences between static and flexible budgets and how a flexible budget lends itself to a cost-volume-profit analysis. Format your paper consistent with APA guidelines

ACC 543 Potential Instructors / snaptutorial For more course Tutorials