Question 1 Garza and Neely, CPAs, are preparing their service revenue (sales) budget for the coming year (2012). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below. Department Quarter 1 Quarter 2 Quarter 3 Quarter 4 Auditing 2,590 1,810 2,230 2,750 Tax 3,220 2,700 2,240 2,630 Consulting 1,870 1,870 1,870 1,870 Average hourly billing rates are: auditing $84, tax $93, and consulting $104. Prepare the service revenue (sales) budget for 2012 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue. GARZA AND NEELY, CPAs Sales Revenue Budget For the Year Ending December 31, 2012 Quarter 1 Quarter 2 Dept. Billable Hours Billable Rate Total Rev. Billable Hours Billable Rate Total Rev. Auditing $ $ $ $ Tax Consulting $ $ GARZA AND NEELY, CPAs Sales Revenue Budget For the Year Ending December 31, 2012 Quarter 3 Quarter 4 Dept. Billable Hours Billable Rate Total Rev. Billable Hours Billable Rate Total Rev. Auditing $ $ $ $ Tax Consulting $ $ GARZA AND NEELY, CPAs Sales Revenue Budget For the Year Ending December 31, 2012 Year Dept. Billable Hours Billable Rate Total Rev. Auditing $ $ Tax Consulting $ LINK TO TEXT LINK TO TEXT LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Question Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER Copyright © 2000-2014 by John Wiley & Sons, Inc. or related companies. All rights reserved. Question 2 Stanton Company is planning to produce 1,000 units of product in 2012. Each unit requires 1.50 pounds of materials at $7.50 per pound and a half-hour of labor at $15.20 per hour. The overhead rate is 80% of direct labor. (a) Compute the budgeted amounts for 2012 for direct materials to be used, direct labor, and applied overhead. Direct materials $ Direct labor $ Overhead $ (b) Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 2.75.) Standard cost $ Question 3 In Harley Company it costs $32 per unit ($19 variable and $13 fixed) to make a product that normally sells for $49. A foreign wholesaler offers to buy 3,930 units at $25 each. Harley will incur special shipping costs of $1 per unit. Assuming that Harley has excess operating capacity. Indicate the net income (loss) Harley would realize by accepting the special order. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.) Reject Order Accept Order Net Income Increase (Decrease) Revenues $ $ $ Costs—Manufacturing            Shipping Net income/(los ...

1. Question 1
Garza and Neely, CPAs, are preparing their service revenue
(sales) budget for the coming year (2012). The practice is
divided into three departments: auditing, tax, and consulting.
Billable hours for each department, by quarter, are provided
below.
Department
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Auditing
2,590
1,810
2,230
2,750
Tax
3,220
2,700
2,240
2,630

2. Consulting
1,870
1,870
1,870
1,870
Average hourly billing rates are: auditing $84, tax $93, and
consulting $104.
Prepare the service revenue (sales) budget for 2012 by listing
the departments and showing for each quarter and the year in
total, billable hours, billable rate, and total revenue.
GARZA AND NEELY, CPAs
Sales Revenue Budget
For the Year Ending December 31, 2012
Quarter 1
Quarter 2
Dept.
Billable Hours
Billable Rate
Total Rev.
Billable Hours
Billable Rate
Total Rev.
Auditing
$
$
$
$

3. Tax
Consulting
$
$
GARZA AND NEELY, CPAs
Sales Revenue Budget
For the Year Ending December 31, 2012
Quarter 3
Quarter 4
Dept.
Billable Hours
Billable Rate
Total Rev.
Billable Hours
Billable Rate
Total Rev.
Auditing

4. $
$
$
$
Tax
Consulting
$
$
GARZA AND NEELY, CPAs
Sales Revenue Budget
For the Year Ending December 31, 2012
Year
Dept.
Billable Hours
Billable Rate
Total Rev.
Auditing

5. $
$
Tax
Consulting
$
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By accessing this Question Assistance, you will learn while you
earn points based on the Point Potential Policy set by your
instructor.
Question Attempts: 0 of 3 used
SAVE FOR LATER
SUBMIT ANSWER

6. Copyright © 2000-2014 by John Wiley & Sons, Inc. or related
companies. All rights reserved.
Question 2
Stanton Company is planning to produce 1,000 units of product
in 2012. Each unit requires 1.50 pounds of materials at
$7.50 per pound and a half-hour of labor at $15.20 per hour.
The overhead rate is 80% of direct labor.
(a) Compute the budgeted amounts for 2012 for direct materials
to be used, direct labor, and applied overhead.
Direct materials
$
Direct labor
$

7. Overhead
$
(b) Compute the standard cost of one unit of product. (Round
answer to 2 decimal places, e.g. 2.75.)
Standard cost
$
Question 3
In Harley Company it costs $32 per unit ($19 variable and
$13 fixed) to make a product that normally sells for $49. A
foreign wholesaler offers to buy 3,930 units at $25 each. Harley
will incur special shipping costs of $1 per unit. Assuming that
Harley has excess operating capacity.
Indicate the net income (loss) Harley would realize by accepting
the special order. (If an amount reduces the net income for
Increase (Decrease) column then enter with a negative sign
preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).
Enter all other amounts in all other columns as positive and
subtract where necessary.)
Reject
Order
Accept
Order
Net Income
Increase
(Decrease)
Revenues

8. $
$
$
Costs—Manufacturing
Shipping
Net income/(loss)
$
$
$
The special order should be .
Question 4
Vintech Manufacturing incurs unit costs of $7 ($4 variable and
$3 fixed) in making a subassembly part for its finished product.
A supplier offers to make 18,400 of the part at $5.70 per unit. If
the offer is accepted, Vintech will save all variable costs but no

9. fixed costs.
Prepare an analysis showing the total cost saving, if any,
Vintech will realize by buying the part. (If an amount reduces
the net income for Increase (Decrease) column then enter with a
negative sign preceding the number e.g. -15,000 or parenthesis,
e.g. (15,000). Enter all other amounts in all other columns as
positive and subtract where necessary.)
Make
Buy
Net Income
Increase
(Decrease)
Variable manufacturing costs
$
$
$
Fixed manufacturing costs
Purchase price

10. Total annual cost
$
$
$
The decision should be to .
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Question 5
Ridley Company has a factory machine with a book value of
$98,200 and a remaining useful life of 5 years. A new machine
is available at a cost of $207,700. This machine will have a 5-
year useful life with no salvage value. The new machine will
lower annual variable manufacturing costs from $573,200 to
$444,100.
Prepare an analysis showing whether the old machine should be
retained or replaced. (If an amount reduces the net income for
Increase (Decrease) column then enter with a negative sign
preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).
Enter all other amounts in all other columns as positive and
subtract where necessary.)
Retain
Equipment

11. Replace
Equipment
Net 5-Year
Income
Increase
(Decrease)
Variable manufacturing costs
$
$
$
New machine cost
Total
$
$
$
The old factory machine should be .