Acct 505

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• Acct 505 Essay

  ... Week 5: Case Study 2 - Internal Control Acct Fin: Managerial Use,Anlys 1. Inform the President of any new internal control requirements if the company decides to go public. (7 points) Answer – Based on facts given in the case, new internal control requirements that are needed for the company to go public are listed below a. Compliance with Sarbanes-Oxley Act Regulations b. Compliance with SEC, GAAP and IFRS procedures to record all transactions c. Internal audit on company financial and business processes and transactions d. Implementation of better security measures for data protection, identity protection and ensuring that company resources are not misused 2. Advise the President of what the company is doing right (they are doing some things well) and also recommend to the President whether or not they should buy the indelible ink machine. When you advise the President, please be sure to reference the applicable internal control principle that applies. (13 points) Answer – Some of the things that the company is doing well and should continue are listed below and in accordance with the Sarbanes-Oxley Act and GAAP regulations: a. Pre-numbered invoices are used for accounting b. Receiving checks and completing the monthly bank reconciliation c. Having an accountant who is able to manage the accounts and streamlining many of their processes d. Loyalty and trust with long term employees In terms of requirement for...

  743  Words | 3  Pages

• Acct 505 Course Project Essay

  ...Ronice M. Bruce Week 3_Course Project A - CASE STUDY ACCT 505- Prof Main January 26, 2013 Springfield Express is a luxury passenger carrier in Texas. All seats are first class, and the following data are available: Number of seats per passenger train car 90 Average load factor (percentage of seats filled) 70% Average full passenger fare $160 Average variable cost per passenger $70 Fixed operating cost per month $3,150,000 a. What is the break-even point in passengers and revenues per month? Fixed cost | $ 3,150,000 | | Selling price | $ 160 | | Variable cost | $ 70 | | Break-even (Passengers) | 35,000 | BE (Passengers) = Fixed cost/ (Selling price – Variable Cost) = 3,150,000 / 160-70 = 3,150,000 / 90 = 35, 000 | Break-even (Revenue) | $5,625,000 | BE (Revenue) = Fixed Cost/Contribution Ratio Contribution Margin Ratio =[(Selling Price per unit – Variable Cost per unit) /Selling price per unit ] = (160-70)/160 = 56%BE Target Sales in $ = (Fixed cost + target income)/ contribution margin ratio = 3,500,000/56% = $5,625,000 | Springfield Express needs 35,000 passengers to generate $5.625M in revenue to break-even per month. b. What...

  1431  Words | 6  Pages

• Acct 505-Midterm Essay

  ...Midterm page 1      1. (TCO A)  Direct material cost is a part of (Points : 6) |        Conversion Cost YES.... Prime Cost NO.        Conversion Cost NO.... Prime Cost YES.        Conversion Cost YES.... Prime Cost YES.        Conversion Cost NO.... Prime Cost NO. | 2. (TCO A)  The costs of staffing and operating the accounting department at Central Hospital would be considered by the Department of Surgery to be (Points : 6) |        direct costs.         sunk costs.         incremental costs.         None of the above | 3. (TCO A) Depreciation of office buildings and office equipment is also known as (Points : 6) |        variable costs.        conversion costs.        product costs.        period costs. | 4. (TCO A) When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following?Fixed cost per unit            Variable cost per unit(Points : 6) |        Increase                No change        Increase                 Increase        Decrease             No change        No change             Increase | 5. (TCO F)  Which of the following statements is true?I. Overhead application may be made slowly as a job is worked on.II. Overhead application may be made in a single application at the time of completion of the job.III. Overhead application should be made to any job not completed at year end in order to properly value the work in process...

  1400  Words | 7  Pages

• Acct 505 Midterm Essay

  ... 1. Question : (TCO A) Wages paid to an assembly line worker in a factory are a  2. Question : (TCO A) A cost incurred in the past that is not relevant to any current decision is classified as a(n)  3. Question : (TCO A) Depreciation of office buildings and office equipment is also known as  4. Question : (TCO A) When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following?  5. Question : (TCO F) Which of the following statements is true?  I. Overhead application may be made slowly as a job is worked on.  II. Overhead application may be made in a single application at the time of completion of the job.  III. Overhead application should be made to any job not completed at year end in order to properly value the work in process inventory.  6. Question : (TCO F) A job-order cost system is employed in those situations where  7. Question : (TCO F) The FIFO method only provides a major advantage over the weighted-average method in that  8. Question : (TCO B) The contribution margin ratio always decreases when the  9. Question : (TCO B) Which of the following would not affect the break-even point?  10. Question : (TCO E) In an income statement prepared using the variable costing method, variable selling and administrative expenses would  1. Question : (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larop...

  681  Words | 4  Pages

• ACCT Essay

  ...1. What is capital budgeting? 2. What are some characteristics that make capital budgeting different from other types of budgets (like a sales budget or cash budget)? It is the process by which management plans, evaluates, and controls investments in fixed assets. 3. Why is the concept of present value relevant to capital budgeting, but not so relevant to other types of budgeting? An investment in fixed assets may be viewed as purchasing a series of net cash flows over a period of time. 4. Describe the Payback Period in your own words. Under what circumstances would Payback be an effective method to use in evaluating competing investment alternatives? The expected period of time that will elapse between the date of a capital expenditure and the complete recovery in cash (or equivalent) of the amount invested. 5. Describe the Accounting Rate of Return in your own words. What are its weaknesses as an investment evaluation tool? It measures the average income as a percent of the average investment. Disadvantages are not directly considering the expected cash flows from the proposal nor directly considering the timing of the expected cash flows. 6. Describe the calculation of NPV in your own words. What does the word "Net" in Net Present Value refer to? Capital investments that focus on the present value of the cash flows expected from the investments. 7. Define the Internal Rate of Return.  Internal Rate of Return uses present value concepts to compute the rate...

  630  Words | 2  Pages

• Course Projectb Acct. 505 Essay

  ...ACCT505 Part B Capital Budgeting problem Data: Cost of new equipment Expected life of equipment in years Disposal value in 5 years Life production - number of cans Annual production or purchase needs Initial training costs Number of workers needed Annual hours to be worked per employee Earnings per hour for employees Annual health benefits per employee Other annual benefits per employee-% of wages Cost of raw materials per can Other variable production costs per can Costs to purchase cans - per can Required rate of return Tax rate Clark Paints $200,000 5 $40,000 5,500,000 1,100,000 0 3 2,000 $12.00 $2,500 18% $0.25 $0.05 $0.45 12% 35% Make Purchase Cost to produce Annual cost of direct material: Need of 1,100,000 cans per year Annual cost of direct labor for new employees: Wages Health benefits Other benefits Total wages and benefits Other variable production costs Total annual production costs Annual cost to purchase cans $275,000 72,000 7,500 12,960 92,460 55,000 $422,460 $495,000 Part 1 Cash flows over the life of the project Item Annual cash savings Tax savings due to depreciation Total annual cash flow Before Tax Amount $72,540 32,000 Tax Effect After Tax Amount 0.65 $47,151 0.35 $11,200 $58,351 Part 2 Payback Period $200,000 / $58,351 = 3.43 years Part 3 Annual rate of return Accounting income as result of decreased costs Annual cash savings Less Depreciation Before tax income Tax at 35% rate After tax income $26351/200,000 = Part 4 Net Present...

  636  Words | 3  Pages

• Acct 505 Case 1 Week 3 Essay

  ...Case Study 1 Springfield Express is a luxury passenger carrier in Texas. All seats are first class, and the following data are available: Number of seats per passenger train car 90 Average load factor (percentage of seats filled) 70% Average full passenger fare $ 160 Average variable cost per passenger $ 70 Fixed operating cost per month $3,150,000 Formula : Revenue = Units Sold * Unit price Contribution Margin = Revenue – All Variable Cost Contribution Margin Ratio = Contribution Margin/Selling Price Break Even Points in Units = (Total Fixed Costs + Target Profit )/Contribution Margin Break Even Points in Sales = (Total Fixed Costs + Target Profit )/Contribution Margin Ratio Margin of Safety = Revenue - Break Even Points in Sales Degree of Operating Leverage = Contribution Margin/Net Income Net Income = Revenue – Total Variable Cost – Total Fixed Cost Unit Product Cost using Absorption Cost = (Total Variable Cost + Total Fixed Cost)/# of units a. Contribution margin per passenger = 160-70=90 Contribution margin ratio = 90/160=56.25% Break-even point in passengers = Fixed costs/Contribution Margin =3,150,000/90=35,000 Passengers = 35,000 passengers Break-even point in dollars = Fixed Costs/Contribution Margin Ratio...

  453  Words | 4  Pages

• Acct 505 Course Project Essay

  ...Valerie Simmons Math533 Dr. Mark Beintema July 22, 2012 Course Project PART A The report below represents the detailed statistical analysis of the data collected from a sample of credit customers in the department chain store AJ DAVIS. The 1st individual variable is LOCATION which is a categorical variable. The three subcategories are Urban, Suburban and Rural. Since Location is a categorical variable, the measures of central tendency have not been calculated for this variable. The frequency distribution and pie chart are given as follows: Frequency Distribution: | Location | Frequency | Urban | 21 | Suburban | 15 | Rural | 14 | From the frequency distribution and pie chart, it is clear that the highest number of customers live in the rural area (42%), followed by customers who live in the suburban category (30%). There are only 28% of the customers living in the urban area. The 2nd individual variable is SIZE which is considered is a quantitative variable. The measures of central tendency and variation are calculated for this variable below: Statistics: | Size | Mean | 3.42 | Standard Error | 0.24593014 | Median | 3 | Mode | 2 | Standard Deviation | 1.73898868 | Sample Variance | 3.02408163 | Kurtosis | -0.7228086 | Skewness | 0.52789598 | Range | 6 | Minimum | 1 | Maximum | 7 | Sum | 171 | Count | 50 | Frequency Distribution: | Size | Frequency | 1 | 5 | 2 | 15 | 3 | 8 | 4 | 9 | 5 | 5 | 6 | 5 | 7...

  596  Words | 4  Pages