The Clayton Company uses a standard cost system in which manufacturing overhead costs are applied to units of the company's single product on the basis of direct labor-hours (DLHs). The standard cost card for the product follows:

The Clayton Company uses a standard cost system in which manufacturing overhead costs are applied to units of the company's single product on the basis of direct labor-hours (DLHs). The standard cost card for the product follows:

Direct Materials	$14
Direct Labor, 1.5 DLHs at $8 per DLH	12
Variable Overhead, 1.5 DLHs at $2 per DLH	3
Fixed Overhead, 1.5 DLHs at $6 per DLH	9
Standard Cost Per Unit	$38

The following data pertain to last year's activities:

• The company manufactured 18,000 units of product during the year. A total of 70,200 yards of aterial was purchased during the year at a cost of $3.75 per yard. All of this material was used to manufacture the 18,000 units.
• The company worked 29,250 direct labor-hours during the year at a cost of $7.80 per hour.
• The denominator activity level was 22,500 direct labor-hours.
• Budgeted fixed manufacturing overhead costs were $135,000 while actual manufacturing overhead costs were $133,200.
• Actual variable manufacturing overhead costs were $61,425.

Required:

1. Compute the direct materials price and quantity variances for the year.

   Direct Materials Price Variance = AQ(AP-SP) 70,200 ($3.75 - $3.50 = $17,550) UDirect Materials Quantity Variance = SP(AQ-SQ) $3.50(70,200 - 72,000*) = $6,300 F  *18,000 units x 4 yards per unit = 72,000 yards

2. Compute the direct labor rate and efficiency variances for the year.

   Direct Labor Rate Variance = AH(AR-SR) 29,250($7.80 - $8.00) = $5,850 FDirect Labor Efficiency Variance = SR(AH-SH) $8.00(29,250 - 27,000*) = $18,000 U  *18,000 units x 1.5 DLHs per unit = 27,000 DLHs

3. Compute the following for overhead:
   1. The variable overhead spending and efficiency variances for the year.

      Spending Variance = (AH x AR) - (AH x SR) ($61,425 ) - (29,250 DLHx x $2 per DLH) = $2,925 UEfficiency Variance = (AH x SR) - (SH x SR) (29,250 DLHs x $2 per DLH) - (27,000 DLHs x $2 per DLH) = $4,500 U

   2. The fixed overhead budget and volume variances for the year.

      Budget Variance = Actual FOH - Flexible budget FOH $133,200 - $135,000 = $1,800 FVolume Variance = Fixed portion of POR x (Denominator Hours - Standard Hours allowed) $6 per DLH (22,500 DLHs - 18,000 units x 1.5 DLHs per unit) = $72,000 F

      
      

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The following information is available for Amos Company for the year ended December 31, 2015.

The following information is available for Amos Company for the year ended December 31, 2015.
 a.    Balance of retained earnings, December 31, 2014, prior to discovery of error, $862,000.
b.    Cash dividends declared and paid during 2015, $18,000.
c.    It neglected to record 2013 depreciation expense of $36,600, which is net of $5,900 in tax benefits.
d.    The company earned $211,000 in 2015 net income.

Prepare a 2015 statement of retained earnings for Amos Company. (Amounts to be deducted should be indicated with a minus sign.)

Answer


Explanation:
Depreciation expense not recorded in 2013 (net of $5,900 in income taxes) = $(36,600)

York’s outstanding stock consists of 46,000 shares of noncumulative 7.20% preferred stock with a $10 par value and also 115,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:

York’s outstanding stock consists of 46,000 shares of noncumulative 7.20% preferred stock with a $10 par value and also 115,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends: 
2015    $    26,000  
2016         31,120  
2017         110,000  
2018         192,000  
Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 2 decimal places.)

Explanation:

	Non-Cumulative Preferred		Common
2015 ($26,000 paid)
Preferred*	$	26,000
Common—remainder			$	0
Total for the year	$	26,000	$	0
2016 ($31,120 paid)
Preferred*	$	31,120
Common—remainder			$	0
Total for the year	$	31,120	$	0
2017 ($110,000 paid)
Preferred*	$	33,120
Common—remainder			$	76,880
Total for the year	$	33,120		76,880
2018 ($192,000 paid)
Preferred*	$	33,120
Common—remainder			$	158,880
Total for the year	$	33,120	$	158,880
2015-2018 ($359,120 paid)
Total for four years	$	123,360	$	235,760

  
 

* The holders of the noncumulative preferred stock are entitled to no more than $33,120 of dividends in any    one year (7.20% × $10 × 46,000 shares).

York’s outstanding stock consists of 49,000 shares of cumulative 7.50% preferred stock with a $10 par value and also 122,500 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends. 
2015    $    29,000  
2016         31,125  
2017         74,250  
2018         111,750  
 Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 2 decimal places.)
 

Explanation:

	Cumulative Preferred		Common
2015 ($29,000 paid)
Preferred*	$	29,000
Common—remainder			$	0
Total for the year	$	29,000	$	0
(Note: $7,750 in preferred stock dividends in arrears.)
2016 ($31,125 paid)
Preferred—arrears from 2015	$	7,750
Preferred*	$	23,375
Common—remainder			$	0
Total for the year	$	31,125	$	0
(Note: $13,375 in preferred stock dividends in arrears.)
2017 ($74,250 paid)
Preferred—arrears from 2016	$	13,375
Preferred*	$	36,750
Common—remainder			$	24,125
Total for the year	$	50,125		24,125
(Note: $0 in preferred stock dividends in arrears.)
2018 ($111,750 paid)
Preferred*	$	36,750
Common—remainder			$	75,000
Total for the year	$	36,750	$	75,000
(Note: $0 in preferred stock dividends in arrears.)
2015-2018 ($246,125 paid)
Total for four years	$	147,000	$	99,125

  
 

* The holders of the cumulative preferred stock are entitled to no more than $36,750 of dividends declared in    any year (7.50% × $10 × 49,000 shares) plus any dividends skipped in prior years.