Incorrect Answers Accounting Genuis

Question 1

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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
			$

Question 3

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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/(loss)		$		$		$

The special order should be .

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Question 5

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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		Replace Equipment		Net 5-Year Income Increase (Decrease)
Variable manufacturing costs		$		$		$
New machine cost
Total		$		$		$

The old factory machine should be .

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230510

104

777920

2616210

192570

192570

0

125760

149340

-23580

0

180

3930

-3930

66810

39300

-27510

rejected

2866000

2220500

645500

98200

89

207700

-109500

2964200

2428200

536000

161090

3220

93

299460

2700

93

251100

1870

104

194480

1870

104

194480

724450

606670

2230

89

198470

2750

89

244750

2240

2590

93

208320

2630

93

244590

1870

104

194480

1870

104

89

194480

601270

683820

9380

89

834820

10790

93

1003470

7480