Use the Following Data for Questions 10 Through 17

question 83

Essay

Use the following data for questions 10 through 17. Each question is independent of the other questions.
Sawyer Corporation has a machine (Machine A) that it acquired on 1/1/14 for $540,000. On 12/31/14 such machines have a selling price and fair value of $621,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.
Brown Corporation has a machine (Machine B) that it acquired on 1/1/14 for $729,000. On 12/31/14 such machines have a selling price and fair value of $540,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.
On 12/31/14 Brown gave Machine B plus $81,000 cash to Sawyer in return for
Machine A.
-Assignment of Costs.Match the following cost items with these appropriate accounts:1. Interest cost incurred during building construction.2. Back taxes on purchased plot of land to be used for building site.3. Assessment by city for drainage system.4. Building permits.5. Landscaping shrubs planted after building has been constructed.6. Demolition costs of building on land bought for plant site.7. Interest cost incurred after completion of building construction.8. Recording fees for land.9. Architect's fees.10. Grading and filling building site.11. Parking lots.12. Fences.
a. Land
b. Buildings
c. Land Improvements
d. Other

Differentiate between various types of costs and their implications on financial statements.

Understand the contribution approach to income statements and its importance in managerial decision-making.

Assess the effect of activity level changes on total costs, net income, and cost per unit.

Estimate expected costs based on historical data using linear cost behavior assumptions.

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Definitions:

Cycle Time

The total time from the beginning to the end of a process, including process time and any delays, indicating the speed at which outputs are produced from inputs.

Workstations

Designated areas in a manufacturing or office setting where specific tasks are performed, often outfitted with necessary tools and equipment.

Task Times

The duration required to complete specific jobs or assignments in a production or work process.