Mark Corporation estimates its manufacturing overhead to be $90,000 and its direct labor costs to be$200,000 for year 1. The actual direct labor costs were $50,000 for Job 301,$75,000 for Job 302, and $100,000 for Job 303 during year 1; the actual manufacturing overhead was$97,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs applying predetermined rates.

Required
What was the over- or underapplied manufacturing overhead for year 1?

Last year net sales were $400,000.
This year net sales are$600,000.
What is the amount of change?
What is the percent change?

The following data (in millions) are taken from recent financial statements of Nike Inc.:

b. Determine the percentage relationship between net income and net sales (net income divided by net sales) for Year 2 and Year 1. Round to one decimal place.

The following data are taken from recent financial statement of Nike, Inc. (in millions):

$$\begin{array}{lrr} & \textbf{Year 2} & \textbf{Year 1}\\ \hline \text{Sales (revenues). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . } & \$30,601 & \$27,799\\ \text{Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . } & 3,273 & 2,693\\ \end{array}$$

a. Determine the amount of change (in millions) and percent of change in net income from Year 1 to Year 2. Round to one decimal place. b. Determine the percentage relationship between net income and sales for Year 2 and Year 1. Round to one decimal place. c. What conclusions can you draw from your analyses?

Refer to the information for Lansing Company.

Required

Prepare the cash flows from operating activities section only of the company's 2013 statement of cash flows using the direct method.

Refer to the information about Sonad Company in Exercise 16-4. Apply the direct method to prepare only the cash provided or used by operating activities section of the statement of cash flows for this company.

Refer to the information in the previous problem.

Required
Prepare the cash flows from operating activities section only of the company’s 2011 statement of cash flows applying the direct method.

Refer to the previous discussion and prepare Middleburg Golf Club’s statement of cash flows for the year ended September 30, 2018. The company uses the direct method for operating cash flows.

Refer to the information in the previous problem.

Required
Prepare the cash flows from operating activities section only of the company’s 2011 statement of cash flows applying the direct method.

Refer to the information in Problem 16-1A

Required
Prepare the cash flows from operating activities section only of the company's 2017 statement of cash flows applying the direct method.

James Lighting manufactures switches that it uses in several of its products. Management is considering whether to continue manufacturing the switches or to buy them from an outside source. The following information is available:

1. The company needs 100,000 switches per year. Switches can be purchased from an outside supplier at a cost of $\$ 4$ per unit.

2. The cost of manufacturing switches is $\$ 5$ per unit, computed as follows:

3. Discontinuing the manufacture of the switches will eliminate all of the direct materials and direct labor costs but will eliminate only 70 percent of the variable overhead costs.

4. If the switches are purchased from an outside source, certain machinery used in the production process would no longer have to be leased. Accordingly, $\$ 19,000$ of fixed overhead costs could be avoided. No other reduction will result from discontinuing production of the switches.

b. Assume that if switches are purchased from the outside source, the factory space previously used to produce switches can be used to manufacture an additional 10,000 dimmers per year. These dimmers have an estimated contribution margin of $\$ 14$ per unit. The manufacture of the additional dimmers would have no effect on fixed overhead. Would this new assumption change your recommendation as to whether to make or buy switches? In support of your conclusion, prepare a schedule showing the incremental cost or benefit of buying switches from the outside source and using the factory space to produce additional dimmers.

James Lighting manufactures switches that it uses in several of its products. Management is considering whether to continue manufacturing the switches or to buy them from an outside source. The following information is available:

1. The company needs 100,000 switches per year. Switches can be purchased from an outside supplier at a cost of $\$ 4$ per unit.

2. The cost of manufacturing switches is $\$ 5$ per unit, computed as follows:

3. Discontinuing the manufacture of the switches will eliminate all of the direct materials and direct labor costs but will eliminate only 70 percent of the variable overhead costs.

4. If the switches are purchased from an outside source, certain machinery used in the production process would no longer have to be leased. Accordingly, $\$ 19,000$ of fixed overhead costs could be avoided. No other reduction will result from discontinuing production of the switches.

a. Prepare a schedule to determine the incremental cost or benefit of buying switches from the outside supplier. On the basis of this schedule, would you recommend that the company manufacture the switches or buy them from the outside source?

Mark Corporation estimates its manufacturing overhead to be $90,000 and its direct labor costs to be$200,000 for year 1. The actual direct labor costs were $50,000 for Job 301,$75,000 for Job 302, and $100,000 for Job 303 during year 1; the actual manufacturing overhead was$97,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs applying predetermined rates.

Required
How much overhead was assigned to each job during year 1?

Tappan, Inc., manufactures 1 product and accounts for costs using a job cost system. You have obtained the following information from the corporation’s books and records for the year ended December 31, Year 1:

• Total manufacturing cost during the year was $2,000,000 based on actual direct material, actual direct labor, and applied manufacturing overhead.
• Manufacturing overhead was applied to work in process at 62.5 percent of direct labor dollars. Applied manufacturing overhead for the year was 25 percent of the total manufacturing cost during the year.

Required
Calculate actual direct material used, actual direct labor, and applied manufacturing overhead. ( Hint: The total of these costs is$2,000,000.)