Treasurers, Inc., a manufacturer of gift articles, uses a single plantwide rate to allocate indirect costs with machine hours as the allocation base. Estimated overhead costs for the year are $ 9 comma 000 comma 000. Estimated machine hours are 30 comma 000. During the year, the actual machine hours used were 36 comma 000. Calculate the predetermined overhead allocation rate.

The leading producer of cell phone backup batteries, jumpstart, has achieved great success because they produce high-quality battery backups that are not too expensive. even so, another company that produces lower-quality batteries at the same price has also achieved some success, but not as much as jumpstart. also, in general, the price of backup batteries has declined because of economies of scale and learning. in addition, jumpstart has added complementary assets, such as a carrying case. considering all of these factors, the backup battery industry is most likely in the introduction stage. growth stage. shakeout stage. maturity stage.

Paar corporation bought 100 percent of kimmel, inc., on january 1, 2012. on that date, paar’s equipment (10-year life) has a book value of $420,000 but a fair value of $520,000. kimmel has equipment (10-year life) with a book value of $272,000 but a fair value of $400,000. paar uses the equity method to record its investment in kimmel. on december 31, 2014, paar has equipment with a book value of $294,000 but a fair value of $445,200. kimmel has equipment with a book value of $190,400 but a fair value of $357,000. the consolidated balance for the equipment account as of december 31, 2014 is $574,000. what would be the impact on consolidated balance for the equipment account as of december 31, 2014 if the parent had applied the initial value method rather than the equity method? the balance in the consolidated equipment account cannot be determined for the initial value method using the information given. the consolidated equipment account would have a higher reported balance. the consolidated equipment account would have a lower reported balance. no effect: the method the parent uses is for internal reporting purposes only and has no impact on consolidated totals.

You are chairman of the board of a successful technology firm. there is a nominal federal corporate tax rate of 35 percent, yet the effective tax rate of the typical corporation is about 12.6%. your firm has been clever with use of transfer pricing and keeping money abroad and has barely paid any taxes over the last 5 years; during this same time period, profits were $28 billion. one member of the board feels that it is un-american to use various accounting strategies in order to avoid paying taxes. others feel that these are legal loopholes and corporations have a fiduciary responsibility to minimize taxes. one board member quoted what the ceo of exxon once said: “i’m not a u.s. company and i don’t make decisions based on what’s good for the u.s.” what are the alternatives? what are your recommendations? why do you recommend this course of action?