Prepare the Statement of Retained Earnings from the Adjusted Trial Balance and Income Statement. Within each section of the statement, SMART TOUCH LEARNING
Adjusted Trial Balance
December 31, 2016
Account Title
Debit Credit
Cash 19500
Accounts recievable 10800
Office Supplies 200
Prepaid Rent 13,000
Furniture 22,800
Accumulated Depreciation--Furniture 7800
Accounts Payable 2600
Salaries Payable 600
Interest Payable 300
Unearned Revenue 6,500
Notes Payable 9,100
Common Stock 12,700
Retained Earnings 13,000
Dividends 33,100
Service Revenue 59,100
Depreciation Expense-Furniture 2600
Interest Expense 300
Rent Expense 3900
Salaries Expense 4500
Supplies Expense 1000
Total 111,700 111,700
SMART TOUCH LEARNING
Income Statement
Month Ended December 31, 2016 Balance
Revenue
Service revenue 59100
ExpensesDepreciation Expense-Furniture 2600
Interest Expense 300
Rent Expense 3900
Salaries Expense 4500
Supplies Expense 1000
Total expense 12300
Net income 46800

Zachary company produces commercial gardening equipment. since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. the costs and cost drivers associated with the four overhead activity cost pools follow: activities unit level batch level product level facility level cost $ 64,800 $ 27,730 $ 15,000 $ 154,000 cost driver 2,400 labor hrs. 47 setups percentage of use 11,000 units production of 780 sets of cutting shears, one of the company’s 20 products, took 240 labor hours and 7 setups and consumed 15 percent of the product-sustaining activities. required: (a) had the company used labor hours as a company wide allocation base, how much overhead would it have allocated to the cutting shears? (b) how much overhead is allocated to the cutting shears using activity-based costing? (c) compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 780 units are produced. if direct product costs are $150 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? (d) assuming that activity-based costing provides a more accurate estimate of cost, indicate whether the cutting shears would be over- or underpriced if direct labor hours are used as an allocation base. explain how over-or undercosting can affect vaulker's profitability. (e) comment on the validity of using the allocated facility-level cost in the pricing decision. should other costs be considered in a cost- plus pricing decision? if so, which ones? what costs would you include if you were trying to decide whether to accept a special order?