Question: Bradby Automotive Restoration (BAR) has three

> The Shipping Department at Nashville Fabricators reports the following information about resources: Required Compute the cost of unused resource capacity in the Shipping Department at Nashville Fabricators.

> What are examples of two nonvalue-added activities that could be found in each of the following service organizations: (a) a health clinic and (b) a bank?

> Refer to Exercise 10-46. Sales revenue totaled $74,000. a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statement like the one in Exhibit 10.12. Exercise 10-46:

> Boston Home Center (BHC) offers customers the use of a truck at $40 per trip to take purchased merchandise home. BHC reports the following information about the trucks it has for customer usage: Required Compute the cost of unused operation and administr

> Refer to Exercise 10-44. Sales revenue from lathe work totaled $17,900. Required a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statement like the one in Exhibit 10.12. Exercise 10-44:

> Refer to Exercise 10-42. Sales revenue from truck repair totaled $32,000. Required a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statement like the one in Exhibit 10.12. Exercise 10-42:

> Byron Truck Repair uses a specialized hydraulic lift to work on trucks and busses. Data on the lift and its usage follow: Required Compute the cost of unused resource capacity in operation and maintenance for Byron Truck Repair.

> Refer to the data in Exercise 10-40. Required a. Assume all else remains the same. What bid by Ewers would make Ellery indifferent between buying from Ewer or Bramford? b. Why, given the information, do you think Ellery continues to buy fabric from Bramf

> Refer to the data in Exercise 10-38. Required Assume all else remains the same. What percentage of late deliveries by Bacon would make WES indifferent between buying from Bacon Electronics and Hessel Audio and Video? Exercise 10-38:

> Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from two suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons are delivered late, the

> Refer to the data in Exercise 10-36. Required Assume all else remains the same. What percentage of metal from Chopin Yards that requires further processing would make Rex Metal Fabricators indifferent between buying from Chopin Yards and Joe Company? Ex

> Rex Metal Fabricators (RMF) buys scrap metal and produces components for buildings and other structures. The purchase contracts specify an average quality level of 90 percent. That is, 90 percent of the metal must be ready for use without further process

> In the context of job costing, what are projects? What additional costing issues are there with projects?

> LaFontaine Accessories makes a variety of computer bags, carrier bags, and so on. LaFontaine uses activity-based costing for its products. The production manager has identified the following cost drivers and rates for overhead. The manufacturing facility

> Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost drivers and rates. Direct materials costs were $480,000 and direct labor costs were $320,000 during November, when the plant fini

> Refer to the information in Exercise 9-36. Required a. Compute the unit costs for the two products, G-09 and G-35, using the current costing system at Heidelberg (using machine-hours as the allocation basis). b. Compute the unit costs for the two product

> Using the data in Exercise 8-41, compute the cost per equivalent unit for direct materials and for conversion costs for February using the FIFO method. Exercise 8-41:

> The following cost information is available for July for the Crest Plant at Calvert Company: Materials are added at the beginning of the process. The following quantities have been recorded: ∙ Beginning inventory, 40,000 partially compl

> In computing the cost per equivalent unit, the weighted-average method considers a. Current costs less costs in beginning WIP inventory. b. Current costs plus the cost of ending WIP inventory. c. Current costs plus costs in beginning WIP inventory. d. Cu

> Refer to the data in Exercise 8-34. Required a. Compute the equivalent units for the conversion cost calculation for March assuming Shirley Processing, Inc. uses the weighted-average method. b. Compute the cost per equivalent unit for materials and conve

> Hedwig Optical makes three models of binoculars: Travel, Sport, and Pro. The models differ by the size of the casing and the quality of the optics. The binoculars are produced in two departments. The Assembly Department purchases components from vendors

> Devereaux Cycles makes three models of scooter: Commuter, Sport, and X-treme. The scooters are produced in four departments: Assembly, Detailing, Customization, and Packaging. All three models are started in Assembly, where all materials are assembled. T

> Shirley Processing, Inc. (SPI) makes adhesive tape and uses a FIFO process costing system. The following information shows the physical flow of units and costs for the month of March: Required a. Compute the equivalent units for the materials and convers

> What are three common sources of improprieties in job costing?

> Boulder Toys manufactures powered, ride-on tractors and other equipment for children. There are three models, increasing in features and detail: XL, XLS, and XLT. All three models start in the Assembly Department, where the raw materials are shaped and c

> Refer to the data in Exercise 8-32. Required Compute the cost per equivalent unit for materials and conversion costs using the FIFO method. Exercise 8-32:

> Beverly Plastics produces a part used in precision machining. The part is produced in two departments: Mixing and Refining. The raw material is introduced into the process in the Mixing Department. The cost of the material fluctuates significantly month

> The following information about the work-in-process inventory pertains to the Remington Plant for the month of July (all materials are added at the beginning of the process): The Remington Plant started 216,000 units and transferred out 200,000 in July.

> Terminal Industries (TI) produces a product using three departments: Mixing, Processing, and Filtering. New material is added only in the Mixing Department. The following information is given for the Processing Department for August. TI uses process cost

> Refer to the data in Exercise 8-45. Required a. Compute the cost of goods transferred out and the cost of ending inventory for March using the FIFO method. b. Is the ending inventory higher or lower under the weighted-average method compared to FIFO? Why

> Refer to the data in Exercise 8-45. Compute the cost per equivalent unit for direct materials and for conversion costs for March using the FIFO method. Exercise 8-45: Bellevue Chemicals had beginning work-in-process inventory of $239,910 on March 1. Of

> Refer to the data in Exercise 8-45. Compute the costs of goods transferred out and the ending inventory for March using the weighted-average method. Exercise 8-45: Bellevue Chemicals had beginning work-in-process inventory of $239,910 on March 1. Of thi

> Bellevue Chemicals had beginning work-in-process inventory of $239,910 on March 1. Of this amount, $101,280 was the cost of direct materials and $138,630 was the cost of conversion. The 24,000 units in the beginning inventory were 45 percent complete wit

> Refer to the data in Exercises 8-41 and 8-43. Compute the cost of goods transferred out and the ending inventory for February using the FIFO method. Exercise 8-41:

> What is a limitation of the direct method of allocating service department costs? The step method?

> At the beginning of the month, Daniel’s Business Services had two incomplete consulting engagements (jobs) that had the following costs assigned from previous months. During the month, Jobs DBS-32 and DBS-35 were completed but not bille

> Refer to the data in Exercise 8-41. Compute the cost of goods transferred out and the ending inventory for February using the weighted-average method. Exercise 8-41:

> Annin Laboratories uses the weighted-average method to account for its work-in-process inventories. The accounting records show the following information for February: Quantity information is obtained from the manufacturing records and includes the follo

> Refer to the data in Exercise 8-37. Compute the cost of goods transferred out and the ending inventory for July using the FIFO method. Exercise 8-37:

> Refer to Exercise 8-37. Compute the cost per equivalent unit for direct materials and for conversion costs for July using the FIFO method. Exercise 8-37:

> What is the basic difference between the allocation of joint costs to (a) joint products and (b) by-products?

> When would a physical quantities method for allocation be preferred?

> Refer to the data in Exercise 8-37. Compute the cost of goods transferred out and the ending inventory for July using the weighted-average method. Exercise 8-37:

> What is the objective of joint cost allocation?

> What criterion should be used to determine the order of allocation from service departments when the step method is used? Explain why.

> What are the similarities and differences among the direct method, the step method, and the reciprocal method of allocating costs?

> Kingsley Products estimated that direct labor for the year would be 64,000 hours. The company also estimated that the fixed overhead cost for the year would be $160,000. They further estimated the variable overhead cost to be $4.00 per direct labor-hour.

> Kenmore Fabrication estimated that direct labor cost for the year would be $640,000. The company also estimated that fixed overhead would be $480,000 and variable overhead would be 35 percent of direct labor cost. Kenmore applies its overhead on the basi

> Louisiana Metals uses a job costing system. The company applies manufacturing overhead using a predetermined rate based on direct labor cost. The following debits (credits) appeared in the Workin- Process Inventory for June. Job LM-12, the only job still

> Rohns Manufacturing produces kitchen appliances at its North Roberts plant. The appliances go through two production departments: Fabrication and Assembly. The plant has three service departments: Information Systems Support (ISS), Training, and Administ

> Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin oper

> Hildale Manufacturing is organized with two service departments (Administration and Maintenance) and two production departments (Assembly and Finishing). The company uses the step method to allocate service department costs, allocating costs from Adminis

> Refer to the information in Exercise 7-36. Required Prepare an entry to allocate over- or underapplied overhead to a. Work in Process. b. Finished Goods. c. Cost of Goods Sold. Exercise 7-36: Marian Manufacturing (2M) applies manufacturing overhead to j

> Greendale Office Products has a warehouse that supplies office products to its store locations. The warehouse has two service departments, Human Resources (HR) and Information Technology (IT), and two operating departments, Packaging and Delivery. The fo

> Tennessee Company manufactures a specialized fitting for industrial machinery at the Stephens Street Facility. The facility has five departments. Two departments (Casting and Finishing) are production departments. The other three departments (Purchasing,

> Refer to the information and data in Problem 10-79. After working with the quality system for one year, the cost analyst revisits the relations for conformance and nonconformance costs. During the year, the quality team worked on lowering the cost of con

> Refer to the information in Problem 10-77. The organic cider business has two seasons, holidays and nonholidays. The holiday season lasts exactly four months (although it feels longer), and the nonholiday season lasts eight months. SOP orders the same am

> Remington Agricultural Products (RAP) produces organic cider with no preservatives. Any production must be sold within a few days, so producing for inventory is not an option. RAP’s single plant has the capacity to make 72,000 cases of cider annually. Cu

> Refer to Problems 10-74 and 10-75. The owner of Terry’s Bakery now believes that there are really three seasons instead of two, the third being the fall and spring (as a combined season). Each of the three seasons lasts exactly four mon

> Refer to the information in Problem 10-74. The pie business in this town has two seasons, summer and winter. Each season lasts exactly six months. Panama Food Mart orders 9,000 pies in the summer and 9,000 pies in the winter. East Street Coffee is closed

> Located in a small town in upstate New York, Terry’s Bakery operates a facility that makes pies for retail sale. The facility has the capacity to make 36,000 pies annually. The plant has only two customers, Panama Food Mart and East Street Coffee. Annual

> Barr Plastics makes parts for a variety of manufacturing applications. Sales last year totaled $3,060,000. Information regarding resources for the month follows. In addition, Barr spent $90,000 on 60 engineering changes with a cost-driver rate of $1,400,

> Consider the information in Problem 10-71. The sales manager of Granger Materials has proposed to the purchasing manager at Carrie Construction that Granger be given an exclusive contract to supply the aggregate. Assume that the total annual demand remai

> Marian Manufacturing (2M) applies manufacturing overhead to jobs based on direct labor costs. For Year 2, 2M estimates its manufacturing overhead to be $421,200 and its direct labor costs to be $810,000. 2M worked on three jobs for the year. Job 2M-1, wh

> Carrie Construction (CC) is a company specializing in building airport runways and major highways. As a part of its business, it receives supplies of aggregate (stone, sand, gravel, and so on) from two suppliers: Austin Aggregate and Granger Materials. T

> Consider the information in Problem 10-69. The sales manager of Woodlawn Petroleum has proposed to the purchasing manager at Atwater that Woodlawn be given an exclusive contract to supply the lubricant. If it receives the contract, Woodlawn will guarante

> Huber Supply is a distribution company specializing in providing paper and soap products for institutions such as hospitals, colleges, and so on. Customers place orders online with Huber. Once an order is received, the warehouse verifies the purchaser&ac

> Stark Remodeling Center (SRC) is a home renovation showroom that caters primarily to contractors. Customers place orders at SRC, either in person or online, and the merchandise is packaged in standard-sized boxes and delivered to the home or job site. (T

> Grand Online Mall (GOM) is an online retailer that sells many different products. GOM offers its customers two options for shipping. First, the “Regular” program charges a flat fee of $9.90 per order within its shippin

> Kresge Lodging has an elite program for its card members. There are three levels, based on total nights stayed: Diamond (50 nights or more); Platinum (25 nights or more); and Base (fewer than 25 nights). In order to facilitate reservations and answer cus

> Lozier Catering and Events (LCE) offers a variety of services from small gatherings to large weddings and corporate retreats. Sales for year 1 totaled $877,500. Information regarding resources for the year includes the following: Required Management has

> Refer to Exercise 10-50. Sales revenue for Hosmer Industries is $720,000. Required a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statement like the one in Exhibit 10.12. c. Prepare a short re

> Refer to the information in Exercise 9-52. The manager of the Personnel Department decides that the estimate of the activities might be too simple in two ways. First, the time to interview depends on the level of the position for which a candidate is sou

> Refer to Exercise 9-50. Until now, Meadow Logistics, Inc. (MLI) has used a commercial vendor to ship orders. The manager of Distribution believes the system described in Exercise 9-50 is too simple in two ways. First, if a retailer is ordering from MLI f

> Refer to the information in Exercise 7-34. The amount of overhead applied in each of the inventory accounts at the end of Year 1 is as follows. Required Prepare an entry to allocate the over- or underapplied overhead. Exercise 7-34: Linzee Liners estima

> Commonwealth Devices makes three wearable fitness devices at its Lake Plant: CFit-1, CFit-2, and CFit-Xtra. The company has for many years allocated overhead to products using machine-hours. Last year, the Lake Plant produced and shipped 8,000 units of C

> Chadwick Industries has several manufacturing facilities that make a wide variety of industrial and consumer products. Two of the plants, River North and River South, make components for road construction equipment. The River North plant was built when t

> Montana Precision Products (MPP) produces parts for small machine tools. The typical product goes through two processes, machining and finishing, before being packaged and shipped to the customer. All jobs at MMP are produced to order, and the company ho

> Miller Manufacturing (2M) makes a variety of components for mechanized agricultural equipment. The products are similar but not identical, and all go through many of the same processes. 2M sells products worldwide and has to comply with various regulatio

> Burgess Business School has two degree programs, BBA and MBA. The school uses an ABC system to cost the three support services it provides to students from both programs: Career Center, Events, and Library. Following are the costs of these three activiti

> Refer to Problem 9-63. The study team decides to look more closely at the assembly activity and determines that it can be broken down into two activities: production and engineering. Production covers the costs of ongoing manufacturing, while engineering

> Lauder Company manufactures and distributes various fixtures used primarily in new building construction. At the company’s Bayside plant, Lauder produces two models of one widely used fixture designated by model names LC-20 and LC-50. C

> Kensington Electronics (KE) is a wholly owned subsidiary of CWD Enterprises, a global manufacturing company. Unlike most CWD companies, KE uses a traditional costing system to compute product costs. After the last review by CWD staff, the financial manag

> Warren Furniture produces three models of desk chairs: Basic, Ergo, and Exec. The cost system at the Warren production facility allocates overhead cost on the basis of direct labor hours. The company is considering updating its cost system to an activity

> Nall Products manufactures a wide variety of products in several facilities. It produces three models of mobility scooters in its St. Claire plant: models NP-10, NP-20, and NPX-70. The machine and labor times for the three models are similar. The differe

> Linzee Liners estimates that its manufacturing overhead will be $1,725,000 in Year 1. It further estimates that direct labor costs will amount to $750,000. During March, Linzee worked on four jobs with actual direct labor costs of $35,000 for Job 0301, $

> What is the cost hierarchy?

> Ellis Equipment (EE) manufactures three models of lawn tractor: EE-1000, EE-1800, and EE-2800. Because of the different materials used, production processes for each model differ significantly in terms of machine types and time requirements. Once parts a

> Delaware Electronics makes three models of a controller for measurement and testing equipment: Models X-100, X-200, and X-500. The three models differ in their capabilities and also in the materials they use. The X-100 model is a low-technology, standard

> Clairepoint Medical Devices, Inc. (CMDI) makes three types of a diagnostic device. For internal purposes, these models are referred to as Alpha, Beta, and Gamma, respectively. Although they are designed to provide the same information, the models differ

> Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that

> Refer to Problem 9-54. Assume that you have prepared financial statements that show the operating profit for each of the two models manufactured by Thatcher Supply. Further assume that under the activity-based costing approach (requirement [b] in Problem

> Thatcher Supply manufactures and sells two types of pet doors—Standard and Hi-Tech. The Standard model is a basic opening installed in a door. The Hi-Tech model is automated and includes several safety features using electronics. The Hi

> Normandy Office Products (NOP) makes two types of office desks, Manager and Executive. The Executive model is adjustable using electric motors and is made with upgraded materials. The manufacturing process for the Executive model is more complex than tha

> Refer to the data in Exercise 8-56 (Hedwig Optical). Information for January is copied here. There are never any work-in-process inventories. The plant controller believes that keeping track of the three models and separating costs in the Assembly and Ca

> Drew Implements makes four models of utility and light construction tractors. The model names are DI-1400, DI-3800, DI-5000, and DI-8000. Drew manufactures the tractors in two departments— Fabrication and Detailing. All four models are

> Chateaufort Craft (CC) makes three models of sea kayaks: CC-100, CC-200, and CC-500. CC manufactures the boats in two departments: Department A (Assembly) and Department B (Finishing). All three models are processed initially in Department A, where all m

> Refer to the information in Exercise 7-32. Overhead applied in each of the inventory accounts is as follows. Required Prepare an entry to allocate the under- or overapplied overhead. Exercise 7-32: Antoine Machining estimated its manufacturing overhead

> Saratoga Systems produces a single product. The production process requires all material to be brought to the shop floor before any work begins. The material is then processed and assembled and then transferred to finished goods inventory. Every unit is

> For each of the following independent cases, determine the units or equivalent units requested (assuming weighted-average costing). a. Beginning inventory consisted of 64,000 units with a direct materials cost of $113,600. The equivalent work represented