Question: Green Thumb Garden Tools Inc. produces and

> Indicate with a Yes or No whether or not each of the following accounts normally re- quires an adjusting entry: e. Nancy Palmer, Capital f. Prepaid Insurance a. Building c Wages Expense d. Miscellaneous Expense b. Cash

> Describe how total fixed costs and unit fixed costs behave with changes in the level of activity.

> For each of the following errors, considered individually, indicate whether the error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or cre

> For each of the following errors, considered individually, indicate whether the error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate wh

> For the year ending August 31, Mammalia Medical Co. mistakenly omitted adjusting entries for (1) depreciation of $5,800, (2) fees earned that were not billed of $44,500, and (3) accrued wages of $7,300. Indicate the effect of the errors on (a) revenu

> For the year ending April 30, Urology Medical Services Co. mistakenly omitted adjusting entries for (1) $1,400 of supplies that were used, (2) unearned revenue of $6,600 that was earned, and (3) insurance of $9,000 that expired. Indicate the effect of

> The estimated amount of depreciation on equipment for the current year is $6,880. Journalize the adjusting entry (include an explanation) to record the depreciation.

> AutoSource Inc. designs and manufactures tires for automobiles. The company’s strategy is to design products that incorporate the full environmental impact of the product over its life cycle. This includes designing tires for fuel effic

> The estimated amount of depreciation on equipment for the current year is $7,700. Journalize the adjusting entry (include an explanation) to record the depreciation

> The supplies account had a beginning balance of $3,375 and was debited for $6,450 for supplies purchased during the year. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of supplies on hand is

> The prepaid insurance account had a beginning balance of $4,500 and was debited for $16,600 of premiums paid during the year. Journalize the adjusting entry (include an ex- planation) required at the end of the year, assuming the amount of unexpired ins

> The balance in the unearned fees account, before adjustment at the end of the year, is $272,500. Journalize the adjusting entry (include an explanation) required if the amount of unearned fees at the end of the year is $189,750

> How would the following costs be classified (variable or fixed) if units produced was the activity base? a. Direct materials costs b. Electricity costs of $0.35 per kilowatt-hour

> On June 1, 2019, Herbal Co. received $18,900 for the rent of land for 12 months. Journalize the adjusting entry (include an explanation) required for unearned rent on December 31, 2019.

> We-Sell Realty Co. pays weekly salaries of $11,800 on Friday for a five-day workweek ending on that day. Journalize the necessary adjusting entry (include an explanation) assuming that the accounting period ends on Wednesday.

> Prospect Realty Co. pays weekly salaries of $27,600 for a six-day workweek (Monday thru Saturday). Journalize the necessary adjusting entry (include an explanation) assuming that the accounting period ends on Friday.

> At the end of the current year, $23,570 of fees have been earned but have not been billed to clients. Journalize the adjusting entry (include an explanation) to record the accrued fees.

> Greeson Clothes Company produced 25,000 units during June of the current year. The Cutting Department used 6,380 direct labor hours at an actual rate of $10.90 per hour. The Sewing Department used 9,875 direct labor hours at an actual rate of $11.12 per

> Central Plains Power Company is considering an investment in wind farm technology to replace natural gas-generating capacity. Initial installation cost of a wind turbine is expected to be $1,200 per kilowatt-hour of capacity. The wind turbine has a capac

> At the end of the current year, $17,555 of fees have been earned but have not been billed to clients. Journalize the adjusting entry (include an explanation) to record the accrued fees

> Classify the following items as (1) prepaid expense, (2) unearned revenue, (3) accrued revenue, or (4) accrued expense: a. Cash received for services not yet rendered. b. Insurance paid for the next year. c. Interest revenue eamed but not receiv

> Classify the following items as (1) prepaid expense, (2) unearned revenue, (3) accrued revenue, or (4) accrued expense: a. Cash received for use of land next month. c. Wages owed but not yet paid. d. Supplies on hand. b. Fees earned but not rece

> Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusting entry: a. Accumulated Depreciation b. Frank Kent, Drawing C Land d. Salaries Payable e. Supplies f. Unearned Rent

> During August, Rothchild Company accumulated 3,500 hours of direct labor costs on Job 40 and 4,200 hours on Job 42. The total direct labor was incurred at a rate of $25.00 per direct labor hour for Job 40 and $23.50 per direct labor hour f

> Beck Inc. and Bryant Inc. have the following operating data: a. Compute the operating leverage for Beck Inc. and Bryant Inc. b. How much would income from operations increase for each company if the sales of each increased by 20%? c. Why is there a di

> a. If Canace Company, with a break-even point at $960,000 of sales, has actual sales of $1,200,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? b. If the margin of safety for Canace Company was 20%, fixed co

> Zero Turbulence Airline provides air transportation services between Los Angeles, California; and Kona, Hawaii. A single Los Angeles to Kona round-trip flight has the following operating statistics: Fuel ……………………………………………………………………. $7,000 Flight crew sal

> Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $620,000, and the sales mix is 40% bats and 60% gloves. The unit selling price and the unit variable cost for each product are as follows: a.

> Daisy’s Creamery Inc. is considering one of two investment options. Option 1 is a $75,000 investment in new blending equipment that is expected to produce equal annual cash flows of $19,000 for each of seven years. Option 2 is a $90,000

> Name the following chart and identify the items represented by the letters (a) through (f): $200,000 $150,000 $100,000 $50,000 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Units of Sales Sales and Costs

> La Barte Company manufactures commuter bicycles from recycled materials. The following data for July of the current year are available: Quantity of direct labor used ………………………………5,050 hrs. Actual rate for direct labor ……………………………$16.80 per hr. Bicycles

> Identify the following costs as direct materials (DM), direct labor (DL), or factory overhead (FO) for a magazine publisher: a. Staples used to bind magazines b. Wages of printing machine employees c. Maintenance on printing machines d. Paper used i

> Using the data for Loudermilk Inc. in Exercise 21-17, Data from Exercise 21-17: For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of $125. The maximum sales within the releva

> For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of $125. The maximum sales within the relevant range are $2,500,000. a. Construct a cost-volume-profit chart. b. Estimate th

> Sprint Nextel is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 32.5 million direct subscribers (accounts) that generated revenue of $35,345 million. Costs and expenses for the year were

> Describe how total variable costs and unit variable costs behave with changes in the level of activity.

> Media outlets such as ESPN and Fox Sports often have websites that provide in-depth coverage of news and events. Portions of these websites are restricted to members who pay a monthly subscription to gain access to exclusive news and commentary. These we

> The Junior League of Yadkinville, California, collected recipes from members and published a cookbook entitled Food for Everyone . The book will sell for $18 per copy. The chairwoman of the cookbook development committee esti

> Currently, the unit selling price of a product is $1,500, the unit variable cost is $1,200, and the total fixed costs are $4,500,000. A proposal is being evaluated to increase the unit selling price to $1,600. a. Compute the current break-even sales (un

> Anheuser-Busch InBev Companies, Inc., reported the following operating information for a recent year (in millions): In addition, assume that Anheuser-Busch InBev sold 400 million barrels of beer during the year. Assume that variable costs were 75% of t

> For the current year ended October 31, Yentling Company expects fixed costs of $14,000,000, a unit variable cost of $200, and a unit selling price of $300. a. Compute the anticipated break-even sales (units). b. Compute the sales (units) required to re

> The following data relate to labor cost for production of 22,000 cellular telephones: Actual: 4,220 hrs. at $44.50 Standard: 4,160 hrs. at $46.00 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost varian

> Boston Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Boston Railroad is a measure of railroad operating activity, t

> a. What is (1) overapplied factory overhead and (2) underapplied factory overhead? b. If the factory overhead account has a debit balance, was factory overhead underapplied or overapplied?

> Intuit Inc. develops and sells software products for the personal finance market, including popular titles such as Quickbooks ® and TurboTax ®. Classify each of the following costs and expenses for this company as either variable or fixed to the number o

> Southeastern Paper Company manufactures three products (computer paper, newsprint, and specialty paper) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified t

> On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable costing concept: a. Prepare an absorption costing income statement. b. Reconcile the variable costing income fr

> Product K has a unit contribution margin of $120. Product L has a unit contribution mar - gin of $100. Product K requires five furnace hours, while Product L requires four furnace hours. Determine the most profitable product, assuming that the furnace is

> Product A has a unit contribution margin of $24. Product B has a unit contribution mar - gin of $30. Product A requires four testing hours, while Product B requires six testing hours. Determine the most profitable product, assuming that the testing is a

> Light Force Inc. produces and sells lighting fixtures. An entry light has a total cost of $180 per unit, of which $100 is product cost and $80 is selling and administrative expenses. In addition, the total cost of $180 is made up of $110 variable cost an

> Portable Power Company expects to operate at 80% of productive capacity during July. The total manufacturing costs for July for the production of 25,000 batteries are budgeted as follows: Direct materials …………………………………………………. $162,500 Direct labor………………

> H.J. Heinz Company uses standards to control its materials costs. Assume that a batch of ketchup (3,128 pounds) has the following standards: The actual materials in a batch may vary from the standard due to tomato characteristics. Assume that the actual

> a. How is a predetermined factory overhead rate calculated? b. Name three common bases used in calculating the rate.

> BriteLite Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated activity costs and activity bases are as follows: Corporate records were obtained to estima

> Artscape Inc. is considering the purchase of automated machinery that is expected to have a useful life of five years and no residual value. The average rate of return on the average investment has been computed to be 20%, and the cash payback period was

> CardioTrainer Equipment Company manufactures stationary bicycles and treadmills. The products are produced in the Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the

> Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass it can make. The production process includes an autoclave

> Instant Image Inc. manufactures color laser printers. Model J20 presently sells for $460 and has a product cost of $230, as follows: Direct materials …………………. $175 Direct labor……………………………. 40 Factory overhead……………………. 15 Total…………………………………. $230 It is e

> Toyota Motor Corporation uses target costing. Assume that Toyota marketing personnel estimate that the competitive selling price for the Camry in the upcoming model year will need to be $27,000. Assume further that the Camry’s total unit cost for the upc

> Smart Stream Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cellular phones are as follows: Smart Stream wants a profit equal to a 30% rate of return on invested assets

> La Femme Accessories Inc. produces women’s handbags. The cost of producing 800 handbags is as follows: Direct materials ……………………………………. $18,000 Direct labor……………………………………………. 8,500 Factory overhead. ……………………………………. 5,500 Total manufacturing cost …………………

> What is the difference between a clock card and time ticket?

> Keystone Healthcare Corp. is proposing to spend $260,820 on an eight-year project that has estimated net cash flows of $42,000 for each of the eight years. a. Compute the net present value, using a rate of return of 10%. Use the present value of an annu

> Under what circumstances is a static budget appropriate?

> The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.20 per pound, and raw sugar can be sold without further processing for $1.40 per pound. Raw sugar is produc

> Cityscape Hotels has 200 rooms available in a major metropolitan city. The hotel is able to attract business customers during the weekdays and leisure customers during the week- end. However, the leisure customers on weekends occupy fewer rooms than do b

> Brightstone Tire and Rubber Company has capacity to produce 170,000 tires. Brightstone presently produces and sells 130,000 tires for the North American market at a price of $175 per tire. Brightstone is evaluating a special order from a European automob

> Homestead Jeans Co. has an annual plant capacity of 65,000 units, and current production is 45,000 units. Monthly fixed costs are $54,000, and variable costs are $29 per unit. The present selling price is $42 per unit. On November 12 of the current yea

> Rise N’ Shine Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which cost $5.50 per pound. Columbian coffee can be sold without further processing for $9.22 p

> Big Fork Lumber Company incurs a cost of $402 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $540 per hbf. An alternative is to produce a “finished cut” at a total processing cost of $523 per hbf, which can be s

> Kim Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $60,000, the accumulated depreciation is $24,000, its remaining useful life is five yea

> A company is considering replacing an old piece of machinery, which cost $105,000 and has $55,000 of accumulated depreciation to date, with a new machine that has a purchase price of $83,000. The old machine could be sold for $56,300. The annual variable

> The Theater Arts Guild of Dallas (TAG-D) employs five people in its Publication Department. These people lay out pages for pamphlets, brochures, magazines, and other publications for the TAG-D productions. The pages are delivered to an outside company fo

> Diamond Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $59 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 40% of direct

> Munch N’ Crunch Snack Company is considering two possible investments: a delivery truck or a bagging machine. The delivery truck would cost $43,056 and could be used to deliver an additional 95,000 bags of pretzels per year. Each bag of

> On the basis of the following data, the general manager of Foremost Footwear Inc. decided to discontinue Children’s Shoes because it reduced income from operations by $10,000. What is the flaw in this decision if it is assumed that fixe

> What document is the source for (a) debiting the accounts in the materials ledger and (b) crediting the accounts in the materials ledger?

> Silicone Engine Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 580 tablets during December. However, due to LCD defects, the company ac

> Charles Schwab Corporation is one of the more innovative brokerage and financial service companies in the United States. The company recently provided information about its major business segments as follows (in millions): a. How does a brokerage compan

> The condensed product-line income statement for Dish N’ Dat Company for the month of May is as follows: Fixed costs are 15% of the cost of goods sold and 30% of the selling and administrative expenses. Dish N’ Dat ass

> A condensed income statement by product line for Celestial Beverage Inc. indicated the following for Star Cola for the past year: Sales ……………………………………………………………. $390,000 Cost of goods sold …………………………………………… 184,000 Gross profit ……………………………………………………. $20

> D’Amato Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $315,000. The freight and installation costs for the equipment are $15,000. If purchased, annual repairs and maintenance are estimated to be $1

> Matrix Construction Company is considering selling excess machinery with a book value of $75,000 (original cost of $200,000 less accumulated depreciation of $125,000) for $60,000 less a 5% brokerage commission. Alternatively, the machinery can be leased

> Based on the data presented in Exercise 25-18, assume that Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. Data from Exercise 25-18: Smart Stream Inc. uses the product cost concept of applying the

> How are investments in sustainability justified?

> Park City Mountain Resort, a Utah ski resort, recently announced a $415 million expansion of lodging properties, lifts, and terrain. Assume that this investment is estimated to produce $99 million in equal annual cash flows for each of the first 10 years

> Give an example of a qualitative factor that should be considered in a capital investment analysis related to acquiring automated factory equipment.

> What are the major advantages of leasing a fixed asset rather than purchasing it?

> Which account is used in the job order cost system to accumulate direct materials, direct labor, and factory overhead applied to production costs for individual jobs?

> Why would the cash payback method understate the attractiveness of a project with a large residual value?

> The following data relate to the direct materials cost for the production of 10,000 automobile tires: Actual: ……………………………………. 145,000 lb. at $2.80 Standard: ………………………………...150,000 lb. at $2.75 a. Determine the direct materials price variance, direct mat

> Your boss has suggested that a one-year payback period is the same as a 100% average rate of return. Do you agree? Explain.

> Discuss the principal limitations of the cash payback method for evaluating capital investment proposals.

> What are the principal objections to the use of the average rate of return method in evaluating capital investment proposals?

> What are the major disadvantages of the use of the net present value method of analyzing capital investment proposals?

> Two projects have an identical net present value of $9,000. Are both projects equal in desirability? Explain.

> The internal rate of return method is used by King Bros. Construction Co. in analyzing a capital expenditure proposal that involves an investment of $156,218 and annual net cash flows of $38,000 for each of the six years of

> A net present value analysis used to evaluate a pro- posed equipment acquisition indicated a $7,900 net present value. What is the meaning of the $7,900 as it relates to the desirability of the proposal?

> Why would the use of the cash payback period for analyzing the financial performance of theatrical releases from a motion picture production studio be supported over the net present value method?

> What kind of firm would use a job order cost system?