Question: Information taken from Ticonderoga Paper Company’s

> “Oh no, not Store 51,” Avis Love moaned under her breath. For the third time, Avis compared the dates listed in the cash receipts journal with the corresponding dates on the bank deposit slips. Avis shook her head softly and leaned back in her chair. The

> One month after being promoted to audit senior, Tommy O’Connell was assigned to the audit engagement team for the Altamesa Manufacturing Company. 1 Tommy worked out of his Big Four employer’s Fort Worth practice office, while Altamesa was headquarted in

> After spending much of the previous three months working elbow-to-elbow with as many as six colleagues in a cramped and poorly ventilated conference room, Hamilton Wong was looking forward to moving on to his next assignment. 1 Wong served as an in-charg

> “Bill, will you have that inventory memo done by this afternoon?” 1 “Yeah, Sam, it’s coming along. I should have it done by five, or so.” “Make it three . . . or so. Okay, Bub?” Bill responded with a smile and a nod. He had a good relationship with Sam H

> Leigh Ann Walker graduated from a major state university with a bachelor’s degree in accounting. 1 During her college career, Walker earned a 3.9 grade point average and participated in several extracurricular activities, including three student business

> In 1983, Marta Giordano inherited the restaurant that her grandfather, Alberto Buranello, had established shortly after returning to his hometown of Boston after serving in World War I. 1 For nearly a century, the restaurant, Buranello’s Ristorante, has

> Richard Grimes glanced at his wristwatch as he pulled into the nearly deserted parking lot of the corporate headquarters of McCaleb Medical Corporation (MMC). 1 It was 6:25 a.m. on a cold and overcast Friday morning in February. Based in a suburb on the

> In late 2003, Le-Nature’s Inc., a Pennsylvania-based beverage company, selected BDO Seidman to replace Ernst & Young (EY) as its independent audit firm. A few months earlier, EY had insisted that Le-Nature’s retain an external law firm to investigate all

> No doubt, Guy Enright was apprehensive as he talked to the mysterious stranger on the phone. At the time, Enright, a British citizen and Chartered Accountant, was working on an unusual engagement for his employer, KPMG. 1,2 The Big Four accounting firm h

> In the early 1930s, the Great Depression forced engineering student William Harrah to drop out of UCLA. Known as a “hustler” by his friends, Harrah began operating a bingo parlor to support himself. After repeated confrontations with law enforcement auth

> Cornelius Vander Starr wanted to see the world. In 1918, the 26-year-old Californian emptied his bank account to purchase a one-way ticket to the Far East on a steam-ship. After “bumming around” Japan for several months, Vander Starr traveled to Shanghai

> Russell Smith knew why he had been summoned to the office of A. Walter Rognlien, the 74-year-old chairman of the board and chief executive officer (CEO) of Smith’s employer, Cardillo Travel Systems, Inc. 1 Just two days earlier, Cardillo’s in-house attor

> Like most high school graduates, Michael Dell had a sense of anticipation, if not exhilaration, when he left home to begin his college career. Because Dell planned to become a doctor, like his father, he declared premed as his major when he enrolled in t

> “The final undergraduate award today is the William J. Upchurch Medal, which is given annually to the outstanding senior in the Hopkins College of Business. 1 Nominations are made by Hopkins faculty members and the criteria considered in choosing the w

> Arvel Ray Smart was born in Lebanon, Missouri, and grew up in the small town of Bolivar, 40 miles west of Lebanon in southeastern Missouri. 1 Arvel’s mother and father graduated from the University of Missouri with accounting degrees in the mid-1970s. T

> Wiley Jackson spent three months as an audit intern with a local practice office of a major accounting firm while he was earning an undergraduate accounting degree at the University of Wisconsin–Milwaukee. Wiley thoroughly enjoyed the three-month interns

> “Woody, that’s $2,400 you owe me. Okay? We’re straight on that?” “Yeah, yeah. I got you.” “And you’ll pay me back by next Friday?” “Al, I said I’d pay you back by Friday, didn’t I?” “Just checkin’.” Borrowing money from a friend can strain even the stron

> Refer to the data in Exercise 10–25, regarding Canandaigua Container Company. Prepare journal entries to: 1. Record the purchase of direct material on account. 2. Record the direct-material variances and add direct-material cost to Work-in-Process Invent

> Visit the website for one of the following companies, or a different company of your choosing. Marriott Hotels www.marriott.com ………………

> Choose one of the following manufacturers (or any manufacturer of your choosing), and use the Internet to gather information about any new products the company has recently introduced or plans to introduce. Boeing www.boeing.com ……….……… Kodak www.kodak.c

> Canandaigua Container Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Direct labor: ……………………… Direct material:

> The following terms are used to describe various economic characteristics of costs. a. Opportunity cost b. Out-of-pocket cost c. Sunk cost d. Differential cost e. Marginal cost f. Average cost Required: Choose one of the terms listed above to character

> Maria Chavez makes custom mooring covers for boats in Tumpa, Florida. Each mooring cover is hand sewn to fit a particular boat. If covers are made for two or more identical boats, each successive cover generally requires less time to make. Chavez has bee

> Global Communications, Inc. manufactures communications satellites used in TV signal transmission. The firm currently purchases one component for its satellites from a European firm. A Global Communications engineering team has found a way to use the com

> For each of the following costs, indicate whether the amount is a direct or indirect cost of the equipment maintenance department. Also indicate whether each cost is at least partially controllable by the department supervisor. 1. Cost of electricity use

> Due to evaporation during production, Plasto Company requires 4 pounds of material input for every 3 pounds of good plastic sheets manufactured. During May, the company produced 6,000 pounds of good sheets. Required: Compute the total standard allowed i

> Write the formula for ROI, showing sales margin and capital turnover as its components.

> Show, using T-accounts, how production overhead is added to Work-in-Process Inventory when standard costing is used.

> McCartney Company manufactures guitars. The company uses a standard, job-order cost accounting system in two production departments. In the Construction Department the wooden guitars are built by highly skilled craftspeople and coated with several layers

> Execucraft, Inc., manufactures upholstered office chairs. The standard cost for material and labor is $89.20 per chair. This includes 8 kilograms of direct material at a standard cost of $5.00 per kilogram, and 6 hours of direct labor at $8.20 per hour.

> Ozarks Camping Equipment, Inc., has established the following direct-material standards for its two products. During May, the company purchased 4,200 yards of tent fabric for its standard model at a cost of $26,880. The actual May production of the stan

> California Housewares’ Merced Division is a small manufacturer of wooden household items. Al Rivkin, divisional controller, plans to implement a standard-costing system. Rivkin has collected information from several co-workers that will assist him in dev

> McKeag Corporation manufactures agricultural machinery. At a recent staff meeting, the following direct-labor variance report for the year just ended was presented by the controller. McKeag’s controller uses the following rule of thumb

> Concord Farms produces items made from local farm products that are distributed to supermarkets. For many years, Concord’s products have had strong regional sales on the basis of brand recognition; however, other companies have begun marketing similar p

> Instructional Resources International (IRI) is a rapidly expanding company involved in the m ass reproduction of instructional materials. Ralph Boston, owner and manager of IRI, has made a concentrated effort to provide a quality product at a fair price,

> The director of cost management for Peoria Instrument Corporation compares each month’s actual results with a monthly plan. The standard direct-labor rates for the year just ended and the standard hours allowed, given the actual output

> SolarPrime, Inc. uses a standard-costing system to assist in the evaluation of operations. The company has had considerable trouble in recent months with suppliers and employees, so much so that management hired a new production supervisor, Marc Hoctor.

> Valport Valve Company manufactured 15,600 units during March of a control valve used by milk processors in its Shreveport plant. Records indicated the following: Direct labor .................................................... 80,200 hr. at $10.95 Direc

> List three observable and three hidden quality costs that could occur in the airline industry related to the quality of service provided.

> The following data pertain to Colgate Palmolive’s liquid filling line during the first 10 mon t hs of a particular year. The standard ratio of direct-labor hours to machine hours is 4:1. The standard direct-labor rate is $15.08. Requir

> Harrison Wolfe operates a residential landscaping business in an affluent suburb of Atlanta. In an effort to provide quality service, he has concentrated solely on the design and installation of upscale landscaping plans (e.g., trees, shrubs, fountains,

> South Atlantic Chemical Company manufactures industrial chemicals in Rio de Janeiro, Brazil. The company plans to introduce a new chemical solution and needs to develop a standard product cost. The new chemical solution is made by combining a chemical co

> Gandolph Game Company has established the following standards for the prime costs of o n e unit of its chief product, dartboards During September, Gandolph purchased 320,000 kilograms of direct material at a total cost of $608,000. The total wages for S

> During March, Manhattan Fabrics Corporation manufactured 1,000 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to March. Direct material purchased: 36,000 yard

> The director of cost management for Odessa Company uses a statistical control chart to help management determine when to investigate variances. The critical value is 1 standard deviation. The company incurred the following direct-labor efficiency varianc

> Part of your company’s a c counting database was destroyed when Godzilla attacked the city. You have been able to gather the following data from your files. Reconstruct the remaining information using the available data. All of the raw

> Refer to the data in the preceding exercise. Use diagrams similar to those in Exhibits 10–2, 10–3, and 10–4 to determine the direct-material and direct-labor variances. Indicate whether each variance

> Seneca Hardwoods produces handcrafted jewelry boxes. A standard-size b ox requires 7 board feet of hardwood in the finished product. In addition, 1.5 board feet of scrap lumber is normally left from the production of one box. Hardwood costs $5.00 per boa

> Refer to the data in the preceding exercise. Draw diagrams depicting the direct-material and direct-labor variances similar to the diagrams in Exhibits 10–2, 10–3 , and 10–4 . Exhibit 10-2: Exhibit 1

> During April, Dryden Company’s material purchases amounted to 6,500 pounds at a price of $7.40 per pound. Actual costs incurred in the production of 2,000 units were as follows: Direct labor: $118,035 ($18.30 per hour) Direct material: $31,820 ($7.40 per

> Refer to your answer for Exercise 10–31. Set up T-accounts, and post the journal entries to the general ledger.  

> MacGyver Corporation manufactures a product called Miracle Goo, which comes in handy for just about anything. The thick tarry substance is sold in six-gallon drums. Two raw materials are used; these are referred to by people in the business as A and B. T

> Metro Fashions, Inc., manufactures women’s blouses of one quality, which are produced in lots to fill each special order. Its customers are department stores in various cities. Metro Fashions sews the particular storesâ€&#153

> Briefly describe three issues that create special challenges for multinational firms in preparing their budgets.

> List the steps you would go through in developing a budget to meet your college expenses.

> Discuss this comment by a small-town bank president: “Budgeting is a waste of time. I’ve been running this business for 40 years. I don’t need to plan.”

> Why is participative budgeting often an effective management tool?

> Define the term budgetary slack, and briefly describe a problem it can cause.

> Discuss the importance of predictions and assumptions in the budgeting process.

> Pinellas Pillow Company’s planned production for the year just ended was 10,000 units. This production level was achieved, but only 9,000 units were sold. Other data follows: Direct material used ........................................... $80,000 Direct

> How can a company’s board of directors use the budget to influence the future direction of the firm?

> Give three examples of how the city of Boston could use a budget for planning purposes.

> How does e-budgeting make use of the Internet?

> How does activity-based budgeting explain the logic of budgeting?

> What is meant by the term operational budgets? List three operational budgets that would be prepared by Cook County Hospital in Chicago.

> Give an example of how general economic trends would affect sales forecasting in the airline industry

> Draw a flowchart similar to the one in Exhibit 9–1 for a service station. The service station provides automotive maintenance services in addition to selling gasoline and related products. Exhibit 9-1: Sales Sales of Services or Go

> Explain what a master budget is, and list five of its parts.

> Use an example to explain how a budget could be used to allocate resources in a university.

> What are the primary differences in budgeting between manufacturing and nonmanufacturing firms?

> Visit the website for one of the following companies, or a different company of your choosing. Coca-Cola www.cocacola.com Bridgestone www.bridgestonetire.com Motorola www.motorola.com/us/consumers/home Casio www.casio.com Toyota www.toyota.com Xerox Corp

> “We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short term loan down at MetroBa

> Fit-for-Life Foods Inc., a manufacturer of breakfast cereals and snack bars, has experienced several years of steady growth in sales, profits, and dividends while maintaining a relatively low level of debt. The board of directors has adopted a long-run s

> Vancouver Consulting Associates, a division of Maple Leaf Services Corporation, offers management and computer consulting services to clients throughout Canada and the northwestern United States. The division specializes in website development and other

> Edgeworth Box Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables. The canned food box (type C) and the perishable food box (type P) have the following material and labor requirements. The unit produ

> Condor Corporation manufactures two different types of coils used in electric motors. In the fall of the current year, the controller compiled the following data • Sales forecast for 20x3 (all units to be shipped in 20x3): â&#128

> Continental Security Systems, Inc. (CSSI), manufactures and sells security systems. The company started by installing photoelectric security systems in offices and has expanded into the private-home market. CSSI has a basic security system that has been

> Dakota Fan, Inc., manufactures an inexpensive household fan that it sells to retailers for $20 per unit. All sales are on account, with 40 percent of sales collected in the month of sale and 60 percent collected in the following month. The data that foll

> School Days Furniture, Inc., manufactures a variety of desks, chairs, tables, and shelf units which are sold to public school systems throughout the midwest. The controller of the company’s Desk Division is currently preparing a budget

> Eastern State University (ESU) is preparing its master budget for the upcoming academic year. Currently, 12,000 students are enrolled on campus; however, the admissions office is forecasting a 5 percent growth in the student body despite a tuition hike t

> Niagra Chemical Company produces three products using three different continuous processes. The products are Yarex, Darol, and Norex. Projected sales in gallons for the three products for the years 20x2 and 20x3 are as follows: • Becau

> Information taken from Collegiate Sporting Goods Company’s records for the most recent year is as follows: Direct material used ..................................................... $272,000 Direct labor ........................................

> Shady Shades, Inc., manufactures artistic frames for sunglasses. Talia Demarest, controller, is responsible for preparing the company’s master budget. In compiling the budget data for 20x1, Demarest has learned that new automated produc

> Sophisticates, Inc., a distributor of jewelry throughout California, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records: &acirc

> Splendid Stereo, Inc., is a large retailer of stereo equipment. The controller is about to prepare the budget for the first quarter of 20x5. Past experience has indicated that 75 percent of the store’s sales are cash sales. The collecti

> Tanya Williams is the new accounts manager at East Bank of Mississippi. She has just been asked to project how many new bank accounts she will generate during 20x5. The economy of the county in which the bank operates has been growing, and the bank has e

> Village Hardware is a retail hardware store. Information about the store’s operations follows. • November 20x4 sales amounted to $400,000. • Sales are budgeted at $440,000 for December 20x4 and $400,0

> The following information is from White Mountain Furniture Showroom’s financial records. Collections from customers are normally 70 percent in the month of sale, 20 percent in the month following the sale, and 9 percent in the second m

> Alder Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are planned for the next year. Two units of raw material are required to produce each unit of finished product Required: 1. If Alder Company plans t

> Fill in the missing amounts in the following schedules. 2. Accounts payable, 12/31/x0 ................................................ €600,000‡ Purchase of goods and services on account during 20x1 .. 2,400,000 Payme

> Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales. 70 percent collected in the month of sale. 15 percent collected in the first month after sale. 10 percent collected in the second month after

> San Fernando Fertilizer Company plans to sell 40,000 units of finished product in July and anticipates a growth rate in sales of 5 percent per month. The desired monthly ending inventory in units of finished product is 80 percent of the next month’s esti

> Sea Star Company manufactures diving masks with a variable cost of $12.50. The masks sell for $17.00. Budgeted fixed manufacturing overhead for the most recent year was $396,000. Actual production was equal to planned production. Required: Under each o

> Three Rivers Dental Associates (TRDA) is a large dental practice in Pittsburgh. The firm’s controller is preparing the budget for the next year. The controller projects a total of 48,000 office visits, to be evenly distributed throughout the year. Eighty

> Jay Rexford, president of Photo Artistry Company, was just concluding a budget meeting with his senior staff. It was November of 20x4, and the group was discussing preparation of the firm’s master budget for 20x5. “I&a

> Triple-F Health Club (Family, Fitness, and Fun) offers tennis, swimming, and other physical fitness facilities to its members. There are four of these clubs in the metropolitan area. Each club has between 1,700 and 2,500 members. Revenue is derived from

> Jack Riley, controller in the division of social services for the state, recognizes the importance of the budgetary process for planning, control, and motivational purposes. He believes that a properly implemented participative budgetary process for plan

> Define the following types of environmental costs: private, social, visible, hidden, monitoring, abatement, and both on-site and off-site remediation.

> What is meant by a product’s grade, as a characteristic of quality? Give an example in the service industry.

> What is the purpose of a budget manual?