Question: Nolton Products uses standard costing. It allocates

> Pendleton Engineering makes cutting tools for metal-working operations. It makes two types of tools: R3, a regular cutting tool, and HP6, a high-precision cutting tool. R3 is manufactured on a regular machine but HP6 must be worked on both the regular ma

> OmniSport’s Plastics Department is currently manufacturing 5,000 pairs of skates annually, making full use of its machine capacity. Presented below are the selling price and costs associated with OmniSport’s skates.

> The TechMech Company produces and sells 6,000 modular computer desks per year at a selling price of $500 each. Its current production equipment, purchased for $1,500,000 and with a five-year useful life, is only two years old. It has a terminal disposal

> The Pastel Company must reach a make/buy decision with respect to a highvolume, easily made metal tool, RG1. Sean Gray, the cost analyst, estimates the following costs and production information for the 50,000 units of RG1 that are expected to be put int

> Air Pacific has leased a single jet aircraft that it operates between Vancouver and the Fiji Islands. Only tourist-class seats are available on its planes. An analyst has collected the following information: Assume that fuel costs are unaffected by the

> Broadway Printers operates a printing press with a monthly capacity of 2,000 machine-hours. Broadway has two main customers: Taylor Corporation and Kelly Corporation. Data on each customer for January follows: Kelly Corporation indicates that it wants

> Meals on Wheels (MOW) operates a meal home-delivery service. It has agreements with 20 restaurants to pick up and deliver meals to customers who phone or fax orders to MOW. MOW allocates variable and fixed overhead costs on the basis of delivery time. MO

> Larry Miller, the general manager of Basil Software, scheduled a meeting on June 2, 2016, with Nicole Nguyen, sales manager, Andy Ayim, accountant, and Ellen Eisner, software operations manager, to discuss the development and release of Basil Software&ac

> Della Simpson Inc. sells two popular brands of cookies, Della’s Delight and Bonnie’s Bourbon. Della’s Delight goes through the Mixing and Baking Departments and Bonnie’s Bourbon, a f

> Information Technology, Inc. assembles and sells two products: printers and desktop computers. Customers can purchase either (a) a computer or (b) a computer plus a printer. The printers are not sold without the computer. The result is that the quantity

> Wolverine Corporation is working at full production capacity producing 10,000 units of a unique product, Rosebo. Manufacturing costs per unit for Rosebo are as follows: Direct materials ……………………………………$2 Direct manufacturing labour …………………$3 Manufacturin

> The Beach Comber is a take-out food store at a popular beach resort. Susan Sexton, owner of the Beach Comber, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows: Sexton has a m

> 6. The company has an inventory of 1,000 units of pens that must be sold immediately at reduced prices. Otherwise, the inventory will become worthless. The unit cost that is relevant for establishing the minimum selling price is (a) $4.50, (b) $4.00, (c)

> The following are the Class Company’s unit costs of manufacturing and marketing a high-style pen at an output level of 20,000 units per month: Manufacturing cost Direct materials……â€&b

> Martin Goretsky examines the output and data from an OLS simple linear regression, what does the plot of the residuals tell Mr. Goretsky? Y Indirect Y-y= e Residual Plot Monthly Produced Q = Q Sold Manufacturing 250 Cost Pool 200 37.8 252 150 39.6 2

> Below are the input and results of an OLS linear regression. The president of a specialty fruit juice company believed that for every single degree change in average temperature during the summer months, the profit would decline 3%. This information was

> OLS simple linear regression analysis. (CIMA, heavily adapted) Lisa Aoli, the financial manager at the Casa Real restaurant, is working with Megan Dryden, the marketing manager, to establish if there is any relationship between the newspaper advertising

> Singh Company uses a standard cost system in its manufacturing plant for auto parts. The standard cost of a particular auto part, based on a denominator level of 4,000 output units per year, included 6 machine-hours of variable manufacturing overhead at

> Ken Howard, financial analyst at JVR Corporation, a manufacturer of precision parts, is examining the behaviour of quarterly maintenance costs for budgeting purposes. Howard collects data on machine-hours worked and maintenance costs for the past 26 quar

> Tammy Cat Tree Co. (TCTC) builds luxury cat trees and sells them through the internet to cat owners who want to provide their cats with a more natural environment. At the start of 2015, TCTC carried no inventory. During the year, it produced 1,000 cat tr

> In 2016, only 806,840 Deliman meals were produced and sold to the retirement homes. Smith suspects that retirement home controllers had systematically inflated their 2016 meal estimates. Required: 1. Recall that Deliman uses the master-budget capacity u

> Shen Company is a manufacturer of MP3 players. It implemented standard costs and a flexible budget on January 1, 2015. The president has been pondering how fixed manufacturing overhead should be allocated to products. Machine-hours have been chosen as th

> The Robertson Company uses an absorption-costing system based on standard costs. Total variable manufacturing cost, including direct material cost, is $3 per unit; the standard production rate is 10 units per machine-hour. Total budgeted and actual fixed

> Four Sheets (FS) Company uses standard costing. Kate King, the new president of FS Company, is presented with the following data for 2015: Required: 1. At what percentage of denominator level was the plant operating during 2015? 2. How much fixed manuf

> Shasta Hills, a winery in British Columbia, manufactures a premium white cabernet and sells primarily to distributors. Wine is sold in cases of one dozen bottles. In the year ended December 31, 2015, Shasta Hills sold 242,400 cases at an average selling

> It is the end of 2015. The All-Fixed Company began operations in January 2014. The company is so named because it has no variable costs. All its costs are fixed. All-Fixed is located on the bank of a river and has its own hydroelectric plant to supply po

> University Press produces textbooks for university courses. They recently hired a new editor, Leslie White, to handle production and sales of books for an introduction to accounting course. Leslie’s compensation depends on the gross margin associated wit

> Deli One operates a chain of 10 retirement homes in the Toronto area. Its central food-catering facility, Deliman, prepares and delivers meals to the retirement homes. It has the capacity to deliver up to 1,460,000 meals a year. In 2015, based on estimat

> Pandom Inc. produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during August 201 Required: Fill in the variances in the table below. Use F for favourable and U for unfavourable. Variable Fixe

> AJG Inc. is a manufacturer of the very popular G36 motorcycles. The management at AJG has recently adopted absorption costing and is debating which denominator level concept to use. The G36 motorcycles sell for an average price of $8,500. Budgeted fixed

> Headsmart, a three-year-old company, has been producing and selling a single type of bicycle helmet. Headsmart uses standard costing. After reviewing the statements of comprehensive income for the first three years, Stuart Weil, president of Headsmart, c

> Corporation is a manufacturer of computer accessories. It uses absorption costing based on standard costs and reports the following data for 2015: There are no rate or efficiency variances. Actual operating costs equal budgeted operating costs. The pro

> The following information for 2015 is for Morgan Corporation, which uses standard costing: Static-budget machine-hours …………………………………………33,000 Fixed overhead budget costs ………………………………….$ 5,940,000 Fixed overhead actual costs …………………………………..$ 5,400,000 Va

> 1. Prepare appropriate journal entries for variable and fixed manufacturing overhead (you will need to calculate the different variances to accomplish this). 2.Overhead variances may be used to reconcile the Cost of Goods Sold account at the end of the f

> FlatScreen manufactures flat-panel LCD displays. The displays are sold to major PC manufacturers. Following are some manufacturing overhead data for FlatScreen for the year ended December 31, 2015: FlatScreen’s budget was based on the

> CellOne is a cellular phone service reseller, contracting with major cellular operators for airtime in bulk and then reselling service to retail customers. Having adopted an ABC system last year, CellOne has defined the following activity areasâ&#1

> Klein Surgical Instruments Inc. makes a special line of forceps, SFA, in batches. Klein randomly selects forceps from each SFA batch for quality-testing purposes. Quality-testing costs are batch-level costs. A separate quality-testing section is responsi

> Levie Company uses standard costing. The company prepared its static budget for 2015 at 2,500,000 machine-hours for the year. Total budgeted overhead cost is $31,250,000. The variable overhead rate is $10 per machine-hour ($20 per unit). Actual results f

> Rollie Manufacturing makes, among other things, wheels for roller skates. Manufacturing Department B receives plastic wheel casings from Manufacturing Department A and puts them on axles along with some ball bearings. The wheel casings have been inspecte

> G-Force Corporation is a manufacturer of centrifuges. Fixed and variable manufacturing overhead cost pools are allocated to each centrifuge using budgeted assembly hours. Budgeted assembly time is two hours per unit. The following table shows the budgete

> How does the planning of fixed overhead costs differ from the planning of variable overhead costs?

> Belle’s Treats produces high-quality dog food distributed only through veterinary offices. To ensure that the food is of the highest quality and has taste appeal, Belle has a rigorous inspection process. For quality-control purposes, Belle has a standard

> Beal Manufacturing Company’s costing system has two direct cost categories: direct materials and direct manufacturing labour. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manu

> Mancusco Company uses a flexible budget and standard costs to aid planning and control of its machining manufacturing operations. Its costing system for manufacturing has two direct cost categories (direct materials and direct manufacturing labour—both v

> Yan Floral Creations Inc. makes jewellery in the shape of flowers. Each piece is hand-made and takes an average of 1.5 hours to produce because of the intricate design and scrollwork. Yan uses direct labour-hours to allocate the overhead cost to producti

> Jo Nathan Publishing Company specializes in printing specialty textbooks for a small but profitable college market. Due to the high setup costs for each batch printed, Jo Nathan holds the book requests until demand for a book is approximately 500. At tha

> Amir’s Fleet Feet Inc. produces dance shoes for stores all over the world. While the pairs of shoes are boxed individually, they are crated and shipped in batches. The shipping department records both variable and fixed overhead costs.

> Heather’s Horse Spa (HHS) is an establishment that boards, trains, and pampers horses while their owners are on vacation. Heather sells her service as an “enchanting vacation experience for your horse while you vacation elsewhere.” Horse feed, shampoos,

> The Art Supply Company produces various types of paints. Actual direct manufacturing labour-hours (DMLH) in the factory that produces paint have been higher than budgeted hours for the last few months and the owner, Sarah B. Jones, is concerned about the

> Consider each of the following situations—cases A, B, and C—independently. Data refer to operations for April 2015. For each situation, assume standard costing. Also assume the use of a flexible budget for control of v

> French Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labour-hours. For 2015, fixed manufacturing overhead was budgeted at $4.00 per direct manufacturing labour hour. Actual fixed manuf

> Fresh Inc. is a manufacturer of vacuums and uses standard costing. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In 2015, budgeted fixed manufacturing overhead cost was $18,000,000. Budg

> Refer to Problem 8-29. Required: 1.Prepare journal entries for variable and fixed manufacturing overhead (you will need to calculate the various variances to accomplish this). 2.Overhead variances are written off to the Cost of Goods Sold (COGS) account

> Magic Dice manufactures premium food processors. The following is some manufacturing overhead data for Magic Dice for the year ended December 31, 2015. Required: Calculate the following quantities (you should be able to do so in the prescribed order):

> Byrd Company is a manufacturer of appliances for both residential and commercial use. The company’s accounting and financial reporting system is primarily designed to meet external reporting requirements in accordance with generally acc

> 1. I f ELF sells all 220,000 bulbs produced, what would be the effect on operating income of using each type of capacity as a basis for calculating manufacturing cost per unit? 2. Compare the results of operating income at different capacity levels when

> Earth Light First (ELF), a producer of energy-efficient light bulbs, expects that demand will increase markedly over the next decade. Due to the high fixed costs involved in the business, ELF has decided to evaluate its financial performance using absorp

> The 24-Hour Mart operates a chain of supermarkets. Its best-selling soft drink is Fruitslice. Demand ( D ) in April for Fruitslice at its Regina supermarket is estimated to be 7,200 cases (24 cans in each case). In March, the Regina supermarket estimated

> ShiraHonig, the chief financial officer of Silicon Valley Computer (SVC), is an enthusiastic advocate of JIT production. The SVC keyboard division that produces keyboards for personal computers has made dramatic improvements in its operations by a highly

> Manufacturing companies participating in a supply chain initiative linking manufacturers and retailers recently made the following comments on the benefits of the initiative: ■ “Receiving better information has allowed us to forecast and reduce inventory

> The Award Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 10,000 medals each month. Current production and sales are 7,500 medals per month. The company normally char

> French Bread Company has two direct-cost categories: direct materials and direct manufacturing labour. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labour-hours (DMLH). Baguettes are baked in batc

> Xylon Processing Limited is a chemical manufacturer. Two chemicals, Aardyn and Gargaton, are produced from the common chemical xylon. The joint process requires 15,000 litres of xylon to be processed at a cost of $21,500 (including the cost of the chemic

> The Mayfield Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: Required: 1. Mayfield is considering using some modern jigs and tools in the finishing operation that would increas

> Taylor Furniture produces and sells specialty mattresses. Production is a machine-intensive process. Taylor’s variable costs are direct material costs, variable machining costs, and sales commissions. Marion Taylor, the owner, is planni

> The Auto Wash Company has just today paid for and installed a special machine for polishing cars at one of its several outlets. It is the first day of the company’s fiscal year. The machine costs $20,000. Its annual cash operating costs total $15,000. Th

> Sanchez Corporation runs two convenience stores, one in Vancouver and one in Surrey. Operating income for each store in 2015 is as follows: The equipment has a zero disposal value. In a senior management meeting, Maria Lopez, the management accountant

> An employee in the accounting department of a certain business was moving a personal computer from one room to another. As he came alongside an open stairway, he slipped and let the computer get away from him. It went careening down the stairs with a gre

> 1. Ewing Computers makes 5,000 units of a circuit board, CB76, at a cost of $230 each. Variable cost per unit is $180 and fixed cost per unit is $50. HT Electronics offers to supply 5,000 units of CB76 for $210. If Ewing buys from HT it will be able to s

> Answer the following questions. 1. A company has an inventory of 1,000 assorted parts for a line of missiles that has been discontinued. The inventory cost is $88,000. The parts can be either (a) remachined at total additional costs of $33,000 and then s

> Jill Goldstein has been collecting data over the last year in an effort to understand the cost drivers of distribution costs at Waterloo Corporation, a manufacturer of brass door handles. Distribution costs include the costs of organizing different shipm

> Dave Ladouceur owns a catering company that prepares banquets and parties for both individual and business functions throughout the year. His business is seasonal, with a heavy schedule during the summer months and the year-end holidays and a light sched

> Young Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labour-hours (DMLH) per suit. Data pertaining to fixed manufacturing overhead costs for June 2015 are $62,400 budgeted and $63,916 actual. Required: 1

> Garvin Corporation manufactures a children’s bicycle, model CT8. Garvin currently manufactures the bicycle frame. During 2016, Garvin made 30,000 frames at a total cost of $900,000. Ryan Corporation has offered to supply as many frames as Garvin wants at

> Sandy Smith, managing director of the Calgary Consulting Group, is examining how overhead costs behave with changes in monthly professional labour-hours billed to clients. Assume the following historical data: Total Overhead Costs…………..Professional Labo

> Gower Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2016 Gower Inc., produced 75,000 units of product in 2016. Gower’s managemen

> Lorenzo operates a brushless car wash. Incoming cars are put on an automatic, continuously moving conveyor belt. Cars are washed as the conveyor belt carries the car from the start station to the finish station. After the car moves off the conveyor belt,

> A number of terms are listed below: Required: Select the terms from the above list to complete the following sentences. There are several methods of quantitative analysis that a management team can use to predict the value of a single overhead cost p

> Rehe Company sells its razors at $3 per unit. The company uses a first-in, first-out actual costing system. A fixed manufacturing cost rate is computed at the end of each year by dividing the actual fixed manufacturing costs by the actual production unit

> Osawa Inc. planned and actually manufactured 200,000 units of its single product in 2015, its first year of operation. Variable manufacturing cost was $20 per unit produced. Variable operating (non-manufacturing) cost was $10 per unit sold. Planned and a

> The variable manufacturing costs per unit of BigScreen Corporation are: Required: 1. Prepare operating statements of comprehensive income for BigScreen Corporation in January, February, and March of 2015 under throughput costing. 2. Contrast the result

> BigScreen Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March of 2015 are: Required: 1. Present statements of comprehensive income for BigScreen Corporation in Janua

> Assume the same facts as in Exercise 19-24, except now Road Warrior uses only two trigger points, the completion of good finished units of product and the sale of finished goods. Any under- or overallocated conversion costs are written off monthly to Cos

> Young Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct materials costs, direct manufacturing labour costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead

> Assume the same facts as in Exercise 19-23, except that Road Warrior now uses a backflush costing system with the following two trigger points: ■ Purchase of direct materials. ■ Sale of finished goods. The Inventory Control account will include direct ma

> Road Warrior Corporation assembles handheld computers that have scaled-down capabilities of laptop computers. Each handheld computer takes 6 hours to assemble. Road Warrior uses a JIT production system and a backflush costing system with three trigger po

> The Champion Hardware Company manufactures specialty brass door handles at its Kitchener plant. Champion is considering implementing a JIT production system. The following are the estimated costs and benefits of JIT production: a. Annual additional tooli

> Devin Sports Cars (DSC) has implemented a balanced scorecard to measure and support its just-in-time production system. In the learning and growth category, DSC measures the percentage of employees who are cross-trained to perform a wide variety of produ

> Morgan Company’s annual demand for Model X253 is 10,000 units. Morgan is unsure about the relevant carrying cost per unit per year and the relevant ordering cost per purchase order. This table presents six possible combinations of carry

> Lakeland Company, which produces lawn mowers, purchases 18,000 units of a rotor blade part each year at a cost of $60 per unit. Lakeland requires a 15% annual rate of return on investment. In addition, the relevant carrying cost (for insurance, materials

> The Cloth Centre sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming in

> Athletic Textiles (AT) manufactures the soccer jerseys that Fan Base (FB) sells to its customers. AT has recently installed computer software that enables its customers to conduct “one-stop” purchasing using state-of-the-art website technology. FB’s orde

> Fan Base (FB) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its soccer jerseys product line. This is a highly popular item. Data for 2015 are:

> A number of terms are listed below: Required: Select the terms from the above list to complete the following sentences. Supply-chain strategy decisions determine __________________ activities. Managing inventory involves the identification of three rel

> A number of terms are listed below: Agility………………………………………………………..………………..value-added cost Capacity…………………………………………………………………………….capacity cost non-value-added cost…………………………..……..denominator-level variance fixed overhead rate variance……………………...producti

> Mendola Corp. has an extensive job-costing facility that uses a variety of metals. Consider each requirement independently. Required: 1. Job 372 uses a particular metal alloy that is not used for any other job. Assume that scrap is material in amount an

> Bright Goods assembles washing machines at its Cambridge plant. In February 2015, 60 tumbler units that cost $44 each from a new supplier were defective and had to be disposed of at zero disposal price. That new supplier is now bankrupt. Bright Goods was

> Bamber Kitchens produces a variety of items in accordance with special job orders from hospitals, plant cafeterias, and university dormitories. An order for 2,500 cases of mixed vegetables costs $6 per case: direct materials, $3; direct manufacturing lab

> Refer to the information in Exercise 18-23. Suppose Chipcity determines standard costs of $200 per equivalent unit for direct materials and $75 per equivalent unit for conversion costs for both beginning work-in-process and work done in the current perio

> Refer to the information in Exercise 18-24. Required: Do Exercise 18-24 using the FIFO method of process costing. Data from Exercise 18-24: Chipcity Inc. is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the