Question: Suppose the assembly division at Quality Time

> Merchandise is sold on account to a customer for $8,000, terms FOB s hipping point, 1/10, n/30. The seller paid the freight of $300. Determine the following: (a) amount of the sale, (b) amount debited to Accounts Receivable, (c) amount of the discount f

> During the current year, merchandise is sold for $6,400,000. The cost of the goods sold is $5,376,000. a. What is the amount of the gross profit? b. Compute the gross profit percent. c. Will the income statement necessarily report a net income? Explain.

> The prepaid insurance account had a balance of $9,600 at the beginning of the year. The account was increased for $28,800 for premiums on policies purchased during the year. What is the adjustment required at the end of the year for each of the following

> Answer each of the following independent questions concerning supplies and the adjustment for supplies. a. The balance in the supplies account, before adjustment at the end of the year, is $3,500. What is the amount of the adjustment if the amount of sup

> At the balance sheet date, a business owes a five-year mortgage note payable of $480,000, the terms of which provide for monthly payments of $8,000. Explain how the liability should be classified on the balance sheet.

> Identify each of the following as (a) a current asset or (b) property, plant, and equipment: 4. Office Equipment 5. Prepaid Insurance 6. Supplies 1. Accounts Receivable 2. Building 3. Cash

> Lowe’s Companies Inc. (LOW) operates over 1,800 home improvement retail stores and is a competitor of The Home Depot (HD). The following data (in millions) were adapted from a recent financial statement of Loweâ&#12

> Compare the Target results in MBA 4-5 with those of Wal-Mart (WMT) shown in the chapter illustration. Comment on the differences. Data from MBA 4-5: Target Corp. (TGT) operates retail stores throughout the United States and is a major competitor of Wal-

> Caterpillar Inc. (CAT) produces and sells various types of equipment, including tractors, loaders, and mining equipment. The following data (in millions) were adapted from recent financial statements of Caterpillar. 1. Compute the gross

> Tiffany & Co. (TIF) designs and sells jewelry including rings, watches, and necklaces throughout the world. The following data (in millions) were taken from recent financial statements of Tiffany: 1. Compute the return on assets for

> ExxonMobil Corporation (XOM) explores, produces, and distributes oil and natural gas. The Coca-Cola Company (KO) produces and distributes soft drink beverages, including Coke. Wal-Mart Stores, Inc., (WMT) operates retail stores and supermarkets. 1. The

> Pfizer Inc. (PFE) discovers, produces, and distributes medicines, including Celebrex and Lipitor. Ford (F) Motor Co. develops, markets, and produces automobiles and trucks. Microsoft Corporation (MSFT) develops, produces, and distributes a variety of com

> The following data (in millions) were adapted from recent financial statements of Tootsie Roll Industries Inc. (TR): 1. What is Tootsie Roll’s percent of the cost of sales to sales? Round to one decimal place. 2. The pe

> The financial statements of The Hershey Company (HSY) are shown in Exhibits 6 through 9 of this chapter. Based upon these statements, answer the following questions. 1. What are Hershey’s sales (in millions)? 2. What is Hershey’s cost of sales (in million

> JetBlue Airways Corporation (JBLU) is a passenger airline with flights to destinations throughout the United States, the Caribbean, and Latin America. Costco (COST) operates membership retail warehouses offering a variety of products including foods, elec

> Interpublic Group of Companies Inc. (IPG) is an advertising and marketing service company that operates throughout the world. In addition, the company provides event planning, public relations, and brand management services. Twitter Inc. (TWTR) operates

> Using adjustment data listed in E4-16, indicate the effects the adjustment for estimated customer refunds and returns on the liquidity metric working capital and profitability metric gross profit percent. Indicate in parenth

> Using adjustment data listed in E4-15, indicate the effects the inventory shrinkage adjustment on the liquidity metric working capital and profitability metric gross profit percent. Data from Exercise 4-15: Intrax Inc.’s perpetual inventory records indica

> Using transactions listed in P4-2, indicate the effects of each transaction on the liquidity metric working capital and profitability metric gross profit percent. Indicate the gross profit percent for each sale (rounding to one decimal place) in parentheses

> Using transactions listed in P4-1, indicate the effects of each transaction on the liquidity metric working capital and profitability metric gross profit percent. Data from Problem 4-1: The following selected transactions were completed by Epic Co. during

> Companies with low gross profit and markup percents often have higher volumes of sales than companies with high gross profit and markup percents. 1. Comment on the preceding statement. 2. The following data (in millions) wer

> Compare the gross profit percent, average markup percent, and ratio of sales to assets for Deere & Company and Caterpillar Inc. using the results of MBA 4-7 and MBA 4-8. Comment on any differences. Data from MBA 4-7: Deere & Compa

> Target Corp. (TGT) operates retail stores throughout the United States and is a major competitor of Wal-Mart. The following data (in millions) were adapted from recent financial statements of Target. 1. Compute the gross profit percent f

> Osborn, Inc., produces cell phone equipment. Amanda Westerly, Osborn’s president, implemented a quality-improvement program that has now been in operation for 2 years. The cost report shown here has recently been issued. Required: 1. F

> The Russell Company 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 am

> Heyer Appliances assembles dishwashers at its plant in Tuscaloosa, Alabama. In February 2017, 60 circulation motors that cost $110 each (from a new supplier who subsequently went bankrupt) were defective and had to be disposed of at zero net disposal val

> Barrett Kitchens produces a variety of items in accordance with special job orders from hospitals, plant cafeterias, and university dormitories. An order for 2,100 cases of mixed vegetables costs $9 per case: direct materials, $4; direct manufacturing la

> Suppose LogicCo determines standard costs of $215 per equivalent unit for direct materials and $92 per equivalent unit for conversion costs for both beginning work in process and work done in the current period. Required: 1. Do Exercise 18-29 using

> Refer to the information in Exercise 18-29. Required: 1. Do Exercise 18-29 using the FIFO method of process costing. 2. Should LogicCo’s managers choose the weighted-average method or the FIFO method? Explain briefly. From exercise 2

> LogicCo is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectabl

> Spheres Toys manufactures globes at its San Fernando facility. The company provides you with the following information regarding operations for April 2017: Total globes manufactured……….20,000 Globes rejected as spoiled units…….750 Total manufacturing cos

> Plastique produces parts for use in various industries. Plastique uses a job-costing system. The nature of its process is such that management expects normal spoilage at a rate of 2% of good parts. Data for last month is as follows: Production (units)………

> Required: 1. Do Exercise 18-25 using the FIFO method. 2. What are the managerial issues involved in selecting or reviewing the percentage of spoilage considered normal? How would your answer to requirement 1 differ if all spoilage were viewed as normal?

> The Reward One Company manufactures windows. Its manufacturing plant has the capacity to produce 12,000 windows each month. Current production and sales are 10,000 windows per month. The company normally charges $250 per window. Cost information for the

> LaCroix Company produces handbags from leather of moderate quality. It distributes the product through outlet stores and department store chains. At LaCroix’s facility in northeast Ohio, direct materials (primarily leather hides) are ad

> Required: For the data in Exercise 18-21, use the FIFO method to summarize the total costs to account for; calculate the cost per equivalent unit for direct materials and conversion costs; and assign costs to units completed and transferred out (includin

> Refer to the information in Exercise 18-21. Suppose MacLean Manufacturing Company uses the FIFO method of process costing instead of the weightedaverage method. Required: Compute equivalent units for direct materials and conversion costs. Show physical

> For the data in Exercise 18-21, summarize the total costs to account for; calculate the cost per equivalent unit for direct materials and conversion costs; and assign costs to units completed and transferred out (including normal spoilage), to abnormal s

> Consider the following data for November 2017 from MacLean Manufacturing Company, which makes silk pennants and uses a process-costing system. All direct materials are added at the beginning of the process, and conversion costs are added evenly during th

> The following data, in physical units, describe a grinding process for January: Work in process, beginning……………19,300 during current period…………………145,400 To account for………………………….164,700 Spoiled units……………………………..12,000 Good units completed and transferr

> Lawrence Company is a manufacturer of contemporary door handles. The vice president of Design attends home shows twice a year so the company can keep current with home trends. Because of its volume, Lawrence uses process costing to account for productio

> Egyptian Spa produces two different spa products: Relax and Refresh. The company uses three operations to manufacture the products: mixing, blending, and packaging. Because of the materials used, Relax is produced in powder form in the mixing department,

> Suppose that Trendy uses the FIFO method instead of the weighted-average method in all of its departments. The only changes to Exercise 17-31 under the FIFO method are that total transferred-in costs of beginning work in process on June 1 are $45,000 (in

> Trendy Clothing, Inc. is a manufacturer of winter clothes. It has a knitting department and a finishing department. This exercise focuses on the finishing department. Direct materials are added at the end of the process. Conversion costs are added evenly

> 1. The Cozy Company manufactures slippers and sells them at $10 a pair. Variable manufacturing cost is $5.75 a pair, and allocated fixed manufacturing cost is $1.75 a pair. It has enough idle capacity available to accept a one-time-only special order of

> Required: 1. Do Exercise 17-29 using the FIFO method. 2. ZanyBrainy’s management seeks to have a more consistent cost per equivalent unit. Which method of process costing should the company choose and why? From exercise 29: ZanyBrainy

> ZanyBrainy Corporation makes interlocking children’s blocks in a single processing department. Direct materials are added at the start of production. Conversion costs are added evenly throughout production. ZanyBrainy uses the weighted-

> The Carter Furniture Company needs to determine the cost of two work orders for December 2017. Work Order 1200A is for 250 painted, unassembled chests and Work Order 1250A is for 400 stained, assembled chests. The following information pertains to these

> Required: For the data in Exercise 17-24, use the FIFO method to summarize the total costs to account for, calculate the cost per equivalent unit for direct materials and conversion costs, and assign costs to units completed (and transferred out) and to

> Required: For the data in Exercise 17-24, summarize the total costs to account for, calculate the cost per equivalent unit for direct materials and conversion costs, and assign costs to the units completed (and transferred out) and units in ending work i

> The assembly division of Quality Time Pieces, Inc. uses the weighted-average method of process costing. Consider the following data for the month of May 2017: Required: Compute equivalent units for direct materials and conversion costs. Show physical un

> Dot and Ken Ice Cream uses a mixing department and a freezing department in producing its ice cream. Its process-costing system in the mixing department has two direct materials cost categories (ice cream mix and flavorings) and one conversion cost pool.

> Refer to requirement 2 of Exercise 17-21. Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. Also prepare a journal entry to transfer out the cost of goods completed. Show the postings to the Work in Proce

> Candid, Inc. is a manufacturer of digital cameras. It has two departments: assembly and testing. In January 2017, the company incurred $800,000 on direct materials and $805,000 on conversion costs, for a total manufacturing cost of $1,605,000. Required

> Answer the following questions. 1. Robinson Computers makes 5,700 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. Peach Electronics offers to supply 5,700 units of CB76 for $210. If R

> Royston, Inc., is a large food-processing company. It processes 150,000 pounds of peanuts in the peanuts department at a cost of $180,000 to yield 12,000 pounds of product A, 65,000 pounds of product B, and 16,000 pounds of product C. â–&nbsp

> Jack Bibby is a prospector in the Texas Panhandle. He has also been running a side business for the past couple of years. Based on the popularity of shows such as “Rattlesnake Nation,” there has been a surge of interes

> (Cheatham and Green, adapted) Crispy, Inc., is a producer of potato chips. A single production process at Crispy, Inc., yields potato chips as the main product, as well as a byproduct that can be sold as a snack. Both products are fully processed by the

> Nervana Soy Products (NSP) buys soybeans and processes them into other soy products. Each ton of soybeans that NSP purchases for $350 can be converted for an additional $210 into 650 pounds of soy meal and 100 gallons of soy oil. A pound of soy meal can

> Tasty Foods produces two types of microwavable products: beef-flavored ramen and shrimp-flavored ramen. The two products share common inputs such as noodle and spices. The production of ramen results in a waste product referred to as stock, which Tasty d

> Sinclair Oil & Gas, a large energy conglomerate, jointly processes purchased hydrocarbons to generate three nonsalable intermediate products: ICR8, ING4, and XGE3. These intermediate products are further processed separately to produce crude oil, nat

> The Cook Company operates a simple chemical process to convert a single material into three separate items, referred to here as X, Y, and Z. All three end products are separated simultaneously at a single splitoff point. Products X and Y are ready for sa

> The Tempura Spirits Company produces two products—methanol (wood alcohol) and turpentine—by a joint process. Joint costs amount to $124,000 per batch of output. Each batch totals 9,500 gallons: 25% methanol and 75% turpentine. Both products are processed

> Sweeney Company is one of the world’s leading corn refiners. It produces two joint products—corn syrup and corn starch—using a common production process. In July 2017, Sweeney reported the following p

> Quality Chicken is computing the ending inventory values for its July 31, 2017, balance sheet. Ending inventory amounts on July 31 are 15 pounds of breasts, 4 pounds of wings, 6 pounds of thighs, 5 pounds of bones, and 2 pounds of feathers. Quality Chick

> Answer the following questions. 1. A company has an inventory of 1,300 assorted parts for a line of missiles that has been discontinued. The inventory cost is $71,000. The parts can be either (a) remachined at total additional costs of $27,500 and then

> Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows: Joint cost of production in July 2017 was $50. A special shipment of 40 pounds of breasts

> Jim Dandy Auto Sales uses all types of media to advertise its products (television, radio, newspaper, Internet, and so on). At the end of 2016, the company president, Jim McKinnley, decided that all advertising costs would be incurred by corporate headqu

> Couture Corp sells Samsung 7 cases. It has a Men’s Division and a Women’s Division. Couture is now considering the sale of a bundled product called Dynamic Duo consisting of Smarty, a men’s case, and

> Gordon Grimes, a self-employed consultant near Atlanta, received an invitation to visit a prospective client in Seattle. A few days later, he received an invitation to make a presentation to a prospective client in Denver. He decided to combine his visit

> Evan and Brett are students at Berkeley College. They share an apartment that is owned by Brett. Brett is considering subscribing to an Internet provider that has the following packages available: Package………………….…………………..Per Month A. Internet access…………

> Consider E-books again. The controller of E-books reads a widely used textbook that states that “the reciprocal method is conceptually the most defensible.” He seeks your assistance. Required: 1. Describe the key features of the reciprocal method. 2.

> E-books, an online book retailer, has two operating departments— corporate sales and consumer sales—and two support departments—human resources and information systems. Each sales department conducts

> Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments—administrative services (AS) and information systems (IS)—and two operating departments&

> Chocolat Inc. decides to examine the effect of using the dual-rate method for allocating truck costs to each roundtrip. At the start of 2017, the budgeted costs were: Variable cost per round-trip……â€&br

> An analysis of Pineway’s operating-income changes between 2016 and 2017 shows the following: Operating income for 2016…………………….$1, 500,000 Add growth component……………………………….91,000 Deduct price-recovery component…………….(82,000) Add productivity component………

> Chocolat Inc. is a producer of premium chocolate based in Palo Alto. The company has a separate division for each of its two products: dark chocolate and milk chocolate. Chocolat purchases ingredients from Wisconsin for its dark chocolate division and fr

> Emcee Inc. prepared the budget for 2017 assuming a 20% market share based on total sales in the Midwest region of the United States. The total fruit drinks market was estimated to reach sales of 1.25 million cartons in the region. However, actual total s

> Emcee Inc. manufactures and sells two fruit drinks: Kostor and Limba. Budgeted and actual results for 2017 are as follows: Required: 1. Compute the total sales-volume variance, the total sales-mix variance, and the total sales-quantity variance. (Calcul

> The Hiro Corporation sells two brands of wine glasses: Plain and Chic. Hiro provides the following information for sales in the month of June 2017: Static-budget total contribution margin…………………………$15,525 Budgeted units to be sold of all glasses……………………2

> The Chicago Tigers play in the American Ice Hockey League. The Tigers play in the Downtown Arena, which is owned and managed by the City of Chicago. The arena has a capacity of 15,000 seats (5,500 lower-tier seats and 9,500 upper-tier seats). The arena c

> Bergen Corporation has three divisions: pulp, paper, and fibers. Bergen’s new controller, David Fisher, is reviewing the allocation of fixed corporate-overhead costs to the three divisions. He is presented with the following information

> Rembrandt Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a 300-room hotel, a casino, and a restaurant. As Rembrandt’s new controller, your manager asks you to recommend the basis the hotel should

> Reidland Manufacturing has four divisions: Acme, Dune, Stark, and Brothers. Corporate headquarters is in Minnesota. Reidland corporate headquarters incurs costs of $16,800,000 per period, which is an indirect cost of the divisions. Corporate headquarters

> Best Drugs is a distributor of pharmaceutical products. Its ABC system has five activities: Activity Area Cost Driver Rate in 2017 1. Order processing…………â€&brvba

> Instant Service (IS) repairs printers and photocopiers for five multisite companies in a tristate area. IS’s costs consist of the cost of technicians and equipment that are directly traceable to the customer site and a pool of office ov

> Pineway Electric manufactures electric motors. It competes and plans to grow by selling high-quality motors at a low price and by delivering them to customers in a reasonable time after receiving customers’ orders. There are many other manufacturers who

> Enviro-Tech has only two retail and two wholesale customers. Information relating to each customer for 2017 follows (in thousands): Enviro-Tech’s annual distribution-channel costs are $33 million for wholesale customers and $12 million

> Harold Monette vacationed at Lake Tahoe last winter. Unfortunately, he broke his ankle while skiing and spent two days at the Sierra University Hospital. Monette’s insurance company received a $4,950 bill for his two-day stay. One item that caught Monett

> Happy Times Hotel operates a 100-room hotel near a busy amusement park. During June, a 30-day month, Happy Times Hotel experiences a 70% occupancy rate from Monday evening through Thursday evening (weeknights). On Friday through Sunday evenings (weekend

> Arnold Manufacturing, Inc., plans to develop a new industrial powered vacuum cleaner for household use that runs exclusively on rechargeable batteries. The product will take 6 months to design and test. The company expects the vacuum sweeper to sell 12,0

> KidsPlay, Inc., manufactures and sells table sets. In 2016, it reported the following: Units produced and sold 3,000 Investment…………………………………..$3,000,000 Markup percentage on full cost…………………10% Rate of return on investment……………………15% Variable cost per un

> Jason Brady is the managing partner of a business that has just finished building a 60-room motel. Brady anticipates that he will rent these rooms for 15,000 nights next year (or 15,000 room-nights). All rooms are similar and will rent for the same price

> Solar Energy Systems (SES) sells solar heating systems in residential areas of eastern Pennsylvania. A successful sale results in the homeowner purchasing a solar heating system and obtaining rebates, tax credits, and financing for which SES completes al

> Neuro Instruments uses a manufacturing costing system with one direct-cost category (direct materials) and three indirect-cost categories: a. Setup, production-order, and materials-handling costs that vary with the number of batches b. Manufacturing-op

> Assume the same facts for Acton Corporation as in Problem 20-37, except that now assume Acton uses a JIT production system and backflush costing with two trigger points for making entries in the accounting system: â–  Completion of good

> Fancy Foods is considering replacing all 12 of its meat scales with new, digital ones. The old scales are fully depreciated and have no disposal value. The new scales cost $120,000 (in total). Because the new scales are more efficient and more accurate

> Johnny Buster owns Entertainment World, a place that combines fast food, innovative beverages, and arcade games. Worried about the shifting tastes of younger audiences, Johnny contemplates bringing in new simulators and virtual reality games to maintain

> The Kuhl Brothers own a frozen custard ice cream shop. The brothers currently are using a machine that has been in use for the last 4 years. On January 1, 2017, the Kuhl Brothers are considering buying a new machine to make their frozen custard. The Kuhl

> Sage Laundromat is trying to enhance the services it provides to customers, mostly college students. It is looking into the purchase of new high efficiency washing machines that will allow for the laundry’s status to be checked via smar