Question: What are predatory pricing, dumping, and price

> The manager of Gratiot Flooring estimates operating costs for the year will include $540,000 in fixed costs. Required a. Find the break-even point in sales dollars with a contribution margin ratio of 30 percent. b. Find the break-even point in sales doll

> The following data refer to the most recent fiscal year for Sterritt Company. Amounts are in thousands of dollars. Required Find the following amounts. a. Direct materials used for the year. b. Gross margin for the year. c. Total manufacturing costs for

> The following data refer to the month of May for Bonita Components. Fill in the blanks.

> The following balances are from the accounts of Santa Maria Parts: Direct materials purchased during the quarter amount to $480,000, and the cost of goods sold for the quarter was $1,740,000. Required Reconstruct a cost of goods sold statement and fill i

> Explain how cost accounting supports value creation in the organization.

> Sheffield Advisors offers financial counseling services to self-employed business owners. Sheffield’s operating profits average 22 percent of revenues and its marketing and administrative costs average 30 percent of the cost of services sold. Sheffield A

> Waterman’s WaterWorld Tourist Park has collected the following data for operations for the year: Required a. What is the average selling price for a ticket? b. What is the average variable cost per ticket? c. What is the average contrib

> Annchester Car Service offers limousine service to the local airport. The cost of a trip (one-way) is $95 and the variable costs of a trip are $42, which covers fuel, variable car maintenance, labor, and so on. Fixed costs for the quarter are $24,380. Re

> Braile Gear Works sells a single gear for a price of $55 per unit. The variable costs are $23 per gear and annual fixed costs are $448,000. Required a. What is the break-even level of annual sales for Braile Gear Works? b. The cost analyst tells you that

> In one of its divisions, an aircraft components manufacturer produces experimental navigational equipment for spacecraft and for private transportation companies. Although the products are essentially identical, they carry different product numbers. The

> Refer to the information in Exercise 1-33. The cost analyst working in the CFO’s office at the City Art Museum learns that the space to be rented for the Weekend Lecture Series is owned by a company in which the museum director is a principal investor. A

> Why is cost estimation important for managerial decision making?

> Explain why it is important to consider the concepts of value and value creation in a textbook about cost accounting.

> What are three practical implementation problems when using regression analysis to estimate costs?

> Write out the equation for the target volume (in units) profit equation when the income tax rate is t.

> A local coffee shop has two major product lines—drinks and pastries. If the manager allocates common costs on any objective basis discussed in this chapter, the drinks are profitable, but the pastries are not. The manager is concerned that the supervisor

> What is the function in Microsoft Excel that you can use for CVP analysis?

> Paul & Paul, Inc. is a manufacturing firm. The following selected pieces of information are from July operations:

> Gates Manufacturing reports based on an October 31 fiscal year. As a part of your interview for a cost analyst position, the interviewer provides you with the information on the following page. Required Find the following: a. Cost of goods manufactured.

> Dobel Devices manufactures an electronic lock used in dockless bicycles and scooters. The product’s price and cost characteristics are as follows: Required The company must sell 23,000 units annually in order to earn $93,000 in profits

> Woodrow Economic Advisors (WEA) is a for-profit consulting firm that offers economic analyses and policy recommendations. WEA is organized into two divisions: the Commercial Division and the Defense Division. Commercial clients are charged a fixed fee ne

> Roxford Plastics manufactures and sells model airplane kits for hobbyists for a price of $14. The fixed costs amount to $170,000 per year, of which $105,000 is manufacturing related. At an annual sales volume of 35,000 kits, Roxford earns $71,225 after t

> Algonac Moldings produces a product made from a metal alloy. Two suppliers, Liebold Metal and Cecil Distributors, supply the alloy. Neither supplier can meet Algonac’s typical demand because of capacity constraints. The material from Li

> Merton Electronics operates two retail outlets in Port Wren, one downtown and the other in Docklands. The stores share the use of a corporate staff responsible for functions such as personnel, IT, marketing, purchasing, and so on. The cost of the corpora

> Alwar Brothers is a small, family-owned business that produces animal feed for dairy farms. The administrative offices and manufacturing plant of Alwar share the same building. Financial records provided by the company for the most recent fiscal year sho

> Mount Elliott Fixtures produces a variety of hardware products, primarily for the home construction and remodeling business. The cost accountant provides you with the following data for the year (in $000): Required Prepare the income statement with a sup

> Refer to Exhibit 1.10 (Panel A), which is a heat map based on the profitability of the six districts for The AM Bakery. A new intern tells you that a better heat map is the one shown here, “. . . because the high numbers are all green a

> East Ferry Tool & Die, a manufacturer of parts for agricultural equipment, provides the following financial information for the most recent fiscal year (all costs are in thousands of dollars): Required Prepare an income statement with a supporting co

> Refer to the information in Problem 4-57 requirement (c) for Platt Instruments. The CMO would like a visual representation of the analysis done to arrive at the decision whether to staff internally or outsource to Westmoreland Products. The company can t

> Refer to the information in Problem 4-55 requirement (c) for Spinnaker Museum of Sailing. The museum director continues to be a bit uncertain about the attendance for the upcoming fiscal year and would like a graphical representation of the analysis done

> Clifton Instruments is a small components maker located in Kansas. The company specializes in aircraft instruments and focuses its production around a single family of products. Recently, one of the new members of the company’s board of

> Whitcomb Foods is a small company in Oregon that packages and sells organic juices. Recently, a sales rep from one of the company’s suppliers suggested that Whitcomb could increase its profitability by 50 percent if it introduced a seco

> Cranbrook Used Books experienced the following events during the current year: 1. Incurred $12,000 in selling costs. 2. Took an inventory at year-end and learned that goods costing $55,000 were on hand. This compared with a beginning inventory of $72,000

> Refer to the data in Exercise 6-59. Required Spring Garden Vegetables uses operations costing and assigns conversion costs based on materials cost. Compute the cost per unit of each brand of frozen vegetables in November. Exercise 6-59:

> Spring Garden Vegetables (SGV) processes two brands of frozen vegetables, Valu-PAK and Gourmet. The two brands are processed in one factory using the same production process. The only difference between the two brands is the quality (cost) of the raw veg

> Refer to the data in Exercise 6-57. Required Piper Recreational Vehicles uses operations costing and assigns conversion costs based on materials cost. Compute the expected cost of each model assembled next year. Exercise 6-57:

> Piper Recreational Vehicles (PRV) modifies vans into recreational vehicles. PRV offers two models, the XC-2 and XC-6, which differ in the quality of the basic van and the workmanship and machining detail that are used. The following data reflect expected

> Refer to the opening vignette of Adam Mercer and The AM Bakery. Adam has hired you to help him make the decisions he needs to make. Required Answer the four questions in the critical thinking framework identified in the chapter that will guide your analy

> Refer to the data in Exercise 6-55. Required Witt Recreation Company uses operations costing and assigns conversion costs based on the the direct materials costs. Compute the cost of each model assembled in the second quarter. Exercise 6-55:

> Witt Recreation Company (WRC) makes e-bikes. The company currently manufactures two models, the Coaster and the Traveler, in one of the WRC factories. Both models require the same assembling operations. The difference between the models is the cost of ma

> Consider the cost allocation system used at Tacoma Accessories and Westover Travel in Exercises 6-50 through 6-54. Required The system is referred to as a two-stage cost allocation system because a. Cost is allocated first to intermediate cost pools and

> Refer to the data in Exercise 6-52. Required Draw the cost flow diagram that represents the cost system used by Westover Travel. Exercise 6-52:

> Refer to the data in Exercise 6-50 Required Draw the cost flow diagram that represents the cost system used by Tacoma Accessories. Exercise 6-50:

> Refer to the data in Exercise 6-46. Required a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the staff cost to allocate general operating costs. b. Based on the rates computed in requi

> Refer to the data in Exercise 6-46. Required a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the staff hours to allocate general operating costs. b. Based on the rates computed in requ

> Refer to the data in Exercise 6-46. Required a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses revenue to allocate general operating costs. b. Based on the rates computed in requirement

> Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data for the expected operation in the next quarter follow. Required a. Compute the predetermined overhead rate used to apply general operati

> Refer to the data in Exercise 6-44. Required a. Compute the predetermined overhead rate assuming that Kilbourne Appliances uses direct labor costs to allocate overhead costs. b. Draw the cost flow diagram assuming that Kilbourne Appliances uses direct la

> Gregorie Tool & Die reports the following information for the quarter: Required Select the answer for each of the following costs. a. Variable cost per unit. 1. $30 2. $35 3. $42 4. $45 b. Variable production cost per unit. 1. $30 2. $35 3. $42 4. $4

> Kilbourne Appliances produces two models of beverage coolers for homes and offices, the KA-15 and the KA-24. Data on operations and costs for March follow. Required a. Compute the predetermined overhead rate assuming that Kilbourne Appliances uses direct

> Refer to the data in Exercise 6-38. Required Draw the cost flow diagram assuming that Redfern Audio uses machine-hours to allocate overhead costs. Exercise 6-38:

> Refer to the data in Exercise 6-38. Required Compute the predetermined overhead rate assuming that Redfern Audio uses machine-hours to allocate overhead costs. Exercise 6-38:

> Refer to the data in Exercise 6-38. Required Compute the predetermined overhead rate assuming that Redfern Audio uses direct material costs to allocate overhead costs. Exercise 6-38:

> Refer to the data in Exercise 6-38. Required Compute the predetermined overhead rate assuming that Redfern Audio uses the number of units to allocate overhead costs. Exercise 6-38:

> Refer to the data in Exercise 6-38. Required Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs. Exercise 6-38:

> Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant

> Gullen Partners produces cleaning solvents. On September 1, it had no work-in-process inventory. It started production of 56,000 gallons of solvent in September and completed production of 47,000 gallons. Cost records at Gullen show the following for Sep

> Bremen Fitness Products produces a sports drink. On October 1, it had no work-in-process inventory. It started production of 9,000 cases of the drink in October and shipped 7,800 cases to retailers. (Bremen holds no finished goods inventory.) The costs o

> Duffield Lubricants produces oil-based machine lubricants. On December 1, it had no work-inprocess inventory. It starts production of 86,000 gallons of lubricant in December and completes 72,000 gallons. The costs of the resources used by Duffield in Dec

> For each of the following statements, indicate whether it is true, false, or uncertain. Explain why. Give examples in your answer. a. A cost is something used up to produce revenues in a particular accounting period. b. Variable costs are direct costs; o

> Bostwick Chemicals started business on April 1. The following operations data are available for April for the one solvent it produces. Costs incurred in April follow. There are never any finished goods at Bostwick Chemicals because all production is to o

> In October, Seville Chemicals produced 22,500 barrels of the additive. Manufacturing overhead was $285,000 and the cost per barrel was $16.30. Materials costs were four times greater than labor costs. Required a. What were the labor costs for October? b.

> In May, Seville Chemicals produced 26,000 barrels of the additive. Labor costs were $16,800 and manufacturing overhead was $313,000. The cost per barrel was $15.80. Required What was the materials cost in May?

> Seville Chemicals produces a fuel additive. Operating data for January follow. Seville Chemicals produced 25,125 barrels of the additive in January. Required Compute the cost per barrel of the additive produced in January.

> Lenox Solvents manufactures a special fluid at its Hazelridge plant. Operating data for June follow. The Hazelridge plant produced 1,050,000 liters in June. The plant never has any beginning or ending inventories. Required Compute the cost per liter of l

> Fill in the missing items for the following inventories:

> Fill in the missing items for the following inventories:

> Assume that the following events occurred at Lakewood, Inc. last month. 1. Incurred direct labor costs of $300,000. 2. Completed work on 70 percent of the work in process. Costs are assigned equally across all work in process. 3. Transferred 80 percent o

> Results from a multiple regression of store costs on revenues and area using the data of Waveney DIY Centers (Exercise 5-44) are as follows: Required The managers in the region are interested in opening a new store with expected revenues of $19 million a

> Results from a regression of store costs on store area using the data of Waveney DIY Centers (Exercise 5-44) are as follows: Required The managers in the region are interested in opening a new store with expected area of 50,000 square feet. Assuming the

> The following information is available for Alcoy Partners for the year just ended: Required Select the answer for each of the following costs. a. Variable cost per unit. 1. $12 2. $18 3. $21 4. $25 b. Variable production cost per unit. 1. $12 2. $18 3. $

> Results from a regression of store costs on revenues using the data of Waveney DIY Centers (Exercise 5-44) are as follows. Required The managers in the region are interested in opening a new store with expected revenues of $19 million. Assuming the data

> Refer to the information in Exercise 5-44. Required Prepare a scattergraph based on the store cost and store area data for Waveney DIY Centers in Exercise 5-44. Exercise 5-44:

> Refer to the information in Exercise 5-44. Required Prepare a scattergraph based on the store cost and revenue data for Waveney DIY Centers in Exercise 5-44. Exercise 5-44:

> Results from a multiple regression of factory costs on labor-hours and machine-hours using the data of Fiske Corporation (Exercise 5-36) are as follows: Required Managers expect the plant to operate at 16,000 labor-hours and 21,000 machine-hours next qua

> Results from a regression of factory costs on machine-hours using the data of Fiske Corporation (Exercise 5-36) are as follows: Required Managers expect the plant to operate at 21,000 machine-hours next quarter. Assuming the relationship remains the same

> Results from a regression of factory costs on labor-hours using the data of Fiske Corporation (Exercise 5-36) are as follows: Required Managers expect the plant to operate at 16,000 labor-hours next quarter. Assuming the relationship remains the same wit

> Refer to the information in Exercise 5-36 for Fiske Corporation. Required Prepare a scattergraph based on the factory cost and machine-hour data in Exercise 5-36. Exercise 5-36:

> Refer to the information in Exercise 5-36 for Fiske Corporation. Required Prepare a scattergraph based on the factory cost and labor-hour data for Fiske Corporation in Exercise 5-36. Exercise 5-36:

> Hughes Payroll and Clerical Services (HPCS) provides payroll, bookkeeping, and other services to small businesses. HPCS financial records show the following costs for last quarter (QTR 1): HPCS recorded 4,375 billable hours in QTR 1, and fixed administra

> Hemlock Nutritional Supplements (HNS) provides you with the following accounting records on manufacturing cost for the most recent month: Production was 60,000 units (cases). Fixed manufacturing overhead was $144,000. For the coming year, costs are expec

> Refer to the information in Exercise 1-32. The museum director is considering a proposal by the head of the Neighborhood Outreach Program to keep the Evening Lecture Series but expand it by offering a Weekend Lecture Series as well. The Weekend Series wo

> Summit Corporation manufactures machines for the apparel industry. The production manager and cost analyst reviewed the accounts for the previous quarter and have provided an estimated breakdown of the fixed and variable portions of manufacturing overhea

> Dickerson Consultants offers logistics advice for large retail firms. Dickerson classifies its consultants into three categories, based on their experience and skills. The three levels are partner, senior, and associate. Dickerson quotes prices for prosp

> Collingwood Contractors (CC) designs and builds new model homes for individual customers. CC has developed a reputation in the market for relatively upscale, unique designs with highend finishings. CC has developed several formulas, which it uses to esti

> Gilbert Canned Produce (GCP) packs and sells three varieties of canned produce: green beans, sweet peas, and tomatoes. The company is currently operating at 82 percent of capacity. Worried about the company’s performance, the chief mark

> Lamothe Kitchen and Bath makes products for the home, which it sells through major retailers and remodeling (do-it-yourself, or DIY) outlets. One product that has had varying success is a ceiling fan for the kitchen. The fan comes in three sizes (36-inch

> Rathbone Industries produces and sells an instrument used in hospital monitoring systems. The instrument uses a specialized sensor that Rathbone currently purchases from Norfolk Electronix. Norfolk charges Rathbone $94 per sensor for the 12,000 sensors R

> Harbortown Marine Products (HMP) manufactures and sells various fixtures for boat cabins. One fixture uses a specialized fitting that is not used in any other HMP product. The management of HMP has considered outsourcing the fitting for several years but

> Riverdale Partners wants to introduce a new line of fragrances. Market research indicates that a potential fragrance would sell well in the market priced at $268.80 each. Riverdale requires an operating profit of 28 percent of costs. Required What is the

> Refer to Exercise 2-56. Required Prepare: a. A gross margin income statement. b. A contribution margin income statement. Exercise 2-56:

> Accounting records for The Ralston Company show the following for the most recent fiscal year: Required Prepare: a. A gross margin income statement. b. A contribution margin income statement.

> Your colleague says, “If a company only has one product, it doesn’t matter how we allocate cost because the result will always be the same.” Do you agree? Explain.

> Whitmore Glassware makes a variety of drinking glasses and mugs. The company’s designers have discovered a market for a 16-ounce mug with college logos. Market research indicates that a mug like this would sell well in the market priced at $26. Whitmore

> Refer to Exercise 2-54. Required Compute: a. Product costs per unit. b. Period costs for the period. Exercise 2-54:

> Refer to the data for Rochester Street Taco Shop in Exercise 3-49. Required Suppose RSTS expects to sell 7,000 tacos next month, but the fixed costs are uncertain. Using the Goal Seek function in Microsoft Excel, what must be the fixed costs for RSTS to

> Rochester Street Taco Shop (RSTS) sells a variety of tacos to go all at a price of $4.50 each. The variable cost of an RSTS taco averages $2.40. RSTS incurs monthly fixed costs of $7,350. RSTS is subject to a 20 percent tax rate. Required Using the Goal

> Refer to the data for Grove Audio in Exercise 3-31. Required Using the Goal Seek function in Microsoft Excel: a. What number must Grove Audio sell to break even? b. What number must Grove Audio sell to make an operating profit of $180,000 per year? Exer

> Golden Gate Novelties (GGN) sells souvenir key chains at the local airport. GGN charges $12 per chain. The variable cost for a chain, including the wholesale cost of the chain, packaging, the commission paid to the airport operator, and so on, is $10.40.

> Norwood Stationary has provided the following information (in thousands of dollars) for October. Required Prepare an income statement for October with a supporting cost of goods sold statement.