All Related Questions of Cost Accounting

Q: Consider the Business Application “Fraudulent Reporting of Project Completion to Improve

Consider the Business Application “Fraudulent Reporting of Project Completion to Improve Financial Performance.” Would a solution to the problem of misreporting in the case of projects be solved by wr...

Q: One of the issues we identified with traditional costing systems is that

One of the issues we identified with traditional costing systems is that all costs are allocated using volume-related drivers, such as direct labor-hours. How is time-driven ABC, which relies on minut...

Q: The cost accounting manager at your business says that he is trying

The cost accounting manager at your business says that he is trying to choose between a job costing system and an ABC system. How would you respond?

Q: Consider the Business Application feature “Technology, Data Analysis, Customer

Consider the Business Application feature “Technology, Data Analysis, Customer Profitability, and Cost of Quality.” What does it mean to “fire a customer”? Why would a firm want to do this? How would...

Q: I have to pay for capacity whether it is used or not

I have to pay for capacity whether it is used or not. Therefore, excess or idle capacity really doesn’t cost me anything.” Do you agree? Why?

Q: Would process costing work well for a service firm? Why or

Would process costing work well for a service firm? Why or why not?

Q: Consider the Business Application “Managing Excess Capacity Resources—The Case

Consider the Business Application “Managing Excess Capacity Resources—The Case of Employees.” In a related article, the authors write that manufacturers would “probably not try to pass them [excess ca...

Q: Consider a company with two producing departments and one service department.

Consider a company with two producing departments and one service department. The service department distributes its costs to the producing departments on the basis of the number of employees in each...

Q: What are some of the factors that a company needs to consider

What are some of the factors that a company needs to consider in addition to cost savings when deciding whether to outsource a service department, such as Information Services?

Q: Surf Beach State College (SBSC) has a business school with

Surf Beach State College (SBSC) has a business school with three products: undergraduate degrees, graduate degrees, and executive education. SBSC has three service departments: Computer Support, Caree...

Q: Consider a firm with three service departments (S1–S3)

Consider a firm with three service departments (S1–S3) with a pattern of usage as follows: That is, service department S2 uses 10 percent of the service from S1, service department S...

Q: This chapter indicated that joint costing is used for inventory valuation and

This chapter indicated that joint costing is used for inventory valuation and regulatory purposes. Under what conditions might the method of joint cost allocation have an impact on other decisions?

Q: How is joint cost allocation like service department cost allocation?

How is joint cost allocation like service department cost allocation?

Q: In what ways is joint cost allocation similar to the allocation of

In what ways is joint cost allocation similar to the allocation of fixed costs? In what ways is it different?

Q: Heidelberg Fabrication manufactures two products, G-09 and G-

Heidelberg Fabrication manufactures two products, G-09 and G-35: Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow: Re...

Q: Regular Company produces audio equipment, specifically headphones and speakers. A

Regular Company produces audio equipment, specifically headphones and speakers. A new CEO has just been hired and announces a new policy that if a product cannot earn a markup of at least 25 percent,...

Q: You are working at a hotel in a resort location. The

You are working at a hotel in a resort location. The manager says that the hotel must raise the rates in the winter when it has fewer tourists because the cost per room is much higher. How would you r...

Q: Brunswick Home Remodelers (BHM) uses a job order cost system

Brunswick Home Remodelers (BHM) uses a job order cost system. The following debits (credits) appeared in Work-in-Process Inventory for April: BHM applies overhead to production at a predetermined rate...

Q: Jason’s Custom Tooling (JCT) uses a job order cost system

Jason’s Custom Tooling (JCT) uses a job order cost system and applies overhead using a predetermined overhead rate based on direct labor costs. The following debits (credits) appeare...

Q: Audubon, Inc. uses a predetermined factory overhead rate based on

Audubon, Inc. uses a predetermined factory overhead rate based on machine-hours. For October, Audubon recorded $4,500 in overapplied overhead, based on 34,100 actual machine-hours worked and actual ma...

Q: Wanda Instrumentation produces navigational equipment for ships, aircraft (both staffed

Wanda Instrumentation produces navigational equipment for ships, aircraft (both staffed and drones), and land vehicles. The parts are produced to specification by their customers. Depending on the cus...

Q: Refer to the information in Exercise 7-41. The controller

Refer to the information in Exercise 7-41. The controller at Wanda Instrumentation chose direct materials cost as the allocation base in Year 2, based on what the financial staff thought reflected the...

Q: Heidt Cleaning Services (HCS) is a local custodial service company

Heidt Cleaning Services (HCS) is a local custodial service company serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business s...

Q: In October, Temptations Event Planners (TEP) planned events for

In October, Temptations Event Planners (TEP) planned events for two clients. TEP worked 140 hours for Ward Corporation and 240 hours for Girardin Industries. TEP bills clients at the rate of $350 per...

Q: Farnsworth Executive Coaching (FEC) offers services to firms in advising

Farnsworth Executive Coaching (FEC) offers services to firms in advising executives on improving productivity and leadership. For August, FEC worked 660 hours for Grace Corporation and 390 hours for T...

Q: Queenston Professional Support (QPS) provides professional services (IT,

Queenston Professional Support (QPS) provides professional services (IT, payroll and billing, and so on) to firms requiring temporary help in those areas. QPS bills clients for its various services ba...

Q: Clarita Contracting builds roads, tunnels, bridges, and other transportation

Clarita Contracting builds roads, tunnels, bridges, and other transportation infrastructure. The following are the budgeted costs and time (months) to a given stage of completion for a project to upgr...

Q: Customers don’t cost money; they bring in revenue.” Do you

Customers don’t cost money; they bring in revenue.” Do you agree? Why?

Q: Fulton Construction is a general contractor for large construction projects. The

Fulton Construction is a general contractor for large construction projects. The budget costs and the time to reach a particular percentage of completion (in months) follow. Also shown are the actual...

Q: Armada Shipping is a global logistics company. The company is organized

Armada Shipping is a global logistics company. The company is organized into two divisions: Contracts and Retail. The Contracts Division, which is by far the larger division, handles customers who hav...

Q: Refer to the information in Exercise 8-49. Required

Refer to the information in Exercise 8-49. Required a. Prepare a production cost report for August using the weighted-average method. b. Is the ending inventory higher using FIFO or the weighted-avera...

Q: Lincolnshire Lumber sells boards for many uses including wood floors. For

Lincolnshire Lumber sells boards for many uses including wood floors. For floors, the boards are sold to local installers or do-it-yourself homeowners. The boards go through up to four processes, alth...

Q: Refer to the information in Exercise 8-51. Required

Refer to the information in Exercise 8-51. Required a. Prepare a production cost report using the FIFO method. b. Is the ending inventory higher using FIFO or the weighted-average method? Why? c. Woul...

Q: McClellan Recreation manufactures and sells two models of paddle boards: Starter

McClellan Recreation manufactures and sells two models of paddle boards: Starter and Pro. The Starter model is a basic board used for instruction and purchased by novices. The Pro model is made with p...

Q: Wakefield Instruments manufactures three digital piano models, which differ only in

Wakefield Instruments manufactures three digital piano models, which differ only in the components included: Solo, Recital, and Concert. Production takes place in two departments, Assembly and Finishi...

Q: Edlie Accessories (EA) makes travel bags, both for sale

Edlie Accessories (EA) makes travel bags, both for sale under their own label (“Branded”) and for other resellers to put their label on the bags (“...

Q: West State Furniture (WSF) manufactures desks and desk chairs using

West State Furniture (WSF) manufactures desks and desk chairs using two departments within a single facility. The West Department produces the desks, and the State Department produces the chairs. WSF...

Q: Trombly Travel Products (TTP) manufactures and sells travel bags and

Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant. The different backpack models are identified by the primary material...

Q: As the representative of the local accounting club, you have been

As the representative of the local accounting club, you have been asked by the dean to help them understand the costs of the different degrees offered at the school. You decide to use an activity-base...

Q: Refer to the information in Exercise 9-31. The manager

Refer to the information in Exercise 9-31. The manager of the Los Angeles office is now unhappy with the results of the controller’s study. The manager asks the controller to develop...

Q: After reviewing the new activity-based costing system that Nancy Chen

After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC’s CenterPoint manufacturing facility, Tom Spencer, the production supervisor, believes that he can reduce p...

Q: Benton Corporation manufactures computer microphones, which come in two models:

Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Manufacturing overhead in the plant h...

Q: Refer to the information in Exercise 9-34. Required

Refer to the information in Exercise 9-34. Required a. Compute the unit costs for the two products, Standard and Premium, using the current costing system at Benton (using direct labor costs as the al...

Q: The Philip County Historical Society (PCHS) collects and displays historical

The Philip County Historical Society (PCHS) collects and displays historical artifacts from the local area. One of its services is dedicated tours. PCHS offers dedicated tours to two groups: the gener...

Q: Refer to the data in Exercise 9-38. Required

Refer to the data in Exercise 9-38. Required a. Compute the unit (per visitor) costs for the two tour types (public and donor) assuming PCHS uses the current cost system. b. Compute the unit (per visi...

Q: Richard’s Events provides catering services, among other services. The company

Richard’s Events provides catering services, among other services. The company has adopted activity-based costing (ABC) for the catering services. The ABC system classifies activitie...

Q: Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders

Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. AC...

Q: Shady Fabrication Group (SFG) manufactures components for manufacturing equipment at

Shady Fabrication Group (SFG) manufactures components for manufacturing equipment at several facilities. The company produces two, related, parts at its Park River Plant, the models SF-08 and SF-48. T...

Q: Spencer’s Sports manufactures outdoor equipment at three regional plants. The Freeway

Spencer’s Sports manufactures outdoor equipment at three regional plants. The Freeway Plant produces two models of fishing reels, the Stream and the Surf. The Surf model is heavier a...

Q: What argument(s) could be given in support of the

What argument(s) could be given in support of the reciprocal method as the preferred method for distributing the costs of service departments?

Q: Cathedral City Services (CCS) is a not-for-

Cathedral City Services (CCS) is a not-for-profit organization offering two services in a midsized city. The services are “Elder Meals” and “Jobs4...

Q: Exeter Group is a large retail company that has brick-and

Exeter Group is a large retail company that has brick-and-mortar outlets throughout the Southeast. It has been in business for many years, but two years ago started an online sales channel to offset s...

Q: Meadow Logistics, Inc. (MLI) distributes food purchased in

Meadow Logistics, Inc. (MLI) distributes food purchased in bulk to small retailers. The firm is divided into two divisions: Purchasing and Distribution. Purchasing is responsible for ordering goods fr...

Q: The manager of the Personnel Department at Binder City has been reading

The manager of the Personnel Department at Binder City has been reading about time-driven ABC and wants to apply it to that department. The manager has identified four basic activities Personnel Depar...

Q: Consider the following actions of a college placement center trying to manage

Consider the following actions of a college placement center trying to manage the costs of its placement services. Required Match each of the process improvements listed with how it delivers cost redu...

Q: Consider the following actions of a manufacturing firm trying to manage the

Consider the following actions of a manufacturing firm trying to manage the costs of materials handling from the direct materials inventory to the production line. Required Match each of the process i...

Q: Brentwood Disaster Relief (BDR) is a local not-for

Brentwood Disaster Relief (BDR) is a local not-for-profit organization working to help victims of disasters. Required The following are various resources and activities of the organization. Indicate w...

Q: The following are various activities for Humphrey Insurance Agency. Required

The following are various activities for Humphrey Insurance Agency. Required Suggest a feasible cost driver base for each of the following, and explain why each selected cost driver base is feasible....

Q: The following are various activities for EMS Law School. Required

The following are various activities for EMS Law School. Required Suggest a feasible cost driver base for each of the following, and explain why each selected cost driver base is feasible. a. Course r...

Q: Alter’s Home Center (AHC) sells renovation and remodeling products to

Alter’s Home Center (AHC) sells renovation and remodeling products to both contractors and individual home owners. One of the services AHC offers is delivery of the purchased product...

Q: Under what conditions are the results from using the direct method of

Under what conditions are the results from using the direct method of allocation the same as those from using the other two methods? Why?

Q: Rupert’s Appliance Warehouse (RAW) delivers appliances to retailers throughout the

Rupert’s Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The deliver...

Q: Northwestern Bank (NB) offers only checking accounts. Customers can

Northwestern Bank (NB) offers only checking accounts. Customers can write checks and use a network of automated teller machines. NB earns revenue by investing the money deposited; currently, it averag...

Q: Refer to the data in Exercise 10-32. Required

Refer to the data in Exercise 10-32. Required a. How can Northwestern Bank use the information from the activity-based costing analysis to manage its costs? b. What does Northwestern Bank need to cons...

Q: Lygon Food Distributors (LFD), introduced in the chapter, hired

Lygon Food Distributors (LFD), introduced in the chapter, hired a consultant to update its system for reporting the cost of customers. The consultant showed Anjana Malik, the owner of LFD, an analysis...

Q: Central State College (CSC) is a state-supported college

Central State College (CSC) is a state-supported college with a large business school. The business school offers an undergraduate degree and training programs for a local manufacturer. The state does...

Q: Ellery Products manufactures various components for the fashion industry. Ellery buys

Ellery Products manufactures various components for the fashion industry. Ellery buys fabric from two vendors: Ewers Textiles and Bramford Materials. Ellery chooses the vendor based on price. Once the...

Q: Wykes Metal Working uses a special lathe to shape components. Data

Wykes Metal Working uses a special lathe to shape components. Data on the lathe and its usage follow: Required Compute the cost of unused resource capacity in energy and repairs for Wykes Metal Workin...

Q: Hosmer Industries provides the following information about resources and usage:

Hosmer Industries provides the following information about resources and usage: Required a. Compute the cost driver rate for each resource. b. Describe what the term unused resource capacity means.

Q: Middle Industries produces a sensor for use in manufacturing. It produces

Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of 75,000 units. The variable cost of the sensor is $185.00 per unit,...

Q: Basil’s Framing manufactures picture frames in one workshop, which has a

Basil’s Framing manufactures picture frames in one workshop, which has a practical capacity of 40,000 frames. The variable cost of a frame is $24 per unit, and the fixed costs of the workshop are $392...

Q: Which method, weighted-average or FIFO, better reflects the

Which method, weighted-average or FIFO, better reflects the current cost of production when using process costing?

Q: Barker Products is a job shop. The following events occurred in

Barker Products is a job shop. The following events occurred in September: 1. Purchased $13,000 of materials. 2. Issued $14,500 in direct materials to the production department. 3. Purchased $11,000 o...

Q: Cairney, Inc. manufactures a specialized part used in internal combustion

Cairney, Inc. manufactures a specialized part used in internal combustion engines. The annual demand for the part is 225,000 units. The facility has a practical capacity of 240,000 units annually. The...

Q: Many companies have adapted the cost of quality framework to environmental issues

Many companies have adapted the cost of quality framework to environmental issues. They assign costs to one of four categories: prevention (P), appraisal (A), internal failure (IF), and external failu...

Q: Consider adapting the cost of quality framework to financial reporting issues.

Consider adapting the cost of quality framework to financial reporting issues. Assign costs to one of four categories: prevention (P), appraisal (A), internal failure (IF), and external failure (EF),...

Q: You are the division president of Wood Division of Underwood Enterprises.

You are the division president of Wood Division of Underwood Enterprises. The only other division at Underwood Enterprises is Plastics Division. Each division has 12,000 employees. Last year, Wood Div...

Q: Refer to the data for Woodstock Binding in Exercise 11-27

Refer to the data for Woodstock Binding in Exercise 11-27. Required Use the step method to allocate the service costs, using the following: a. The order of allocation starts with IT. b. The order of a...

Q: Refer to the data for Mack Precision Tool and Die in Exercise

Refer to the data for Mack Precision Tool and Die in Exercise 11-25. Required Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Exercise 11-25:

Q: Activity and selected costs for three production departments (Training, Independent

Activity and selected costs for three production departments (Training, Independent, and Commercial) and two service departments (Accounting and Facilities) at DuBay Films for the past month follow: R...

Q: Refer to the data for Woodstock Binding in Exercise 11-27

Refer to the data for Woodstock Binding in Exercise 11-27. Required Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two servic...

Q: Refer to the data for Memorial Services, Inc. in Exercise

Refer to the data for Memorial Services, Inc. in Exercise 11-33. Required Use the step method to allocate the service department costs to the two production departments. Allocate HR costs first, follo...

Q: Refer to the data for Memorial Services, Inc. in Exercise

Refer to the data for Memorial Services, Inc. in Exercise 11-33. Required Use the reciprocal method to allocate the service department costs to the production departments. (Matrix algebra is not requi...

Q: Ervin Equipment, a manufacturer of exercise and workout equipment for sale

Ervin Equipment, a manufacturer of exercise and workout equipment for sale to institutions, uses job costing. The following transactions occurred in January: 1. Purchased $76,000 of materials. 2. Paid...

Q: Refer to Exercises 11-27, 11-29, and

Refer to Exercises 11-27, 11-29, and 11-32 (Woodstock Binding). Required a. Which method do you think is best? Why? b. How much would it be worth to the company to use the best method compared to the...

Q: Refer to the facts in Exercise 11-25. Mack Precision

Refer to the facts in Exercise 11-25. Mack Precision Tool and Die estimates that the variable costs in the Repair Department total $15,225, and in Quality Control variable costs total $39,200. Avoidab...

Q: Refer to the facts in Exercise 11-27. Woodstock Binding

Refer to the facts in Exercise 11-27. Woodstock Binding estimates that the variable costs in the IT Department total $110,000, and in the HR Department variable costs total $140,000. Avoidable fixed c...

Q: Sanford Agricultural Chemicals (SAC) produces two main products, M

Sanford Agricultural Chemicals (SAC) produces two main products, M-4 and M-5, and one byproduct, BYP, from a single input, Gen-10. Products M-4 and M-5 can either be sold at split off or processed fur...

Q: Refer to the data in Exercise 11-39. Suppose that

Refer to the data in Exercise 11-39. Suppose that Sanford Agricultural Chemicals uses the physical quantities method to allocate joint costs and the revenues from by-products are credited to joint cos...

Q: Gunston Processing produces two products, ALT-1 and ALT-

Gunston Processing produces two products, ALT-1 and ALT-2, from a batch using a single raw material, ALT-0. Both products require further processing before they be can be sold. A batch of ALT-1 can be...

Q: Milo Manufacturing produces products Kappa and Lambda from a joint process.

Milo Manufacturing produces products Kappa and Lambda from a joint process. Total joint costs are $150,000. The sales value at split-off was $162,000 for 1,200 units of Kappa and $63,000 for 1,800 uni...

Q: Denver Fabricators manufactures products DF1 and DF2 from a joint process,

Denver Fabricators manufactures products DF1 and DF2 from a joint process, which also yields a by-product, BP. The company accounts for the revenues from its by-product sales as other income. Addition...

Q: Refer to the facts in Exercises 11-47 and 11-

Refer to the facts in Exercises 11-47 and 11-48. Required Which, if any, of the four products would you recommend Barrett Chemicals sell at split-off (and not process further)? Explain. Does your answ...

Q: Refer to the facts in Exercise 11-50. The sale

Refer to the facts in Exercise 11-50. The sale of FP-40 has been banned by a recent law. If FP-40 is produced, disposal in an approved manner costs $120,000 for every 55,000 units produced. Required a...

Q: Elmira Tool and Die makes machine tools to order. The following

Elmira Tool and Die makes machine tools to order. The following transactions occurred in October: 1. Issued $2,800 of supplies from the materials inventory. 2. Purchased $42,000 of materials. 3. Issue...

Q: Lawn Products produces two products (X and Y) and a

Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities...

Q: Radford Products adds materials at the beginning of the process in Department

Radford Products adds materials at the beginning of the process in Department A. The following information on physical units for Department A for the month of January is available. Required a. Compute...

Q: The following partially complete T-accounts for the month of June

The following partially complete T-accounts for the month of June along with additional information are from Renfrew & Co.: Additional information for June follows: ∙ Manufacturi...

Q: Selected information from the Iowa Instruments accounting records for April follows:

Selected information from the Iowa Instruments accounting records for April follows: Additional information for April follows: ∙ The labor wage rate was $30 per hour. âˆ&#...

Q: Partially completed T-accounts and additional information for Dumfries Designs for

Partially completed T-accounts and additional information for Dumfries Designs for the month of August follow: Additional information for August follows: ∙ The labor wage rate was $2...

Q: The partially completed T-accounts and selected additional information for Hancock

The partially completed T-accounts and selected additional information for Hancock Parts for the month of February follow: Additional information for February follows: ∙ Sales revenu...

Q: Sturgis Manufacturing produces one model of precision tool and accounts for costs

Sturgis Manufacturing produces one model of precision tool and accounts for costs using a job cost system. Information from the most recent fiscal year indicates the following. ∙ Total manufacturing c...

Q: When using the FIFO method of process costing, total equivalent units

When using the FIFO method of process costing, total equivalent units produced for a given period equal a. The number of units started and completed during the period plus the number of units in begin...

Q: Refer to the data in Exercise 8-28 for Charlevoix Chemicals

Refer to the data in Exercise 8-28 for Charlevoix Chemicals. Required Charlevoix Chemicals uses FIFO process costing at the Bay Plant for product costing. The following equivalent units (materials; co...

Q: Hoyt, Inc. has a process costing system at its Forest

Hoyt, Inc. has a process costing system at its Forest Street Plant. All materials are introduced when conversion costs reach 40 percent. The following information is available for physical units durin...

Q: Kronk, Inc. provides the following information concerning the work in

Kronk, Inc. provides the following information concerning the work in process at its plant: ∙ Beginning inventory was partially complete (materials are 100 percent complete; conversion costs are 10 pe...

Q: By mistake, the production supervisor at East Manufacturing transposed the digits

By mistake, the production supervisor at East Manufacturing transposed the digits on the production report and reported a higher percentage of completion for each inventory component. Assume that ther...

Q: Refer to the data in Exercise 8-22. Assume that

Refer to the data in Exercise 8-22. Assume that beginning inventory is 20 percent complete with respect to materials and 40 percent complete with respect to conversion costs. Required a. Compute the e...

Q: Consider the following actions of a retail store trying to manage the

Consider the following actions of a retail store trying to manage the costs of its returns service. Required Match each of the process improvements listed with how they deliver cost reductions.

Q: Refer to the data in Exercise 8-24. Required

Refer to the data in Exercise 8-24. Required a. Compute the equivalent units for materials using FIFO. b. Compute the equivalent units for conversion costs using FIFO. Exercise 8-24: Kronk, Inc. prov...

Q: Vermont Company uses continuous processing to produce stuffed bears and FIFO process

Vermont Company uses continuous processing to produce stuffed bears and FIFO process costing to account for its production costs. It uses FIFO because costs are quite unstable due to the volatile pric...

Q: Ag-Coop is a large farm cooperative with a number of

Ag-Coop is a large farm cooperative with a number of agriculture-related manufacturing and service divisions. As a cooperative, it pays no federal income taxes. The company owns a fertilizer plant tha...

Q: WSM Corporation is considering offering an air shuttle service between Sao Paulo

WSM Corporation is considering offering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to offer four flights every day (excluding certain holidays) for a total of 1,400 flights...

Q: Refer to Integrative Case 9-75 in Chapter 9. Assume

Refer to Integrative Case 9-75 in Chapter 9. Assume that all of the facts in Case 9-75 still hold except that the practical capacity of the machinery is 20,000 hours instead of 10,000 hours. Required...

Q: O’Leary Corporation manufactures special-purpose portable structures (huts, mobile

O’Leary Corporation manufactures special-purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to c...

Q: A&R Quality Advisors is a small consulting firm offering quality

A&R Quality Advisors is a small consulting firm offering quality audits and advising services to small and mid-sized manufacturing firms. Quality audits entail reviewing, checking, and documenting...

Q: The following data are taken from the production records at the Bay

The following data are taken from the production records at the Bay Plant of Charlevoix Chemicals for May. Work-in-process beginning inventory consisted of 43,000 units fully complete with respect to...

Q: Dunedin Bank has two operating departments (Retail and Commercial) and

Dunedin Bank has two operating departments (Retail and Commercial) and three service departments: Operations, Information Technology (IT), and Transactions. For the last period, the following costs an...

Q: Hessel Corporation has two operating departments (Domestic and Global) and

Hessel Corporation has two operating departments (Domestic and Global) and three service departments: Human Resources (HR), Legal, and Testing. In the most recent period, the following costs and servi...

Q: Lothrop Security Group (LSG) provides consulting and security services to

Lothrop Security Group (LSG) provides consulting and security services to various clients, including government agencies and commercial firms. It has two operating departments, Government and Commerci...

Q: Refer to the facts in Problem 11-57. Baldwin Enterprises

Refer to the facts in Problem 11-57. Baldwin Enterprises estimates that the cost structure in its operations is as follows: Required a. If Baldwin outsources the Legal Department, what is the maximum...

Q: Refer to the facts in Problem 11-60. The cost

Refer to the facts in Problem 11-60. The cost accountant at Dunedin Bank estimates that the cost structures in its departments are as follows: Required a. If Dunedin Bank outsources the Transactions D...

Q: Refer to the facts in Problem 11-65. Required

Refer to the facts in Problem 11-65. Required a. If Dunedin Bank outsources both the Transactions Department and the IT Department, the total savings (before considering the fee paid to the outside ve...

Q: Refer to the information in Problem 11-58 for Rohns Manufacturing

Refer to the information in Problem 11-58 for Rohns Manufacturing. Required Assume that Rohns uses the reciprocal method of service department cost allocation. What is the total service department cos...

Q: Filer Fabrication has three service departments (S1, S2, and

Filer Fabrication has three service departments (S1, S2, and S3) and two production departments (P1 and P2). Data on service department usage and service direct costs follow. Required Assume that File...

Q: Morrell Financial Services (MFS) has three service departments: Accounting

Morrell Financial Services (MFS) has three service departments: Accounting, Information Technology (IT), and Personnel. MFS also has two operating departments (Advice and Brokerage). Data on service d...

Q: Douglass Minerals mines ore and then processes it into other products.

Douglass Minerals mines ore and then processes it into other products. At the end of the mining process, the ore splits off into three products: Metal-A, Metal-B, and Metal-C. Douglass sells Metal-C a...

Q: Mack Precision Tool and Die has two production departments, Fabricating and

Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of s...

Q: Lipton Liquids produces three products by a joint production process. Raw

Lipton Liquids produces three products by a joint production process. Raw materials are put into production in Department 1, and at the end of processing in this department, three products appear. Alp...

Q: Troester Manufacturing produces products X, Y, and Z from a

Troester Manufacturing produces products X, Y, and Z from a joint process. Each product can be processed further and sold as X-Prime, Y-Prime, and Z-Prime. Information on the operations for the most r...

Q: Wadsworth Processes manufactures three produces—ABC, DEF, and GHI

Wadsworth Processes manufactures three produces—ABC, DEF, and GHI—from a joint production process. Data on the operations at Wadsworth for the most recent period ar...

Q: Terry Chemicals processes a single raw material, Clean-Z,

Terry Chemicals processes a single raw material, Clean-Z, in Department 1 of its main production facility. Out of the joint process in Department 1, two products emerge: Azyne and Bethanol. Azyne is f...

Q: Goldsmith Processors produces two joint products from a special type of ore

Goldsmith Processors produces two joint products from a special type of ore. Product X-1 sells for $8 per unit at the split-off point. After an additional $90,000 of processing costs are incurred, pro...

Q: Longwood Corporation processes a liquid into three outputs: K-2

Longwood Corporation processes a liquid into three outputs: K-2, K-4, and K-5. The sales value of each of these products for a single batch follows: The joint costs total $850,000. There are no separa...

Q: Elsa Products processes Chem-Z into two products: Chem-

Elsa Products processes Chem-Z into two products: Chem-A and Chem-B. Chem-Z costs $42,000 per batch. The joint process produces 11,250 units of Chem-A with a market value of $135,000, and 20,000 units...

Q: Hendricks Mining & Manufacturing is a global mineral resource company. At

Hendricks Mining & Manufacturing is a global mineral resource company. At its Taylor site, the company mines and processes three grades of metal—IA, IB, and II—in fixed proportions. The joint costs of...

Q: Bromley Custom Cabinetry (BCC) uses a job costing system and

Bromley Custom Cabinetry (BCC) uses a job costing system and applies overhead based on direct materials cost. Last year, manufacturing overhead was expected to be $693,000 and direct materials cost wa...

Q: The following T-accounts for the Fitzpatrick Company represent April activity

The following T-accounts for the Fitzpatrick Company represent April activity: Required Compute the missing amounts indicated by the letters (a) through (i).

Q: Refer to the facts in Exercise 11-25. Assume that

Refer to the facts in Exercise 11-25. Assume that both Fabricating and Finishing work on just two jobs during the month of March: MP-47 and MP-48. Costs are allocated to jobs based on laborhours in Fa...

Q: The following T-accounts represent September activity for Kelly Tools:

The following T-accounts represent September activity for Kelly Tools: Additional Data ∙ Sales are billed at 175 percent of Cost of Goods Sold before the over- or underapplied overhe...

Q: Whitlock Manufacturing uses a job costing accounting system for its production costs

Whitlock Manufacturing uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct materials costs to apply overhead to individual job...

Q: Sorrento Products uses a job costing accounting system for its manufacturing costs

Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machine-hours is used to apply overhead to individual jobs. An estimate of ov...

Q: A series of computer and backup system failures caused the loss of

A series of computer and backup system failures caused the loss of most of the company records at Stotter, Inc. Information technology consultants for the company could recover only a few fragments of...

Q: Highway 1 Manufacturing (H1M) produces several, related products in

Highway 1 Manufacturing (H1M) produces several, related products in multiple factories. At one facility, which produces only a single product, managers are debating whether to use a predetermined rate...

Q: Mercier Manufacturing produces a plastic part in three sequential departments: Extruding

Mercier Manufacturing produces a plastic part in three sequential departments: Extruding, Fabricating, and Packaging. Mercier uses the weighted-average process costing method to account for costs of p...

Q: Garvin, Inc. produces a specialized machine tool to order.

Garvin, Inc. produces a specialized machine tool to order. Garvin uses a job costing system and applies overhead on the basis of direct labor-hours. Each unit varies according to customer specificatio...

Q: Select the best answer for each of the following independent multiple-

Select the best answer for each of the following independent multiple-choice questions. a. Hillger Paints’s production cycle starts in Department A. The following information is avai...

Q: Rogell Academic Services (RAS) provides tutoring and test preparation services

Rogell Academic Services (RAS) provides tutoring and test preparation services for children and young adults. Employees include a director and six facilitators. The director manages all marketing and...

Q: The records of Tillman Corporation’s initial and unaudited accounts show the following

The records of Tillman Corporation’s initial and unaudited accounts show the following ending inventory balances, which must be adjusted to actual costs: As the auditor, you have lea...

Q: Cranshaw Business Services (CBS) operates an information technology (IT

Cranshaw Business Services (CBS) operates an information technology (IT) consulting firm out of two offices: Detroit and Los Angeles. Corporate services, such as legal, finance, and personnel, are cen...

Q: On April 1, two jobs were in process at Hartwell Contracting

On April 1, two jobs were in process at Hartwell Contracting. Details of the jobs follow: The Materials Inventory account on April 1 totaled $7,900. Materials purchased during the month totaled $17,10...

Q: Refer to the facts in Problem 8-64. Required

Refer to the facts in Problem 8-64. Required The financial managers at Ambassador Lubricants are trying to decide between whether to continue using the weighted-average method or switch to FIFO. They...

Q: Hyde Restorations rebuilds factory facilities. It employs 130 full-time

Hyde Restorations rebuilds factory facilities. It employs 130 full-time workers at $25 per hour. Despite operating at capacity, last year’s performance was a great disappointment to...

Q: Manor Painting is a commercial interior and exterior painting contractor specializing in

Manor Painting is a commercial interior and exterior painting contractor specializing in commercial buildings. An inventory of materials and equipment is on hand at all times, so work can start as qui...

Q: The following financial information about the manufacturing plant of Continental Company for

The following financial information about the manufacturing plant of Continental Company for the year-to-date and the month of July appears on the company’s records: A count of the i...

Q: Mechanic Implements manufactures miscellaneous parts for building construction and maintenance. The

Mechanic Implements manufactures miscellaneous parts for building construction and maintenance. The company uses a normal job costing system and overhead is applied on the basis of direct labor cost....

Q: Accounting records for Antoinette Designs (AD) for November show the

Accounting records for Antoinette Designs (AD) for November show the following (each entry is the total of the actual entries for the account for the month): The Work-in-Process Inventory ending accou...

Q: Plainview Paving Contractors (PPC) is a rapidly growing, recently

Plainview Paving Contractors (PPC) is a rapidly growing, recently established company that has not been profitable despite increases in sales. It has hired you as a consultant to find ways to improve...

Q: Jerome Shipyards does work for both the U.S. Navy

Jerome Shipyards does work for both the U.S. Navy and private shipping companies. Jerome’s major business is renovating ships, which it does at one of two company dry docks referred...

Q: Buelow, LLP, is a consulting firm that helps organizations become

Buelow, LLP, is a consulting firm that helps organizations become more efficient. A supervisor on two consulting jobs discusses an issue that arose recently. One of the consulting jobs is for a large...

Q: Antoine Machining estimated its manufacturing overhead to be $279,000

Antoine Machining estimated its manufacturing overhead to be $279,000 and its direct materials costs to be $450,000 in Year 1. Three of the jobs that Antoine Machining worked on in Year 1 had actual d...

Q: Spokane, Inc. is a manufacturing company that produces parts both

Spokane, Inc. is a manufacturing company that produces parts both for inventory and to custom specifications. Parts produced for inventory are sold at prices determined in the market. Custom parts are...

Q: Refer to the data in Exercise 8-56 and Problem 8

Refer to the data in Exercise 8-56 and Problem 8-74 (Hedwig Optical). The marketing manager cannot believe that the controller wants to treat all binocular models the same. The marketing manager says...

Q: Refer to the facts in Problem 8-59. Required

Refer to the facts in Problem 8-59. Required a. Prepare a production cost report using FIFO. b. Answer requirement (b) in Problem 8-59. Problem 8-59: Required a. Prepare a production cost report for...

Q: Ambassador Lubricants (AL) produces various oil and synthetic-based

Ambassador Lubricants (AL) produces various oil and synthetic-based products. One of the products is produced at the company’s Bridge Plant in a single department. Two materials are...

Q: The Erskine Inc. Metals Division manufactures an industrial compound used in

The Erskine Inc. Metals Division manufactures an industrial compound used in metal working at the division’s only plant. The production process uses two materials. The first is a lubricant produced by...

Q: Howell Food Products (HFP) produces the most popular of its

Howell Food Products (HFP) produces the most popular of its canned soup varieties at the Stadium Plant. The Stadium Plant has two departments: Mixing and Canning. Raw materials are added at two points...

Q: Refer to the information in Problem 8-67. The Mixing

Refer to the information in Problem 8-67. The Mixing Department at the Stadium Plant uses FIFO process costing to account for production. In May, beginning work-in-process inventory consisted of 150,0...

Q: For each of the following independent cases, use FIFO costing to

For each of the following independent cases, use FIFO costing to determine the information requested. a. At the start of the period, 7,000 units were in the work-in-process inventory; 5,250 units were...

Q: For each of the following independent cases, determine the units or

For each of the following independent cases, determine the units or equivalent units requested (assuming weighted-average costing). a. Beginning inventory consisted of 64,000 units with a direct mater...

Q: Saratoga Systems produces a single product. The production process requires all

Saratoga Systems produces a single product. The production process requires all material to be brought to the shop floor before any work begins. The material is then processed and assembled and then t...

Q: Refer to the information in Exercise 7-32. Overhead applied

Refer to the information in Exercise 7-32. Overhead applied in each of the inventory accounts is as follows. Required Prepare an entry to allocate the under- or overapplied overhead. Exercise 7-32: A...

Q: Chateaufort Craft (CC) makes three models of sea kayaks:

Chateaufort Craft (CC) makes three models of sea kayaks: CC-100, CC-200, and CC-500. CC manufactures the boats in two departments: Department A (Assembly) and Department B (Finishing). All three model...

Q: Drew Implements makes four models of utility and light construction tractors.

Drew Implements makes four models of utility and light construction tractors. The model names are DI-1400, DI-3800, DI-5000, and DI-8000. Drew manufactures the tractors in two departmentsâ€...

Q: Refer to the data in Exercise 8-56 (Hedwig Optical

Refer to the data in Exercise 8-56 (Hedwig Optical). Information for January is copied here. There are never any work-in-process inventories. The plant controller believes that keeping track of the th...

Q: Normandy Office Products (NOP) makes two types of office desks

Normandy Office Products (NOP) makes two types of office desks, Manager and Executive. The Executive model is adjustable using electric motors and is made with upgraded materials. The manufacturing pr...

Q: Thatcher Supply manufactures and sells two types of pet doors—Standard

Thatcher Supply manufactures and sells two types of pet doors—Standard and Hi-Tech. The Standard model is a basic opening installed in a door. The Hi-Tech model is automated and incl...

Q: Refer to Problem 9-54. Assume that you have prepared

Refer to Problem 9-54. Assume that you have prepared financial statements that show the operating profit for each of the two models manufactured by Thatcher Supply. Further assume that under the activ...

Q: Fisher Fixtures manufactures three types of lighting fixtures, with model names

Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct l...

Q: Clairepoint Medical Devices, Inc. (CMDI) makes three types

Clairepoint Medical Devices, Inc. (CMDI) makes three types of a diagnostic device. For internal purposes, these models are referred to as Alpha, Beta, and Gamma, respectively. Although they are design...

Q: Delaware Electronics makes three models of a controller for measurement and testing

Delaware Electronics makes three models of a controller for measurement and testing equipment: Models X-100, X-200, and X-500. The three models differ in their capabilities and also in the materials t...

Q: Ellis Equipment (EE) manufactures three models of lawn tractor:

Ellis Equipment (EE) manufactures three models of lawn tractor: EE-1000, EE-1800, and EE-2800. Because of the different materials used, production processes for each model differ significantly in term...

Q: What is the cost hierarchy?

What is the cost hierarchy?

Q: Linzee Liners estimates that its manufacturing overhead will be $1,

Linzee Liners estimates that its manufacturing overhead will be $1,725,000 in Year 1. It further estimates that direct labor costs will amount to $750,000. During March, Linzee worked on four jobs wit...

Q: Nall Products manufactures a wide variety of products in several facilities.

Nall Products manufactures a wide variety of products in several facilities. It produces three models of mobility scooters in its St. Claire plant: models NP-10, NP-20, and NPX-70. The machine and lab...

Q: Warren Furniture produces three models of desk chairs: Basic, Ergo

Warren Furniture produces three models of desk chairs: Basic, Ergo, and Exec. The cost system at the Warren production facility allocates overhead cost on the basis of direct labor hours. The company...

Q: Kensington Electronics (KE) is a wholly owned subsidiary of CWD

Kensington Electronics (KE) is a wholly owned subsidiary of CWD Enterprises, a global manufacturing company. Unlike most CWD companies, KE uses a traditional costing system to compute product costs. A...

Q: Lauder Company manufactures and distributes various fixtures used primarily in new building

Lauder Company manufactures and distributes various fixtures used primarily in new building construction. At the company’s Bayside plant, Lauder produces two models of one widely use...

Q: Refer to Problem 9-63. The study team decides to

Refer to Problem 9-63. The study team decides to look more closely at the assembly activity and determines that it can be broken down into two activities: production and engineering. Production covers...

Q: Burgess Business School has two degree programs, BBA and MBA.

Burgess Business School has two degree programs, BBA and MBA. The school uses an ABC system to cost the three support services it provides to students from both programs: Career Center, Events, and Li...

Q: Miller Manufacturing (2M) makes a variety of components for mechanized

Miller Manufacturing (2M) makes a variety of components for mechanized agricultural equipment. The products are similar but not identical, and all go through many of the same processes. 2M sells produ...

Q: Montana Precision Products (MPP) produces parts for small machine tools

Montana Precision Products (MPP) produces parts for small machine tools. The typical product goes through two processes, machining and finishing, before being packaged and shipped to the customer. All...

Q: Chadwick Industries has several manufacturing facilities that make a wide variety of

Chadwick Industries has several manufacturing facilities that make a wide variety of industrial and consumer products. Two of the plants, River North and River South, make components for road construc...

Q: Commonwealth Devices makes three wearable fitness devices at its Lake Plant:

Commonwealth Devices makes three wearable fitness devices at its Lake Plant: CFit-1, CFit-2, and CFit-Xtra. The company has for many years allocated overhead to products using machine-hours. Last year...

Q: Refer to the information in Exercise 7-34. The amount

Refer to the information in Exercise 7-34. The amount of overhead applied in each of the inventory accounts at the end of Year 1 is as follows. Required Prepare an entry to allocate the over- or under...

Q: Refer to Exercise 9-50. Until now, Meadow Logistics

Refer to Exercise 9-50. Until now, Meadow Logistics, Inc. (MLI) has used a commercial vendor to ship orders. The manager of Distribution believes the system described in Exercise 9-50 is too simple in...

Q: Refer to the information in Exercise 9-52. The manager

Refer to the information in Exercise 9-52. The manager of the Personnel Department decides that the estimate of the activities might be too simple in two ways. First, the time to interview depends on...

Q: Refer to Exercise 10-50. Sales revenue for Hosmer Industries

Refer to Exercise 10-50. Sales revenue for Hosmer Industries is $720,000. Required a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statemen...

Q: Lozier Catering and Events (LCE) offers a variety of services

Lozier Catering and Events (LCE) offers a variety of services from small gatherings to large weddings and corporate retreats. Sales for year 1 totaled $877,500. Information regarding resources for the...

Q: Kresge Lodging has an elite program for its card members. There

Kresge Lodging has an elite program for its card members. There are three levels, based on total nights stayed: Diamond (50 nights or more); Platinum (25 nights or more); and Base (fewer than 25 night...

Q: Grand Online Mall (GOM) is an online retailer that sells

Grand Online Mall (GOM) is an online retailer that sells many different products. GOM offers its customers two options for shipping. First, the “Regular” program ch...

Q: Stark Remodeling Center (SRC) is a home renovation showroom that

Stark Remodeling Center (SRC) is a home renovation showroom that caters primarily to contractors. Customers place orders at SRC, either in person or online, and the merchandise is packaged in standard...

Q: Huber Supply is a distribution company specializing in providing paper and soap

Huber Supply is a distribution company specializing in providing paper and soap products for institutions such as hospitals, colleges, and so on. Customers place orders online with Huber. Once an orde...

Q: Consider the information in Problem 10-69. The sales manager

Consider the information in Problem 10-69. The sales manager of Woodlawn Petroleum has proposed to the purchasing manager at Atwater that Woodlawn be given an exclusive contract to supply the lubrican...

Q: Carrie Construction (CC) is a company specializing in building airport

Carrie Construction (CC) is a company specializing in building airport runways and major highways. As a part of its business, it receives supplies of aggregate (stone, sand, gravel, and so on) from tw...

Q: Marian Manufacturing (2M) applies manufacturing overhead to jobs based on

Marian Manufacturing (2M) applies manufacturing overhead to jobs based on direct labor costs. For Year 2, 2M estimates its manufacturing overhead to be $421,200 and its direct labor costs to be $810,0...

Q: Consider the information in Problem 10-71. The sales manager

Consider the information in Problem 10-71. The sales manager of Granger Materials has proposed to the purchasing manager at Carrie Construction that Granger be given an exclusive contract to supply th...

Q: Barr Plastics makes parts for a variety of manufacturing applications. Sales

Barr Plastics makes parts for a variety of manufacturing applications. Sales last year totaled $3,060,000. Information regarding resources for the month follows. In addition, Barr spent $90,000 on 60...

Q: Located in a small town in upstate New York, Terry’s Bakery

Located in a small town in upstate New York, Terry’s Bakery operates a facility that makes pies for retail sale. The facility has the capacity to make 36,000 pies annually. The plant has only two cust...

Q: Refer to the information in Problem 10-74. The pie

Refer to the information in Problem 10-74. The pie business in this town has two seasons, summer and winter. Each season lasts exactly six months. Panama Food Mart orders 9,000 pies in the summer and...

Q: Refer to Problems 10-74 and 10-75. The

Refer to Problems 10-74 and 10-75. The owner of Terry’s Bakery now believes that there are really three seasons instead of two, the third being the fall and spring (as a combined sea...

Q: Remington Agricultural Products (RAP) produces organic cider with no preservatives

Remington Agricultural Products (RAP) produces organic cider with no preservatives. Any production must be sold within a few days, so producing for inventory is not an option. RAP’s single plant has t...

Q: Refer to the information in Problem 10-77. The organic

Refer to the information in Problem 10-77. The organic cider business has two seasons, holidays and nonholidays. The holiday season lasts exactly four months (although it feels longer), and the nonhol...

Q: Refer to the information and data in Problem 10-79.

Refer to the information and data in Problem 10-79. After working with the quality system for one year, the cost analyst revisits the relations for conformance and nonconformance costs. During the yea...

Q: Tennessee Company manufactures a specialized fitting for industrial machinery at the Stephens

Tennessee Company manufactures a specialized fitting for industrial machinery at the Stephens Street Facility. The facility has five departments. Two departments (Casting and Finishing) are production...

Q: Greendale Office Products has a warehouse that supplies office products to its

Greendale Office Products has a warehouse that supplies office products to its store locations. The warehouse has two service departments, Human Resources (HR) and Information Technology (IT), and two...

Q: Refer to the information in Exercise 7-36. Required

Refer to the information in Exercise 7-36. Required Prepare an entry to allocate over- or underapplied overhead to a. Work in Process. b. Finished Goods. c. Cost of Goods Sold. Exercise 7-36: Marian...

Q: Hildale Manufacturing is organized with two service departments (Administration and Maintenance

Hildale Manufacturing is organized with two service departments (Administration and Maintenance) and two production departments (Assembly and Finishing). The company uses the step method to allocate s...

Q: Baldwin Enterprises has two service departments, Personnel and Legal, and

Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allo...

Q: Rohns Manufacturing produces kitchen appliances at its North Roberts plant. The

Rohns Manufacturing produces kitchen appliances at its North Roberts plant. The appliances go through two production departments: Fabrication and Assembly. The plant has three service departments: Inf...

Q: Bradby Automotive Restoration (BAR) has three service departments (S1

Bradby Automotive Restoration (BAR) has three service departments (S1, S2, and S3) and two operating departments (P1 and P2). Data on departmental usage of service departments follow: The direct costs...

Q: Louisiana Metals uses a job costing system. The company applies manufacturing

Louisiana Metals uses a job costing system. The company applies manufacturing overhead using a predetermined rate based on direct labor cost. The following debits (credits) appeared in the Workin- Pro...

Q: Kenmore Fabrication estimated that direct labor cost for the year would be

Kenmore Fabrication estimated that direct labor cost for the year would be $640,000. The company also estimated that fixed overhead would be $480,000 and variable overhead would be 35 percent of direc...

Q: Kingsley Products estimated that direct labor for the year would be 64

Kingsley Products estimated that direct labor for the year would be 64,000 hours. The company also estimated that the fixed overhead cost for the year would be $160,000. They further estimated the var...

Q: What are the similarities and differences among the direct method, the

What are the similarities and differences among the direct method, the step method, and the reciprocal method of allocating costs?

Q: What criterion should be used to determine the order of allocation from

What criterion should be used to determine the order of allocation from service departments when the step method is used? Explain why.

Q: What is the objective of joint cost allocation?

What is the objective of joint cost allocation?

Q: Refer to the data in Exercise 8-37. Compute the

Refer to the data in Exercise 8-37. Compute the cost of goods transferred out and the ending inventory for July using the weighted-average method. Exercise 8-37:

Q: When would a physical quantities method for allocation be preferred?

When would a physical quantities method for allocation be preferred?

Q: What is the basic difference between the allocation of joint costs to

What is the basic difference between the allocation of joint costs to (a) joint products and (b) by-products?

Q: Refer to Exercise 8-37. Compute the cost per equivalent

Refer to Exercise 8-37. Compute the cost per equivalent unit for direct materials and for conversion costs for July using the FIFO method. Exercise 8-37:

Q: Refer to the data in Exercise 8-37. Compute the

Refer to the data in Exercise 8-37. Compute the cost of goods transferred out and the ending inventory for July using the FIFO method. Exercise 8-37:

Q: Annin Laboratories uses the weighted-average method to account for its

Annin Laboratories uses the weighted-average method to account for its work-in-process inventories. The accounting records show the following information for February: Quantity information is obtained...

Q: Refer to the data in Exercise 8-41. Compute the

Refer to the data in Exercise 8-41. Compute the cost of goods transferred out and the ending inventory for February using the weighted-average method. Exercise 8-41:

Q: At the beginning of the month, Daniel’s Business Services had two

At the beginning of the month, Daniel’s Business Services had two incomplete consulting engagements (jobs) that had the following costs assigned from previous months. During the mont...

Q: What is a limitation of the direct method of allocating service department

What is a limitation of the direct method of allocating service department costs? The step method?

Q: Refer to the data in Exercises 8-41 and 8-

Refer to the data in Exercises 8-41 and 8-43. Compute the cost of goods transferred out and the ending inventory for February using the FIFO method. Exercise 8-41:

Q: Bellevue Chemicals had beginning work-in-process inventory of $

Bellevue Chemicals had beginning work-in-process inventory of $239,910 on March 1. Of this amount, $101,280 was the cost of direct materials and $138,630 was the cost of conversion. The 24,000 units i...

Q: Refer to the data in Exercise 8-45. Compute the

Refer to the data in Exercise 8-45. Compute the costs of goods transferred out and the ending inventory for March using the weighted-average method. Exercise 8-45: Bellevue Chemicals had beginning wo...

Q: Refer to the data in Exercise 8-45. Compute the

Refer to the data in Exercise 8-45. Compute the cost per equivalent unit for direct materials and for conversion costs for March using the FIFO method. Exercise 8-45: Bellevue Chemicals had beginning...

Q: Refer to the data in Exercise 8-45. Required

Refer to the data in Exercise 8-45. Required a. Compute the cost of goods transferred out and the cost of ending inventory for March using the FIFO method. b. Is the ending inventory higher or lower u...

Q: Terminal Industries (TI) produces a product using three departments:

Terminal Industries (TI) produces a product using three departments: Mixing, Processing, and Filtering. New material is added only in the Mixing Department. The following information is given for the...

Q: The following information about the work-in-process inventory pertains

The following information about the work-in-process inventory pertains to the Remington Plant for the month of July (all materials are added at the beginning of the process): The Remington Plant start...

Q: Beverly Plastics produces a part used in precision machining. The part

Beverly Plastics produces a part used in precision machining. The part is produced in two departments: Mixing and Refining. The raw material is introduced into the process in the Mixing Department. Th...

Q: Refer to the data in Exercise 8-32. Required

Refer to the data in Exercise 8-32. Required Compute the cost per equivalent unit for materials and conversion costs using the FIFO method. Exercise 8-32:

Q: Boulder Toys manufactures powered, ride-on tractors and other equipment

Boulder Toys manufactures powered, ride-on tractors and other equipment for children. There are three models, increasing in features and detail: XL, XLS, and XLT. All three models start in the Assembl...

Q: What are three common sources of improprieties in job costing?

What are three common sources of improprieties in job costing?

Q: Shirley Processing, Inc. (SPI) makes adhesive tape and

Shirley Processing, Inc. (SPI) makes adhesive tape and uses a FIFO process costing system. The following information shows the physical flow of units and costs for the month of March: Required a. Comp...

Q: Devereaux Cycles makes three models of scooter: Commuter, Sport,

Devereaux Cycles makes three models of scooter: Commuter, Sport, and X-treme. The scooters are produced in four departments: Assembly, Detailing, Customization, and Packaging. All three models are sta...

Q: Hedwig Optical makes three models of binoculars: Travel, Sport,

Hedwig Optical makes three models of binoculars: Travel, Sport, and Pro. The models differ by the size of the casing and the quality of the optics. The binoculars are produced in two departments. The...

Q: Refer to the data in Exercise 8-34. Required

Refer to the data in Exercise 8-34. Required a. Compute the equivalent units for the conversion cost calculation for March assuming Shirley Processing, Inc. uses the weighted-average method. b. Comput...

Q: In computing the cost per equivalent unit, the weighted-average

In computing the cost per equivalent unit, the weighted-average method considers a. Current costs less costs in beginning WIP inventory. b. Current costs plus the cost of ending WIP inventory. c. Curr...

Q: The following cost information is available for July for the Crest Plant

The following cost information is available for July for the Crest Plant at Calvert Company: Materials are added at the beginning of the process. The following quantities have been recorded: â&#...

Q: Using the data in Exercise 8-41, compute the cost

Using the data in Exercise 8-41, compute the cost per equivalent unit for direct materials and for conversion costs for February using the FIFO method. Exercise 8-41:

Q: Refer to the information in Exercise 9-36. Required

Refer to the information in Exercise 9-36. Required a. Compute the unit costs for the two products, G-09 and G-35, using the current costing system at Heidelberg (using machine-hours as the allocation...

Q: Heintz Products uses activity-based costing to account for product costs

Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost drivers and rates. Direct materials costs were $480,000 and direct labor co...

Q: LaFontaine Accessories makes a variety of computer bags, carrier bags,

LaFontaine Accessories makes a variety of computer bags, carrier bags, and so on. LaFontaine uses activity-based costing for its products. The production manager has identified the following cost driv...

Q: In the context of job costing, what are projects? What

In the context of job costing, what are projects? What additional costing issues are there with projects?

Q: Rex Metal Fabricators (RMF) buys scrap metal and produces components

Rex Metal Fabricators (RMF) buys scrap metal and produces components for buildings and other structures. The purchase contracts specify an average quality level of 90 percent. That is, 90 percent of t...

Q: Refer to the data in Exercise 10-36. Required

Refer to the data in Exercise 10-36. Required Assume all else remains the same. What percentage of metal from Chopin Yards that requires further processing would make Rex Metal Fabricators indifferent...

Q: Watko Entertainment Systems (WES) buys audio and video components for

Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from two suppliers, Bacon Electronics and Hessel Audio and Video. The components are deliver...

Q: Refer to the data in Exercise 10-38. Required

Refer to the data in Exercise 10-38. Required Assume all else remains the same. What percentage of late deliveries by Bacon would make WES indifferent between buying from Bacon Electronics and Hessel...

Q: Refer to the data in Exercise 10-40. Required

Refer to the data in Exercise 10-40. Required a. Assume all else remains the same. What bid by Ewers would make Ellery indifferent between buying from Ewer or Bramford? b. Why, given the information,...

Q: Byron Truck Repair uses a specialized hydraulic lift to work on trucks

Byron Truck Repair uses a specialized hydraulic lift to work on trucks and busses. Data on the lift and its usage follow: Required Compute the cost of unused resource capacity in operation and mainten...

Q: Refer to Exercise 10-42. Sales revenue from truck repair

Refer to Exercise 10-42. Sales revenue from truck repair totaled $32,000. Required a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statemen...

Q: Refer to Exercise 10-44. Sales revenue from lathe work

Refer to Exercise 10-44. Sales revenue from lathe work totaled $17,900. Required a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statement...

Q: Boston Home Center (BHC) offers customers the use of a

Boston Home Center (BHC) offers customers the use of a truck at $40 per trip to take purchased merchandise home. BHC reports the following information about the trucks it has for customer usage: Requi...

Q: Refer to Exercise 10-46. Sales revenue totaled $74

Refer to Exercise 10-46. Sales revenue totaled $74,000. a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statement like the one in Exhibit 1...

Q: What are examples of two nonvalue-added activities that could be

What are examples of two nonvalue-added activities that could be found in each of the following service organizations: (a) a health clinic and (b) a bank?

Q: The Shipping Department at Nashville Fabricators reports the following information about resources

The Shipping Department at Nashville Fabricators reports the following information about resources: Required Compute the cost of unused resource capacity in the Shipping Department at Nashville Fabric...

Q: Abbott Business Services (ABS) generated revenue of $637,

Abbott Business Services (ABS) generated revenue of $637,800 processing accounts payable and payroll transactions for clients. ABS reports the following information about resources in two functions: R...

Q: Fraser Plastics produces plastic parts for use in various products. The

Fraser Plastics produces plastic parts for use in various products. The following represents accounts in its cost of quality system. Required Classify each as prevention (P), appraisal (A), internal f...

Q: Cass Company has recorded the following information for the last six months

Cass Company has recorded the following information for the last six months of operations from its cost of quality system: Required a. Classify these items into prevention (P), appraisal (A), internal...

Q: Refer to the data in Exercise 10-55. Required

Refer to the data in Exercise 10-55. Required Construct a cost of quality report for Quarter 1 and Quarter 2. Exercise 10-55:

Q: The following represents the financial information for Plaza Plastics for May and

The following represents the financial information for Plaza Plastics for May and June: Required a. Classify these items into prevention (P), appraisal (A), internal failure (IF), or external failure...

Q: Refer to the data in Exercise 10-57. Required

Refer to the data in Exercise 10-57. Required Construct a cost of quality report for May and June. Exercise 10-57:

Q: One of Camely Chemicals’ facilities manufactures a hazardous chemical. The following

One of Camely Chemicals’ facilities manufactures a hazardous chemical. The following represents the financial information from the plant for the most recent two years: Required a. Cl...

Q: Refer to the data in Exercise 10-59. Required

Refer to the data in Exercise 10-59. Required Construct a cost of quality report for year 1 and year 2. Exercise 10-59:

Q: Woodstock Binding has two service departments, IT (Information Technology)

Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs...

Q: What are examples of two nonvalue-added activities that could be

What are examples of two nonvalue-added activities that could be found in organizations that manufacture (a) lumber and (b) furniture?

Q: Refer to the data for Mack Precision Tool and Die in Exercise

Refer to the data for Mack Precision Tool and Die in Exercise 11-25. Required Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Repair. b....

Q: Memorial Services, Inc. (MSI) has three service departments

Memorial Services, Inc. (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous...

Q: Monroe Materials processes a purchased material, PM-20, and

Monroe Materials processes a purchased material, PM-20, and produces three outputs, Alpha, Beta, and Gamma. In February, the costs to process PM-20 are $524,000 for materials and $196,000 for conversi...

Q: Refer to the data for Monroe Materials in Exercise 11-41

Refer to the data for Monroe Materials in Exercise 11-41. Required Assign costs to Alpha, Beta, and Gamma for February using the physical quantities method. Exercise 11-41:

Q: St. John Mining operates several facilities. At one, a

St. John Mining operates several facilities. At one, a typical batch of an ore, Pryex, run through the processing plant yields three products: PX-10, PX-20, and PX-30. At the split-off point, the $110...

Q: Barrett Chemicals manufactures four chemicals, Chem-1, Chem-

Barrett Chemicals manufactures four chemicals, Chem-1, Chem-2, Chem-3, and Chem-4, from a joint process. The total joint costs in May were $564,000. Additional information follows: Required Barrett Ch...

Q: Refer to the facts in Exercise 11-47. Required

Refer to the facts in Exercise 11-47. Required Barrett Chemicals uses the physical quantities method to allocate joint costs. What joint costs would be allocated to each product in May? Exercise 11-4...

Q: Forest Products, Inc. manufactures three products (FP-10

Forest Products, Inc. manufactures three products (FP-10, FP-20, and FP-40) from a single, joint input. None of the products can be sold without further processing. In November, joint product costs we...

Q: Refer to the information in Exercise 11-50 for Forest Products

Refer to the information in Exercise 11-50 for Forest Products. Required Forest Products uses the estimated net realizable value method to allocate joint costs. What joint costs would be allocated to...

Q: Trevor Mills produces agricultural feed at its only plant. Materials are

Trevor Mills produces agricultural feed at its only plant. Materials are added at the beginning of the process. Information on work-in-process in December follows: ∙ Beginning inventory, 16,000 partia...

Q: Suppose a manager can reduce the processing time for loan applications by

Suppose a manager can reduce the processing time for loan applications by reducing the amount of time the application awaits action. How does the reduction add value to the organization?

Q: Refer to the data in Exercise 8-20. Required

Refer to the data in Exercise 8-20. Required Compute the equivalent units for materials and conversion costs for December using the FIFO method. Exercise 8-20: Trevor Mills produces agricultural feed...

Q: Patton Dyes manufactures colorings, primarily for textiles. Information on the

Patton Dyes manufactures colorings, primarily for textiles. Information on the work in process follows: ∙ Beginning inventory, 115,000 partially complete liters. ∙ Ending inventory, 85,000 liters; uni...

Q: Breckenridge Corporation manufactures a part in a single production process in Department

Breckenridge Corporation manufactures a part in a single production process in Department B. The company reports the following information about conversion costs for June: Work-in-process ending inven...

Q: Refer to the information and data in Problem 7-58.

Refer to the information and data in Problem 7-58. Required Help the managers at Highway 1 Manufacturing by illustrating graphically the effect of using monthly rates versus an annual rate for applyin...

Q: Refer to the information and data in Problem 7-60.

Refer to the information and data in Problem 7-60. Required Graphically illustrate the effect of using monthly rates versus an annual rate for applying overhead. Problem 7-60:

Q: Refer to the data in Problem 8-61. The Refining

Refer to the data in Problem 8-61. The Refining Department uses the FIFO method of process costing. The Mixing Department at the Grant Street Plant uses the weighted-average method of process costing....

Q: Rutland Business Services (RBS) provides miscellaneous consulting and services to

Rutland Business Services (RBS) provides miscellaneous consulting and services to local businesses. In August, RBS worked for three clients. It worked 270 hours for Selden Contracting, 170 hours for M...

Q: Edwina Industrial Products (EIP) manufactures cleaning products. The Grant

Edwina Industrial Products (EIP) manufactures cleaning products. The Grant Street Plant produces a single product in three departments: Mixing, Refining, and Packaging. Additional materials are added...

Q: Edwin Parts, a job shop, recorded the following transactions in

Edwin Parts, a job shop, recorded the following transactions in May: 1. Purchased $87,200 in materials on account. 2. Issued $3,650 in supplies from the materials inventory to the production departmen...

Q: Western Services has three service departments: Information Systems (IS),

Western Services has three service departments: Information Systems (IS), Personnel, and Administration. There are two operating departments: Residential and Commercial. A summary of costs and other d...

Q: What are the advantages of the contribution margin format based on variable

What are the advantages of the contribution margin format based on variable costing compared to the traditional format based on full absorption costing?

Q: What is the advantage of recognizing materials price variances at the time

What is the advantage of recognizing materials price variances at the time of purchase rather than at the time of use?

Q: Romeyn Food Markets has decided to adopt a balanced scorecard to monitor

Romeyn Food Markets has decided to adopt a balanced scorecard to monitor performance. The company’s strategy is to be a provider of premium foods, sourced from local farms and nation...

Q: Gordon Industries has the following mission statement: To be the

Gordon Industries has the following mission statement: To be the low-cost leader in package delivery services. Gordon’s CEO tells you that the financial staff has developed the follo...

Q: For each category of functional measures listed in Exhibit 18.9

For each category of functional measures listed in Exhibit 18.9, add one additional specific measurement that is not already listed.

Q: RST Airlines operates call centers for customer service in four locations:

RST Airlines operates call centers for customer service in four locations: Minneapolis, Phoenix, Boise, and Singapore. Although all four call centers can handle any inquiries, calls from elite custome...

Q: Top management at Reisener Corporation are looking to improve productivity in corporate

Top management at Reisener Corporation are looking to improve productivity in corporate staff functions. One area targeted for the initiative is the Human Resources (HR) department. The following data...

Q: The controller’s staff at McNichols Lubricants is responsible for preparing quarterly performance

The controller’s staff at McNichols Lubricants is responsible for preparing quarterly performance reports. One report evaluates quarter-to-quarter improvement in partial productivity...

Q: Canfield Transition Centers is a not-for-profit organization to

Canfield Transition Centers is a not-for-profit organization to teach new technical skills to individuals looking to change careers. Canfield operates four campuses (Construction, Electrical, Plumbing...

Q: Cahalan is a network of clinics performing laser surgery for vision correction

Cahalan is a network of clinics performing laser surgery for vision correction. Each clinic tracks the number of patients treated and the number of professional-hours spent on the laser patient proced...

Q: Ternes Manufacturing produces metal products primarily used in the construction industry.

Ternes Manufacturing produces metal products primarily used in the construction industry. The three main inputs in production are materials (metal), labor, and overhead. Data for the previous three re...

Q: Trombly Fabrication has three production facilities located in the state, each

Trombly Fabrication has three production facilities located in the state, each producing the same basic mix of products. Facility 1 was the original plant and the only one for several years. Facilitie...

Q: What is the advantage of preparing the flexible budget? The period

What is the advantage of preparing the flexible budget? The period is over and the actual results are known. Is this just extra work for the staff?

Q: Write a memo to Megan Okoye outlining how you would recommend measuring

Write a memo to Megan Okoye outlining how you would recommend measuring “correct orders” for Silo Coffee and Tea. Be sure to discuss the advantages and disadvantages of your proposed measure.

Q: Emmons Lawn Maintenance (ELM) provides lawn and garden care for

Emmons Lawn Maintenance (ELM) provides lawn and garden care for residential properties. In the current year, ELM maintains 75 properties and earns an average of $5,000 annually for each property. The...

Q: Bramell Park is an amusement park with an entrance fee that allows

Bramell Park is an amusement park with an entrance fee that allows unlimited rides. Last year, the company sold 88,000 one-day admission tickets with an average price of $125 and 30,000 three-day admi...

Q: Lamont Copy Centers (LCC) operates several stores in the upper

Lamont Copy Centers (LCC) operates several stores in the upper midwest. The company is decentralized. At the corporate level, there are two operating managers: chief personnel officer (CPO) and chief...

Q: Westphalia Corporation produces audio equipment for home, office, and vehicles

Westphalia Corporation produces audio equipment for home, office, and vehicles. The production manager (PM) and marketing manager (MM) are both are paid a flat salary and are eligible for a bonus. The...

Q: Wreford Components produces testing equipment for hospitals and other health care facilities

Wreford Components produces testing equipment for hospitals and other health care facilities. The vice president for operations (VP-Ops) and vice president for sales (VP-Sales) are paid a flat salary....

Q: Shadownook Industries is a multinational firm operating in many businesses, including

Shadownook Industries is a multinational firm operating in many businesses, including manufacturing, mining, and agriculture. Top management focuses on the annual earnings in evaluating the performanc...

Q: Zender Fabrication is a long-established manufacturer of various industrial products

Zender Fabrication is a long-established manufacturer of various industrial products located in the United States. This company’s products have a well-respected brand name and receive a premium price...

Q: Consider the Business Application, “Centralizing as a Cost-Cutting

Consider the Business Application, “Centralizing as a Cost-Cutting Approach.” Required What best describes the benefits that the companies cited that chose not to c...

Q: Sauer Instruments manufactures a surgical tool used in cardiovascular procedures. The

Sauer Instruments manufactures a surgical tool used in cardiovascular procedures. The demand for the instrument has been strong after a competitor’s instrument was deemed defective and is currently of...

Q: What is the link between flexible budgeting and management control?

What is the link between flexible budgeting and management control?

Q: Cherboneau Novelties produces drink coasters (among many other products). During

Cherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 520,000 units (packages of 6 coasters). In the coming year (year 1), the co...

Q: Benham Foundries manufactures metal components. The inventory policy at Benham is

Benham Foundries manufactures metal components. The inventory policy at Benham is to hold inventory equal to 150 percent of the average monthly sales for its main product. Sales for the main product f...

Q: Equipment is a specialty nozzle. The budgeting team is now determining

Equipment is a specialty nozzle. The budgeting team is now determining the purchase requirements and monthly cash disbursements for this part. Eliot wishes to have in stock enough nozzles to use for t...

Q: Giardin Outdoors is a recreational goods retailer with two divisions: Online

Giardin Outdoors is a recreational goods retailer with two divisions: Online and Stores. The two divisions both use the services of the corporate Finance and Accounting (F&A) Department. Annual co...

Q: Montrose Instrumentation produces measurement equipment. One component, used in a

Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company’s products, is critical, and the supply chain often breaks. For that reason,...

Q: Kentfield Advisory Services (KAS) is a large management consulting firm

Kentfield Advisory Services (KAS) is a large management consulting firm organized into two groups: Governmental Services (GS) and Commercial Support (CS). Corporate information technology (IT) service...

Q: All sales at Alaska Company are on credit. The company is

All sales at Alaska Company are on credit. The company is preparing a cash budget for November. The following information on accounts receivable collections is available from customer payment history:...

Q: Dill Shipyards operates a dry dock on the East Coast, where

Dill Shipyards operates a dry dock on the East Coast, where it builds and repairs ships. The company’s Payroll Department supports its two divisions, Naval and Private. The Naval div...

Q: Cornwall Mobile Detailing (CMD) is a service that washes and

Cornwall Mobile Detailing (CMD) is a service that washes and details a customer’s vehicle at their home or office. It operates on a membership basis. Members pay $200 dues per month,...

Q: One of the authors of this book has a favorite sandwich shop

One of the authors of this book has a favorite sandwich shop where one person makes the sandwich and another person rings up the sale and takes the customer’s cash. At first, this author thought that...

Q: What are the advantages and disadvantages of starting the budgeting process early

What are the advantages and disadvantages of starting the budgeting process early in the year versus later in the year prior to the budget year?

Q: Commonly in many organizations, including corporations, universities, and government

Commonly in many organizations, including corporations, universities, and government agencies, when more than one employee from the organization is having a business meal paid by the organization, the...

Q: Hackett Produce Supply is preparing its cash budget for April. The

Hackett Produce Supply is preparing its cash budget for April. The following information is available: Required What is the estimated amount of cash receipts from accounts receivable collections in Ap...

Q: Curtis Party Rentals offers party equipment such as tents, tables,

Curtis Party Rentals offers party equipment such as tents, tables, chairs, and so on for outdoor events. The rental fees average $750 per event. Curtis receives a 15 percent deposit two months before...

Q: Lambie Custodial Services (LCS) offers residential and commercial janitorial services

Lambie Custodial Services (LCS) offers residential and commercial janitorial services. Clients are billed monthly but can cancel the service at the end of any month. In addition to the employees who d...

Q: Refer to the information in Exercise 13-47. For November

Refer to the information in Exercise 13-47. For November, Lambie Custodial Services has budgeted profit of $1,620 based on 50 commercial clients. All information about unit costs for cleaners and supp...

Q: Avery Equipment Rental is a regional firm servicing agricultural and construction clients

Avery Equipment Rental is a regional firm servicing agricultural and construction clients in the northern plains states. The CFO of Avery is preparing next quarter’s budget and has two forecasts for s...

Q: The director of marketing for Marbud Hardware is responsible for, among

The director of marketing for Marbud Hardware is responsible for, among other things, identifying new geographic regions for the company to enter. As part of the company’s zero-based...

Q: Lamphere Lawn Care provides lawn and gardening services. The price of

Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed at a flat rate for each service, and most costs of providing the service are the same, given the similarity i...

Q: Volte Corporation produces small electric appliances. The following information is available

Volte Corporation produces small electric appliances. The following information is available for the most recent period of operations: Volte never has any work-in-process inventories and began the yea...

Q: Post Parts manufactures components used in audio and video systems. The

Post Parts manufactures components used in audio and video systems. The year just ended was Post’s first year of operations and it is preparing financial statements. The immediate issue facing Post is...

Q: Pick an organization you know, such as a school, a

Pick an organization you know, such as a school, a local firm, a business, an entertainment business, a sports team, and so on. Identify an example of when a favorable cost variance (actual cost relat...

Q: Philadelphia Supply Corporation (PSC) produces and distributes various products for

Philadelphia Supply Corporation (PSC) produces and distributes various products for the hospitality industry. It is organized in two divisions: Assembly and Packaging. The managers of both divisions a...

Q: Refer to the data in Exercise 15-22. PSC management

Refer to the data in Exercise 15-22. PSC management has disallowed any change in transfer prices for special orders. Required a. Does PSC want to accept this order? b. Will the Assembly Division manag...

Q: Stockton Distributors is a large, privately held warehousing and freight company

Stockton Distributors is a large, privately held warehousing and freight company with managers assigned to each region of the U.S. The company managers are developing Stockton’s sales budget for the f...

Q: Fargo Industries manufactures and sells snowmobiles. The company has eight business

Fargo Industries manufactures and sells snowmobiles. The company has eight business units strategically located near the major markets, each with a sales force and two to four manufacturing plants. Th...

Q: Keewee Company manufactures a single product for the military. Keewee Company

Keewee Company manufactures a single product for the military. Keewee Company had steady work, but it only had a return on investment of 6 percent. The CEO of Keewee Company did a test flight of Keewe...

Q: I thought the Internet would be an ideal way to distribute our

I thought the Internet would be an ideal way to distribute our products. We’ve had a lot of success with our direct sales, but now we can reach a much larger audience. The baskets we...

Q: I just don’t understand these financial statements at all!” exclaimed Mr

I just don’t understand these financial statements at all!” exclaimed Mr. Elmo Knapp. Mr. Knapp explained that he had turned over management of Racketeer, Inc., a d...

Q: Following several years of tight budgets, administrators at the University of

Following several years of tight budgets, administrators at the University of California, Davis, looked for ways “to do more with less.” Janet Hamilton, vice chance...

Q: The board of directors of the Cortez Beach Yacht Club (CBYC

The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $50,...

Q: Burt Management Consultants (BMC) is a multinational consulting group organized

Burt Management Consultants (BMC) is a multinational consulting group organized geographically. In the U.S. Division, the managing partner for sales (MPS) is responsible for client acquisition. The MP...

Q: Give two reasons why dividing production cost variances into price and efficiency

Give two reasons why dividing production cost variances into price and efficiency variances is useful for management control.

Q: Cherrylawn Appliance Stores is a nationwide chain of kitchen appliance stores.

Cherrylawn Appliance Stores is a nationwide chain of kitchen appliance stores. The company operates with a widely based retail and distribution system that has led to a highly decentralized management...

Q: Racine Chemicals’ division managers have been expressing growing dissatisfaction with the methods

Racine Chemicals’ division managers have been expressing growing dissatisfaction with the methods the company uses to measure division performance. Division operations are evaluated every quarter by c...

Q: Lilac Group is organized into two geographic divisions (Americas and Rest

Lilac Group is organized into two geographic divisions (Americas and Rest of the World, or ROW) and a corporate headquarters. Late last year, the Lilac CFO prepared financial operating plans (budgets)...

Q: Refer to the information in Problem 12-49 for Lilac Group

Refer to the information in Problem 12-49 for Lilac Group. Required Recommend a corporate cost allocation system that would improve the performance measurement system used for the two divisions and wo...

Q: Elba Consulting Associates (ECA) is organized into three divisions (

Elba Consulting Associates (ECA) is organized into three divisions (Manufacturing, Retail, and Entertainment). Many support services, such as human resources, legal, and information technology, are pr...

Q: Refer to the information in Problem 12-51 for Elba Consulting

Refer to the information in Problem 12-51 for Elba Consulting Associates. Required Recommend a corporate cost allocation system that would improve the performance measurement system used for the three...

Q: Burwell Manufacturing is organized into two divisions (Agriculture and Mining)

Burwell Manufacturing is organized into two divisions (Agriculture and Mining) and a corporate headquarters. The financial group of the corporate staff prepared financial operating plans (budgets) for...

Q: Loretto Outfitters is a retail chain of stores organized into two divisions

Loretto Outfitters is a retail chain of stores organized into two divisions (East and West) and a corporate headquarters. Corporate planners have prepared financial operating plans (budgets) for the t...

Q: Manning Systems is a commercial software vendor that sells billing and other

Manning Systems is a commercial software vendor that sells billing and other financial software to companies around the globe. Manning operates a centralized call center for customer support calls. Co...

Q: Burchill Consultants is a global consulting firm. The firm has a

Burchill Consultants is a global consulting firm. The firm has a travel policy that reimburses employees for the “ordinary and necessary” costs of business travel a...

Q: On December 30, a manager determines that income is about $

On December 30, a manager determines that income is about $9.9 million. The manager has a compensation plan that calls for a bonus of 25 percent (of salary) if income exceeds $10 million and no bonus...

Q: Refer to the data in Problem 13-56. Estimate the

Refer to the data in Problem 13-56. Estimate the cash from operations expected in year 2 for Coyle Manufacturing. Problem 13-56:

Q: Several years ago, Humboldt Products acquired Crescent Fabrication. Prior to

Several years ago, Humboldt Products acquired Crescent Fabrication. Prior to the acquisition, Crescent manufactured and sold metal and plastic components to third-party customers. Since becoming a div...

Q: Refer to the data in Problem 13-58. Estimate the

Refer to the data in Problem 13-58. Estimate the cash from operations expected in year 2. Problem 13-58:

Q: Clairpointe Accessories manufactures products for food preparation at several different manufacturing sites

Clairpointe Accessories manufactures products for food preparation at several different manufacturing sites. The following costs and other data apply to unit production from the year just ending: The...

Q: West Partners manufactures metal fixtures. Each fitting requires both steel and

West Partners manufactures metal fixtures. Each fitting requires both steel and an alloy that can withstand extreme temperatures. The following data apply to the production of the fittings for year 1:...

Q: Leland Pharmaceuticals develops both over-the-counter (OTC)

Leland Pharmaceuticals develops both over-the-counter (OTC) and prescription medicines. It is organized into two divisions, which are evaluated as investment centers. The cost of capital used in evalu...

Q: Oakley Wholesale Hardware and Supplies (OWHS) sells tools, lumber

Oakley Wholesale Hardware and Supplies (OWHS) sells tools, lumber, and other remodeling supplies to commercial contractors. The company controller is compiling cash and other budget information for Ju...

Q: Vernon Cabins is a small motel chain located near state and national

Vernon Cabins is a small motel chain located near state and national parks. Each property is made up of separate cabins. The chain has 10 properties with an average of 15 cabins at each property. In y...

Q: Refer to the data in Problem 13-64. The managers

Refer to the data in Problem 13-64. The managers of Vernon Cabins are considering different pricing strategies for year 2. Under the first strategy (High Price), they will work to maintain an average...

Q: Lane Products manufactures a popular kitchen utensil. The company recently expanded

Lane Products manufactures a popular kitchen utensil. The company recently expanded, and the controller believes that it will need to borrow cash to continue operations. It opened negotiations with th...

Q: Accounting is objective and precise. Therefore, performance measures based on

Accounting is objective and precise. Therefore, performance measures based on accounting numbers must be objective and precise. Do you agree? Explain.

Q: Refer to the information in Exercise 14-45. Assume that

Refer to the information in Exercise 14-45. Assume that the company uses an 8 percent cost of capital. Required a. Compute residual income, using net book value for each year. b. Compute residual inco...

Q: Owen Surf Sports is an idea of two budding entrepreneurs. Their

Owen Surf Sports is an idea of two budding entrepreneurs. Their plan is to sell kiteboards from a store in the local town. Between them, they invest $30,000 in capital and are in the process of applyi...

Q: Refer to the data in Problem 13-68. Required

Refer to the data in Problem 13-68. Required a. Prepare a cash budget for the year. b. The owners want to ensure that they have cash on hand at the end of the year equal to the current accounts payabl...

Q: Norcross Carpet Cleaning (NCC) is a commercial service specializing in

Norcross Carpet Cleaning (NCC) is a commercial service specializing in maintaining floor coverings in high-traffic areas such as malls and office buildings. The business is highly seasonal, with high...

Q: Refer to the data in Exercise 13-51. Recent economic

Refer to the data in Exercise 13-51. Recent economic events in the local area have led the owner of Lamphere Lawncare to revise some estimates in budgeting the operating income for the following year....

Q: Navarre Energy Research specializes in developing and commercializing new products. It

Navarre Energy Research specializes in developing and commercializing new products. It is organized into two divisions, which are based on the products they produce. Canal Division is smaller, and the...

Q: Refer to the data in Problem 14-49. R&

Refer to the data in Problem 14-49. R&D is assumed to have a three-year life in Canal Division and an eight-year life in Lake Division. All R&D expenditures are spent at the beginning of the y...

Q: Refer to the data in Problems 14-49 and 14-

Refer to the data in Problems 14-49 and 14-50. The manager of the Canal Division complains that the calculation of EVA is unfair because a much longer life is assumed for the Lake Division in calculat...

Q: Refer to the information in Problem 14-52. The manager

Refer to the information in Problem 14-52. The manager is still assessing the problem of whether to acquire SSM’s assembly machine. SSM tells the manager that the new machine could b...

Q: Refer to the facts in Problem 14-52. Assume that

Refer to the facts in Problem 14-52. Assume that the performance measurement and bonus plans at Leidich Corporation are based on residual income instead of ROI. The company uses a cost of capital of 1...

Q: Surveying the accounts payable records, a clerk in the controller’s office

Surveying the accounts payable records, a clerk in the controller’s office noted that expenses appeared to rise significantly within one month of the close of the budget period. The organization did n...

Q: Refer to the facts in Problem 14-52 through 14-

Refer to the facts in Problem 14-52 through 14-54. Assume that the Leidich Corporation performance measurement and bonus plans are based on residual income instead of ROI. The company uses a cost of c...

Q: Division managers at Lesure, Inc. are granted a wide range

Division managers at Lesure, Inc. are granted a wide range of decision authority. With the exception of managing cash, which is done at corporate headquarters, divisions are responsible for sales, pri...

Q: Technology firms, pharmaceutical firms, oil and gas companies, and

Technology firms, pharmaceutical firms, oil and gas companies, and other ventures inevitably incur costs on unsuccessful investments in new projects (e.g., new technologies or new drugs). For oil and...

Q: Vermont Automotive is a regional chain of auto parts stores. The

Vermont Automotive is a regional chain of auto parts stores. The managers of the individual stores are evaluated using ROI. Vermont requires managers to earn an ROI of at least 10 percent of assets. T...

Q: Bentler Industries provides high-technology navigation and communication equipment for the

Bentler Industries provides high-technology navigation and communication equipment for the aerospace and shipbuilding industries. It is organized into two divisions, Aeronautics and Marine. The divisi...

Q: Refer to the information in Problem 14-63. Looking at

Refer to the information in Problem 14-63. Looking at the ROI results for year 3, the president of Aeronautics Division complains that the division is evaluated unfairly because of the accounting rule...

Q: Refer to the information in Problems 14-63 and 14-

Refer to the information in Problems 14-63 and 14-64. The executives at Bentler’s corporate headquarters are intrigued and interested by the EVA findings. They are concerned, however...

Q: Refer to the information in Problems 14-63 and 14-

Refer to the information in Problems 14-63 and 14-64. Looking at the EVA results for year 3, the president of Marine Division complains that the division is evaluated unfairly because a common cost of...

Q: Refer to the information in Exercise 14-48. Assume that

Refer to the information in Exercise 14-48. Assume that the company uses a 12 percent cost of capital. As in Exercise 14-48, performance measures are based on beginning-of-year gross book values for t...

Q: Pallister Medical, Inc. (PMI) produces and sells a

Pallister Medical, Inc. (PMI) produces and sells a single drug. The company is organized into three divisions: Production, Packaging, and Distribution. Production, located in country A, manufactures t...

Q: The manager of an operating department just received a cost report and

The manager of an operating department just received a cost report and has made the following comment with respect to the costs allocated from one of the service departments: “This charge to my divisi...

Q: Dakota Security Systems (DSS) is a decentralized organization that evaluates

Dakota Security Systems (DSS) is a decentralized organization that evaluates divisional management based on measures of divisional contribution margin. Residential Division and Commercial Division bot...

Q: LGA’s Energy Division is operating at capacity. It has been asked

LGA’s Energy Division is operating at capacity. It has been asked by Products Division to supply it a thermal switch, which Energy sells to its regular customers for $72 each. Produc...

Q: Fenton Supplies manufactures and sells food products for restaurants and other institutional

Fenton Supplies manufactures and sells food products for restaurants and other institutional food providers. Produce Division does both manufacturing (blending, canning, bottling) and storing of produ...

Q: Norfolk, Inc. consists of three divisions—Tidal, Hill

Norfolk, Inc. consists of three divisions—Tidal, Hill, and Wood—that operate as if they were independent companies. Each division has its own sales force and produc...

Q: Northfield Manufacturing has two operating divisions in a semiautonomous organizational structure.

Northfield Manufacturing has two operating divisions in a semiautonomous organizational structure. Americas Division, based in the United States, produces a specialized memory chip that is an input to...

Q: Wager Enterprises has four operating divisions: Tours, Hotels, Concerts

Wager Enterprises has four operating divisions: Tours, Hotels, Concerts, and Ticket Services. Each division is a separate segment for financial reporting purposes. Revenues and costs related to outsid...

Q: Grand Amusements, Inc. (GAI) has two operating divisions

Grand Amusements, Inc. (GAI) has two operating divisions, Parks and Foods. The two divisions have a marketing agreement to provide incentives to customers. Parks Division offers vouchers good for meal...

Q: Radom Manufacturing produces various products. The company operates a landfill,

Radom Manufacturing produces various products. The company operates a landfill, which it uses to dispose of nonhazardous trash. The trash is hauled from the two nearby manufacturing facilities in truc...

Q: Milner Technologies is a large, multidivision firm. One division,

Milner Technologies is a large, multidivision firm. One division, Testing, is well known inside Milner for its efficient information technology (IT). A smaller division, Energy, has approached Testing...

Q: Whipple Parts is organized in two divisions: Stamping and Assembly.

Whipple Parts is organized in two divisions: Stamping and Assembly. Managers in both divisions are evaluated as profit centers using divisional income. All orders at Whipple come to Assembly Division....

Q: In Chapter 12, we discussed corporate cost allocation and the incentive

In Chapter 12, we discussed corporate cost allocation and the incentive problems associated with these allocations. How is the problem of corporate cost allocations similar to the transfer pricing pro...

Q: In the previous chapters, we considered different allocation methods and considered

In the previous chapters, we considered different allocation methods and considered which one might be “better.” Why might a manager have a different opinion about the “best” allocation system after m...

Q: Rogge Corporation makes a specialized sensor that is used in testing equipment

Rogge Corporation makes a specialized sensor that is used in testing equipment. The company is organized in two divisions: Assembly and Shipping. Managers in both divisions are evaluated as profit cen...

Q: The following are the actual results for Bentler Associates for the most

The following are the actual results for Bentler Associates for the most recent period: The company planned to produce and sell 72,000 units for $12.50 each. At that volume, the contribution margin wo...

Q: The following, partially complete profit variance analysis is from October for

The following, partially complete profit variance analysis is from October for La Salle Manufacturing: Required Find the values of the missing items (a) through (q). Assume that the actual sales volum...

Q: McCoy Industries has prepared the following, partially complete profit variance analysis

McCoy Industries has prepared the following, partially complete profit variance analysis: Required Find the values of the missing items (a) through (x). Assume that actual sales volume equals actual p...

Q: Parkdale Courier Service employs several delivery specialists. The following reports the

Parkdale Courier Service employs several delivery specialists. The following reports the information for these specialists for April: Required Based on these data, what was the number of actual hours...

Q: The following is a typical monthly report used to evaluate managers at

The following is a typical monthly report used to evaluate managers at the six manufacturing plants of Missouri Foundries: Required Identify and explain at least three changes to the report that would...

Q: Hart Business Solutions operates call centers for multiple clients. Hart has

Hart Business Solutions operates call centers for multiple clients. Hart has suffered declining profits and is looking at ways to improve its performance. Because of competition in the industry, Hart...

Q: The Valley Plant of Patton Supply manufactures a single product. The

The Valley Plant of Patton Supply manufactures a single product. The standard cost sheet for the product follows: Standards have been computed based on a master budget activity level of 20,000 direct...

Q: Refer to the information in Problem 16-71. Assume there

Refer to the information in Problem 16-71. Assume there are no beginning inventories or ending inventories. All production was sold on account for $2,500,000. Selling and administrative costs were inc...

Q: Copland Components manufactures an electronic device for vehicle manufacturing. The current

Copland Components manufactures an electronic device for vehicle manufacturing. The current standard cost sheet for a device follows: Assume that the following data appeared in Coplandâ€
...

Q: A company has a bonus plan that states that managers with division

A company has a bonus plan that states that managers with division income ranked below the average of all managers receive no bonus for the year. What biases might arise in this system?

Q: Anthon Corporation has provided the following information regarding last month’s activities.

Anthon Corporation has provided the following information regarding last month’s activities. Variable overhead is applied on the basis of direct labor-hours. Required Prepare a repor...

Q: Refer to the information in Problem 16-75. Assume that

Refer to the information in Problem 16-75. Assume that the company carries no beginning or ending inventories. Sales in March totaled $3,800,000 for both products combined. Required Prepare the journa...

Q: The following information concerning actual results is available from Hamburg, Inc

The following information concerning actual results is available from Hamburg, Inc.: The company planned to sell 64,800 units at a price of $11 each. Variable marketing and administrative costs are bu...

Q: Refer to the information and analysis of Problem 16-78.

Refer to the information and analysis of Problem 16-78. Required Help the managers at Harlow understand the implications from the profit variance analysis by writing a short summary of your analysis....

Q: Refer to the information and analysis of Problem 16-79.

Refer to the information and analysis of Problem 16-79. Required Help the managers at Harlow understand the implications from the production cost variance analysis by writing a short summary of your a...

Q: Gateshead Indistries manufactures a single product and started the year with no

Gateshead Indistries manufactures a single product and started the year with no inventories. Selected information about results for the period just ended include the following: Thirty percent of this...

Q: Larned Company makes a storage box using metal. The company uses

Larned Company makes a storage box using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct materials usage (pounds). Overhead is allocated to uni...

Q: Refer to the information in Problem 17-52. Required

Refer to the information in Problem 17-52. Required Write a memo to the managers at Graves Bank & Trust recommending which variances they should investigate this period, along with your reasons. Prob...

Q: Earle Soup Company makes three varieties of soups: Bean, Tomato

Earle Soup Company makes three varieties of soups: Bean, Tomato, and Vegetable. Sales volume for the annual budget is determined by estimating the total market volume for soups and then applying the c...

Q: Refer to the information in Problem 17-58. Required

Refer to the information in Problem 17-58. Required Write a memo to the managers at Pease Contractors recommending which variances they should investigate this period, along with your reasons. Proble...

Q: Consider the Business Application “Recent Experiences with Zero-Based Budgeting

Consider the Business Application “Recent Experiences with Zero-Based Budgeting. According to the Application, the company Kraft Heinz intends to keep using zero-based budgeting while other firms in t...

Q: The Berry Bowl sells fresh fruit cups from a cart. The

The Berry Bowl sells fresh fruit cups from a cart. The owner want to compare this quarter’s results with those for last quarter. The owner believes that the last quarterâ€...

Q: You are a county supervisor for Firwood County and are preparing for

You are a county supervisor for Firwood County and are preparing for the monthly supervisor meeting where the operations of various units are reviewed. One of the units that the county government oper...

Q: La Salle Outfitters organizes wilderness tours. For the most recent touring

La Salle Outfitters organizes wilderness tours. For the most recent touring season, the industry volume variance showed La Salle sold 336 more tours than expected, but the market share variance result...

Q: McKinley City Tours offers small group guided walks. The following information

McKinley City Tours offers small group guided walks. The following information for July provides the original budget: McKinley actually sold 1,440 tours in July. The price variance was $2,880 unfavora...

Q: Goodwin Advisors offers financial advice on an hourly basis. The following

Goodwin Advisors offers financial advice on an hourly basis. The following information for the second quarter is the flexible budget based on the actual volume of 3,500 hours: The master budget for th...

Q: A company is considering using sales revenue (selling price multiplied by

A company is considering using sales revenue (selling price multiplied by sales quantity) as a performance measure for its marketing manager. The newly hired compensation analyst suggests that it migh...

Q: Brace Parts manufactures components for the audiovideo equipment industry. At a

Brace Parts manufactures components for the audiovideo equipment industry. At a recent corporate retreat, the management of Brace reviewed the company strategy and decided that Brace had a strategic a...

Q: Stansbury Stores is a general grocery and convenience items retailer. The

Stansbury Stores is a general grocery and convenience items retailer. The business is quite competitive and margins are thin. The company recently reviewed its performance measurement system and decid...

Q: Write a report to the CEO of Acer Incorporated (a manufacturer

Write a report to the CEO of Acer Incorporated (a manufacturer of laptops) recommending specific benchmark measures. Include specific competitors against which to measure.

Q: Mission statements can be difficult to write, especially for not-

Mission statements can be difficult to write, especially for not-for-profit organizations engaged in charitable work. Consider the following two statements from relief organizations: • American Red Cr...

Q: Each April, it is common to find news articles contrasting executive

Each April, it is common to find news articles contrasting executive pay with firm performance. For example, on April 9, 2009, The Wall Street Journal reported that the top three executives at Kilroy...

Q: Terrell Industries produces a single product at its Roosevelt facility. The

Terrell Industries produces a single product at its Roosevelt facility. The product has two main inputs, metal and labor, with additional costs being included in manufacturing overhead. The plant carr...

Q: Prevost Chemicals manufactures an industrial solvent at its only processing plant.

Prevost Chemicals manufactures an industrial solvent at its only processing plant. A liquid chemical and labor are the two primary inputs. All other resources are included in manufacturing overhead. T...

Q: Henderson Parts manufactures parts for turbines. The company is in the

Henderson Parts manufactures parts for turbines. The company is in the process of adopting lean manufacturing techniques to remain competitive. Part of the effort is to eliminate as much of the nonval...

Q: Boleyn Cycles produces several models of high-end bicycles and related

Boleyn Cycles produces several models of high-end bicycles and related products. The company collects various operational performance measurements monthly and reviews them as part of its continuous im...

Q: Refer to the data in Exercise 18-42 (McNichols Lubricants

Refer to the data in Exercise 18-42 (McNichols Lubricants). From the accounting records, you also gather the following information for the two years. Required a. Compute the total factor productivity...

Q: Venice Textiles produces cloth. The inputs are fabric, labor,

Venice Textiles produces cloth. The inputs are fabric, labor, and overhead. Fragmentary productivity records from plant files for the last period show the following: Required Determine the partial fab...

Q: A common method of measuring performance in many college and university courses

A common method of measuring performance in many college and university courses is to combine objective measures (test scores, for example) with subjective measures (class participation measures, for...

Q: The interaction between customers and line employees is often more direct in

The interaction between customers and line employees is often more direct in service industries than in manufacturing firms. At the same time, we often observe that employees in many service firms (fo...

Q: Many firms in the service industry have empowered their customer-facing

Many firms in the service industry have empowered their customer-facing employees to handle service complaints on the spot rather than having the customer contact a corporate customer service center....

Q: Tarnow Manufacturing produces metal components and is organized in four geographic divisions

Tarnow Manufacturing produces metal components and is organized in four geographic divisions (North, South, East, and West). The company adopted a balanced scorecard approach to performance measuremen...

Q: The Treadway Commission commented that the forces leading to financial fraud were

The Treadway Commission commented that the forces leading to financial fraud were present in all companies to some extent, but fraudulent financial reporting resulted from the right combustible mixtur...

Q: Norfolk Advisors operates a network of offices that provide business and financial

Norfolk Advisors operates a network of offices that provide business and financial advice to small businesses. Each office is managed by an office director. The office director is given relatively wid...

Q: Washburn Associates has two divisions. Western Division, which has an

Washburn Associates has two divisions. Western Division, which has an investment base of $50,000,000, produces and sells 1,400,000 units of a product at a market price of $60 per unit. Its variable co...

Q: Refer to the data in Problem 15-41. Division managers

Refer to the data in Problem 15-41. Division managers are evaluated using residual income using a 9 percent cost of capital. Required a. What is the residual income for Western without the transfer to...

Q: Mack’s Juices produces and bottles a line of fruit juices. The

Mack’s Juices produces and bottles a line of fruit juices. The manufacturing process entails mixing and adding juices and other ingredients at the bottling plant, which is a part of...

Q: Montgomery Fashions produces and sells clothing through various retailers. Montgomery is

Montgomery Fashions produces and sells clothing through various retailers. Montgomery is highly decentralized and allows its managers discretion in managing with little direct oversight. This latitude...

Q: How are actual direct labor costs used in a standard cost system

How are actual direct labor costs used in a standard cost system? Does this differ from their use in a normal costing system? If so, how? If not, why not?

Q: What role do “packages” play in zero-based budgeting

What role do “packages” play in zero-based budgeting? How do these roles address critiques of traditional budgeting?

Q: How does the separation of duties help prevent financial fraud?

How does the separation of duties help prevent financial fraud?

Q: Why is transfer pricing important in tax accounting?

Why is transfer pricing important in tax accounting?

Q: Actual direct materials costs differ from the master budget amount. What

Actual direct materials costs differ from the master budget amount. What are the three primary reasons for the difference?

Q: The Treadway Commission commented that a factor giving rise to fraud is

The Treadway Commission commented that a factor giving rise to fraud is the existence of pressures on division managers to achieve unrealistic profit objectives. Why might top management set unrealist...

Q: Fixed cost variances are computed differently from the variances for variable costs

Fixed cost variances are computed differently from the variances for variable costs. Why?

Q: What complication arises in variance analysis when the number of units produced

What complication arises in variance analysis when the number of units produced is not the same as the number of units sold?

Q: How would you recommend accounting for variances at the end of the

How would you recommend accounting for variances at the end of the year? Why?

Q: If the sales activity or materials efficiency variance is zero, there

If the sales activity or materials efficiency variance is zero, there is no reason to compute a mix and quantity or yield variance. True or false?

Q: Why is it important for management accountants to understand business strategy?

Why is it important for management accountants to understand business strategy?

Q: Why is worker involvement important to an organization’s success?

Why is worker involvement important to an organization’s success?

Q: What are the advantages of financial measures of performance? What are

What are the advantages of financial measures of performance? What are the advantages of nonfinancial measures of performance?

Q: What are the five basic kinds of decentralized units in a responsibility

What are the five basic kinds of decentralized units in a responsibility accounting system?

Q: What is goal congruence? How is it different from behavioral congruence

What is goal congruence? How is it different from behavioral congruence?

Q: What is the controllability concept?

What is the controllability concept?

Q: The Treadway Commission indicated that bonus plans based on achieving short-

The Treadway Commission indicated that bonus plans based on achieving short-run financial results have been a factor in financial frauds, particularly when the bonus is a large component of an individ...

Q: What is relative performance evaluation (RPE)?

What is relative performance evaluation (RPE)?

Q: What is contingent compensation?

What is contingent compensation?

Q: How could a professional sports firm use the mix variance to analyze

How could a professional sports firm use the mix variance to analyze its total stadium revenues?

Q: Preparing a budget is a waste of time. The strategic plan

Preparing a budget is a waste of time. The strategic plan is what we work to accomplish.” How would you respond to this comment?

Q: The management control system collects information from local managers for planning purposes

The management control system collects information from local managers for planning purposes. It then uses the plan to evaluate the local managers. What are the advantages of this? What are the disadv...

Q: Salespeople are often paid a commission based on sales revenue. How

Salespeople are often paid a commission based on sales revenue. How might that incentive system lead to dysfunctional consequences?

Q: Is the CEO ever an agent in the principal–agent relationship

Is the CEO ever an agent in the principal–agent relationship as discussed in the chapter? Is a division president ever a principal in the principal–agent relationship as discussed in the chapter? Expl...

Q: Would the budgeting plans for a company that uses a just-

Would the budgeting plans for a company that uses a just-in-time (JIT) inventory system be different from those for a company that does not? Why?

Q: Government agencies are limited in spending by budget categories, not just

Government agencies are limited in spending by budget categories, not just by an overall spending limit. What purpose does this serve? What problems does it create?

Q: In some organizations (firms, universities, government agencies), spending

In some organizations (firms, universities, government agencies), spending appears to increase as the end of the budgeting period approaches, even if there are no seasonal differences. What might caus...

Q: What is the difference between the planning and the control functions of

What is the difference between the planning and the control functions of the budget? What problems do these differences create?

Q: Refer to Question 15-14. What type of responsibility center

Refer to Question 15-14. What type of responsibility center would you recommend the company make Alpha Division? Beta Division? Explain your reasons.

Q: Refer to the Business Application item “Transfer Pricing at Weyerhaeuser.”

Refer to the Business Application item “Transfer Pricing at Weyerhaeuser.” Why might the company use market prices instead of costs for product transfers?

Q: Actual revenues are greater than budgeted for December, so our revenue

Actual revenues are greater than budgeted for December, so our revenue variance is favorable.” Give an example of when this would be “good” news and when it could be “bad” news.

Q: Many companies argue that they do not pay their managers a bonus

Many companies argue that they do not pay their managers a bonus because they believe their employees will work hard for a “fair” wage and do not need to be motivated with a bonus. Why would managers...

Q: A computer company always sells the processing unit and monitor together as

A computer company always sells the processing unit and monitor together as a bundled package. Is there any benefit to computing a sales mix variance under these circumstances?

Q: “A process control chart will tell managers when to investigate variances

“A process control chart will tell managers when to investigate variances.” Do you agree?

Q: Consider your campus bookstore. Who do you think are the stakeholders

Consider your campus bookstore. Who do you think are the stakeholders? What do you think are its critical success factors? How would they differ from those of a retail bookstore in a city without a co...

Q: Again, consider a class you are taking (or have taken

Again, consider a class you are taking (or have taken). Did the instructor use solely objective measures (scores on numerical exams, for example) or did they use a mix of objective and subjective (sho...

Q: Consider the number of customer complaints as a measure of customer satisfaction

Consider the number of customer complaints as a measure of customer satisfaction. How does this measure customer satisfaction? How does it fail to measure customer satisfaction?

Q: I know how to satisfy customers—give the product away.”

I know how to satisfy customers—give the product away.” How does a system with multiple measures of performance address this concern with evaluating managers in part on customer satisfaction?

Q: When might the master budget start with a forecast of something other

When might the master budget start with a forecast of something other than sales— production, for example? Why?

Q: My company is unique. We can’t use benchmarking.” How would

My company is unique. We can’t use benchmarking.” How would you respond?

Q: Kirby Soups has just made its sales forecasts, and its marketing

Kirby Soups has just made its sales forecasts, and its marketing department estimates that the company will sell 3,900,000 units of its vegetable soup during the coming year. In the past, management h...

Q: Dolson Appliances makes coffee machines for offices and homes. For next

Dolson Appliances makes coffee machines for offices and homes. For next year, the production budget is 125,000 units. Beginning inventories will be 10,000 units and the desired ending inventory will b...

Q: Refer to the data in Exercises 14-24 and 14-

Refer to the data in Exercises 14-24 and 14-28. Lauderdale Corporation has a cost of capital of 8.6 percent. Required Compute residual income for the three regions. Ignore taxes. How have these region...

Q: Consider the Business Application, “Centralizing as a Cost-Cutting

Consider the Business Application, “Centralizing as a Cost-Cutting Approach.” Required What best describes the cost(s) Pernod Ricard SA likely hoped to reduce by re...

Q: Evergreen Transportation is a domestic logistics company offering warehousing and transportation services

Evergreen Transportation is a domestic logistics company offering warehousing and transportation services. It is organized along product lines with three sectors: Agricultural, Manufactured Goods, and...

Q: Mackenzie Mining has two operating divisions, Northern and Southern, that

Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company’s human resources (HR) department. The annual costs of the HR departme...

Q: Refer to data for Mackenzie Mining in Exercise 12-35.

Refer to data for Mackenzie Mining in Exercise 12-35. Required Determine the cost allocation if $9.5 million of the HR costs are fixed and allocated on the basis of employees, and the remaining costs,...

Q: Dawes Designs buys T-shirts for clubs, teams, and

Dawes Designs buys T-shirts for clubs, teams, and other organizations. Dawes takes the shirts and adds the organization’s logo. Because of the uncertainty in the timing of the sales...

Q: Refer to data for Giardin Outdoors in Exercise 12-37.

Refer to data for Giardin Outdoors in Exercise 12-37. Required Determine the cost allocation if $3.8 million of the F&A costs are fixed and allocated on the basis of revenues, and the remaining co...

Q: Our cash budget shows a surplus for the quarter so we do

Our cash budget shows a surplus for the quarter so we do not have to think about arranging any bank financing.” Comment on this statement.

Q: Evergreen Furniture, a retailing company, is preparing the cash budget

Evergreen Furniture, a retailing company, is preparing the cash budget for August. The following inventory information is available: Required What are the estimated cash disbursements in August?

Q: Refer to data for Kentfield Advisory Services in Exercise 12-39

Refer to data for Kentfield Advisory Services in Exercise 12-39. Required What is the cost allocation if fixed IT costs of $22.4 million are allocated on the basis of utilization and the remaining cos...

Q: Refer to the data in Exercise 14-40. The division

Refer to the data in Exercise 14-40. The division manager learns that there is an option to lease the asset on a year-to-year lease for $1,162,000 per year. All depreciation and other tax benefits wou...

Q: Refer to data for Dill Shipyards in Exercise 12-41.

Refer to data for Dill Shipyards in Exercise 12-41. Required What is the cost allocation if fixed Payroll costs of $5.6 million are allocated on the basis of number of employees and the remaining cost...

Q: Refer to the data in Exercise 13-42. Cornwall estimates

Refer to the data in Exercise 13-42. Cornwall estimates that the number of members in July should increase 20 percent above June levels, and the number of additional washes per member should increase...

Q: Cymbal E-Motors is a fast-growing start-up

Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income statement is available for April: Sales volume is expected to increase by 30 percen...

Q: Felch Tacos is a drive-thru restaurant in a coastal town

Felch Tacos is a drive-thru restaurant in a coastal town with significant seasonal changes in business. The owners are trying to decide whether to remain open during the fourth quarter of the year (Oc...

Q: Mansfield Information Systems (MIS) is an IT support firm.

Mansfield Information Systems (MIS) is an IT support firm. Managers and staff are billed to clients on an hourly basis. The senior administrative staff does not directly provide client support. Becaus...

Q: Refer to the information in Exercise 14-45. In computing

Refer to the information in Exercise 14-45. In computing ROI, this division uses end-of-year asset values. Assume that all cash flows increase 10 percent at the end of each year. This has the followin...

Q: Exeter Division of Wetherby Labs acquired an asset with a cost of

Exeter Division of Wetherby Labs acquired an asset with a cost of $800,000 and a four-year life. The cash flows from the asset, considering the effects of inflation, were scheduled as follows: The cos...

Q: Describe four methods used to estimate sales for budgeting purposes.

Describe four methods used to estimate sales for budgeting purposes.

Q: Your boss asks for your estimate on the costs of a major

Your boss asks for your estimate on the costs of a major project for which you have responsibility. Your future with the company depends on your performance relative to this budget. Your best guess is...

Q: The Custodial Division of Clark’s Corporate Services (CCS) has assets

The Custodial Division of Clark’s Corporate Services (CCS) has assets of $1.2 million. During the past year, the division had profits of $216,000. CCS has a cost of capital of 7.5 percent. Ignore taxe...

Q: Albany Division is considering the acquisition of a new asset that will

Albany Division is considering the acquisition of a new asset that will cost $540,000 and have a cash flow of $180,000 per year for each of the four years of its life. Depreciation is computed on a st...

Q: Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has

Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial information (in thousands of dollars) for the first year of business foll...

Q: Refer to the data in Exercise 14-33. Required

Refer to the data in Exercise 14-33. Required Evaluate the performance of the two divisions assuming Lasky Manufacturing uses residual income. Exercise 14-33:

Q: Houghton Chemicals, which started operations one year ago, has two

Houghton Chemicals, which started operations one year ago, has two divisions: Alloys and Petro. Both divisions invest heavily in R&D, which is assumed to generate benefits for five years. R&D...

Q: Refer to the information in Exhibits 13.20 and 13.

Refer to the information in Exhibits 13.20 and 13.21 that are part of the test of zero-based budgeting at Rainy Days Umbrellas. Information concerning the funding requests for PDG Areas 2 and 3 are as...

Q: Refer to the data in Exercise 14-37. Required

Refer to the data in Exercise 14-37. Required Evaluate the performance of the two divisions assuming Houghton Chemicals uses residual income. Exercise 14-37:

Q: The Plastics Division of Minock Manufacturing currently earns $2.87

The Plastics Division of Minock Manufacturing currently earns $2.87 million and has divisional assets of $35.0 million. The division manager is considering the acquisition of a new asset that will add...

Q: Veach Division has total assets (net of accumulated depreciation) of

Veach Division has total assets (net of accumulated depreciation) of $462,000 at the beginning of year 1. One of the assets is a machine that has a net book value of $42,000. Expected divisional incom...

Q: Refer to the facts in Exercise 14-43, but assume

Refer to the facts in Exercise 14-43, but assume that Veach has been leasing the machine for $7,200 annually. Assume also that the machine generates income of $2,940 annually after the lease payment....

Q: The chapter identified four techniques used for forecasting sales (market researchers

The chapter identified four techniques used for forecasting sales (market researchers, Delphi technique, trend analysis, and econometric models). What are some factors that would lead you in preparing...

Q: The Street Division of Labrosse Logistics just started operations. It purchased

The Street Division of Labrosse Logistics just started operations. It purchased depreciable assets costing $36 million and having a four-year expected life, after which the assets can be salvaged for...

Q: Southfield Division offers its product to outside markets for $115.

Southfield Division offers its product to outside markets for $115. It incurs variable costs of $40 per unit and fixed costs of $139,000 per month based on monthly production of 22,000 units. Northfie...

Q: Eastlawn Travel has two operating divisions, Tours and Resorts. The

Eastlawn Travel has two operating divisions, Tours and Resorts. The two divisions meet the requirements for segment disclosures. Before transactions between the two divisions are considered, revenues...

Q: The master budget at Monroe Manufacturing last period called for sales of

The master budget at Monroe Manufacturing last period called for sales of 42,000 units at $42 each. The costs were estimated to be $26 variable per unit and $524,000 fixed. During the period, actual p...

Q: Refer to the data in Exercise 16-26. Required

Refer to the data in Exercise 16-26. Required Prepare a sales activity variance analysis like the one in Exhibit 16.4. Exercise 16-26: The master budget at Cherrylawn Corporation at the beginning of...

Q: Refer to the data in Exercises 16-26 and 16-

Refer to the data in Exercises 16-26 and 16-27. Required Prepare a profit variance analysis like the one in Exhibit 16.5. Exercise 16-26: The master budget at Cherrylawn Corporation at the beginning...

Q: The following graph is from Welton Associates. Required Find

The following graph is from Welton Associates. Required Find the missing amounts for (a) and (b).

Q: The following graph is from Floyd & Company. Required

The following graph is from Floyd & Company. Required Label (a) and (b) in the graph and give the number of units sold for each.

Q: Fournier Fixtures produces a variety of manufactured items for the home and

Fournier Fixtures produces a variety of manufactured items for the home and building industry. The company produces only when it receives orders and, therefore, has no inventories. The following infor...

Q: Refer to the data in Exercise 16-32. Required

Refer to the data in Exercise 16-32. Required Prepare a sales activity variance analysis for Fournier Fixtures like the one in Exhibit 16.4. Exercise 16-32:

Q: Consider a company that leases a fleet of aircraft for passenger service

Consider a company that leases a fleet of aircraft for passenger service. Because the planes often fly with room in the cargo area, the company adds a new business shipping timesensitive freight. The...

Q: Refer to the data in Exercise 16-32 and the analysis

Refer to the data in Exercise 16-32 and the analysis in Exercise 16-33. Required Prepare a profit variance analysis for Fournier Fixtures like the one in Exhibit 16.5. Exercise 16-32:

Q: Refer to the information in Exercise 16-38. The following

Refer to the information in Exercise 16-38. The following is the actual income statement (in thousands of dollars) for the year for Golden Food Products: Required Prepare a profit variance analysis li...

Q: The standard direct material cost per unit for Willis Group was $

The standard direct material cost per unit for Willis Group was $124 (= $31 per gallon × 4 gallons per unit). During the period, actual direct materials costs amounted to $1,635,480, materials used to...

Q: Records at the Farnsworth Corporation contained the following data for the most

Records at the Farnsworth Corporation contained the following data for the most recent period of activity: Variable overhead is applied based on standard direct labor-hours allowed. Required Compute t...

Q: The records of Heritage Home Supplies show the following for July:

The records of Heritage Home Supplies show the following for July: Required Compute the direct labor and variable overhead price and efficiency variances.

Q: Information on Chicago Crafters direct materials costs follows: /

Information on Chicago Crafters direct materials costs follows: Chicago Crafters carries no materials inventories. Required a. What were Chicago Crafters’ direct materials price and...

Q: Information on Grixdale Partner’s fixed overhead costs follows: /

Information on Grixdale Partner’s fixed overhead costs follows: Required What are the fixed overhead price and production volume variances? (Refer to Exhibit 16.17 for the format to...

Q: Refer to the data in Exercise 16-46. Management would

Refer to the data in Exercise 16-46. Management would like to see results reported graphically. Required Prepare a graph like that shown in Exhibit 16.18. Exercise 16-46:

Q: Wetherbee Tech Services (WTS) is a chain of computer maintenance

Wetherbee Tech Services (WTS) is a chain of computer maintenance technicians for households and small businesses. The following data are available for last year’s services: â&#...

Q: The Faraday Plant of Hindle, Inc. shows the following overhead

The Faraday Plant of Hindle, Inc. shows the following overhead information for the current period: Required What are the variable overhead price and efficiency variances and the fixed overhead price v...

Q: Consider a university setting with many colleges, such as the Engineering

Consider a university setting with many colleges, such as the Engineering College, the Business College, Arts & Sciences College, and so on. The central administration is responsible for finance, pers...

Q: The cost analyst for Sheffer Systems collected the following data concerning direct

The cost analyst for Sheffer Systems collected the following data concerning direct materials: Required Compute the direct materials cost variances. Prepare an analysis for management like the one in...

Q: Refer to the information in Exercise 17-24. Assume that

Refer to the information in Exercise 17-24. Assume that Sheffer Systems had no beginning finished goods or direct materials inventory and only produced one product. Sheffer sold 27,720 units during th...

Q: Appoline Juices budgeted sales of 87,000 units of Grape,

Appoline Juices budgeted sales of 87,000 units of Grape, assuming that the company would have 30 percent of 290,000 units sold in a particular market. The actual results were 78,000 units sold by Appo...

Q: Logan Passport Services budgeted sales of 8,000 units of its

Logan Passport Services budgeted sales of 8,000 units of its Basic Visa Service (BVS). This was based on its estimated 5 percent share of this service in the relevant regional market. Actual sales of...

Q: Piper Products sold 406,000 units during the last period

Piper Products sold 406,000 units during the last period when industry volume totaled 2.8 million units. The company originally expected to sell 442,500 based on a budgeted market share of 15 percent...

Q: Olivet Devices sells two models of fitness devices. The budgeted price

Olivet Devices sells two models of fitness devices. The budgeted price per unit for the wireless model is $38 and the budgeted price per unit for the wireless and cellular model is $83. The master bud...

Q: Allonby Foods processes frozen meals for sale in grocery and other retail

Allonby Foods processes frozen meals for sale in grocery and other retail outlets. Two versions are produced: The FlavorPak version has a budgeted price of $16 per case and a standard variable cost of...

Q: Beatrice Math Tutors offers two tutoring models: individual and group.

Beatrice Math Tutors offers two tutoring models: individual and group. The individual model provides one-on-one tutoring, while the group model consists of groups of no more than four students. The in...

Q: Lee Lighting produces two models of floor lamps: Standard and Smart

Lee Lighting produces two models of floor lamps: Standard and Smart. The two differ primarily in the quality of the materials and the additional electronics required for the Smart lamp. At budget, Sta...

Q: Proctor Cleaning Products manufactures a product using a process that allows for

Proctor Cleaning Products manufactures a product using a process that allows for substitution between two materials, X-1 and Y-7. The company has the following direct materials data for its product: T...

Q: A rush order for a major customer has led to considerable overtime

A rush order for a major customer has led to considerable overtime and an unfavorable variance for production costs. Is this variance the responsibility of the marketing manager, the production manage...

Q: Windward Chemicals produces a product using a process that allows for substitution

Windward Chemicals produces a product using a process that allows for substitution between two materials, Sol-1 and Sol-2. The company has the following direct materials data for its product: The comp...

Q: Casino Pest Control (CPC) provides services to residential households by

Casino Pest Control (CPC) provides services to residential households by an application of a special chemical mix that varies somewhat in proportion based on environmental factors. CPC mixes two chemi...

Q: Pembridge Burritos has two categories of direct labor: unskilled, which

Pembridge Burritos has two categories of direct labor: unskilled, which costs $16 per hour, and skilled, which costs $30 per hour. Management has established standards per “meal,&aci...

Q: Kentford Associates is a small professional services firm. Last month,

Kentford Associates is a small professional services firm. Last month, Kentford billed more hours than expected, and profits reflected this. Required Prepare a flexible budget for Kentford. Use billab...

Q: Refer to the data in Exercise 17-38. Required

Refer to the data in Exercise 17-38. Required Prepare a sales activity variance analysis like the one in Exhibit 16.4 of the previous chapter. Exercise 17-38:

Q: Refer to the data in Exercise 17-38. Required

Refer to the data in Exercise 17-38. Required Prepare a profit variance analysis for Kentford Associates like the one in Exhibit 16.5 of the previous chapter. Exercise 17-38:

Q: Oakman Accounting Partners is a small tax and accounting services firm.

Oakman Accounting Partners is a small tax and accounting services firm. Each billable hour of partner time has a $960 budgeted price and $450 budgeted variable cost. Each billable hour of staff time h...

Q: The standard direct labor cost per call for Crescent Call Centers (

The standard direct labor cost per call for Crescent Call Centers (CCC) is $5.25 (= $21 per labor hour ÷ 4 calls per hour). Actual direct labor costs during the period totaled $82,810. Also during the...

Q: Consider the following large organizations. Would you classify them as primarily

Consider the following large organizations. Would you classify them as primarily cost leaders, product differentiators, or focused competitors according to the Porter strategy framework? Why?

Q: Walden Tire Store is a chain of tire and auto accessory retail

Walden Tire Store is a chain of tire and auto accessory retail stores. Required Walden discloses that it uses a balanced scorecard with seven performance measures. Link the measures to the perspective...

Q: My firm has a wage contract with the union. Therefore,

My firm has a wage contract with the union. Therefore, we do not need to compute a labor price variance; it will always be zero.” Comment.

Q: Crawford County Park is a historical center and recreation area located in

Crawford County Park is a historical center and recreation area located in a rural county. It is a not-for-profit organization that relies on ticket sales, memberships, and donations for financial sup...

Q: Match each of the following specific measurements to its benchmark category:

Match each of the following specific measurements to its benchmark category:

Q: Match each of the following specific measurements with its benchmark category:

Match each of the following specific measurements with its benchmark category:

Q: Observe the operations of a fitness center and identify an important nonfinancial

Observe the operations of a fitness center and identify an important nonfinancial performance measure for it.

Q: Steger & Company has the following average times (in minutes):

Steger & Company has the following average times (in minutes): Required Calculate the manufacturing cycle efficiency.

Q: Canfield Components produces machine parts. The average times for its largest

Canfield Components produces machine parts. The average times for its largest volume product (in hours) follow: Required Calculate the manufacturing cycle efficiency.

Q: In many manufacturing plants, employees on the manufacturing lines are empowered

In many manufacturing plants, employees on the manufacturing lines are empowered to stop the line (halt production on a particular assembly line) if they see something they believe is “not right.” For...

Q: Fischer Fabrication reported the following information concerning its direct materials:

Fischer Fabrication reported the following information concerning its direct materials: Required Compute the direct materials cost variances. Prepare an analysis for management like the one in Exhibit...

Q: Raynor Testing Services (RTS) is a new company that has

Raynor Testing Services (RTS) is a new company that has not yet developed a formal planning and budgeting process. RTS is unsure how to proceed. It understands that the following five steps need to be...

Q: Refer to the data in Exercise 16-23. Required

Refer to the data in Exercise 16-23. Required Prepare a sales activity variance analysis like the one in Exhibit 16.4. Exercise 16-23: The master budget at Monroe Manufacturing last period called for...

Q: The production volume variance indicates whether a company has spent more or

The production volume variance indicates whether a company has spent more or less than called for in the budget. True or false?

Q: Refer to the data in Exercises 16-23 and 16-

Refer to the data in Exercises 16-23 and 16-24. Required Prepare a profit variance analysis like the one in Exhibit 16.5. Exercise 16-23: The master budget at Monroe Manufacturing last period called...

Q: The master budget at Cherrylawn Corporation at the beginning of the year

The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,000 units with revenues of $3,300,000. Total variable costs were budgeted at $1,925,000 and fixed cos...

Q: Gladys Bank & Trust has $360 million in consumer loans with

Gladys Bank & Trust has $360 million in consumer loans with an average interest rate of 7.25 percent. The bank also has $240 million in home equity loans with an average interest rate of 5 percent. Fi...

Q: Ethel Company manufactures and sells desk lamps for hotel and motel rooms

Ethel Company manufactures and sells desk lamps for hotel and motel rooms. Last year, it sold 120,000 units of its model Y lamp for $45 per unit. The company estimates that this volume represents a 24...

Q: Bortle Manufacturing Group estimates that sales for the coming year will be

Bortle Manufacturing Group estimates that sales for the coming year will be 576,000 units. Company policy is to maintain a finished goods inventory of one and one-half months’ unit sales. Beginning in...

Q: Santos Shipping Lines (SSL) operates a fleet of container ships

Santos Shipping Lines (SSL) operates a fleet of container ships in international trade between Brazil and Ireland. All of the shipping income (that is, that related to SSL’s ships) is deemed to be ear...

Q: Maple Cargo is an all-cargo airline that operates on four

Maple Cargo is an all-cargo airline that operates on four continents. Its headquarters are in New Zealand. It has two divisions, Cargo and Maintenance. Cargo Division flies cargo to and from internati...

Q: Pasadena Industries has prepared the following graph similar to the one presented

Pasadena Industries has prepared the following graph similar to the one presented in Exhibit 17.4: Required a. The difference between actual and budgeted sales volume. b. Budgeted industry volume. c....

Q: The following graph is similar to that in Exhibit 17.4

The following graph is similar to that in Exhibit 17.4. It has been prepared for Longacre Parts. Required a. Industry volume variance. b. Actual industry volume. c. Budgeted market share. d. Budgeted...

Q: Wilde Vintners produces and sells wine. The following data concern the

Wilde Vintners produces and sells wine. The following data concern the three varietals of white wine the company currently offers. Sales data for November are given as follows: Required a. Compute the...

Q: The production volume variance should be charged to the production manager.

The production volume variance should be charged to the production manager. Do you agree? Why or why not?

Q: Lothrop Consulting Group is a small firm that offers services to two

Lothrop Consulting Group is a small firm that offers services to two business segments: not-for profits (NFPs) and corporate clients. Lothrop’s business model is to rely to a great e...

Q: Leverette Mortgage Lenders (LML) is a financial institution that originates

Leverette Mortgage Lenders (LML) is a financial institution that originates mortgage loans. The company charges a service fee for processing loan applications. This fee is set twice a year based on th...

Q: Leidich Corporation manufactures hospital equipment. The Measurement Division (MD)

Leidich Corporation manufactures hospital equipment. The Measurement Division (MD) manufactures testing and measurement equipment including a special cardiovascular instrument. MD started the year wit...

Q: Graves Bank & Trust (GB&T) estimates that its

Graves Bank & Trust (GB&T) estimates that its overhead costs for policy administration should be $55 for each new account opened and $0.60 per year for each $1,000 of deposits. The company set a budge...

Q: Consider the following well-known companies and their key products and

Consider the following well-known companies and their key products and services: Required Identify one thing that is a core capability for each. Also identify one capability that companies have that i...

Q: Refer to the data in Problem 15-54. At the

Refer to the data in Problem 15-54. At the end of the year, the following data are available on actual operations at the landfill: Required Based on the actual activities and costs, would you change t...

Q: Coyle Manufacturing reports the following information for year 1: /

Coyle Manufacturing reports the following information for year 1: All depreciation charges are fixed. Manufacturing depreciation is expected to increase by 10 percent in year 2. Marketing and administ...

Q: Refer to Problem 15-56. Suppose Testing could sell time

Refer to Problem 15-56. Suppose Testing could sell time on the machine to other companies in the area on a per-hour basis. Further, it can sell all the time available for $22 per hour. Required a. Wha...

Q: The following information is available for Fairmount Industries from year 1 operations

The following information is available for Fairmount Industries from year 1 operations: All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $22,000 wi...

Q: Refer to the data in Problem 16-58. Required

Refer to the data in Problem 16-58. Required Prepare a sales activity variance analysis for Nottingham Forest Products like the one in Exhibit 16.4. Problem 16-58:

Q: A CEO tells you, “Division A always reports large,

A CEO tells you, “Division A always reports large, favorable variances. This saves us a lot of time because we do not have to spend time reviewing their results.” Comment.

Q: Normandy Instruments invests heavily in research and development (R&D

Normandy Instruments invests heavily in research and development (R&D), although it must currently treat its R&D expenditures as expenses for financial accounting purposes. To encourage investment in...

Q: Gable Corporate Services uses EVA to evaluate the performance of division managers

Gable Corporate Services uses EVA to evaluate the performance of division managers. For the Media Division, after-tax divisional income was $3,100,000 in year 3. The company adjusts the after-tax inco...

Q: New Town Foods sells a variety of packaged foods through supermarkets and

New Town Foods sells a variety of packaged foods through supermarkets and other outlets using a dedicated sales team. The budget planning group has just received the sales team expense summary for the...

Q: Refer to the data in Problem 16-61. Required

Refer to the data in Problem 16-61. Required Prepare a profit variance analysis for Savery Parts for March like the one in Exhibit 16.5. Problem 16-61:

Q: Information about direct materials cost follows for Jennings Chemicals: /

Information about direct materials cost follows for Jennings Chemicals: Required What was the actual purchase price per gallon?

Q: Nottingham Forest Products reports the following information concerning operations for the most

Nottingham Forest Products reports the following information concerning operations for the most recent month: There are no inventories. Required Prepare a flexible budget for Nottingham Forest Product...

Q: Monitor Devices shows the following overhead information for the current period.

Monitor Devices shows the following overhead information for the current period. Required What are the variable overhead price and efficiency variances and fixed overhead price variance?

Q: The management at Inverness Manufacturing feels confident about the company’s prospect in

The management at Inverness Manufacturing feels confident about the company’s prospect in the current year (year 2). Sales in the first quarter were one-third ahead of last year, and...

Q: The following partial information is contained in the variance analysis received from

The following partial information is contained in the variance analysis received from the Western Plant of Eastlawn Company. All plants at Eastlawn apply overhead on the basis of direct labor-hours. R...

Q: Refer to the data in Problem 16-58. Required

Refer to the data in Problem 16-58. Required Use the information for Nottingham Forest Products in Problem 16-58 to prepare a profit variance analysis like the one in Exhibit 16.5. Problem 16-58:

Q: Production cost variances are not useful in my company. There is

Production cost variances are not useful in my company. There is substantial learning that takes place, so we are more efficient, the more we produce. A standard cost sheet doesn’t reflect that.” Do y...

Q: The results for March for Savery Parts follow: /

The results for March for Savery Parts follow: Required Prepare a flexible budget for Savery Parts for March.

Q: Refer to the data in Problem 16-61. Required

Refer to the data in Problem 16-61. Required Prepare a sales activity variance analysis for Savery Parts for March like the one in Exhibit 16.4. Problem 16-61:

Q: Wisner Fabrication prepares its budgets on the basis of standard costs.

Wisner Fabrication prepares its budgets on the basis of standard costs. Variances are analyzed and reported monthly. There are no materials inventories. The following information relates to the curren...

Q: Refer to the data for the Earle Soup Company (Problem 17

Refer to the data for the Earle Soup Company (Problem 17-54). Required Break down the total activity variance into sales mix and quantity parts. Problem 17-54:

Q: McKinney Solvents produces a wide variety of products for the manufacturing industry

McKinney Solvents produces a wide variety of products for the manufacturing industry. The standard mix for producing a single batch of 100 gallons of its biggest-selling product is as follows: There i...

Q: Robinwood Fixtures manufactures two products, K4 and X7. The company

Robinwood Fixtures manufactures two products, K4 and X7. The company prepares its master budget on the basis of standard costs. The following data are for September: Required a. Prepare a variance ana...

Q: Stearn & Company makes a lubricating oil using two grades of petroleum

Stearn & Company makes a lubricating oil using two grades of petroleum (Alpha and Beta). Within certain limits, the two grades can substitute for one another, so the actual mix of inputs often dif...

Q: Pease Contractors is a local home remodeling company. In analyzing financial

Pease Contractors is a local home remodeling company. In analyzing financial performance, the accountant compares actual results with a flexible budget. The standard direct labor rates used in the fle...

Q: Harlow Parts produces a single product at its Superior Plant. The

Harlow Parts produces a single product at its Superior Plant. The master budget for July follows: The following operating income statement shows the actual results for July: Required Prepare a profit...

Q: Refer to the information in Problem 16-78. Variable overhead

Refer to the information in Problem 16-78. Variable overhead is applied on the basis of machine hours. The standard cost sheet follows: The actual resource usage for July per unit of output follows: R...

Q: What role does the master budget play in the planning and budgeting

What role does the master budget play in the planning and budgeting exercise?

Q: Reviewing the variance report for one of the manufacturing plants in your

Reviewing the variance report for one of the manufacturing plants in your company, you see a large unfavorable fixed cost price variance and large favorable production volume variance. You contact the...

Q: A regional airline discloses that it uses a balanced scorecard with the

A regional airline discloses that it uses a balanced scorecard with the following performance measures: • Profit • Gate agent assessments • Load f...

Q: The owner-manager of Molena Restaurant describes the balanced scorecard measures

The owner-manager of Molena Restaurant describes the balanced scorecard measures used to assess performance by listing the following performance measures: Required a. Link the measures to the perspect...

Q: What is the dual-rate method of corporate cost allocation?

What is the dual-rate method of corporate cost allocation?

Q: Which has more detail, the budget for the coming period or

Which has more detail, the budget for the coming period or a long-range forecast? Why?

Q: What does the phrase “use it or lose it” mean

What does the phrase “use it or lose it” mean in the context of budgeting?

Q: What is the purpose of the cash budget if the budgeted income

What is the purpose of the cash budget if the budgeted income statement will indicate whether the firm expects to be profitable?

Q: What is participative budgeting? What are some advantages of participative budgeting

What is participative budgeting? What are some advantages of participative budgeting? What are some disadvantages?

Q: Write out the inventory equation that is used to determine required production

Write out the inventory equation that is used to determine required production in the production budget for a manufacturing firm.

Q: What makes creating budgets for marketing and administration more difficult than creating

What makes creating budgets for marketing and administration more difficult than creating, for example, the production cost budget?

Q: How is return on investment (ROI) computed?

How is return on investment (ROI) computed?

Q: How could a hospital firm use the mix variance to analyze its

How could a hospital firm use the mix variance to analyze its revenues?

Q: If a division’s ROI falls from one period to the next,

If a division’s ROI falls from one period to the next, does that mean that the division’s performance is declining? Why?

Q: If a division’s residual income falls from one period to the next

If a division’s residual income falls from one period to the next, does that mean that the division’s performance is declining? Why?

Q: Do transfer prices exist in centralized firms? Why?

Do transfer prices exist in centralized firms? Why?

Q: Many firms prefer to use market prices for transfer prices. Why

Many firms prefer to use market prices for transfer prices. Why would they have this preference?

Q: When would you advise a firm to use prices other than market

When would you advise a firm to use prices other than market prices for interdivisional transfers?

Q: How can a budget be used for performance evaluation?

How can a budget be used for performance evaluation?

Q: The flexible budget for costs is computed by multiplying average total cost

The flexible budget for costs is computed by multiplying average total cost at the master budget activity level by the activity at some other level.” Is this true or false? Explain.

Q: A flexible budget is a. Appropriate for control of factory

A flexible budget is a. Appropriate for control of factory overhead but not for control of direct materials and direct labor. b. Appropriate for control of direct materials and direct labor but not fo...

Q: What is the standard cost sheet?

What is the standard cost sheet?

Q: What is the basic difference between a master budget and a flexible

What is the basic difference between a master budget and a flexible budget? a. A flexible budget considers only variable costs; a master budget considers all costs. b. A master budget is based on a pr...

Q: How could a hospital firm use the mix variances to analyze salary

How could a hospital firm use the mix variances to analyze salary costs regarding emergency room services?

Q: Standards and budgets are the same thing. True or false?

Standards and budgets are the same thing. True or false?

Q: Variance analysis can be useful in a manufacturing environment where you know

Variance analysis can be useful in a manufacturing environment where you know the standards, but it wouldn’t be useful in a service environment.” True or false?

Q: What does a manager learn by computing an industry volume variance?

What does a manager learn by computing an industry volume variance?

Q: Why is there no efficiency variance for revenues?

Why is there no efficiency variance for revenues?

Q: For what decisions would a manager want to know market share variance

For what decisions would a manager want to know market share variance?

Q: What are several examples of companies that probably use materials mix and

What are several examples of companies that probably use materials mix and yield variances?

Q: What is “management by exception”?

What is “management by exception”?

Q: What is the difference between an organization’s mission and its strategy?

What is the difference between an organization’s mission and its strategy?

Q: What performance factors do measures related to customer satisfaction attempt to evaluate

What performance factors do measures related to customer satisfaction attempt to evaluate?

Q: Why is manufacturing cycle efficiency important to most organizations?

Why is manufacturing cycle efficiency important to most organizations?

Q: There is no reason to investigate favorable variances; only unfavorable variances

There is no reason to investigate favorable variances; only unfavorable variances indicate problems.” Do you agree?

Q: Why measure delivery performance?

Why measure delivery performance?

Q: How do companies evaluate their own performance in getting workers involved and

How do companies evaluate their own performance in getting workers involved and committed?

Q: A balanced scorecard is a set of two or more performance measures

A balanced scorecard is a set of two or more performance measures. Do you agree? Why or why not?

Q: Why do effective performance evaluation systems measure different things at different levels

Why do effective performance evaluation systems measure different things at different levels in the organization?

Q: What is benchmarking?

What is benchmarking?

Q: How is benchmarking used?

How is benchmarking used?

Q: What is the difference among a firm’s value proposition, its mission

What is the difference among a firm’s value proposition, its mission, and its mission statement?

Q: What does decentralization mean in the context of a management control system

What does decentralization mean in the context of a management control system?

Q: Why is performance measurement an important component of a management control system

Why is performance measurement an important component of a management control system in a decentralized organization?

Q: What are the advantages of decentralization? What are some major disadvantages

What are the advantages of decentralization? What are some major disadvantages of decentralization?

Q: A business school dean asks you for help in understanding the school’s

A business school dean asks you for help in understanding the school’s inability to meet its budget. What are some of the variances you think might be important to consider? Why?

Q: What does dysfunctional decision making refer to?

What does dysfunctional decision making refer to?

Q: What are the three elements of a management control system?

What are the three elements of a management control system?

Q: Consider a firm in the “sharing economy,” such as Uber

Consider a firm in the “sharing economy,” such as Uber, Lyft, or Airbnb. Do you think they would benefit by computing and evaluating (1) market share and industry volume variances; (2) sales mix and s...

Q: Consider the Business Application “Changes in Bank Distribution Channels—a

Consider the Business Application “Changes in Bank Distribution Channels—a Mix Variance Interpretation.” In what ways would the mix variance described there be similar to the sales mix and production...

Q: Consider a locally owned coffee shop, a Starbucks store, and

Consider a locally owned coffee shop, a Starbucks store, and a retail gas station that offers fresh coffee in its convenience stores. Characterize these stores according to the Porter strategy framewo...

Q: Consider the Business Application “A New Strategy for an Old Business

Consider the Business Application “A New Strategy for an Old Business.” Prior to the internet, the The New York Times (and other papers) offered news, a crossword puzzle, recipes, and so on. They are...

Q: Consider a class you are taking (perhaps cost accounting) or

Consider a class you are taking (perhaps cost accounting) or have taken in the past. Was your evaluation based on a single measure of performance (a final exam, for example) or did the instructor use...

Q: What problems might arise if a firm relies solely on management estimates

What problems might arise if a firm relies solely on management estimates in preparing the master budget?

Q: If customers are satisfied, they will buy your products and profits

If customers are satisfied, they will buy your products and profits will increase. Therefore, you only need to measure profit. Comment.

Q: A friend tells you that the Business Application “The Risks of

A friend tells you that the Business Application “The Risks of Focusing on Efficiency” demonstrates “that trying to achieve efficient operations is not a good idea.” Do you agree? Explain.

Q: Gladstone Mini-Golf operates in a tourist area. The population

Gladstone Mini-Golf operates in a tourist area. The population grows significantly in the summer but is relatively small the rest of the year. For that reason, the business operates only during the ro...

Q: Chatsworth Theatre Group (CTG) is a not-for-

Chatsworth Theatre Group (CTG) is a not-for-profit organization that stages plays and other performances in a medium-sized city. Ticket revenues cover a portion of the operating costs, but CTG also re...

Q: Lauderdale Corporation is organized in three geographical divisions (regions) with

Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized an...

Q: Refer to the data in Exercise 13-54 and in Exhibits

Refer to the data in Exercise 13-54 and in Exhibits 13.20 and 13.21. Required To what level or levels would funding for Product Development Group have to drop such that one, but only one, of the PDG A...

Q: Owen Audio shows the following information for its two divisions for year

Owen Audio shows the following information for its two divisions for year 1. Required Compute divisional operating income for the two divisions. Ignore taxes. How have these divisions performed?

Q: Refer to Exercise 14-25. The results for year 2

Refer to Exercise 14-25. The results for year 2 have just been posted: Required Compute divisional operating income for the two divisions. How have these divisions performed? Exercise 14-25:

Q: The following partial financial information (in thousands of dollars) is

The following partial financial information (in thousands of dollars) is available for Thole, Inc.: Corporate overhead costs at Thole are allocated to divisions based on relative sales. Required a. Co...

Q: Refer to the information in Exercise 14-24. Information on

Refer to the information in Exercise 14-24. Information on the division assets in the three regions of Lauderdale Corporation follows: Required Compute the division ROI for each of the three regions....

Q: What is the coordinating role of budgeting?

What is the coordinating role of budgeting?

Q: The following data are available for two divisions of Ryan Enterprises:

The following data are available for two divisions of Ryan Enterprises: The cost of capital for the company is 7 percent. Ignore taxes. Required a. If Ryan measures performance using ROI, which divisi...

Q: Refer to the data in Exercise 14-33. Required

Refer to the data in Exercise 14-33. Required Evaluate the performance of the two divisions assuming Lasky Manufacturing uses economic value added (EVA). Exercise 14-33:

Q: Refer to the data in Exercises 14-24, 14-

Refer to the data in Exercises 14-24, 14-28, and 14-32. The individual regions are responsible for research and development (R&D) decisions and for current liabilities. Information on R&D expe...

Q: Refer to the data in Exercise 14-37. Required

Refer to the data in Exercise 14-37. Required Evaluate the performance of the two divisions assuming Houghton Chemicals uses economic value added (EVA). Exercise 14-37:

Q: Refer to the information in Exercises 14-40 and 14-

Refer to the information in Exercises 14-40 and 14-41. Required a. What is the division’s residual income before considering the project? b. What is the division’s residual income if the asset is purc...

Q: Refer to the data in Exercise 14-45. Assume that

Refer to the data in Exercise 14-45. Assume that the division uses beginning-of-year asset values in the denominator for computing ROI. Required a. Compute ROI, using net book value. b. Compute ROI, u...

Q: Hamlet Industries is organized into two divisions, Fabrication and Finishing.

Hamlet Industries is organized into two divisions, Fabrication and Finishing. Both divisions are considered to be profit centers, and the two division managers are evaluated in large part on divisiona...

Q: Refer to the data in Exercise 15-24. Assume the

Refer to the data in Exercise 15-24. Assume the transfer price is unchanged from the current transfer price. Required a. Does Hamlet Industries want to accept this order? b. Will the Distribution Divi...

Q: Lamothe Solutions is a management consulting firm. Its Business Division advises

Lamothe Solutions is a management consulting firm. Its Business Division advises firms on the adoption and use of financial systems. Civic Division consults with state and local governments. Civic Div...

Q: Lola Metals has two decentralized divisions, Stamping and Finishing. Finishing

Lola Metals has two decentralized divisions, Stamping and Finishing. Finishing always has purchased certain units from Stamping at $36 per unit. Stamping plans to raise the price to $48 per unit, the...

Q: How can ratios, such as ROI, be used for control

How can ratios, such as ROI, be used for control as well as performance evaluation?

Q: Pilgrim Logistics operates a network of delivery vans. Pilgrim allows its

Pilgrim Logistics operates a network of delivery vans. Pilgrim allows its decentralized units (divisions) to “rent” vans to another Pilgrim division. Commercial Division has leased some of its idle va...

Q: Hardyke Group operates a local after-school recreation and activities program

Hardyke Group operates a local after-school recreation and activities program. The Education Department is a state governmental agency. Hardyke has an agreement with the Department to provide services...

Q: Whitehill Chemicals has two operating divisions. Its Formulation Division in the

Whitehill Chemicals has two operating divisions. Its Formulation Division in the United States mixes, processes, and tests basic chemicals, and then ships them to Ireland, where the company’s Commerci...

Q: Refer to the data in Exercise 15–26. Suppose that

Refer to the data in Exercise 15–26. Suppose that Civic Division will charge the client interested in implementing a costing system by the hour based on cost plus a fixed fee, where the cost is primar...

Q: Cascade Containers is organized into two divisions—Manufacturing and Distribution.

Cascade Containers is organized into two divisions—Manufacturing and Distribution. Manufacturing produces a product that can be sold immediately or transferred to Distribution for further processing a...

Q: Carol Components operates a Production Division and a Packaging Division. Both

Carol Components operates a Production Division and a Packaging Division. Both divisions are evaluated as profit centers. Packaging buys components from Production and assembles them for sale. Product...

Q: Refer to the information in Exercise 15-34. Suppose Production

Refer to the information in Exercise 15-34. Suppose Production is located in Country A with a tax rate of 30 percent and Distribution in Country B with a tax rate of 10 percent. All other facts remain...

Q: Anstell Corporation operates a Manufacturing Division and a Marketing Division. Both

Anstell Corporation operates a Manufacturing Division and a Marketing Division. Both divisions are evaluated as profit centers. Marketing buys products from Manufacturing and packages them for sale. M...

Q: Refer to the information in Exercise 15-24. Assume there

Refer to the information in Exercise 15-24. Assume there is no special order pending. Required a. What transfer price would you recommend for Hamlet Industries? b. Using your recommended transfer pric...

Q: Refer to the information in Exercise 15-36. Suppose Manufacturing

Refer to the information in Exercise 15-36. Suppose Manufacturing is located in Country X with a tax rate of 35 percent and Marketing in Country Y with a tax rate of 15 percent. All other facts remain...

Q: What are the limitations of market-based transfer prices? What

What are the limitations of market-based transfer prices? What are the limitations of cost based transfer prices?

Q: Burdeno Appliances has two divisions, Sales and Financing. Sales is

Burdeno Appliances has two divisions, Sales and Financing. Sales is responsible for selling Burdeno’s inventory and maintaining inventory for future sale. Financing Division takes loan applications, p...

Q: The Main Street plant controller at Nowak Enterprises sends you the following

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Q: The following data are available for the most recent year of operations

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Q: Selected data for March for Irvington, Inc. follow. The

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Q: Engleside Components produces testing equipment for medical devices. Recently, one

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Q: Golden Food Products produces special-formula pet food. The company

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Q: Refer to the information in Exercises 16-38 and 16-

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Q: Rankin Fabrication reports the following information with respect to its direct materials

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Q: Coe Parts applies fixed overhead at the rate of $6.

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Q: Annland Components applies fixed overhead at the rate of $5.

Annland Components applies fixed overhead at the rate of $5.10 per unit. For October, budgeted fixed overhead was $513,825. The production volume variance amounted to $3,825 favorable, and the price v...

Q: When would you advise a firm to use direct intervention to set

When would you advise a firm to use direct intervention to set transfer prices? What are the disadvantages of such a practice?

Q: Refer to the information in Exercises 16-38 and 16-

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Q: The (partial) cost sheet for the single product manufactured at

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Q: Refer to the information in Exercise 17-22. Assume that

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Q: Gerisch Consolidated sold 21,150 units of its only product last

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Q: Refer to the information in Exercise 17-41. Required

Refer to the information in Exercise 17-41. Required Write a memo to the senior manager of Oakman Accounting Partners recommending which variances from the past year the firm should investigate along...

Q: Refer to the information in Exercise 17-43. Required

Refer to the information in Exercise 17-43. Required Write a memo to the managers at Crescent Call Centers recommending which variances they should investigate this period along with your reasons. Ex...

Q: Kipling’s Taco Shop was the only establishment serving tacos and other quick

Kipling’s Taco Shop was the only establishment serving tacos and other quick bites in a small college town for more than 20 years. Service was limited to the walk-up window, with no delivery and no in...

Q: Consider the following jobs. Identify a nonfinancial performance measure that you

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Q: At one time, a well-known communications firm measured all

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Q: 16. Which of the following is not a function of a

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Q: Paul Nellis manufactures nail cutters which has a fixed cost of $

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Q: Prepare journal entries and post them to T-accounts for all

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Q: Topiary Co. produces molded plastic garden pots and other plastic containers

Topiary Co. produces molded plastic garden pots and other plastic containers. In June 2020, Topiary produces 1,000 lots (each lot is 12 dozen pots) of its most popular line of pots, the 14-inch â...

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Student Finance (StuFi) is a start-up that aims to use the power of social communities to transform the student loan market. It connects participants through a dedicated lending pool, enabling current...

Q: Ostrich Enterprise is a small production firm that operates in Sweden.

Ostrich Enterprise is a small production firm that operates in Sweden. The company produces meatballs for canteens. During June 2020, the standard variable overhead has been budgeted as follows: Actua...

Q: Base Accountancy is an audit and consultancy firm that operates in New

Base Accountancy is an audit and consultancy firm that operates in New Queensland, Australia. The followings relate to its operation in August 2020. Required Calculate the variable overhead cost vari...

Q: Baking Bad bakes tarts for distribution to upscale grocery stores. The

Baking Bad bakes tarts for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is alloc...

Q: Baking Bad also allocates fixed manufacturing overhead to products on the basis

Baking Bad also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. For 2020, fixed manufacturing overhead was budgeted at £4.00 per direct ma...

Q: The Principles Corporation is a manufacturer of centrifuges. Fixed and variable

The Principles Corporation is a manufacturer of centrifuges. Fixed and variable manufacturing overheads are allocated to each centrifuge using budgeted assembly-hours. Budgeted assembly time is 2 hour...

Q: Healthy-U Ltd is a pharmaceutical and biotechnology company. It

Healthy-U Ltd is a pharmaceutical and biotechnology company. It has the following data for manufacturing overhead costs during August 2020: Fill in the blanks. Use F for favorable and U for unfavorabl...

Q: The Ramirez Company uses standard costing in its manufacturing plant for auto

The Ramirez Company uses standard costing 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...

Q: Which of the following is not a primary component of business applications

Which of the following is not a primary component of business applications of data science? a. Computer science and data skills b. Substantive expertise in natural sciences c. Math and statistics d. S...

Q: Foodies operates a meal home-delivery service. It has agreements

Foodies operates a meal home-delivery service. It has agreements with 20 restaurants to pick up and deliver meals to customers who place orders on the Foodies web- site. Foodies allocates variable and...

Q: Dru Automobiles Ltd manufactures car accessories. For 2020, budgeted variable

Dru Automobiles Ltd manufactures car accessories. For 2020, budgeted variable overhead is $90,000 for 12,000 direct labor-hours. Budgeted total overhead is $110,000 at 8,000 direct labor-hours. The st...

Q: Marissa Designs, Inc., makes jewelry in the shape of geometric

Marissa Designs, Inc., makes jewelry in the shape of geometric patterns. Each piece is handmade and takes an average of 1.5 hours to produce because of the intricate design and scrollwork. Marissa use...

Q: Alpha Capital Company provides financial services to their clients. Recently,

Alpha Capital Company provides financial services to their clients. Recently, Alpha has experienced rapid growth rate due to expansion and is becoming concerned as to their rising costs, particularly...

Q: Mercy Enterprise is a knitting company based in Dublin, Ireland.

Mercy Enterprise is a knitting company based in Dublin, Ireland. The following is the static budget and actual results of Mercy Ltd. for the month of April 2020. Mercy’s management i...

Q: Michael Roberts is a cost accountant and business analyst for Darby Design

Michael Roberts is a cost accountant and business analyst for Darby Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct...

Q: Yokojo Ltd specializes in the servicing of Japanese vehicles. The following

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Q: Gorimapa Manufacturing Company produces desktop calendars. The following are the budgeted

Gorimapa Manufacturing Company produces desktop calendars. The following are the budgeted data for 3,000 units of Joystick produced in September 2020: During the period 2,800 were produced and sold to...

Q: EntertainMe Corporation manufactures and sells 50-inch television sets and uses

EntertainMe Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2020 are as follows: The selling price per unit i...

Q: The Zeta Company manufactures trendy, good-looking, moderately priced

The Zeta Company manufactures trendy, good-looking, moderately priced umbrellas. As Zeta’s senior financial analyst, you are asked to recommend a method of inventory costing. The CFO...

Q: Opportunity cost. Jacobs Enterprise rents a small workshop for £50

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Q: PAMO Medicals Ltd. makes face masks for the prevention of high

PAMO Medicals Ltd. makes face masks for the prevention of high contagious virus. For December 2020, PAMO Medicals incurred the following production costs: Required 1. Compute PAMO Medicalsâ...

Q: Regina Company manufacturers a professional-grade vacuum cleaner and began operations

Regina Company manufacturers a professional-grade vacuum cleaner and began operations in 2020. For 2020, Regina budgeted to produce and sell 20,000 units. The company had no price, spending, or effici...

Q: Smart Safety, a 3-year- old company, has

Smart Safety, a 3-year- old company, has been producing and selling a single type of bicycle helmet. Smart Safety uses standard costing. After reviewing the income statements for the first 3 years, St...

Q: Match each of the following numbered descriptions with one or more of

Match each of the following numbered descriptions with one or more of the denominator-level capacity concepts by putting the appropriate letter(s) by each item: a. Theoretical capacity b. Practical ca...

Q: Thunder Bolt, Inc., is a manufacturer of the very popular

Thunder Bolt, Inc., is a manufacturer of the very popular G36 motor- cycles. The management at Thunder Bolt has recently adopted absorption costing and is debating which denominator-level concept to u...

Q: Artesa, a leading firm in the semiconductor industry, produces digital

Artesa, a leading firm in the semiconductor industry, produces digital integrated circuits (ICs) for the communications and defense markets. For the year ended December 31, 2020, Artesa sold 242,400 I...

Q: The Stenback Company uses an absorption-costing system based on standard

The Stenback Company uses an absorption-costing system based on standard costs. Variable manufacturing cost consists of direct material cost of $4 per unit and other variable manufacturing costs of $1...

Q: Prepare an income statement under throughput costing for the year ended December

Prepare an income statement under throughput costing for the year ended December 31, 2020 for Stenback Company. 2. Reconcile the difference between the contribution margin and the throughput margin fo...

Q: Khan Sunil Enterprises, a soft- ware engineering firm, uses

Khan Sunil Enterprises, a soft- ware engineering firm, uses the account analysis approach to identify the cost behavior of production costs for its premium software. The following details relate to th...

Q: The Rolling Boulders Corporation operates car rental agencies at more than 20

The Rolling Boulders Corporation operates car rental agencies at more than 20 airports. Customers can choose from one of three contracts for car rentals of one day or less: ■ Contract 1: £50 for the d...

Q: Which of the following statements is/are true regarding the implementation

Which of the following statements is/are true regarding the implementation of a balanced score- card in an organization? a. To sustain long-run financial performance, a company must strengthen all lin...

Q: Given here are a number of graphs. / The

Given here are a number of graphs. The horizontal axis of each graph represents the units produced over the year, and the vertical axis represents total cost or revenues. Required Indicate by number...

Q: Karil Teeze Building Ltd is an estate developer based in Laos.

Karil Teeze Building Ltd is an estate developer based in Laos. The company’s overhead costs fluctuate considerably from year to year according to the number of direct labor-hours wor...

Q: Hamwey, Inc., a manufacturer of plastic products, reports the

Hamwey, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2020. Hamwey, Inc., produced 75,000 unit...

Q: FlyHigh Vacations offers helicopter service from suburban towns to Heathrow Airport in

FlyHigh Vacations offers helicopter service from suburban towns to Heathrow Airport in the United Kingdom. Each of its 10 helicopters makes between 1,000 and 2,000 round-trips per year. The records in...

Q: Lynda Donovan is examining customer-service costs in the southern region

Lynda Donovan is examining customer-service costs in the southern region of Clement Products. Clement Products has more than 200 separate electrical products that are sold with a 6-month guarantee of...

Q: Terry Lawler, managing director of the Little Rock Reviewers Company,

Terry Lawler, managing director of the Little Rock Reviewers Company, is examining how overhead costs behave with changes in monthly professional labor-hours billed to clients. Assume the following hi...

Q: Carney Cabinets Ltd is a furniture manufacturing company with its factories located

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Q: Lucy Hall owns a professional character business in a large metropolitan area

Lucy Hall owns a professional character business in a large metropolitan area. She hires local college students to play these characters at children’s parties and other events. Linda...

Q: Mandy Knox is the new manager of the materials storeroom for Timken

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Q: Global Defender manufactures radar systems. It has just completed the manufacture

Global Defender manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: Calculate the total variable costs...

Q: Use the information below to answer questions 15-16 and 15

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Q: Coronavirus disease (COVID-19) caused by a new virus

Coronavirus disease (COVID-19) caused by a new virus results in respiratory illness (like the flu). The disease was first identified in December 2019 and has since spread globally, resulting in the co...

Q: Kevin Brown is the management accountant at Boehm and Sons Bank.

Kevin Brown is the management accountant at Boehm and Sons Bank. Some of his colleagues attended a conference recently where they learned that machine learning can be used to accurately predict loan p...

Q: Laurie Rech is a management accountant at Donnelly Bank, which has

Laurie Rech is a management accountant at Donnelly Bank, which has recently suffered significant loan losses. Rech and her team are worried that they do not fully understand the risk profile of their...

Q: The data science team at Swift Investments uses a sample of 16

The data science team at Swift Investments uses a sample of 16 loans to build a decision tree that predicts whether a loan will repay or default. Although the data science team is very familiar with d...

Q: TelMark Mobile Services provides mobile phone services to millions of customers in

TelMark Mobile Services provides mobile phone services to millions of customers in the U.S. TelMark’s customer base is constantly changing as old customers leave the service and new...

Q: Assume the same information for TelMark as in Exercise 11-24

Assume the same information for TelMark as in Exercise 11-24. A member of the data science team points out that overfitting is often an issue with decision trees. To avoid this issue, he suggests prun...

Q: Margo London is the management accountant at Norse Credit. Norse Credit

Margo London is the management accountant at Norse Credit. Norse Credit spends a lot of time and resources trying to detect fraudulent activity within customers’ accounts. For most c...

Q: An ROC curve plots the false positive rate (x-axis

An ROC curve plots the false positive rate (x-axis) against the true positive rate (y-axis) for different model thresholds. The graph below shows three different ROC curves labeled 1, 2, and 3. Requir...

Q: Sun TV sells TV sets. It does not sell smart TVs

Sun TV sells TV sets. It does not sell smart TVs so customers do not come to Sun TV if they want to purchase smart TVs. Sun TV wants to start selling smart TVs and will only sell smart TVs to customer...

Q: Blanda Brothers is a produce processing company that specializes in fruits,

Blanda Brothers is a produce processing company that specializes in fruits, with apple sales representing the majority of their revenue. Their main facility receives a daily shipment of apples, which...

Q: Fresh Products, Inc. incurred the following costs during December related

Fresh Products, Inc. incurred the following costs during December related to the production of its 162,500 frozen ice cream cone specialty items: What is the December per-unit inventory cost allocated...

Q: Assume the same information for Blanda Brothers as in Problem 11-

Assume the same information for Blanda Brothers as in Problem 11-29. Due to increased competition among grocery stores, the cost to Blanda of selling a low-quality apple to the grocery store as an acc...

Q: Graham Douglas is a guard dog training business based in Coventry,

Graham Douglas is a guard dog training business based in Coventry, the United Kingdom. The business trains and sells different breeds of guard dogs. The dogs are usually purchased from local dog breed...

Q: Edward Jingo runs a modern sawmill in Old Trafford, Manchester.

Edward Jingo runs a modern sawmill in Old Trafford, Manchester. The company received an order for its MIC wood for which the labor and machine time is available but requires three types of wood materi...

Q: The Gold Plus Company manufactures medals for winners of athletic events and

The Gold Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to pro- duce 11,000 medals each month. Current production and sale...

Q: The Svenson Corporation manufactures cellular modems. It manufactures its own cellular

The Svenson Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information a...

Q: Oscar Ltd manufactures small electrical parts in Hamburg, Germany. The

Oscar Ltd manufactures small electrical parts in Hamburg, Germany. The company has a production capacity of 18,000 electrical units per year and the unit cost is as follows: The companyâ€&#...

Q: Alpha Cables Ltd manufactures electric cables for households. The company has

Alpha Cables Ltd manufactures electric cables for households. The company has capacity to produce 16,000 units per month. However, the current plans call for monthly production and sales of 10,000 uni...

Q: Isochlorine is produced in a chemical process that is very threatening to

Isochlorine is produced in a chemical process that is very threatening to the environment. As a result of this, the government has limited the yearly production. Company Soleil uses isochlorine to pro...

Q: The Pierce Corporation manufactures filing cabinets in two operations: machining and

The Pierce Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: Each cabinet sells for $70 and has direct material costs of $30 i...

Q: LMTC Ltd manufactures PE clothes for primary schools in Northamptonshire, the

LMTC Ltd manufactures PE clothes for primary schools in Northamptonshire, the United Kingdom. The company produces 30,000 units per academic session. The following is the cost per unit: It has been es...

Q: The Ukraine power plant that services all manufacturing departments of CC Engineering

The Ukraine power plant that services all manufacturing departments of CC Engineering has a budget for the coming year. This budget has been expressed in the following monthly terms: The expected mont...

Q: Rodeo Printers operates a printing press with a monthly capacity of 4

Rodeo Printers operates a printing press with a monthly capacity of 4,000 machine-hours. Rodeo has two main customers: Trent Corporation and Julie Corporation. Data on each customer for January are: J...

Q: Papa’s Pizza is considering replacement of its pizza oven with a new

Papa’s Pizza is considering replacement of its pizza oven with a new, more energy-efficient model. Information related to the old and new pizza ovens follows: The old oven had been p...

Q: Pineway Electric manufactures electric motors. It competes and plans to grow

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 cust...

Q: An analysis of Pineway’s operating-income changes between 2019 and 2020

An analysis of Pineway’s operating-income changes between 2019 and 2020 shows the following: The industry market size for electric motors did not grow in 2020, input prices did not c...

Q: Dominic & Sons buys T-shirts in bulk, applies its

Dominic & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Dominic wants to be known for its trendsetting designs...

Q: Refer to Exercise 13-21. Required 1.

Refer to Exercise 13-21. Required 1. Calculate Dominic’s operating income in both 2019 and 2020. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operat...

Q: Refer to Exercise 13-22. Suppose that the market for

Refer to Exercise 13-22. Suppose that the market for silk-screened T-shirts grew by 10% during 2020. All increases in sales greater than 10% are the result of Dominic’s strategic actions. Required Ca...

Q: Refer to Exercise 13-21. Required 1.

Refer to Exercise 13-21. Required 1. Calculate the amount and cost of unused administrative capacity at the beginning of 2020, based on the actual number of customers Dominic served in 2020. 2. Suppo...

Q: Methuen Corporation makes a special-purpose machine, D4H, used

Methuen Corporation makes a special-purpose machine, D4H, used in the textile industry. Methuen has designed the D4H machine for 2020 to be distinct from its competitors. It has been generally regarde...

Q: Refer to Exercise 13-25. Required 1.

Refer to Exercise 13-25. Required 1. Calculate the operating income of Methuen Corporation in 2019 and 2020. 2. Calculate the growth, price-recovery, and productivity components that explain the chan...

Q: Chocolat Inc. is a producer of premium chocolate based in Palo

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...

Q: Suppose that during 2020, the market for Methuen’s special-purpose

Suppose that during 2020, the market for Methuen’s special-purpose machines grew by 3%. All increases in market share (that is, sales increases greater than 3%) are the result of Methuen’s strategic a...

Q: Refer to Exercise 13-25. Required 1.

Refer to Exercise 13-25. Required 1. Calculate the amount and cost of (a) unused manufacturing capacity and (b) unused selling and customer-service capacity at the beginning of 2020 based on actual...

Q: Krater Associates is an architectural firm that has been in practice only

Krater Associates is an architectural firm that has been in practice only a few years. Because it is a relatively new firm, the market for the firm’s services is very competitive. To...

Q: Refer to Exercise 13-29. Required 1.

Refer to Exercise 13-29. Required 1. Calculate the operating income of Krater Associates in 2019 and 2020. 2. Calculate the growth, price-recovery, and productivity components that explain the change...

Q: Suppose that during 2020, the market for architectural jobs increases by

Suppose that during 2020, the market for architectural jobs increases by 10%. Assume that any increase in market share more than 10% and any decrease in selling price are the result of strategic choic...

Q: Refer to Exercise 13-29. Required 1.

Refer to Exercise 13-29. Required 1. Calculate the amount and cost of unused architectural support capacity at the beginning of 2020, based on the number of jobs actually done in 2020. 2. Suppose Kra...

Q: Europa Associates prepares architectural drawings to conform to local structural-safety

Europa Associates prepares architectural drawings to conform to local structural-safety codes. Its income statement for 2020 is as follows: The percentage of time spent by professional staff on variou...

Q: Snappy Tiles is a small distributor of marble tiles. Snappy identifies

Snappy Tiles is a small distributor of marble tiles. Snappy identifies its three major activities and cost pools as ordering, receiving and storage, and ship- ping, and it reports the following detail...

Q: Neuro Instruments uses a manufacturing costing system with one direct-cost

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...

Q: Sun Systems provides energy audits in residential areas of southern Ohio.

Sun Systems provides energy audits in residential areas of southern Ohio. The energy audits provide information to homeowners on the benefits of solar energy. A consultant from Sun Systems educates th...

Q: Pfizer, a pharmaceutical company, incurs the following costs:

Pfizer, a pharmaceutical company, incurs the following costs: a. Payment of booth registration fee at a medical conference to promote new products to physicians b. Cost of redesigning an insulin syrin...

Q: John Branch is the managing partner of a business that has just

John Branch is the managing partner of a business that has just finished building a 60-room motel. Branch anticipates that he will rent these rooms for 16,000 nights next year (or 16,000 room-nights)....

Q: TinRoof, Inc., manufactures and sells a do-it-

TinRoof, Inc., manufactures and sells a do-it-your- self storage shed kit. In 2019, it reported the following: Required 1. What was TinRoof’s operating income in 2019? What was the...

Q: Jurgensen Manufacturing, Inc., plans to develop a new industrial-

Jurgensen Manufacturing, Inc., plans to develop a new industrial-powered vacuum sweeper for household use that runs exclusively on rechargeable batteries. The product will take 6 months to design and...

Q: Fun Stay Express operates a 100-room hotel near a busy

Fun Stay Express operates a 100-room hotel near a busy amusement park. During June, a 30-day month, Fun Stay Express experienced a 65% occupancy rate from Monday evening through Thursday evening (week...

Q: Dave Meltzer vacationed at Lake Tahoe last winter. Unfortunately, he

Dave Meltzer vacationed at Lake Tahoe last winter. Unfortunately, he broke his ankle while skiing and spent 2 days at the Sierra University Hospital. Meltzer’s insurance company rece...

Q: Enviro-Tech has only two retail and two whole- sale

Enviro-Tech has only two retail and two whole- sale customers. Information relating to each customer for 2020 follows (in thousands): Enviro-Tech’s annual distribution-channel costs...

Q: Lapworth County Council has been awarded the office window cleaning contract against

Lapworth County Council has been awarded the office window cleaning contract against competition from private firms. The contract price is $6.20 per of- fice window and budget and actual results for f...

Q: HQ Drugs is a distributor of pharmaceutical products. Its ABC system

HQ Drugs is a distributor of pharmaceutical products. Its ABC system has five activities: Rick Flair, the controller of HQ Drugs, wants to use this ABC system to examine individual customer profit- ab...

Q: Blueback Manufacturing has four divisions named after its locations: China,

Blueback Manufacturing has four divisions named after its locations: China, Cambodia, Bangladesh, and India. Corporate headquarters is in Minnesota. Blueback corporate headquarters incurs $8,400,000 p...

Q: Martini Hotel & Casino is situated on beautiful Lake Tahoe in Nevada

Martini Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a 300-room hotel, a casino, and a restaurant. As Martini’s new controller, your manager...

Q: Taco Bell, a fast-food restaurant, incurs the following

Taco Bell, a fast-food restaurant, incurs the following costs: a. Cost of oil for the deep fryer b. Wages of the counter help who give customers the food they order c. Cost of tortillas and lettuce d....

Q: Holbrook Corporation has three divisions: pulp, paper, and fibers

Holbrook Corporation has three divisions: pulp, paper, and fibers. Holbrook’s new controller, Paul Weber, is reviewing the allocation of fixed corporate-overhead costs to the three d...

Q: Lofty Bread Ltd is a baking company that operates in Thailand.

Lofty Bread Ltd is a baking company that operates in Thailand. The company produces two types of bread—a full loaf and a mini loaf. A full loaf is 8 inches long and a mini loaf is 3...

Q: The Hiro Corporation sells two brands of wine glasses: Plain and

The Hiro Corporation sells two brands of wine glasses: Plain and Chic. Hiro provides the following information for sales in the month of June 2020: All variances are computed in contribution-margin te...

Q: Soda-King manufactures and sells two soft drinks: Kola and

Soda-King manufactures and sells two soft drinks: Kola and Limor. Budgeted and actual results for 2020 are as follows: Required 1. Compute the total sales-volume variance, the total sales-mix varianc...

Q: Soda-King prepared the budget for 2020 assuming a 12.

Soda-King prepared the budget for 2020 assuming a 12.5% market share based on total sales in the western region of the Australia. The total soft drinks market was estimated to reach sales of 10 millio...

Q: Ebbelly Transport Services is a trucking business in the United States.

Ebbelly Transport Services is a trucking business in the United States. The company has two divisions (Loading and Off-loading) and uses the dual-rate method for allocating trucking costs to each roun...

Q: Phoenix Partners provides management consulting services to government and corporate clients.

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

Q: Refer to the data given in Exercise 16-19.

Refer to the data given in Exercise 16-19. Required 1. Allocate the two support departments’ costs to the two operating departments using the reciprocal method. Use (a) linear equations and (b) rep...

Q: E-books, an online book retailer, has two operating

E-books, an online book retailer, has two operating departments— corporate sales and consumer sales—and two support departments—human resources an...

Q: Essence Company blends and sells designer fragrances. It has a Men’s

Essence Company blends and sells designer fragrances. It has a Men’s Fragrances Division and a Women’s Fragrances Division, each with different sales strategies, di...

Q: 16. Which of the following is not correct regarding variable costs

16. Which of the following is not correct regarding variable costs and fixed costs. a. Variable costs change in proportion to changes in the related level of activity while fixed costs remain unchange...

Q: Vortex Consulting has issued a report recommending changes for its newest high

Vortex Consulting has issued a report recommending changes for its newest high-tech manufacturing client, Precision Instruments. Precision currently manufactures a single product, a surgical robot tha...

Q: Hall Auto Sales uses all types of media to advertise its products

Hall Auto Sales uses all types of media to advertise its products (television, radio, newspaper, and so on). At the end of 2019, the company president, Tina Hall, decided that all advertising costs wo...

Q: Quality Chicken grows and processes chickens. Each chicken is disassembled into

Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2020 follows: Joint cost of production in July 2020 was $5...

Q: Quality Chicken is computing the ending inventory values for its July 31

Quality Chicken is computing the ending inventory values for its July 31, 2020, balance sheet. Ending inventory amounts on July 31 are 15 pounds of breasts, 4 pounds of wings, 6 pounds of thighs, 5 po...

Q: Stenback Company is one of the world’s leading corn refiners. It

Stenback Company is one of the world’s leading corn refiners. It produces two joint products—corn syrup and corn starch—using a common production...

Q: The KZee Company operates a simple chemical process to convert a single

The KZee Company operates a simple chemical process to convert a single material into three separate items, referred to here as A, B, andC. All three end products are separated simultaneously at a sin...

Q: Sinclair Oil & Gas, a large energy conglomerate, jointly processes

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...

Q: Fancy Foods produces two types of microwavable products: beef-flavored

Fancy 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...

Q: Illinois Soy Products (ISP) buys soy- beans and processes

Illinois Soy Products (ISP) buys soy- beans and processes them into other soy products. Each ton of soybeans that ISP purchases for $340 can be converted for an additional $190 into 575 pounds of soy...

Q: Tasty, Inc., is a producer of potato chips. A

Tasty, Inc., is a producer of potato chips. A single production process at Tasty, Inc., yields potato chips as the main product and a byproduct that can also be sold as a snack. Both products are full...

Q: Carl Jason is a prospector in the Texas Panhandle. He has

Carl Jason 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...

Q: Dalworth Construction Company provides construction services for major projects. Managers at

Dalworth Construction Company provides construction services for major projects. Managers at the company believe that construction is a people-management business, and they list the following as facto...

Q: Royston, Inc., is a large food-processing company.

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...

Q: Panagra, Inc. manufactures digital cameras. It has two departments

Panagra, Inc. manufactures digital cameras. It has two departments: assembly and testing. In January 2020, the company incurred $775,000 on direct materials and $816,000 on conversion costs, for a tot...

Q: Pilar Chemicals has a mixing department and a refining department. Its

Pilar Chemicals has a mixing department and a refining department. Its process-costing system in the mixing department has two direct materials cost categories (chemical P and chemical Q) and one conv...

Q: The assembly division of Fenton Watches, Inc., uses the weighted

The assembly division of Fenton Watches, Inc., uses the weighted-average method of process costing. Consider the following data for the month of May 2020: Required Compute equivalent units for direct...

Q: For the data in Exercise 18-24, summarize the total

For the data in Exercise 18-24, 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...

Q: Refer to the information in Exercise 18-24. Suppose the

Refer to the information in Exercise 18-24. Suppose the assembly division at Fenton Watches, Inc., uses the FIFO method of process costing instead of the weighted-average method. Required Compute equ...

Q: For the data in Exercise 18-24, use the FIFO

For the data in Exercise 18-24, 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 u...

Q: Whole Goodness Bakery needs to determine the cost of two work orders

Whole Goodness Bakery needs to determine the cost of two work orders for the month of June. Work order 215 is for 2,400 packages of dinner rolls, and work order 216 is for 2,800 loaves of multigrain b...

Q: Tomlinson Corporation is a biotech company based in Milpitas. It makes

Tomlinson Corporation is a biotech company based in Milpitas. It makes a cancer-treatment drug in a single processing department. Direct materials are added at the start of the process. Conversion cos...

Q: Do Exercise 18-29 using the FIFO method. 2

Do Exercise 18-29 using the FIFO method. 2. Tomlinson’s management seeks to have a more consistent cost per equivalent unit. Which method of process costing should the company choose and why?

Q: Goldings Limited produces sports wears for school children. The company incurred

Goldings Limited produces sports wears for school children. The company incurred the following costs in the production of its inter-school sports wears: Required 1. Classify each of the costs listed...

Q: Trendy Clothing, Inc. is a manufacturer of winter clothes.

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...

Q: Refer to the information in Exercise 18-31. Suppose Trendy

Refer to the information in Exercise 18-31. Suppose Trendy uses the FIFO method instead of the weighted-average method in all its departments. The only changes to Exercise 18-31 under the FIFO method...

Q: Purex produces three different types of detergents: Breeze, Fresh,

Purex produces three different types of detergents: Breeze, Fresh, and Joy. The company uses four operations to manufacture the detergents: spray drying, mixing, blending, and packaging. Breeze and Fr...

Q: The following data, in physical units, describe a grinding process

The following data, in physical units, describe a grinding process for January: Inspection occurs at the 100% completion stage. Normal spoilage is 4% of the good units passing inspection. Required 1....

Q: Consider the following data for November 2020 from Gray Manufacturing Company,

Consider the following data for November 2020 from Gray Manufacturing Company, which makes silk pennants and uses a process-costing system. All direct materials are added at the beginning of the proce...

Q: For the data in Exercise 19-21, summarize the total

For the data in Exercise 19-21, 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 tran...

Q: Gray Manufacturing Company uses the FIFO method of process costing instead of

Gray Manufacturing Company uses the FIFO method of process costing instead of the weighted-average method. Required Compute equivalent units for direct materials and conversion costs. Show physical u...

Q: For the data in Exercise 19-21, use the FIFO

For the data in Exercise 19-21, 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 u...

Q: Do Exercise 19-25 using the FIFO method. 2

Do Exercise 19-25 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 diffe...

Q: Mason produces small machined parts. Mason uses a job-costing

Mason produces small machined parts. Mason 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 quarter are...

Q: Fred Harris is the president of United Maintenance Service. He takes

Fred Harris is the president of United Maintenance Service. He takes the following actions, not necessarily in the order given. For each action (a–e) state whether it is a planning decision or a contr...

Q: Roku Electronics manufactures universal power adapters at its Desert Sands plant.

Roku Electronics manufactures universal power adapters at its Desert Sands plant. The company provides you with the following information regarding operations for April 2020: Assume the spoiled units...

Q: WaferCo is a fast-growing manufacturer of computer chips. Direct

WaferCo 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 pr...

Q: Refer to the information in Exercise 19-29. Required

Refer to the information in Exercise 19-29. Required 1. Do Exercise 19-29 using the FIFO method of process costing. 2. Should WaferCo’s managers choose the weighted-average method or the FIFO method?...

Q: Refer to the information in Exercise 19-30. Suppose that

Refer to the information in Exercise 19-30. Suppose that WaferCo determines standard costs of $240 per equivalent unit for direct materials and $100 per equivalent unit for conver- sion costs for both...

Q: Heyer Appliances assembles dishwashers at its plant in Tuscaloosa, Alabama.

Heyer Appliances assembles dishwashers at its plant in Tuscaloosa, Alabama. In February 2020, 60 circulation motors that cost $110 each (from a new supplier that subsequently went bankrupt) were defec...

Q: Rufenstein War Systems Pvt. Ltd. has an extensive job-

Rufenstein War Systems Pvt. Ltd. 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 i...

Q: Osborn, Inc., produces cell phone equipment. Amanda Westerly,

Osborn, Inc., produces cell phone equipment. Amanda Westerly, Osborn’s president, implemented a quality-improvement program that has now been in operation for two years. The cost rep...

Q: Calculus Company makes calculators for students. The company has been working

Calculus Company makes calculators for students. The company has been working on improving its quality over the last year and it wants to confirm a reduction in their costs-of- quality (COQ). Here are...

Q: KidsTravel produces car seats for children from newborn to two years old

KidsTravel produces car seats for children from newborn to two years old. KidsTravel’s only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired dur...

Q: iProtect produces covers for all makes and models of iPads. iProtect

iProtect produces covers for all makes and models of iPads. iProtect sells 1,500,000 units each year at a price of $30 per unit and a contribution margin of 35%. A survey of iProtect’...

Q: State the five-step decision-making process in an organization

State the five-step decision-making process in an organization. Josephine and Amira are planning to expand their bakery business, this will require an additional $15,000 which they hope to obtain from...

Q: Pressing Matters manufactures and sells 18,000 high-technology printing

Pressing Matters manufactures and sells 18,000 high-technology printing presses each year. The variable and fixed costs of rework and repair are as follows: Pressing Matters’ current...

Q: AquaPro produces water purifiers for the household. Business is good but

AquaPro produces water purifiers for the household. Business is good but Derek, the manager, has noticed that customers complain because they find leakages in the plastic nozzles used. AquaPro provide...

Q: It’s a Dog’s World (IDW) makes toys for big-

It’s a Dog’s World (IDW) makes toys for big-breed puppies. IDW’s managers have recently learned that they can calculate the average waiting time f...

Q: The registration advisors at the Brunendorf University (BU) in Berlin

The registration advisors at the Brunendorf University (BU) in Berlin help 4,200 students develop their class schedules and register for classes each semester. Each advi- sor works for 10 hours a day...

Q: Refer to the information presented in Exercise 20-24. The

Refer to the information presented in Exercise 20-24. The head of the registration advisors at BU has decided that the advisors must finish their advising in 2 weeks (10 working days) and therefore mu...

Q: Global Cell Phones (GCP) has developed a cell phone that

Global Cell Phones (GCP) has developed a cell phone that can be used anywhere in the world (even countries like Japan that have a relatively unique cell phone system). GCP has been receiving complaint...

Q: Prescott Manufacturing evaluates the performance of its production managers based on a

Prescott Manufacturing evaluates the performance of its production managers based on a variety of factors, including cost, quality, and cycle time. The following are nonfinancial measures for quality...

Q: RightTime (RT) Corporation operates a retail store featuring wristwatches.

RightTime (RT) Corporation operates a retail store featuring wristwatches. It maintains an EOQ decision model to make inventory decisions. Currently, it is considering inventory decisions for its TagM...

Q: MakeWatch (MW) manufactures the TagMe wristwatches that RightTime (RT

MakeWatch (MW) manufactures the TagMe wristwatches that RightTime (RT) sells to its customers. MW has recently installed a computer software that enables its customers to conduct “one-stop” purchasing...

Q: The HomeServe Corporation provides a wide range of household essentials to householders

The HomeServe Corporation provides a wide range of household essentials to householders. One of the products it offers is dotted paper rolls, used in kitchens and toilets. The supplier for the dotted...

Q: Brook Exteriors is a firm that provides house painting services. Richard

Brook Exteriors is a firm that provides house painting services. Richard Brook, the owner, is trying to find new ways to increase revenues. Mr. Brook performs the following actions, not in the order l...

Q: TurfPro Company produces lawn mowers and purchases 4,500 units of

TurfPro Company produces lawn mowers and purchases 4,500 units of a rotor blade part each year at a cost of $30 per unit. TurfPro requires a 15% annual rate of return on investment. In addition, the r...

Q: Endrino Bot Company’s annual demand for its only product, R2-

Endrino Bot Company’s annual demand for its only product, R2-T2, is 10,000 units. Endrino is currently analyzing possible combinations of relevant carrying cost per unit per year and...

Q: The TyeNeck Company manufactures men’s neckwear at its A1 plant. TyeNeck

The TyeNeck Company manufactures men’s neckwear at its A1 plant. TyeNeck is considering implementing a JIT production system. The following are the estimated costs and benefits of JIT production: a. A...

Q: Raymore, a unit of Outdoor UnPlugged, manu- factures a

Raymore, a unit of Outdoor UnPlugged, manu- factures a line of electric, cordless, lawn mowers. Senior management of Outdoor UnPlugged has noticed that Raymore has been producing more lawn mowers than...

Q: Refer to Exercise 21-27. Jose, the unit manager

Refer to Exercise 21-27. Jose, the unit manager of Raymore, is concerned that switching to the backflush costing system will lower the operating income of his unit. The senior management at Outdoor Un...

Q: Silicon Valley Computer (SVC), the producer of keyboards for personal

Silicon Valley Computer (SVC), the producer of keyboards for personal computers, which is discussed in the chapter, is a subsidiary of El Camino Corporation. Each year, headquarters of El Camino provi...

Q: To be sure that you understand how to use the tables in

To be sure that you understand how to use the tables in Appendix A at the end of this text, solve the following exercises. Ignore income tax considerations. The correct answers, rounded to the nearest...

Q: Heavenly Candy Company is considering purchasing a second chocolate dipping machine in

Heavenly Candy Company is considering purchasing a second chocolate dipping machine in order to expand its business. The information Heavenly has accumulated regarding the new machine is Heavenly esti...

Q: Assume the same facts as in Exercise 22-23 except that

Assume the same facts as in Exercise 22-23 except that City Hospital is a taxpaying entity. The income tax rate is 30% for all transactions that affect income taxes. Required 1. Complete requirement...

Q: Eastern Cola is considering the purchase of a special-purpose bottling

Eastern Cola is considering the purchase of a special-purpose bottling machine for $70,000. It is expected to have a useful life of 4 years with no terminal disposal value. The plant manager estimates...

Q: Joshua Wilson is the controller of Apex Frame Mouldings, a division

Joshua Wilson is the controller of Apex Frame Mouldings, a division of Garman Enterprises. As the division is preparing to count year-end inventory, Wilson is approached by Doug Leonard, the division’...

Q: New Med Corporation is a rapidly growing biotech company that has a

New Med Corporation is a rapidly growing biotech company that has a required rate of return of 12%. It plans to build a new facility in Santa Clara County. The building will take 2 years to complete....

Q: Lulus Construction is analyzing its capital expenditure proposals for the purchase of

Lulus Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $12,000,000 for the year. Lyssa Bickerson, staff an...

Q: Jenna’s Bakery plans to purchase a new oven for its store.

Jenna’s Bakery plans to purchase a new oven for its store. The oven has an estimated useful life of 4 years. The estimated pretax cash flows for the oven are as shown in the table th...

Q: Captain Inc. is considering the purchase of new equipment that will

Captain Inc. is considering the purchase of new equipment that will automate production and thus reduce labor costs. Captain made the following estimates related to the new machinery: Assume depreciat...

Q: Ortel Telecom sells telecommunication products and services to a variety of small

Ortel Telecom sells telecommunication products and services to a variety of small businesses. Two of Ortel’s key clients are Square and Cloudburst, both fast-growing technology start...

Q: The Platinum Company is a national mattress manufacturer. Its Marion plant

The Platinum Company is a national mattress manufacturer. Its Marion plant will become idle on December 31, 2020. Nina Simon, the corporate control- ler, has been asked to look at three options regard...

Q: Chocfix produces hot cocoa mix. The company has two divisions,

Chocfix produces hot cocoa mix. The company has two divisions, each operating as a profit center. The transportation division purchases raw cocoa in the Ivory Coast and transports it to the mixing div...

Q: Jose Martinez is the CEO of ShakeIt, a producer of premium

Jose Martinez is the CEO of ShakeIt, a producer of premium ice cream. ShakeIt has two divisions, the supplying division and the processing division. The supplying division supplies milk, the main ingr...

Q: People Able Computer, Inc., with headquarters in San Francisco,

People Able Computer, Inc., with headquarters in San Francisco, manufactures and sells a desktop computer. People Able has three divisions, each of which is located in a different country: a. China di...

Q: Watson Motors, Inc., operates as a decentralized multidivision company.

Watson Motors, Inc., operates as a decentralized multidivision company. The Vadner division of Watson Motors purchases most of its airbags from the airbag division. The airbag division’s incremental c...

Q: Dotball Candies manufactures jawbreaker candies or gobstoppers in a fully automated process

Dotball Candies manufactures jawbreaker candies or gobstoppers in a fully automated process. The machine that produces candies was purchased recently and can make 4,400 jawbreakers per month. The mach...

Q: The Burton Company manufactures chainsaws at its plant in Sandusky, Ohio

The Burton Company manufactures chainsaws at its plant in Sandusky, Ohio. The company has marketing divisions throughout the world. A Burton marketing division in Lille, France, imports 200,000 chains...

Q: The Jill-Farley Corporation, manufacturer of tractors and other heavy

The Jill-Farley Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit ce...

Q: Refer to Exercise 23-24. Assume that division A can

Refer to Exercise 23-24. Assume that division A can sell the 1,800 units to other customers at $153 per unit, with variable marketing costs of $8 per unit. Required Determine whether Jill-Farley will...

Q: Online Learning, Inc. has two divisions: Test Preparation and

Online Learning, Inc. has two divisions: Test Preparation and Language Arts. Results (in millions) for the past 3 years are partially displayed here: Required 1. Complete the table by filling in the b...

Q: The Quality Athletics Company produces a wide variety of sports equipment.

The Quality Athletics Company produces a wide variety of sports equipment. Its newest division, Golf Technology, manufactures and sells a single product— AccuDriver, a golf club that...

Q: Fabulous Motor Company makes electric model cars and has two products,

Fabulous Motor Company makes electric model cars and has two products, the Simplegreen and the Fabulousgreen. To produce the Simplegreen, Fabulous Motor employed assets of $11,250,000 at the beginning...

Q: Hamilton Corp. is a reinsurance and financial services company. Hamilton

Hamilton Corp. is a reinsurance and financial services company. Hamilton strongly believes in evaluating the performance of its stand-alone divisions using financial metrics such as ROI and residual i...

Q: Mary Jane is an upscale retailer for women’s clothing with stores in

Mary Jane is an upscale retailer for women’s clothing with stores in many high-end shopping centers across the United States. In recent years, sales in most of the stores, especially...

Q: McCall Corporation manufactures furniture in several divisions, including the patio furniture

McCall Corporation manufactures furniture in several divisions, including the patio furniture division. The manager of the patio furniture division plans to retire in 2 years. The manager receives a b...

Q: Accelerate Auto Company operates a new car division (that sells high

Accelerate Auto Company operates a new car division (that sells high-performance sports cars) and a performance parts division (that sells performance-improvement parts for family cars). Some division...

Q: Compute the missing amounts. Required /

Compute the missing amounts. Required

Q: The Mountainside Corporation manufactures similar products in the United States and Norway

The Mountainside Corporation manufactures similar products in the United States and Norway. The U.S. and Norwegian operations are organized as de- centralized divisions. The following information is a...

Q: Isla Manufacturing makes fashion products and competes on the basis of quality

Isla Manufacturing makes fashion products and competes on the basis of quality and leading-edge designs. The company has two divisions, clothing and cosmetics. Isla has $2,500,000 invested in assets i...

Q: Estancia, Inc. is a large company that owns restaurants and

Estancia, Inc. is a large company that owns restaurants and has a wine division and a frozen food division. Management of the company gives its division managers autonomy in running their divisions fo...

Q: Kroger Company recently introduced a new bonus plan for its corporate executives

Kroger Company recently introduced a new bonus plan for its corporate executives. The company believes that current profitability and customer satisfaction levels are equally important to the company&...

Q: Precision Equipment specializes in the manufacture of medical equipment, a field

Precision Equipment specializes in the manufacture of medical equipment, a field that has become increasingly competitive. Approximately 2 years ago, Pedro Mendez, president of Precision, decided to r...

Q: Channels is a manufacturer of flatware that is grade-rolled rather

Channels is a manufacturer of flatware that is grade-rolled rather than stamped. The flatware is sold in upscale stores as a high-quality item. The company sells the goods that are within specificatio...

Q: Refresh Resorts, Inc., operates health spas in Key West,

Refresh Resorts, Inc., operates health spas in Key West, Florida; Phoenix, Arizona; and Carmel, California. The Key West spa was the company’s first and opened in 1994. The Phoenix s...

Q: Consider the following series of independent situations in which a firm is

Consider the following series of independent situations in which a firm is about to make a strategic decision. Decisions a. Stila Cosmetics is considering introducing an anti-aging facial cream with n...

Q: Consider the following series of independent situations in which a firm is

Consider the following series of independent situations in which a firm is about to make a strategic decision. Decisions a. Lactalis Foods is planning to come out with a special tetrazzini made. with...

Q: Explain the three main management accounting guidelines.

Explain the three main management accounting guidelines.

Q: Minnesota Office Products produces three different paper products at its Vaasa lumber

Minnesota Office Products produces three different paper products at its Vaasa lumber plant: Supreme, Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently...

Q: For each of the following items, identify which of the management

For each of the following items, identify which of the management accounting guidelines applies: cost–benefit approach, behavioral and technical considerations, or different costs for different purpos...

Q: Discuss the roles of the chief financial officer and the controller.

Discuss the roles of the chief financial officer and the controller.

Q: Henry Maddox was recently promoted to Controller of Research and Development for

Henry Maddox was recently promoted to Controller of Research and Development for Pharmex, a Fortune 500 pharmaceutical company that manufactures prescription drugs and nutritional supplements. The com...

Q: Discuss the core professional standards governing management accountants.

Discuss the core professional standards governing management accountants.

Q: Phoenix Press produces consumer magazines. The house and home division,

Phoenix Press produces consumer magazines. The house and home division, which sells home-improvement and home-decorating magazines, has seen a 15% reduction in operating income over the past 15 months...

Q: Stewart Tables’ selected data for March 2020 are presented here (in

Stewart Tables’ selected data for March 2020 are presented here (in millions): Required Calculate the following costs: 1. Direct materials inventory, March 31, 2020 2. Fixed manufac...

Q: Consider the following account balances (in thousands) for the Peterson

Consider the following account balances (in thousands) for the Peterson Company: Required 1. Prepare a schedule for the cost of goods manufactured for 2020. 2. Revenues for 2020 were $310 million. Pr...

Q: The following information is available for the McCain Manufacturing Company for 2020

The following information is available for the McCain Manufacturing Company for 2020. Required Assume that all raw materials are purchased on credit and all sales are credit sales. Compute the missin...

Q: The Howell Corporation has the following account balances (in millions):

The Howell Corporation has the following account balances (in millions): Required Prepare an income statement and a supporting schedule of cost of goods manufactured for the year ended December 31,...

Q: How would the answer to Problem 2-40 be modified if

How would the answer to Problem 2-40 be modified if you were asked for a schedule of cost of goods manufactured and sold instead of a schedule of cost of goods manufactured? Be specific. 2. Would the...

Q: Which of the following statement about contribution margin and gross margin is

Which of the following statement about contribution margin and gross margin is correct. a. Contribution margin indicates why the operating income changes as the number of units sold changes. b. Contri...

Q: Timi Company manufactures pens for schools. Summary data (in thousands

Timi Company manufactures pens for schools. Summary data (in thousands) for the year ended December 31, 2019, are as follows: Required 1. For each cost item (A–I) from the records,...

Q: Chan’s manufacturing costing system uses a three-part classification of direct

Chan’s manufacturing costing system uses a three-part classification of direct materials, direct manufacturing labor, and manufacturing overhead costs. The following items (in millio...

Q: Granolla Mike works as an auditor in the audit firm of Alison

Granolla Mike works as an auditor in the audit firm of Alison Wonderland & Partners and charges £60 per hour for normal working hours. The firm pays him £90 per hour for unsociable hours, which includ...

Q: The following data are for Huang Wong Ping Retail Outlet Stores.

The following data are for Huang Wong Ping Retail Outlet Stores. The account balances (in thousands) are for 2021. Required 1. Compute (a) the cost of goods purchased and (b) the cost of goods sold....

Q: Sam Wright recently took over as the controller of Osborn Brothers Manufacturing

Sam Wright recently took over as the controller of Osborn Brothers Manufacturing. Last month, the previous controller left the company with little notice and left the accounting records in disarray. S...

Q: A UK-based company Office Essentials manufactures and sells metal shelving

A UK-based company Office Essentials manufactures and sells metal shelving. It began operations on January 1, 2020. Costs incurred for 2020 are as follows (V stands for variable; F stands for fixed):...

Q: The following data are for Mama Retail Outlet Stores. The account

The following data are for Mama Retail Outlet Stores. The account balances (in thousands) are for 2020. Required 1. Compute (a) the cost of goods purchased and (b) the cost of goods sold. 2. Prepare t...

Q: An auditor for the Internal Revenue Service is trying to reconstruct some

An auditor for the Internal Revenue Service is trying to reconstruct some partially destroyed records of two taxpayers. Required For each case in the accompanying list, find the unknown elements desi...

Q: The Matrix Company has three product lines of belts—A,

The Matrix Company has three product lines of belts—A, B, and C—with contribution margins of $7, $5, and $4, respectively. The president foresees sales of 400,000 units in the coming period, consistin...

Q: Romi Filters produces two types of water filters. One at-

Romi Filters produces two types of water filters. One at- taches to the faucet and cleans all water that passes through the faucet; the other is a pitcher-cum-filter that only purifies water meant for...

Q: Blackthorns Ltd produces a single product, which has a selling price

Blackthorns Ltd produces a single product, which has a selling price of £10 per unit and a variable cost of production of £4 per unit. The fixed costs of production are £55,000. In addition, the compa...

Q: The following data has been collected from Decent Waters Company for the

The following data has been collected from Decent Waters Company for the year ended December 31, 2019. Required 1. Prepare a schedule for the cost of goods manufactured for the year 2019. 2. If the c...

Q: The Garden Club is preparing for its annual meeting in which a

The Garden Club is preparing for its annual meeting in which a magic show will be shown to its contributing members only. Last year, out of 1,500 members, only 600 contributed for the magic show. Tick...

Q: Megaphone Corporation produces a molded plastic casing, M&M101,

Megaphone Corporation produces a molded plastic casing, M&M101, for many cell phones currently on the market. Summary data from its 2020 income statement are as follows: Joshua Kirby, Megaphone&ac...

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Central térmica, Inc., produces the same power gen- erator in two Spanish plants, a new plant in Los Barrios and an older plant in Ascó. The following data are available for...

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Wellington Vents Ltd operates and services snack vending machines located in restaurants, metro stations, canteens, etc. The machines are rented from the manufacturer. In addition, the company must re...

Q: Yahama Medical Centre operates a medical surgery in Japan that specializes in

Yahama Medical Centre operates a medical surgery in Japan that specializes in the diagnosis and treatment of hay fever allergies. The firm’s budget for next year is as follows: Requi...

Q: Crestwood Ltd makes 200 wooden kitchen chairs every month and sells them

Crestwood Ltd makes 200 wooden kitchen chairs every month and sells them for €50 each. Fixed monthly overheads are €3,000 and the standard cost of one chair is as fol...

Q: J.T. Brooks and Company, a manufacturer of quality

J.T. Brooks and Company, a manufacturer of quality handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased competition has led Mr. Brooks, the president, to be...

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Mundial Nails produces a famous nail polish with a unique glossy feature and sells it for $25 per unit. The operating income for 2017 is as follows: Mundial Nails would like to increase its profitabil...

Q: The LadyStyle sells women’s shoes across the country through its chain of

The LadyStyle sells women’s shoes across the country through its chain of shoe stores. It sells 20 different styles of shoes with identical unit costs and selling prices. A unit is d...

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Refer to requirement 3 of Problem 3-43. In this problem, assume the role of the owner of LadyStyle. Required 1. As owner, which sales compensation plan would you choose if forecasted annual sales of...

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The Big Event (TBE) recently started a business organizing food and music at weddings and other large events. In order to better understand the profitability of the business, the owner has asked you f...

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Sunshine Printing Company currently leases its only copy machine for $1,500 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based....

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TopHats operates a kiosk at a local mall, selling hats for $30 each. TopHats currently pays $900 a month to rent the space and pays three full-time employees to each work 160 hours a month at $12 per...

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Carlisle Engine Company manufactures and sells diesel engines for use in small farming equipment. For its 2020 budget, Carlisle Engine Company estimates the following: The first-quarter income stateme...

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AgroPharm Corporation manufactures pharmaceutical products that are sold through a network of external sales agents. The agents are paid a commission of 18% of revenues. AgroPharm is considering repla...

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Daewoong Medicals, a healthcare company based in South Korea, uses a job-costing system at Hyangnam plant. The plant has a technology department and a finishing department. Daewoong uses normal costin...

Q: Kidman & Associates is a law firm specializing in labor relations and

Kidman & Associates is a law firm specializing in labor relations and employee-related work. It employs 30 professionals (5 partners and 25 associates) who work directly with its clients. The average...

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Kidman has just completed a review of its job-costing system. This review included a detailed analysis of how past jobs used the firm’s resources and interviews with personnel about...

Q: The Zaf Radiator Company uses a normal-costing system with a

The Zaf Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base. The following data are for 2020: Machine-hours data...

Q: Gordon Bros Ltd manufactures plastic products. The following details relates to

Gordon Bros Ltd manufactures plastic products. The following details relates to Job #369: April 1, 2020: Direct materials of $420,000 and indirect materials of $17,000 were purchased. However, the com...

Q: Premier Golf Carts makes custom golf carts that it sells to dealers

Premier Golf Carts makes custom golf carts that it sells to dealers across the Southeast. The carts are produced in two departments, fabrication (a mostly automated department) and custom finishing (a...

Q: The following items appear as cost of a manufacturing company:

The following items appear as cost of a manufacturing company: A. Depreciation on plant and equipment B. Depreciation on delivery vans C. Insurance on plant and building D. Marketing manager’s salary...

Q: Oregon Outfitters, a manufacturer of fly fishing flies, uses a

Oregon Outfitters, a manufacturer of fly fishing flies, uses a normal-costing system with a single overhead cost pool and direct labor cost as the cost-allocation base. The following data are for 2020...

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Brandon Company uses normal costing in its job-costing system. The company produces custom bikes for toddlers. The beginning balances (December 1) and ending balances (as of December 30) in their inve...

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Kitchen Works Ltd is a carpentry business that specializes in the production of kitchen cabinets. The company budgeted to produce 44,000 kitchen chairs for the month of January, but actually produced...

Q: Beth Bledsoe joined Baker Brothers, Inc. as controller in October

Beth Bledsoe joined Baker Brothers, Inc. as controller in October 2019. Baker Brothers manufactures and installs custom kitchen countertops. The company uses a normal-costing sys- tem with two direct-...

Q: Eware Ltd, a bakery, records the following trans- actions

Eware Ltd, a bakery, records the following trans- actions in its books for the month of August. a. Raw materials of $182,000 were purchased on credit. b. The total of stores requisitions for direct ma...

Q: Bradley Associates is a recently formed law partnership. Emmit Harrington,

Bradley Associates is a recently formed law partnership. Emmit Harrington, the managing partner of Bradley Associates, has just finished a tense phone call with Martin Omar, president of Campa Coal. O...

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Harrington asks his assistant to collect details on those costs included in the $25,000 indirect-cost pool that can be traced to each individual job. After analysis, Bradley is able to reclassify $15,...

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Bradley has two classifications of professional staff: partners and associates. Harrington asks his assistant to examine the relative use of partners and associates on the recent Campa Coal and St. Ed...

Q: Marshall’s Devices uses activity-based costing to allocate overhead costs to

Marshall’s Devices uses activity-based costing to allocate overhead costs to customer orders for pricing purposes. Many customer orders are won through competitive bidding. Direct ma...

Q: Yahama Ltd makes several spare parts for motorbikes including Suzuka and Yahama

Yahama Ltd makes several spare parts for motorbikes including Suzuka and Yahama parts. The company has recently switched from the traditional absorption costing to the activity-based costing system. T...

Q: Essential College Supplies (ECS) is a store on the campus

Essential College Supplies (ECS) is a store on the campus on a large Midwestern university. The store has both an apparel section (t-shirts with the school logo) and a convenience section. ECS reports...

Q: Pharmassist, Inc., a distributor of special pharmaceutical products, operates

Pharmassist, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments: a. General supermarket chains b. Drugstore chains c. Mom-and-pop single-st...

Q: Shades & Hues (S&H) is a designer of

Shades & Hues (S&H) is a designer of high-quality curtains and bedsheets. Each design is made in small batches. Each spring, S&H comes out with new designs for the curtains and for the bed...

Q: Phoenix Medical Associates operates a walk-in medical clinic in Tempe

Phoenix Medical Associates operates a walk-in medical clinic in Tempe, Arizona. The clinic includes two different departments, Urgent Care, which serves patients with minor to moderate acute illnesses...

Q: Adamac Clinic is a specialist healthcare provider which operates in Lagos,

Adamac Clinic is a specialist healthcare provider which operates in Lagos, Nigeria. Output is defined as patient days. The clinic uses ABC in its accounting system and provides the following three ser...

Q: Whitewater Adventures manufactures two models of kayaks, Basic and Deluxe,

Whitewater Adventures manufactures two models of kayaks, Basic and Deluxe, using a combination of machining and hand finishing. Machine setup costs are driven by the number of setups. Indirect manufac...

Q: Plum Electronics, a division of Berry Corporation, manufactures two large

Plum Electronics, a division of Berry Corporation, manufactures two large-screen television models: the Mammoth, which has been produced since 2016 and sells for $990, and the Maximum, a newer model i...

Q: Main Street Books and Café (MSBC) is a large city

Main Street Books and Café (MSBC) is a large city bookstore that sells books and music CDs and has a café. MSBC operates at capacity and allocates selling, general, and admin...

Q: Woodechuck’s manufactures, among other things, jerseys for the girls’ football

Woodechuck’s manufactures, among other things, jerseys for the girls’ football teams in two high schools in Australia. The company uses fabric to create the jerseys...

Q: EverGreen Store, Singapore, manufactures plain white and solid-colored

EverGreen Store, Singapore, manufactures plain white and solid-colored T-shirts. Budgeted inputs include the following: Budgeted sales and selling price per unit are as follows: EverGreen has the opp...

Q: John Dawling Brothers is a company that produces two well-known

John Dawling Brothers is a company that produces two well-known domestic appliance models, the Tablefrig and Tablefrez. The following details have been estimated for 2021 for the sales and production...

Q: Consider the following details of the income statement of Fountain Pen Ltd

Consider the following details of the income statement of Fountain Pen Ltd, a Swedish company that produces special pens, for the last year: An analysis of Fountain Pen Ltd’s costs r...

Q: Spin Cycle Company is a manufacturer of commercial- grade exercise bikes

Spin Cycle Company is a manufacturer of commercial- grade exercise bikes that are sold to hotels and health clubs. Maintaining the bikes is an important area of customer satisfaction. Because of incre...

Q: Christa Schuller owns an outlet of a popular chain of restaurants in

Christa Schuller owns an outlet of a popular chain of restaurants in the southern part of Germany. One of the chain’s popular lunch items is the cheeseburger. It is a hamburger topped with cheese. On...

Q: Akanson Crafts Ltd. is an arts gallery that produces three different

Akanson Crafts Ltd. is an arts gallery that produces three different arts products namely: Akra, Omra, and Okore. The budgeted sales of the products for 2020 were as follow: Materials used in the prod...

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Jayzee Company manufactures a variety of products in a variety of departments and evaluates departments and departmental managers by comparing actual cost and output relative to the budget. Department...

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Angler Chemical Company currently operates three manufacturing plants in Colorado, Utah, and Arizona. Annual carbon emissions for these plants in the first quarter of 2021 are140,000 metric tons per q...

Q: Roma Skincare manufactures and sells a face cream to small specialty stores

Roma Skincare manufactures and sells a face cream to small specialty stores in Victoria, Australia. It presents the monthly operating income statement shown here to Jacob Scott, a potential investor i...

Q: Tyva makes a very popular undyed cloth sandal in one style,

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Q: Milan Statuary manufactures bust statues of famous historical figures. All statues

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Q: Andrew Scheid Ltd manufactures kitchen cabinets. The company’s budget for fixed

Andrew Scheid Ltd manufactures kitchen cabinets. The company’s budget for fixed costs per month is $7,500 and budgeted variable costs per cabinet are: The company had budgeted to mak...

Q: You have been invited to interview for an internship with an international

You have been invited to interview for an internship with an international food manufacturing company. When you arrive for the interview, you are given the following information related to a fictitiou...

Q: Young Bay Surfboards manufactures fiberglass surfboards. The standard cost of direct

Young Bay Surfboards manufactures fiberglass surfboards. The standard cost of direct materials and direct manufacturing labor is $223 per board. This includes 40 pounds of direct materials, at the bud...

Q: GoodFoods produces snack mixes for the gourmet and natural foods market.

GoodFoods produces snack mixes for the gourmet and natural foods market. Its most popular product is Tempting Trail Mix, a mixture of peanuts, dried cranberries, and chocolate pieces. For each batch,...

Q: On May 1, 2020, Lowell Company began the manufacture of

On May 1, 2020, Lowell Company began the manufacture of a new paging machine known as Qwik. The company in- stalled a standard costing system to account for manufacturing costs. The standard costs for...

Q: Zanella’s Smart Shawls, Inc., is a small business that Zanella

Zanella’s Smart Shawls, Inc., is a small business that Zanella developed while in college. She began hand-knitting shawls for her dorm friends to wear while studying. As demand grew, she hired some wo...

Q: You are a new junior ac- countant at Clearvision Corporation,

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Q: Futuremart is an international retail store. They are considering implementing a

Futuremart is an international retail store. They are considering implementing a new business-to-business (B2B) information system for processing merchandise orders. The current system costs Futuremar...

Q: Trevor Joseph employs two workers in his guitar-making business.

Trevor Joseph employs two workers in his guitar-making business. The first worker, George, has been making guitars for 20 years and is paid $30 per hour. The second worker, Earl, is less experienced a...

Q: The Shirt Company produces cotton/polyester blend T-shirts to

The Shirt Company produces cotton/polyester blend T-shirts to supply a custom T-shirt customer. The company experienced a computer failure and some of the data were lost and could not be recovered. Th...

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Q: Sunto Scientific manufactures GPS devices for a chain of retail stores.

Sunto Scientific manufactures GPS devices for a chain of retail stores. Its most popular model, the Magellan XS, is assembled in a dedicated facility in Savannah, Georgia. Sunto is keenly aware of the...

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Q: Bruno Limited manufactures padlocks for which they have established unit standard costs

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Delta Rubber Plastic Company Ltd manufactures rubber chairs and tables. The company’s accountant, has prepared the overhead budget shown below: The company had a great year with the...

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Consider the following two situations—cases A and B—independently. Data refer to operations for April 2020. For each situation, assume standard costing. Also assume...

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Grant Manufacturing uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor-hours (DMLH). Grant develops it...

Q: Omega’s Fleet Feet, Inc., produces dance shoes for stores all

Omega’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 de...

Q: Fill in the blanks for each of the following independent cases.

Fill in the blanks for each of the following independent cases.

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Johns Manufacturing Company manufactures and sells rolling suitcases. After several years of increased sales, Johns experiences a drop in sales in 2020 from increased competition. Johns uses machine-h...

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NWI is a service provider that offers computing resources measured in RAM (random-access memory)-hours to handle enterprise-wide applications. Information about variable overhead costs for March 2020...

Q: The Delta Company started business on January 1, 2020. The

The Delta Company started business on January 1, 2020. The company adopted a standard absorption costing system to produce ergonomic backpacks. Delta chose direct labor as the application base for ove...

Q: BlueBox Company uses standard costing. The company has two manufacturing plants

BlueBox Company uses standard costing. The company has two manufacturing plants, one in Shanghai and the other in Shenzhen. For the Shanghai plant, BlueBox has budgeted annual output of 2,000,000 unit...

Q: Johnson Stores produce and sell face powder called the ‘Success’ in

Johnson Stores produce and sell face powder called the ‘Success’ in cases. Each case is sold for £80. The following information relates to the product...

Q: Gammaro Company uses standard costing. Tim St. Germaine, the

Gammaro Company uses standard costing. Tim St. Germaine, the new president of Gammaro Company, is presented with the following data for 2020: Required 1. At what percentage of denominator level was t...

Q: Horizon Press produces textbooks for college courses. The company recently hired

Horizon Press produces textbooks for college courses. The company recently hired a new editor, Billie White, to handle production and sales of books for an introduction to accounting course. Billie&ac...

Q: Zing Lager has just purchased the Chicago Brewery. The brewery is

Zing Lager has just purchased the Chicago Brewery. The brewery is 2 years old and uses absorption costing. It will “sell” its product to Zing Lager at $44 per barre...

Q: Simplex Inc. sells its product at $80 per unit with

Simplex Inc. sells its product at $80 per unit with a contribution margin of 40%. During 2016, Simplex sold 540,000 units of its product; its total fixed costs are $2,100,000. Required 1. Calculate t...

Q: Donaldson Corporation is a manufacturer of computer accessories. It uses absorption

Donaldson Corporation is a manufacturer of computer accessories. It uses absorption costing based on standard costs and reports the following data for 2020: There are no price, spending, or efficiency...

Q: Whistler, Inc., manufactures a specialized snowboard made for the advanced

Whistler, Inc., manufactures a specialized snowboard made for the advanced snowboarder. Whistler began 2020 with an inventory of 240 snow- boards. During the year, it produced 900 boards and sold 995...

Q: Gostkowski Company is about to enter the highly competitive personal electronics market

Gostkowski Company is about to enter the highly competitive personal electronics market with a new optical reader. In anticipation of future growth, the company has leased a large manufacturing facili...

Q: Kappa Electricals, a producer of energy-efficient compact fluorescent lamps

Kappa Electricals, a producer of energy-efficient compact fluorescent lamps (CFLs), expects that demand will increase markedly over the next decade. Due to the high fixed costs involved in the busines...

Q: If Kappa sells all 350,000 CFLs produced, what would

If Kappa sells all 350,000 CFLs 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...

Q: The Beta Company started business on January 1, 2020. Beta

The Beta Company started business on January 1, 2020. Beta manufactures a specialty honey soda, which it sells directly to state-owned distributors in Abu Dhabi. Honey soda is produced and sold in six...

Q: Top Catering operates a chain of 10 hospitals in the Los Angeles

Top Catering operates a chain of 10 hospitals in the Los Angeles area. Its central food-catering facility, TopStuff, prepares and delivers meals to the hospitals. It has the capacity to deliver up to...

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In 2021, only 740,000 TopStuff meals were produced and sold to the hospitals. Smith suspects that hospital controllers had systematically inflated their 2021 meal estimates. Required 1. Recall that T...

Q: JetStar produces jet bridges for many domestic and international airports. Cost

JetStar produces jet bridges for many domestic and international airports. Cost information for JetStar’s jet bridges is as follows: Additional information for the first three quarte...

Q: Rollalong Inc. produces wheelchairs that are sold primarily to hospitals.

Rollalong Inc. produces wheelchairs that are sold primarily to hospitals. Rollalong’s three plant managers’ bonuses are based on operating income that is produced using absorption costing. The company...

Q: Which of the following statements does not accurately describe the flow of

Which of the following statements does not accurately describe the flow of costs in a job costing system? a. Direct materials used and direct manufacturing labor can be easily traced to jobs. b. Direc...

Q: Brilliant Travel Agency specializes in flights between Toronto and Vishakhapatnam. It

Brilliant Travel Agency specializes in flights between Toronto and Vishakhapatnam. It books passengers on EastWest Air. Brilliant’s fixed costs are $36,000 per month. EastWest Air charges passengers $...

Q: Farm Fresh, a cooperative of organic family- owned farms outside

Farm Fresh, a cooperative of organic family- owned farms outside of New South Wales, Australia, has recently started a fresh produce club to provide support to the group’s member far...

Q: Anna Schaub, the financial manager at the Mangiamo restaurant, is

Anna Schaub, the financial manager at the Mangiamo restaurant, is checking to see if there is any relationship between newspaper advertising and sales revenues at the restaurant. She obtains the follo...

Q: Parker Manufacturing has been using activity-based costing to determine the

Parker Manufacturing has been using activity-based costing to determine the cost of product X-678. One of the activities, “Inspection”, occurs just before the produ...

Q: Unicorn Freightways is a leader in transporting agricultural products in the western

Unicorn Freightways is a leader in transporting agricultural products in the western provinces of Italy. Rita Bonnie, a financial analyst at Unicorn Freightways, is studying the behavior of transporta...

Q: The Blue Seas Company, which is under contract to the Navy

The Blue Seas Company, which is under contract to the Navy, assembles troop deployment boats. As part of its research program, it completes the assembly of the first of a new model (PT109) of deployme...

Q: Hankuk Electronics started production on a sophisticated new smartphone run- ning

Hankuk Electronics started production on a sophisticated new smartphone run- ning the Android operating system in January 2020. Given the razor-thin margins in the consumer electronics industry, Hanku...

Q: Inbee is concerned that she still does not understand the relationship between

Inbee is concerned that she still does not understand the relationship between output and labor consumption. She consults with Jim Park, the head of engineering, and shares the results of her regressi...

Q: Designer Wear operates a chain of 10 retail department stores. Each

Designer Wear operates a chain of 10 retail department stores. Each department store makes its own purchasing decisions. Barry Lee, assistant to the president of Designer Wear, is interested in better...

Q: Barry Lee decides that the simple regression analysis used in Problem 10

Barry Lee decides that the simple regression analysis used in Problem 10-47 could be extended to a multiple regression analysis. He finds the following results for two multiple regression analyses: Re...

Q: James Silva is a management accountant at Keebler-Olson, where

James Silva is a management accountant at Keebler-Olson, where he is in charge of their investment portfolio. In 2015, James worked with a data scientist to develop a model that predicts how a given l...

Q: The Patisserie Hartog owns and operates 10 puff pastry outlets in and

The Patisserie Hartog owns and operates 10 puff pastry outlets in and around Amsterdam. You are given the following corporate budget data for next year: Variable costs change based on the number of pu...

Q: Assume the same information for Keebler-Olson as in Problem 11

Assume the same information for Keebler-Olson as in Problem 11-31. James Silva and the data scientist on his team work together to develop the following decision tree: The data science team tests the...

Q: Assume the same information for Keebler- Olson as in Problems 11

Assume the same information for Keebler- Olson as in Problems 11-31 and 11-32. Required 1. Prune the tree at depth 3. Using the pruned tree, classify each loan in the validation sample as repay or de...

Q: Assume the same information for Keebler-Olson as in Problems 11

Assume the same information for Keebler-Olson as in Problems 11-31, 11-32, and 11-33. While James is presenting his work to the president and his team, someone asks whether he had calculated the overa...

Q: Assume the same information for Keebler-Olson as in Problems 11

Assume the same information for Keebler-Olson as in Problems 11-31, 11-32, 11-33, and 11-34. James plans to invest $100 in each of the 1,000 loans he is examining. If he decides not to invest in a loa...

Q: Sarah Letourneau is the management accountant at Turcotte Manufacturing, an auto

Sarah Letourneau is the management accountant at Turcotte Manufacturing, an auto supplier that produces brake pads. Turcotte’s customers have high safety standards, and managers at T...

Q: Assume the same information for Turcotte as in Problem 11-36

Assume the same information for Turcotte as in Problem 11-36. Working brake pads yield a profit of $25. If defective brake pads are identified before they are shipped, they can be fixed and sold as wo...

Q: It is June, and the manager of the retail chain Stapleton

It is June, and the manager of the retail chain Stapleton wants to increase revenues during the back-to-school period. To do that, he plans to attract more customers in August whose children are enter...

Q: David Porter is the management accountant at Spruce Bank, where the

David Porter is the management accountant at Spruce Bank, where the data science department is leading an initiative to predict whether loans will default or repay. The default rate in the training se...

Q: Model thresholds and payoff matrices, sensitivity analysis (continuation of 11

Model thresholds and payoff matrices, sensitivity analysis (continuation of 11-39). Assume the same information for Spruce Bank as in Problem 11-39. David believes that within the pool of borrowers he...

Q: Julie Bolts Ltd manufactures mechanical bolts for different vehicle engines. The

Julie Bolts Ltd manufactures mechanical bolts for different vehicle engines. The company has been approached to submit a quote for supply of some 3-D Bolts. The company’s inventory a...

Q: The Unique Toys Company manufactures and sells toys. Currently, 300

The Unique Toys Company manufactures and sells toys. Currently, 300,000 units are sold per year at $12.50 per unit. Fixed costs are $880,000 per year. Variable costs are $7.00 per unit. (Consider each...

Q: Jersey Acres Dairy, maker of specialty cheeses, produces a soft

Jersey Acres Dairy, maker of specialty cheeses, produces a soft cheese from the milk of Friesian cows raised on a special corn-based diet. One kilogram of soft cheese, which has a contribution margin...

Q: Cuddly Critters, Inc., manufactures plush toys in a facility in

Cuddly Critters, Inc., manufactures plush toys in a facility in Queensland, Brisbane. Recently, the company designed a group of collectible resin figurines to go with the plush toy line. Management is...

Q: Mitch McCalister, the general manager of Time Sprint, must decide

Mitch McCalister, the general manager of Time Sprint, must decide when to release the new version of Time Sprint’s fitness watch, TS-12. Development of TS-12 is complete, but the pro...

Q: Sandy’s Paint Shop paints exterior surfaces for commercial and residential customers.

Sandy’s Paint Shop paints exterior surfaces for commercial and residential customers. It charges $175 per hour for a crew of painters. For March 2020, Sandy expects the crew to opera...

Q: The Allen Company produces chairs. This year’s expected production is 30

The Allen Company produces chairs. This year’s expected production is 30,000 units. Currently, Allen makes the upholstery for the chairs in its factory. Allen’s man...

Q: Gormley Precision Tools makes cutting tools for metalworking operations. It makes

Gormley Precision Tools makes cutting tools for metalworking operations. It makes two types of tools: A6, a regular cutting tool, and EX4, a high precision cutting tool. A6 is manufactured on a regula...

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Rush Industries manufactures electronic testing equipment. Rush also installs the equipment at customers’ sites and ensures that it functions smoothly. Additional information on the...

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Talking Toys (TT) produces dolls in two processes: molding and assembly. TT is currently producing two models: Chatty Chelsey and Talking Tanya. Production in the molding department is limited by the...

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Ainsley Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2020 follows: Further analysis of costs reveals the following percentages of variable costs i...

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Mechum River Anglers, a division of Old Dominion Travel, offers two types of guided fishing tours, Basic and Deluxe. Operating income for each tour type in 2020 is as follows: The equipment has a disp...

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Sonix Electronics is a dealer of industrial refrigerator. Its average sell- ing price of an industrial refrigerator is $5,000, which it purchases from the manufacturer for $4,200. Each month, Sonix El...

Q: Susan Smith manages the Wexford plant of Sanchez Manufacturing. A representative

Susan Smith manages the Wexford plant of Sanchez Manufacturing. A representative of Darnell Engineering approaches Smith about replacing a large piece of manufacturing equipment that Sanchez uses in i...

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The R and J Company manufactures a robotic vacuum called the Baxter. The company sells the vacuum to discount stores throughout the country. The Baxter is a basic robotic vacuum with a remote and is s...

Q: XBlast manufactures an entry-level hoverboard, HOV-X.

XBlast manufactures an entry-level hoverboard, HOV-X. Pursuing a cost-leadership strategy, the company has tried to improve quality and reduce costs. As a result of the actions taken over the last yea...

Q: Suppose that during 2020, the market for hoverboards increased by 25

Suppose that during 2020, the market for hoverboards increased by 25%. All increases in market share (that is, sales increases greater than 25%) and decreases in the selling price of HOV-X are the res...

Q: Refer to the information for XBlast in Problem 13-34.

Refer to the information for XBlast in Problem 13-34. Required 1. Calculate the amount and cost of (a) unused manufacturing capacity and (b) unused selling and customer-service capacity at the begi...

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Unearth, Inc., refines petrol and sells it through its own Unearth gas stations. On the basis of market research, Unearth determines that 60% of the overall petrol market consists of â€...

Q: Vic Corporation manufactures various types of color laser printers in a highly

Vic Corporation manufactures various types of color laser printers in a highly automated facility with high fixed costs. The market for laser printers is competitive. The various color laser printers...

Q: Monza Pharma (Monza) is a developer and manufacturer of medical

Monza Pharma (Monza) is a developer and manufacturer of medical drugs, based in Beeland but selling its products all over the world. As a listed company, the overall objective of the company is to max...

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Highland State Company provides cable and Internet services in Barcelona. There are many competitors that provide similar services. Highland State believes that the key to financial success is to offe...

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While many reports do recognize the advantage of an out- comes focus in government, often public bodies concentrate on individual outputs. Many agencies are still working on short-term or annual plann...

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The Swift Meal has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $456,000 per year. Service varies from a cup of coffee to full meals. The average sa...

Q: Goldstein Company manufactures wallets from fabric. In 2019, Goldstein made

Goldstein Company manufactures wallets from fabric. In 2019, Goldstein made 2,700,000 wallets using 1,875,000 yards of fabric. In 2019, Goldstein has capacity to make 3,600,000 wallets and incurs a co...

Q: Refer to the data for Problem 13-43. Assume the

Refer to the data for Problem 13-43. Assume the fabric costs $4.40 per yard in 2020 and $4.55 per yard in 2019. Required 1. Compute Goldstein Company’s total factor productivity (TFP) for 2020. 2. Co...

Q: Zoom-o-licious makes candy bars for vending ma-

Zoom-o-licious makes candy bars for vending ma- chines and sells them to vendors in cases of 30 bars. Although Zoom-o-licious makes a variety of candy, the cost differences are insignificant, and the...

Q: A & L Mechanical sells and services plumbing, heating, and

A & L Mechanical sells and services plumbing, heating, and air-conditioning systems. A & L’s cost accounting system tracks two cost categories: direct labor and direct materi...

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Florida Temps, a large labor contractor, supplies contract labor to construction companies. For 2020, Florida Temps has budgeted to supply 82,000 hours of contract labor. Its variable costs are $11 pe...

Q: Quick Test Laboratories evaluates the re- action of materials to extreme

Quick Test Laboratories evaluates the re- action of materials to extreme increases in temperature. Much of the company’s early growth was attribut- able to government contracts, but...

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Life Cycle Metal Recycling and Salvage receives the opportunity to salvage scrap metal and other materials from an old industrial site. The current owners of the site will sign over the site to Life C...

Q: Europa Airways is about to introduce a daily round-trip flight

Europa Airways is about to introduce a daily round-trip flight from Madrid, Spain, to Cairo, Egypt, and is determining how to price its round-trip tickets. The market research group at Europa Airways...

Q: ProDry is entering the professional hair dryer market. Research shows that

ProDry is entering the professional hair dryer market. Research shows that their customers wish to pay $310 or less for each dryer. Cost accountants at the manufacturer have collected the following in...

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The management of ProDry is considering use of the cost-plus approach rather than the target-cost approach used in 14-35. Refer to the information in 14-35. Required 1. Do you think that it’s a good...

Q: Northampton plc, a British-based company, makes superbikes for

Northampton plc, a British-based company, makes superbikes for the U.S. and British markets. For the current year, it estimates fixed costs of £10 million. Its variable costs are £3,000 per motorcycle...

Q: Wood Creations designs, manufactures, and sells modern wood sculptures.

Wood Creations designs, manufactures, and sells modern wood sculptures. Sally Jensen is an artist for the company. Jensen has spent much of the past month working on the design of an intricate abstrac...

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Sarah Reynolds recently started a job as an administrative assistant in the cost accounting department of Mize Manufacturing. New to the area of cost accounting, Sarah is puzzled by the fact that one...

Q: Save Trees Delivery has decided to analyze the profitability of five new

Save Trees Delivery has decided to analyze the profitability of five new customers. It buys recycled paper at £20 per case and sells to retail customers at a list price of £2...

Q: Antelope Manufacturing makes a component called A1030. This component is manufactured

Antelope Manufacturing makes a component called A1030. This component is manufactured only when ordered by a customer, so Antelope keeps no inventory of A1030. The list price is $115 per unit, but cus...

Q: Denise Nelson owns Interiors by Denise, an interior design consulting and

Denise Nelson owns Interiors by Denise, an interior design consulting and window treatment fabrication business. Her business is made up of two different distribution channels, a consulting business i...

Q: Dusty Rhodes, controller of Richfield Oil Company, is preparing a

Dusty Rhodes, controller of Richfield Oil Company, is preparing a presentation to senior executives about the performance of its four divisions. Summary data (dollar amounts in millions) related to th...

Q: Francisco Bakery makes baked goods for grocery stores and has three divisions

Francisco Bakery makes baked goods for grocery stores and has three divisions: bread, cake, and doughnuts. Each division is run and evaluated separately, but the main headquarters incurs costs that ar...

Q: Rod Manufacturing Company produces metal rods for their customers. Its wholesale

Rod Manufacturing Company produces metal rods for their customers. Its wholesale division is the focus of our analysis. Management of the company wishes to analyze the profitability of the three key c...

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Q: Space Infonautics, Inc., produces handheld Windows CE™-compatible organizers

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Q: Ariba Corporation reaches its breakeven point at $3,200,

Ariba Corporation reaches its breakeven point at $3,200,000 of revenues. At present, it is selling 105,000 units and its variable costs are $30. Fixed manufacturing costs, administrative costs, and ma...

Q: Space Infonautics’ senior vice president of marketing prepared his budget at the

Space Infonautics’ senior vice president of marketing prepared his budget at the beginning of the third quarter assuming a 25% market share based on total sales. Star Research estimated that the total...

Q: The Robin’s Basket operates a chain of Italian gelato stores. Although

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Q: The Robin’s Basket’s senior vice president of marketing prepared her budget at

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Q: Henry Jackson, the new controller of United Manufacturing Company (UMC

Henry Jackson, the new controller of United Manufacturing Company (UMC) believes that the company should use the dual rate method of allocating overhead costs of its Materials Management Department to...

Q: Yang Inc. produces and sells DVDs to businesspeople and students who

Yang Inc. produces and sells DVDs to businesspeople and students who are plan- ning extended stays in China. It has been very successful with two DVDs: Beginning Mandarin and Conversational Mandarin....

Q: Baker University completed construction of its newest administrative building at the end

Baker University completed construction of its newest administrative building at the end of 2019. The University’s first employees moved into the building on January 1, 2020. The bui...

Q: The Central Valley Company has prepared department overhead budgets for budgeted-

The Central Valley Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: Management has decided that the most appropriate inventory costs are achie...

Q: The Milton Company has two products. Product 1 is manufactured entirely

The Milton Company has two products. Product 1 is manufactured entirely in department X. Product 2 is manufactured entirely in department Y. To produce these two products, the Milton Company has two s...

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Ema Inc. and Gold Inc. are two small clothing companies that are considering leasing a dyeing machine together. The companies estimated that in order to meet production, Ema needs the machine for 600...

Q: Office Magic, Inc., sells computer hardware to end consumers.

Office Magic, Inc., sells computer hardware to end consumers. Its most popular model, the CX30 is sold as a “bundle,” which includes three hardware products: a pers...

Q: Blanchard Company manufactures and sells dresses at a variable cost of $

Blanchard Company manufactures and sells dresses at a variable cost of $30 each and a fixed cost of x. It can sell 6,000 dresses at a selling price of $50 to earn an operating income of $20,000 or it...

Q: Sportz, Inc., manufactures athletic shoes and athletic clothing for both

Sportz, Inc., manufactures athletic shoes and athletic clothing for both amateur and professional athletes. The company has two product lines (clothing and shoes), which are produced in separate manuf...

Q: Premier Resorts (PR) operates a five-star hotel with

Premier Resorts (PR) operates a five-star hotel with a championship golf course. PR has a decentralized management structure, with three divisions: â–  Lodging (rooms, conference facil...

Q: Tivoli Labs produces a drug used for the treatment of hypertension.

Tivoli Labs produces a drug used for the treatment of hypertension. The drug is produced in batches. Chemicals costing $60,000 are mixed and heated, creating a reaction; a unique separation process th...

Q: The Eastern Oil Company buys crude vegetable oil. Refining this oil

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The Cocoa Factory manufactures and distributes chocolate products. It purchases cocoa beans and processes them into two intermediate products: chocolate-powder liquor base and milk-chocolate liquor ba...

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Clover Dairy Products Corp. buys one input of full-cream milk, and refines it in a churning process. From each gallon of milk Clover produces three cups of butter and nine cups of buttermilk. During M...

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Clover has decided that buttermilk may sell better if it was marketed for baking and sold in pints. This would involve additional packaging at an incremental cost of $0.70 per pint. Each pint could be...

Q: Cloths of Heaven purchases old tires and recycles them to produce rubber

Cloths of Heaven purchases old tires and recycles them to produce rubber floor mats and car mats. The company washes, shreds, and molds the recycled tires into sheets. The floor and car mats are cut f...

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Cloths of Heaven’s accountant needs to record the information about the joint and byproducts in the general journal but is not sure what the entries should be. The company has hired you as a consultan...

Q: The Palm Company produces two products—coconut and coconut water—

The Palm Company produces two products—coconut and coconut water—by a joint process. Joint costs amount to $14,000 per batch of output. Each batch totals 4,000 pounds of coconut and 6,000 pounds of co...

Q: Broadpull Rugs is holding a 4-week carpet sale at Tryst’s

Broadpull Rugs is holding a 4-week carpet sale at Tryst’s Club, a local ware- house store. Broadpull Rugs plans to sell carpets for $1,500 each. The company will purchase the carpets from a local dist...

Q: Iridium Technologies manufactures a variety of flash memory chips at its main

Iridium Technologies manufactures a variety of flash memory chips at its main foundry in Anam, Korea. Some chips are sold by Iridium to makers of electronic equipment while others are embedded into co...

Q: Third Wave Bakery supplies cupcakes to a national grocery chain for their

Third Wave Bakery supplies cupcakes to a national grocery chain for their private label. The cupcakes must meet specific requirements of the grocery chain. Third Wave uses a specific process to produc...

Q: Larsen Company manufactures car seats in its San Antonio plant. Each

Larsen Company manufactures car seats in its San Antonio plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The pr...

Q: Prepare a set of summarized journal entries for all October 2020 transactions

Prepare a set of summarized journal entries for all October 2020 transactions affecting Work in Process— Assembly. Set up a T-account for Work in Process—Assembly and post your entries to it.

Q: Do Problem 18-36 using the FIFO method of process costing

Do Problem 18-36 using the FIFO method of process costing. Explain any difference between the cost per equivalent unit in the assembly department under the weighted-average method and the FIFO method....

Q: Larsen Company, as you know, is a manufacturer of car

Larsen Company, as you know, is a manufacturer of car seats. Each car seat passes through the assembly department and testing department. This problem focuses on the testing department. Direct materia...

Q: Refer to the information in Problem 18-39. Suppose that

Refer to the information in Problem 18-39. Suppose that Larsen Company uses the FIFO method instead of the weighted-average method in all of its departments. The only changes to Problem 18-39 under th...

Q: McKnight Handcraft is a manufacturer of picture frames for large retailers.

McKnight Handcraft is a manufacturer of picture frames for large retailers. Every picture frame passes through two departments: the assembly department and the finishing department. This problem focus...

Q: Complete Problem 18-41 using the FIFO method of process costing

Complete Problem 18-41 using the FIFO method of process costing. 2. If you did Problem 18-41, explain any difference between the cost of work completed and transferred out and the cost of ending work-...

Q: Publishers, Inc., has two departments: printing and binding.

Publishers, Inc., has two departments: printing and binding. Each department has one direct-cost category (direct materials) and one indirect-cost category (conversion costs). This problem focuses on...

Q: Plush Decor, Inc., is considering three possible countries for the

Plush Decor, Inc., is considering three possible countries for the sole manufacturing site of its newest area rug: Italy, Spain, and Singapore. All area rugs are to be sold to retail outlets in Austra...

Q: Refer to the information in Problem 18-43. Suppose that

Refer to the information in Problem 18-43. Suppose that Publishers, Inc., uses the FIFO method instead of the weighted-average method in all of its departments. The only changes to Problem 18-43 under...

Q: The Tiffenex Company manufactures reproductions of expensive earrings. Tiffenex uses the

The Tiffenex Company manufactures reproductions of expensive earrings. Tiffenex uses the standard-costing method of process costing to account for production of earrings. All materials are added at th...

Q: The Sedona Company is dedicated to making products that meet the needs

The Sedona Company is dedicated to making products that meet the needs of customers in a sustainable manner. Sedona is best known for its KLN water bottle, which is a BPA-free, dishwasher-safe, bubbly...

Q: Brown Industries operates several laminate flooring plants. Given the competitive pricing

Brown Industries operates several laminate flooring plants. Given the competitive pricing for flooring, Brown’s managers pay close attention to costs. Each plant uses a process- cost...

Q: The Seafood Company is a food-processing firm based in Oslo

The Seafood Company is a food-processing firm based in Oslo. It operates under the weighted-average method of process costing and has two departments: clean- ing and packaging. For the cleaning depart...

Q: Refer to the information in Problem 19-35. Required

Refer to the information in Problem 19-35. Required Do Problem 19-35 using the FIFO method of process costing. (Problem 19-38 explores additional facets of this problem.)

Q: In the Seafood Company’s packaging department, conversion costs are added evenly

In the Seafood Company’s packaging department, conversion costs are added evenly during the process, and direct materials are added at the end of the process. Spoiled units are detec...

Q: Refer to the information in Problem 19- 37 except that the

Refer to the information in Problem 19- 37 except that the transferred-in costs of beginning work in process on May 1 are $33,090 (instead of $33,698). Transferred-in costs for May equal the total cos...

Q: Jiminy Jacks produces jacks that are used in many types of automobiles

Jiminy Jacks produces jacks that are used in many types of automobiles. In the assembly department, materials are added at the beginning of the process and conversion costs are added evenly during the...

Q: Textual Brilliance is a manufacturer of writing products for aspiring indie authors

Textual Brilliance is a manufacturer of writing products for aspiring indie authors. Winston Smith, the plant manager of Textual Brilliance, obtains the following information for Job #10 in August 202...

Q: Which of the following statements regarding department costing and ABC is/

Which of the following statements regarding department costing and ABC is/are correct? I. Department costing systems always properly recognize the drivers of costs within departments. II. Emphasizing...

Q: Chartz 1-2-3 is a top-selling electronic

Chartz 1-2-3 is a top-selling electronic spreadsheet product. Chartz is about to release version 5.0. It divides its customers into two groups: new customers and upgrade customers (those who previousl...

Q: Superb Furniture manufactures plastic lawn furniture in a continuous process. The

Superb Furniture manufactures plastic lawn furniture in a continuous process. The company pours molten plastic into molds and then cools the plastic. Materials are added at the beginning of the proces...

Q: The Horsheim Company manufactures furniture in two departments: molding and finishing

The Horsheim Company manufactures furniture in two departments: molding and finishing. The company uses the weighted- average method of process costing. August data for the finishing department are as...

Q: Chunky Meatbots produces a wide variety of unorthodox bread sauces. The

Chunky Meatbots produces a wide variety of unorthodox bread sauces. The company’s three best-selling variants are The BLT Apprentice, The Submachine Bun, and Game of Scones. Each bot...

Q: Pauli’s Pizza has recently begun collecting data on the quality of its

Pauli’s Pizza has recently begun collecting data on the quality of its customer order processing and delivery. Pauli’s made 1,800 deliveries during the first quarte...

Q: The Brady Corporation sells 375,000 V262 valves to the automobile

The Brady Corporation sells 375,000 V262 valves to the automobile and truck industry. Brady has a capacity of 210,000 machine-hours and can produce two valves per machine-hour. V262’s contribution mar...

Q: The Brightlight Corporation uses multicolored molding to make plastic lamps. The

The Brightlight Corporation uses multicolored molding to make plastic lamps. The molding operation has a capacity of 150,000 units per year. The demand for lamps is very strong. Brightlight will be ab...

Q: The IVplast Corporation uses an injection molding ma- chine to make

The IVplast Corporation uses an injection molding ma- chine to make a plastic product, Z39, after receiving firm orders from its customers. IVplast estimates that it will receive 40 orders for Z39 dur...

Q: IVplast is still de- bating whether it should introduce Y28.

IVplast is still de- bating whether it should introduce Y28. The following table provides information on selling prices, variable costs, and inventory carrying costs for Z39 and Y28: Required Using t...

Q: American Electronics manufactures 200,000 55-inch 4K TVs each

American Electronics manufactures 200,000 55-inch 4K TVs each year. The variable and fixed costs of rework and repair for the TVs are as follows: American Electronics’ 55-inch 4K TVs...

Q: Outmark Corporation manufactures computer processors for leading com- puter makers.

Outmark Corporation manufactures computer processors for leading com- puter makers. Joe Agent is the management accountant for one of Outmark’s largest manufacturing plants. His bonu...

Q: The Belkin Company has three product lines of coffee mugs—A

The Belkin Company has three product lines of coffee mugs—A, B, and C—with contribution margins of $7, $5, and $4, respectively. The president foresees sales of 240,000 units in the coming period, con...

Q: FootLove Shoe Co. produces and sells excellent quality walking shoes.

FootLove Shoe Co. produces and sells excellent quality walking shoes. After production, these shoes are distributed to 30 warehouses around the country. Each warehouse services approximately 120 store...

Q: Phillips Corporation is a major manufacturer of food processors. It purchases

Phillips Corporation is a major manufacturer of food processors. It purchases motors from Viking Corporation. Annual demand is 52,000 motors per year or 1,000 motors per week. The ordering cost is $36...

Q: Gadgets Galore Corp. produces J-Pods, music players that

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Q: CompTech Solution purchases one model of computer at a wholesale cost of

CompTech Solution purchases one model of computer at a wholesale cost of $400 per unit and resells it to end consumers. The annual demand for the company’s product is 500,000 units. Ordering costs are...

Q: The KateSteel Corporation is an automotive supplier that uses automatic turning machines

The KateSteel Corporation is an automotive supplier that uses automatic turning machines to manufacture precision parts from steel bars. KateSteel’s inventory of raw steel averages $...

Q: ClearPic Television Co. outsources the production of picture-tubes for

ClearPic Television Co. outsources the production of picture-tubes for the televisions it manufactures. It is currently deciding whether to use sup- plier X or supplier Y. Due to differences in the pr...

Q: Smart Jeans Ltd. orders high-quality denim fabric from two

Smart Jeans Ltd. orders high-quality denim fabric from two different suppliers: Shine Fabrics and Soft Cotton. Smart would like to use only one of the suppliers in the future. Due to variations in qua...

Q: The Grand Meter Corporation manufactures electrical meters. For August, there

The Grand Meter Corporation manufactures electrical meters. For August, there were no beginning inventories of direct materials and no beginning or ending work in process. Grand Meter uses a JIT produ...

Q: Assume the same facts for the Grand Meter Corporation as in Problem

Assume the same facts for the Grand Meter Corporation as in Problem 21-37, except that now assume the second trigger point for it is the sale, rather than the completion of finished goods: ■ Purchase...

Q: Assume the same facts for the Grand Meter Corporation as in Problem

Assume the same facts for the Grand Meter Corporation as in Problem 21-37, except that now assume there are only two trigger points for making entries in the accounting system: ■ Completion of good fi...

Q: For each of the following, state whether job costing or process

For each of the following, state whether job costing or process costing would be most appropriate.

Q: Steadfast Security Devices (SSD) has introduced a just-in

Steadfast Security Devices (SSD) has introduced a just-in-time production process and is considering the adoption of lean accounting principles to support its new production philosophy. The company ha...

Q: Perez Containers Corporation is considering implementing a JIT production system. The

Perez Containers Corporation is considering implementing a JIT production system. The new system would reduce current average inventory levels of $4,000,000 by 75%, but it would require a much greater...

Q: Dublin Chips is a manufacturer of prototype chips based in Dublin,

Dublin Chips is a manufacturer of prototype chips based in Dublin, Ireland. Next year, in 2021, Dublin Chips expects to deliver 615 prototype chips at an average price of $95,000. Dublin Chipsâ&...

Q: Assume the same facts as in Problem 22-34, except

Assume the same facts as in Problem 22-34, except that the plant is located in Buffalo, New York. Dublin Chips has no special waiver on income taxes. It pays a 35% tax rate on all income. Proceeds fro...

Q: Jeong Natural Snacks is contemplating an expansion. The finance manager is

Jeong Natural Snacks is contemplating an expansion. The finance manager is looking at buying a second machine that would cost $62,000 and last for 10 years, with no disposal value at the end of that t...

Q: Paulina Jones, a manager for the Carpenter Manufacturing Company, has

Paulina Jones, a manager for the Carpenter Manufacturing Company, has the opportunity to upgrade the equipment in the Midwest division by replacing and upgrading some of its machinery. The cost of the...

Q: Bobwhite Laundromat is trying to enhance the services it provides to customers

Bobwhite 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 th...

Q: The Kuhl Brothers own a frozen custard ice cream shop. The

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, 2020, the Kuhl Brothers are considering buyin...

Q: Johnny Buster owns Entertainment World, a place that combines fast food

Johnny Buster owns Entertainment World, a place that combines fast food, innovative beverages, and arcade games. Worried about the shift- ing tastes of younger audiences, Johnny contemplates bringing...

Q: TriMart is considering replacing 20 of their checkout registers with new self

TriMart is considering replacing 20 of their checkout registers with new self-checkout equipment. The equipment currently being used is fully depreciated and has no disposal value. The new equipment w...

Q: Carolin Chemicals pro- duces a range of chemical products for industries

Carolin Chemicals pro- duces a range of chemical products for industries on getting bulk orders. It uses a job-costing system to calculate the cost of a particular job. Materials and labors used in th...

Q: Shalie Manufacturing makes several thousand different metal products, including building materials

Shalie Manufacturing makes several thousand different metal products, including building materials, tools, and furniture parts. The manager of the furniture parts division has proposed that his divisi...

Q: The Aqua Company manufactures and sells television sets. Its assembly division

The Aqua Company manufactures and sells television sets. Its assembly division (AD) buys television screens from the screen division (SD) and assembles the TV sets. The SD, which is operating at capac...

Q: Chicago, Inc., has two divisions, A and B,

Chicago, Inc., has two divisions, A and B, that manufacture expensive bicycles. Division A produces the bicycle frame, and division B assembles the rest of the bicycle onto the frame. There is a marke...

Q: Cranfuel Products is a cranberry cooperative that operates two divisions, a

Cranfuel Products is a cranberry cooperative that operates two divisions, a harvesting division and a processing division. Currently, all of harvesting’s output is converted into cra...

Q: Refer to Problem 23-28. Assume that Pat Borges,

Refer to Problem 23-28. Assume that Pat Borges, CEO of Cranfuel, had mandated a transfer price equal to 175% of full cost. Now he decides to decentralize some management decisions and sends around a m...

Q: Rapid Grow Inc., based in Des Moines, Iowa, sells

Rapid Grow Inc., based in Des Moines, Iowa, sells high-end fertilizers. Rapid Grow has two divisions: â–  North Italy mining division, which mines potash in northern Italy â–...

Q: Doorharmony Company makes doorbells. It has a weighted-average cost

Doorharmony Company makes doorbells. It has a weighted-average cost of capital of 7% and total assets of $5,630,000. Doorharmony has current liabilities of $750,000. Its operating income for the year...

Q: Blue Fish owns and operates coffee shops in three large cities on

Blue Fish owns and operates coffee shops in three large cities on the West Coast: Seattle, San Francisco, and Los Angeles. The three geographic areas are considered separate divisions. Each division o...

Q: Natural Bounty Corporation operates three divisions that process and bottle natural fruit

Natural Bounty Corporation operates three divisions that process and bottle natural fruit juices. The historical-cost accounting system reports the following information for 2020: Natural Bounty estim...

Q: Newmann, Inc. has divisions in the United States, France

Newmann, Inc. has divisions in the United States, France, and Australia. The U.S. division is the oldest and most established of the three and has a cost of capital of 6%. The French division was star...

Q: Caldwell Toys produces toys mainly for the domestic market. The company

Caldwell Toys produces toys mainly for the domestic market. The company uses a job-costing system under which materials and labors used in the manufacturing process are directly allocated to different...

Q: News Report Group has two major divisions: print and Internet.

News Report Group has two major divisions: print and Internet. Summary financial data (in millions) for 2019 and 2020 are as follows: The two division managers’ annual bonuses are ba...

Q: The new chief executive officer (CEO) of Richard Manufacturing has

The new chief executive officer (CEO) of Richard Manufacturing has asked for a variety of information about the operations of the firm from last year. The CEO is given the following information, but w...

Q: Tiffany Cosmetics manufactures and sells a variety of makeup and beauty products

Tiffany Cosmetics manufactures and sells a variety of makeup and beauty products. The company has come up with its own patented formula for a new anti-aging cream. The company president wants to make...

Q: PostNews.com offers its subscribers several services, such as an

PostNews.com offers its subscribers several services, such as an annotated TV guide and local-area information on weather, restaurants, and movie theaters. Its main revenue sources are fees for banner...

Q: What is a cost driver? Give one example.

What is a cost driver? Give one example.

Q: Why and when is it essential to calculate a unit cost?

Why and when is it essential to calculate a unit cost?

Q: Explain whether a business department can be a cost object.

Explain whether a business department can be a cost object.

Q: Give an example for each of the following: A cost that

Give an example for each of the following: A cost that is variable and direct, a cost that is variable and indirect, a cost that is fixed and direct, and a cost that is fixed and indirect.

Q: Technical and basic analytical competence are necessary but not sufficient conditions to

Technical and basic analytical competence are necessary but not sufficient conditions to becoming a successful management accountant.” Do you agree? Why?

Q: As the new controller, reply to the following comment made by

As the new controller, reply to the following comment made by your plant manager: “When I install a proper accounting software, which can process all my daily accounting records and provide me with al...

Q: Gammaro Manufacturer uses normal costing. It allocates manufacturing overhead costs using

Gammaro Manufacturer uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2020: Required 1. Calculate the budget...

Q: Explain how overtime premium and idle time affect labor costs.

Explain how overtime premium and idle time affect labor costs.

Q: Due to the significance of the information they’re trusted with, management

Due to the significance of the information they’re trusted with, management accountants are expected to observe well-defined professional ethical standards. Professional management accountant organiza...

Q: Explain the impact of having weak ethics on suppliers, customers,

Explain the impact of having weak ethics on suppliers, customers, and the market. Provide an example to illustrate your answer.

Q: Inventoriable costs are usually associated with the manufacturing firms whilst period costs

Inventoriable costs are usually associated with the manufacturing firms whilst period costs are mainly for trading firms. Discuss.

Q: Explain three common features of cost accounting and cost management and their

Explain three common features of cost accounting and cost management and their applications.

Q: Is CVP analysis more focused on the short or the long term

Is CVP analysis more focused on the short or the long term? Explain.

Q: Is it possible to calculate the breakeven point for a company that

Is it possible to calculate the breakeven point for a company that produces and sells more than one type of product? Explain.

Q: CVP analysis assumes that costs can be accurately divided into fixed and

CVP analysis assumes that costs can be accurately divided into fixed and variable categories. Do you agree? Explain.

Q: What are some of the assumptions underlying breakeven analysis in a multiple

What are some of the assumptions underlying breakeven analysis in a multiple products environment?

Q: What is the main difference between gross margin and contribution margin?

What is the main difference between gross margin and contribution margin? Which one is the focus of CVP analysis? Explain briefly.

Q: The Lynn Company uses a normal job-costing system at its

The Lynn Company uses a normal job-costing system at its Minneapolis plant. The plant has a machining department and an assembly department. Its job-costing system has two direct-cost categories (dire...

Q: Differentiate between contribution margin and contribution margin ratio.

Differentiate between contribution margin and contribution margin ratio.

Q: What is breakeven point (BEP)?

What is breakeven point (BEP)?

Q: Explain what are the main limitations of CVP analysis for decision making

Explain what are the main limitations of CVP analysis for decision making? Explain.

Q: Explain how job-costing information may be used for decision making

Explain how job-costing information may be used for decision making.

Q: Comment on the following statement: There is no difference between “

Comment on the following statement: There is no difference between “actual costing” and “nor- mal costing” systems because both systems use the product’s actual direct-cost rates and actual quantities...

Q: Describe the flow of costs in a normal job-costing system

Describe the flow of costs in a normal job-costing system.

Q: Why do managers have to make adjustments for under- or over

Why do managers have to make adjustments for under- or over-allocated indirect costs?

Q: Explain how the cost of a cost object/job is determined

Explain how the cost of a cost object/job is determined under a job-costing system.

Q: Describe a key feature of job costing and process costing.

Describe a key feature of job costing and process costing.

Q: Explain the role of information technology in job costing.

Explain the role of information technology in job costing.

Q: Global Enterprize, a management consulting firm, has the following condensed

Global Enterprize, a management consulting firm, has the following condensed budget for 2021: Required Global Enterprize has a single direct-cost category (professional labor) and a single indirect-c...

Q: Seasonal patterns and fluctuating levels of monthly outputs are the two main

Seasonal patterns and fluctuating levels of monthly outputs are the two main factors for most organizations to use an annual period rather than a weekly or a monthly period to compute budgeted indirec...

Q: Describe normal costing and actual costing systems.

Describe normal costing and actual costing systems.

Q: Describe the main limitations of ABC systems.

Describe the main limitations of ABC systems.

Q: Explain why ABC is equally important for both manufacturing and service companies

Explain why ABC is equally important for both manufacturing and service companies.

Q: Activity-based costing is providing more accurate and detailed information and

Activity-based costing is providing more accurate and detailed information and should replace simple costing.” Do you agree? Explain.

Q: What are the main factors determining the number of indirect-cost

What are the main factors determining the number of indirect-cost pools in a costing system, to increase the accuracy of product or service costs? Explain.

Q: The total annual production cost of a manufacturing company that produces three

The total annual production cost of a manufacturing company that produces three different USB devices is $10,000,000. The manager of the company states that the contribution margins of all three produ...

Q: What are the fundamental cost objects in activity-based costing?

What are the fundamental cost objects in activity-based costing? How does activity-based costing work?

Q: How can a cost hierarchy lead to a more accurate costing system

How can a cost hierarchy lead to a more accurate costing system?

Q: Which levels of cost hierarchy (under activity-based costing)

Which levels of cost hierarchy (under activity-based costing) are not used in simple costing systems and why are they important?

Q: Plunge Manufacturing produces outdoor wading and slide pools. The company uses

Plunge Manufacturing produces outdoor wading and slide pools. The company uses a normal-costing system and allocates manufacturing overhead based on direct manufacturing labor-hours. Most of the compa...

Q: Outline the steps involved in a simple costing system using a single

Outline the steps involved in a simple costing system using a single indirect-cost pool.

Q: What are some behavioral issues that managers must be sensitive to when

What are some behavioral issues that managers must be sensitive to when implementing ABC systems?

Q: The cost of cost objects under simple costing systems and under activity

The cost of cost objects under simple costing systems and under activity-based costing are never the same.” Do you agree? Explain.

Q: What is the key emphasis in Kaizen budgeting?

What is the key emphasis in Kaizen budgeting?

Q: What are some additional considerations when budgeting in multinational companies?

What are some additional considerations when budgeting in multinational companies?

Q: Explain why cash budgets are important.

Explain why cash budgets are important.

Q: Define a master budget and explain its purpose. Describe its components

Define a master budget and explain its purpose. Describe its components.

Q: What are the advantages of a budget?

What are the advantages of a budget?

Q: List the key questions that a manager must consider when developing a

List the key questions that a manager must consider when developing a successful strategy.

Q: Budgets can promote coordination and communication among subunits within the company.”

Budgets can promote coordination and communication among subunits within the company.” Do you agree? Explain.

Q: Holland Builders uses normal costing and allocates manufacturing overhead to jobs based

Holland Builders uses normal costing and allocates manufacturing overhead to jobs based on a budgeted labor-hour rate and actual direct labor-hours. Under- or over allocated overhead, if immaterial, i...

Q: Budgets meet the cost–benefit test by pushing managers to act

Budgets meet the cost–benefit test by pushing managers to act differently.” Do you agree? Explain.

Q: What is the usual starting point for an operating budget?

What is the usual starting point for an operating budget?

Q: What is the purpose of variance analysis to management?

What is the purpose of variance analysis to management?

Q: Comment on the following statement made by a management accountant: “

Comment on the following statement made by a management accountant: “The plant manager has little knowledge of the individual impacts of the purchase department, the sales department, and the producti...

Q: When inputs are substitutable, how can the direct materials efficiency variance

When inputs are substitutable, how can the direct materials efficiency variance be decomposed further to obtain useful information?

Q: Benchmarking is about comparing your firm’s performance against the best levels of

Benchmarking is about comparing your firm’s performance against the best levels of performance in the market and has nothing to do with variance analyses.” Do you agree?

Q: Why are standard costs often used in variance analysis?

Why are standard costs often used in variance analysis?

Q: What are the impacts of variances on an operating income?

What are the impacts of variances on an operating income?

Q: When is a flexible budget similar to a static budget? Why

When is a flexible budget similar to a static budget? Why?

Q: Describe why standard costs are used in variance analysis.

Describe why standard costs are used in variance analysis.

Q: Which of the following statements is true about a master budget?

Which of the following statements is true about a master budget? I. It is a summary of all other budgets. It is expressed as a budgeted income and is mentioned in the balance sheet. II. The master bud...

Q: Olga Ltd produces stapling machines for most businesses operating in New Orleans

Olga Ltd produces stapling machines for most businesses operating in New Orleans. The production process involves three stages: cutting department, assembly department and painting and finishing depar...

Q: How are the main components of materials variances interrelated in a flexible

How are the main components of materials variances interrelated in a flexible budget?

Q: How can flexible-budget variance analysis be used to control costs

How can flexible-budget variance analysis be used to control costs of activity areas?

Q: What are the main features to be considered in planning variable overhead

What are the main features to be considered in planning variable overhead costs and fixed over- head costs?

Q: Explain why standard costing should not be used to report results in

Explain why standard costing should not be used to report results in year-end financial statements. Why would managers use standard costing?

Q: Describe some of the characteristics of a flexible budget.

Describe some of the characteristics of a flexible budget.

Q: Assume variable manufacturing overhead is allocated using machine-hours. Give

Assume variable manufacturing overhead is allocated using machine-hours. Give three possible reasons for a favorable variable overhead efficiency variance.

Q: What needs to be calculated to explain a variable flexible-budget

What needs to be calculated to explain a variable flexible-budget variance? Explain what an €8,000 unfavorable flexible-budget variance indicates.

Q: How does the treatment of fixed production overhead differ under variable costing

How does the treatment of fixed production overhead differ under variable costing and absorption costing?

Q: Do companies in either the service sector or the merchandising sector make

Do companies in either the service sector or the merchandising sector make choices about absorption costing versus variable costing?

Q: Explain linear cost function and give an example.

Explain linear cost function and give an example.

Q: Virtual Company produces gadgets for the coveted small appliance market. The

Virtual Company produces gadgets for the coveted small appliance market. The following data reflect activity for the year 2020: Virtual Co. uses a normal-costing system and allocates overhead to work...

Q: Why is a linear cost function useful?

Why is a linear cost function useful?

Q: What criteria are used by managers in the classification of costs into

What criteria are used by managers in the classification of costs into variable and fixed components?

Q: Differentiate between the industrial engineering method of cost estimation and the quantitative

Differentiate between the industrial engineering method of cost estimation and the quantitative method.

Q: When using the high-low method, should you base the

When using the high-low method, should you base the high and low observations on the dependent variable or on the cost driver?

Q: How do management accountants work with data scientists to create value for

How do management accountants work with data scientists to create value for an organization?

Q: Explain the bias–variance tradeoff.

Explain the bias–variance tradeoff.

Q: What is the receiver operating characteristic (ROC) curve?

What is the receiver operating characteristic (ROC) curve?

Q: Explain false positives (FP) and false negatives (FN).

Explain false positives (FP) and false negatives (FN).

Q: How does the management accountant use the payoff matrix to make decisions

How does the management accountant use the payoff matrix to make decisions using data science models?

Q: How do management accountants help managers to operationalize data science models?

How do management accountants help managers to operationalize data science models?

Q: Docks Transport assembles prestige manufactured homes. Its job- costing system

Docks Transport assembles prestige manufactured homes. Its job- costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturin...

Q: What is the seven-step decision-making process for applying

What is the seven-step decision-making process for applying machine-learning techniques in business situations?

Q: Define target leakage.

Define target leakage.

Q: Describe the decision tree technique of predictive modeling.

Describe the decision tree technique of predictive modeling.

Q: What is Gini impurity?

What is Gini impurity?

Q: Why does overfitting occur?

Why does overfitting occur?

Q: What is pruning? Why is it helpful?

What is pruning? Why is it helpful?

Q: How do data scientists use cross-validation and holdout samples?

How do data scientists use cross-validation and holdout samples?

Q: What is the likelihood value? Why do prediction models attempt to

What is the likelihood value? Why do prediction models attempt to maximize it?

Q: What is a one-time-only special order?

What is a one-time-only special order?

Q: State the importance of cost information in decision making.

State the importance of cost information in decision making.

Q: Global Pipes produces longitudinal submerged arc welded (LSAW) pipes for

Global Pipes produces longitudinal submerged arc welded (LSAW) pipes for the oil, gas, and petrochemical industries. Each job is unique. In April 2020, it completed all outstanding orders, and then, i...

Q: What are ways that a company can achieve cost leadership?

What are ways that a company can achieve cost leadership?

Q: Differentiate between a strategy map and a balanced scorecard.

Differentiate between a strategy map and a balanced scorecard.

Q: What are the key components of the financial perspective and customer perspective

What are the key components of the financial perspective and customer perspective of a balanced scorecard?

Q: Define price discrimination and give an example.

Define price discrimination and give an example.

Q: Describe peak-load pricing and give an example.

Describe peak-load pricing and give an example.

Q: What factors should be considered by managers when allocating resources among customers

What factors should be considered by managers when allocating resources among customers?

Q: The “fairness or equity” criterion is most applicable to the

The “fairness or equity” criterion is most applicable to the government rather than the private sector. Explain.

Q: What are some common clauses that are often included in contracts based

What are some common clauses that are often included in contracts based on cost accounting information?

Q: Distinguish between revenue allocation and bundled product or service.

Distinguish between revenue allocation and bundled product or service.

Q: What is conceptually the most defensible method for allocating multiple support-

What is conceptually the most defensible method for allocating multiple support-department costs? Why?

Q: Chico & Partners, a Quebec-based public accounting partnership,

Chico & Partners, a Quebec-based public accounting partnership, specializes in audit services. Its job-costing system has a single direct-cost category (professional labor) and a single indirect-c...

Q: Explain the concept of cost–volume–profit (CVP)

Explain the concept of cost–volume–profit (CVP) analysis.

Q: What are the strategic consequences of product undercosting and overcosting?

What are the strategic consequences of product undercosting and overcosting?

Q: Why might an advertising agency use job costing for an advertising campaign

Why might an advertising agency use job costing for an advertising campaign by PepsiCo, whereas a bank might use process costing to determine the cost of checking account deposits?

Q: How does cost accounting help organizations assess their competitive advantage in value

How does cost accounting help organizations assess their competitive advantage in value chain analysis?

Q: Differentiate between variable costs and fixed costs. Give some examples.

Differentiate between variable costs and fixed costs. Give some examples.

Q: Discuss the role of management accounting in decision-making activities in

Discuss the role of management accounting in decision-making activities in an organization.

Q: Clayton Solutions de- signs Web pages for clients in the education

Clayton Solutions de- signs Web pages for clients in the education sector. The company’s job-costing system has a single direct cost category (Web-designing labor) and a single indir...

Q: The Row-On-Watershed Company (ROW) produces a

The Row-On-Watershed Company (ROW) produces a line of non-motorized boats. ROW uses a normal-costing system and allocates manufacturing overhead using direct manufacturing labor cost. The following da...

Q: SharpPitch, Inc., manufactures karaoke machines for several well-known

SharpPitch, Inc., manufactures karaoke machines for several well-known companies. The machines differ significantly in their complexity and their manufacturing batch sizes. The following costs were in...

Q: CoreTech Laboratories does heat testing (HT) and stress testing (

CoreTech Laboratories does heat testing (HT) and stress testing (ST) on materials and operates at capacity. Under its current simple costing system, CoreTech aggregates all operating costs of $1,800,0...

Q: The Walliston Group (WG) provides tax advice to multinational firms

The Walliston Group (WG) provides tax advice to multinational firms. WG charges clients for (a) direct professional time (at an hourly rate) and (b) support services (at 30% of the direct professional...

Q: The following data relate to the budget and actual results of Oscar

The following data relate to the budget and actual results of Oscar Enterprises, which produces and sells net balls in France. Use the information above to answer questions 7-16–7-20...

Q: Automotive Products (AP) designs and pro- duces automotive parts

Automotive Products (AP) designs and pro- duces automotive parts. In 2020, actual variable manufacturing overhead is $308,600. AP’s simple costing system allocates variable manufactu...

Q: Triumph Trophies makes trophies and plaques and operates at capacity. Triumph

Triumph Trophies makes trophies and plaques and operates at capacity. Triumph does large custom orders, such as the participant trophies for the Minnetonka Little League. The controller has asked you...

Q: John Bradshaw & Bros Ltd. manufactures different plastic toys for kindergartens

John Bradshaw & Bros Ltd. manufactures different plastic toys for kindergartens in Lagos, Nigeria. Details of the toy production budget for the next accounting year are as follows. Note all costs...

Q: CKM is an architectural firm that designs and builds build- ings

CKM is an architectural firm that designs and builds build- ings. It prices each job on a cost plus 20% basis. Overhead costs in 2020 are $4,011,780. CKM’s simple cost- ing system al...

Q: Aniline Corporation owns a small printing press that prints leaflets, brochures

Aniline Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Aniline classifies its various printing jobs as standard jobs or special jobs. Anilineâ...

Q: Caleb Enterprises Ltd. manufactures electrical cables for households and industries.

Caleb Enterprises Ltd. manufactures electrical cables for households and industries. The company has identified the following overheads activities, costs, and activity drivers for the coming year. The...

Q: Ramirez Wholesalers operates at capacity and sells furniture items to four department

Ramirez Wholesalers operates at capacity and sells furniture items to four department-store chains (customers). Mr. Ramirez commented, “We apply ABC to deter- mine product-line profi...

Q: The job-costing system at Sheri’s Custom Framing has five indirect

The job-costing system at Sheri’s Custom Framing has five indirect-cost pools (purchasing, material handling, machine maintenance, product inspection, and packaging). The company is...

Q: Legion Bank (LB) is examining the profitability of its Star

Legion Bank (LB) is examining the profitability of its Star Account, a combined savings and checking account. Depositors receive a 6% annual interest rate on their average deposit. LB earns an interes...

Q: Coronavirus disease 2019 (COVID-19) was first identified in

Coronavirus disease 2019 (COVID-19) was first identified in December 2019 and resulted in an ongoing pandemic. There are currently few effective treatments for coronavirus with doctors relying on pati...

Q: Which of the following is indicated by an unfavorable fixed overhead spending

Which of the following is indicated by an unfavorable fixed overhead spending variance? a. There was more excess capacity than planned b. The price of fixed overhead items cost more than budgeted c. T...

Q: Sandra Martins, a confectionery based in Austria, decides to produce

Sandra Martins, a confectionery based in Austria, decides to produce peanut packs for supermarkets in Salzburg. The projected sales units and selling price per pack for 2021 for its three brands of pe...

Q: Nova Plastics produces 10-liter plastic buckets. The company expects

Nova Plastics produces 10-liter plastic buckets. The company expects to produce 825,000 buckets in 2020. Nova Plastics purchases high-density polyethylene (HDPE) to produce the buckets. Each pound of...

Q: Augustine Company sells a product for £50. Budgeted sales for

Augustine Company sells a product for £50. Budgeted sales for the first quarter of 2020 are as follows: The company collects 60% in the month of sale, 20% in the following month, and 10%...

Q: The Deluxe Motorcar in northern California manufactures motor cars of all categories

The Deluxe Motorcar in northern California manufactures motor cars of all categories. Its budgeted sales volume for the most popular sedan model XE8 in 2020 is 4,000 units. Deluxe Motorcar has a begin...

Q: Price, Inc., bottles and distributes mineral water from the company’s

Price, Inc., bottles and distributes mineral water from the company’s natural springs in northern Oregon. Price markets two products: 12-ounce disposable plastic bottles and 1-gallon reusable plastic...

Q: Xander Manufacturing Company manufactures blue rugs using wool and dye as direct

Xander Manufacturing Company manufactures blue rugs using wool and dye as direct materials. One rug is budgeted to use 36 skeins of wool at a cost of $2 per skein and 0.8 gallons of dye at a cost of $...

Q: Roletter Company makes and sells artistic frames for pictures of weddings,

Roletter Company makes and sells artistic frames for pictures of weddings, graduations, and other special events. Bob Anderson, the controller, is responsible for preparing Roletter’...

Q: The Jerico store of Jiffy Mart, a chain of small neighborhood

The Jerico store of Jiffy Mart, a chain of small neighborhood convenience stores, is preparing its activity-based budget for January 2021. Jiffy Mart has three product categories: soft drinks (35% of...

Q: Jiffy Mart has a Kaizen (continuous improvement) approach to budgeting

Jiffy Mart has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2021. Each successive month, the budgeted cost-driver rate decreases by 0.4% relative to...

Q: Amira Ltd is a trading company that sells mobile phones. The

Amira Ltd is a trading company that sells mobile phones. The opening cash balance on January 1 was expected to be £30,000. The sales budgeted were as follows: Analysis of records shows th...

Q: Abeka Bakery Company had opening inventory of 14,800 units and

Abeka Bakery Company had opening inventory of 14,800 units and closing inventory of 17,500 units. Profits based on marginal costing were £315,250 while overhead absorption rate was £5.20 unit. What is...

Q: Daytona Wheels is a Japanese tire manufacturer. For August 2021,

Daytona Wheels is a Japanese tire manufacturer. For August 2021, it budgeted to manufacture and sell 3,000 tires at a variable cost of $74 per tire and total fixed costs of $54,000. The budgeted selli...

Q: L’Accessorio, an Italian manufacturer of leather belts, budgeted prices for

L’Accessorio, an Italian manufacturer of leather belts, budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per luxury belt&ac...

Q: Dartford Enterprises Ltd manufactures just one product line of scientific calculators for

Dartford Enterprises Ltd manufactures just one product line of scientific calculators for engineers. The current standard cost of one unit of the product is as follows: During last month, due to an un...

Q: The Alpha Company manufactures designer jewelry for jewelry stores. A new

The Alpha Company manufactures designer jewelry for jewelry stores. A new accountant intern at Alpha Company has accidentally deleted the calculations on the company’s variance analy...

Q: McKenzie Ltd produces chairs and employs three workers. The staff normally

McKenzie Ltd produces chairs and employs three workers. The staff normally work 40 hours per week for €12 per hour (including social security). It takes four hours for a worker to produce a cabinet: i...

Q: Modern Tiles Ltd. manufactures ceramic tiles. For January 2020,

Modern Tiles Ltd. manufactures ceramic tiles. For January 2020, it budgeted to purchase and use 10,000 pounds of clay at $0.70 a pound. Actual purchases and usage for January 2020 were 11,000 pounds a...

Q: Consider the following data collected for Theta Homes, Inc.:

Consider the following data collected for Theta Homes, Inc.: Required Compute the price, efficiency, and flexible-budget variances for direct materials and direct manufacturing labor.

Q: SallyMay, Inc., designs and manufactures T-shirts. It

SallyMay, Inc., designs and manufactures T-shirts. It sells its T-shirts to brand-name clothes retailers in lots of one dozen. SallyMay’s May 2020 static budget and actual results fo...

Q: The Schuyler Corporation manufactures lamps. It has set up the following

The Schuyler Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor: The number of finished units budgeted for Janu...

Q: Limerick Fare is a furniture manufacturer in Dublin, Ireland. For

Limerick Fare is a furniture manufacturer in Dublin, Ireland. For August 2020, Limerick had the following standards for one of its products, a coffee table: The following data were compiled regarding...