Questions from General Accounting

Q: Explain the meaning of (a) differential revenue,

Explain the meaning of (a) differential revenue, (b) differential cost, and (c) differential income.

Q: A company could sell a building for $250,000 or

A company could sell a building for $250,000 or lease it for $2,500 per month. What would need to be considered in determining if the lease option would be preferred?

Q: A company accepts incremental business at a special price that exceeds the

A company accepts incremental business at a special price that exceeds the variable cost. What other issues must the company consider in deciding whether to accept the business?

Q: A company fabricates a component at a cost of $6.

A company fabricates a component at a cost of $6.00. A supplier offers to supply the same component for $5.50. Under what circumstances is it reasonable to purchase from the supplier?

Q: Many fast-food restaurant chains such as McDonald’s occasionally discontinue restaurants

Many fast-food restaurant chains such as McDonald’s occasionally discontinue restaurants in their system. What are some financial considerations in deciding to eliminate a store?

Q: How does the target cost concept differ from cost- plus

How does the target cost concept differ from cost- plus approaches?

Q: What is meant by reporting by the “principle of exceptions”

What is meant by reporting by the “principle of exceptions” as the term is used in reference to cost control?

Q: A partial list of The Grand Hotel’s costs follows: /

A partial list of The Grand Hotel’s costs follows: Instructions 1. What would be The Grand Hotel’s most logical definition for the final cost object? Explain. 2. I...

Q: The materials cost variance report for Nickols Inc. indicates a large

The materials cost variance report for Nickols Inc. indicates a large favorable materials price variance and a significant unfavorable materials quantity variance. What might have caused these offsett...

Q: Fire Rock Company manufactures designer paddle boards in a wide variety of

Fire Rock Company manufactures designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for June: In addition,...