Questions from Cost Accounting

Q: In what ways is transfer pricing like cost allocation? In what

In what ways is transfer pricing like cost allocation? In what ways is it different?

Q: Best Practices, Inc., is a management consulting fi rm.

Best Practices, Inc., is a management consulting fi rm. Its Corporate Division advises private firms on the adoption and use of cost management systems. Government Division consults with state and loc...

Q: Mississippi Company has two decentralized divisions, Illinois and Iowa. Illinois

Mississippi Company has two decentralized divisions, Illinois and Iowa. Illinois always has purchased certain units from Iowa at $60 per unit. Because Iowa plans to raise the price to $80 per unit, Il...

Q: A company permits its decentralized units to “lease” space to

A company permits its decentralized units to “lease” space to one another. Uptown Division has leased some of its idle warehouse space to Downtown Division for $60 per square foot per month. Recently,...

Q: Division A offers its product to outside markets for $60.

Division A offers its product to outside markets for $60. It incurs variable costs of $22 per unit and fixed costs of $75,000 per month based on monthly production of 4,000 units. Division B can acqui...

Q: Seattle Transit Ltd. operates a local mass transit system. The

Seattle Transit Ltd. operates a local mass transit system. The transit authority is a state governmental agency. It has an agreement with the state government to provide rides to senior citizens for 5...

Q: Carmen Seville and Don Turco jointly own Bright Green Temp Services (

Carmen Seville and Don Turco jointly own Bright Green Temp Services (BGTS). Carmen owns 60 percent and Don owns 40 percent. The company provides temporary clerical services at a rate of $40 per hour....

Q: Trans Atlantic Metals has two operating divisions. Its forging operation in

Trans Atlantic Metals has two operating divisions. Its forging operation in Finland forges raw metal, cuts it, and then ships it to the United States where the company’s Gear Division uses the metal t...

Q: Clean Corporation manufactures liquid window cleaner. The following information concerns its

Clean Corporation manufactures liquid window cleaner. The following information concerns its work in process: • Beginning inventory, 12,000 partially complete gallons. • Transferred out, 63,000 gallon...

Q: Refer to the data in Exercise 15–17. Suppose that

Refer to the data in Exercise 15–17. Suppose that Government Division will charge the client interested in implementing an activity-based costing system by the hour based on cost plus a fixed fee, whe...