Questions from Cost Accounting

Q: New York Fabrics makes three clothing items: pants, shorts,

New York Fabrics makes three clothing items: pants, shorts, and shirts. Contribution margins for the products are $4.25, $4.05, and $2.70 per unit, respectively. The company’s manage...

Q: Trady’s Tree People manufactures wood statues, which yields sawdust as a

Trady’s Tree People manufactures wood statues, which yields sawdust as a by-product. Selling costs associated with the sawdust are $25 per ton sold. The company accounts for sawdust sales by deductin...

Q: Ramirez Tax Services is considering the installation of a new system for

Ramirez Tax Services is considering the installation of a new system for electronically filing tax returns. The system has an initial cost of $80,000 and an expected life of 5 years. a. If the company...

Q: Renaissance Creations restores antique stained glass windows. All jobs generate some

Renaissance Creations restores antique stained glass windows. All jobs generate some breakage or improper cuts. This scrap can be sold to stained glass hobbyists. Renaissance Creations expects to incu...

Q: Mosbee Designs uses a job order costing system to account for the

Mosbee Designs uses a job order costing system to account for the various architectural services offered to commercial clients. For each major job, architectural models of the completed structures are...

Q: Brenda’s Bees is considering the purchase of new honey processing equipment.

Brenda’s Bees is considering the purchase of new honey processing equipment. The equipment would cost $100,000, have an expected life of 7 years, and save the firm $28,000 annually in maintenance, ope...

Q: You have just invested $60,000 in a bank account

You have just invested $60,000 in a bank account that guarantees to pay you 6 percent interest, compounded annually. At the end of 5 years, how much money will have accumulated in your investment acco...

Q: You have just purchased a new car, making a down payment

You have just purchased a new car, making a down payment of $8,000 and financing the balance of the purchase cost on an installment credit plan. According to the credit agreement, you will pay $600 pe...

Q: Portsmouth Port Services creates and maintains shipping channels at various ports around

Portsmouth Port Services creates and maintains shipping channels at various ports around the world. The company is considering the purchase of a $72,000,000 ocean-going dredge that has a 5-year life a...

Q: Macon Farms raises peaches that, at harvest, are separated into

Macon Farms raises peaches that, at harvest, are separated into three grades: premium, good, and fair. Joint cost is allocated to products based on bushels of output. The $337,500 joint cost for one h...