Questions from Cost Accounting

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

The Eastern Oil Company buys crude vegetable oil. Refining this oil results in four products at the splitoff point: A, B, C, and D. Product C is fully processed by the splitoff point. Products A, B, a...

Q: The Cocoa Factory manufactures and distributes chocolate products. It purchases cocoa

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...

Q: Clover Dairy Products Corp. buys one input of full-cream

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...

Q: Clover has decided that buttermilk may sell better if it was marketed

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...