Questions from Cost Management

Q: Fisher Company produces two types of components for airplanes: A and

Fisher Company produces two types of components for airplanes: A and B, with unit contribution margins of $400 and $600, respectively. The components pass through three sequential processes: cutting,...

Q: Fisher Company has three sequential processes: cutting, welding, and

Fisher Company has three sequential processes: cutting, welding, and assembly. Assume that the optimal mix is Component A = 0 units per week; and Component B = 30 units per week. Demand is uniformly s...

Q: Aranda Company is an import-export company that relocated earlier this

Aranda Company is an import-export company that relocated earlier this year in a foreign trade zone (FTZ) in a southwestern city. The company imports $760,000 of fabric from overseas for resale to clo...

Q: Chinook, Inc., purchases components from a Japanese company that requires

Chinook, Inc., purchases components from a Japanese company that requires payment in yen (¥); it sells finished product to a German company that pays in euros. On June 1, Chinook ordered components fr...

Q: Goler Company, based in Illinois, sells its product at home

Goler Company, based in Illinois, sells its product at home and abroad. On March 1, Bondi Company, an Australian company, orders $30,000 worth of product to be delivered immediately and to be paid in...

Q: The controller for McGarvey Manufacturing Company felt that the number of purchase

The controller for McGarvey Manufacturing Company felt that the number of purchase orders alone did not explain the monthly purchasing cost. He knew that nonstandard orders (for example, one requiring...

Q: On June 1, Marano, Inc., sold product for $

On June 1, Marano, Inc., sold product for $50,000 to be delivered immediately to a Japanese customer and to be paid in yen on August 1. Marano is worried that the exchange rate of dollar for yen could...

Q: Washington, Inc., has a number of divisions around the world

Washington, Inc., has a number of divisions around the world. Division US (in the United States) purchases a component from Division N (in the Netherlands). The component can be purchased externally f...

Q: High drug costs are often in the news. Consumer groups contend

High drug costs are often in the news. Consumer groups contend that the pricing for some drugs (e.g., HIV anti-retrovirals, Betaseron for multiple sclerosis) is “too high” considering that the cost to...

Q: McConkie Company has decided to pursue a cost leadership strategy. This

McConkie Company has decided to pursue a cost leadership strategy. This decision is prompted, in part, by increased competition from foreign firms. McConkie’s management is confident...