Questions from Cost Management

Q: Southward Company has implemented a JIT flexible manufacturing system. Nia Johnson

Southward Company has implemented a JIT flexible manufacturing system. Nia Johnson, controller of the company, has decided to reduce the accounting requirements given the expectation of lower inventor...

Q: Reddy Heaters, Inc., produces insert heaters that can be used

Reddy Heaters, Inc., produces insert heaters that can be used for various applications, ranging from coffeepots to submarines. Because of the wide variety of insert heaters produced, Reddy uses a job-...

Q: Joseph Fox, controller of Thorpe Company, has been in charge

Joseph Fox, controller of Thorpe Company, has been in charge of a project to install an activity based cost management system. This new system is designed to support the company’s ef...

Q: Volante, Inc., supplies wheels for a large bicycle manufacturing company

Volante, Inc., supplies wheels for a large bicycle manufacturing company. The bicycle company has recently requested that Volante decrease its delivery time. Volante made a commitment to reduce the le...

Q: Novo, Inc., wants to develop an activity f lexible budget

Novo, Inc., wants to develop an activity f lexible budget for the activity of moving materials. Novo uses eight forklifts to move materials from receiving to stores. The forklifts are also used to mov...

Q: Joseph Hansen, president of Electronica, Inc., was concerned about

Joseph Hansen, president of Electronica, Inc., was concerned about the end-of-the-year marketing report that he had just received. According to Asha Kumar, marketing manager, a price decrease for the...

Q: Angie Ramirez, vice president of Dunn Company (a producer of

Angie Ramirez, vice president of Dunn Company (a producer of plastic products), has been supervising the implementation of an activity-based cost management system. One of Angie’s objectives is to imp...

Q: Tidwell, Inc., has two plants that manufacture a line of

Tidwell, Inc., has two plants that manufacture a line of wheelchairs. One is located in Dallas, and the other in Oklahoma City. Each plant is set up as a profit center. During the past year, both plan...

Q: Kelly Gray, production manager, was upset with the latest performance

Kelly Gray, production manager, was upset with the latest performance report, which indicated that she was $100,000 over budget. Given the efforts that she and her workers had made, she was confident...

Q: Douglas Davis, controller for Marston, Inc., prepared the following

Douglas Davis, controller for Marston, Inc., prepared the following budget for manufacturing costs at two different levels of activity for 20X1: During 20X1, Marston worked a total of 80,000 direct la...