Questions from Cost Management

Q: Forchen, Inc., provided the following information for two of its

Forchen, Inc., provided the following information for two of its divisions for last year: Required: 1. For the Small Appliances Division, calculate: a. Average operating assets b. Margin c. Turnover d...

Q: Refer to Brief Exercise 10-1. Forchen, Inc.,

Refer to Brief Exercise 10-1. Forchen, Inc., requires an 8 percent minimum rate of return. Required: 1. Calculate residual income for the Small Appliances Division. 2. Calculate residual income for th...

Q: Ignacio, Inc., had after-tax operating income last year

Ignacio, Inc., had after-tax operating income last year of $1,196,500. Three sources of financing were used by the company: $2 million of mortgage bonds paying 4 percent interest, $4 million of unsecu...

Q: Jean and Tom Perritz own and manage Happy Home Helpers, Inc

Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On avera...

Q: Carreker, Inc., has a number of divisions, including the

Carreker, Inc., has a number of divisions, including the Alamosa Division, producer of surgical blades, and the Tavaris Division, a manufacturer of medical instruments. Alamosa Division produces a 2.6...

Q: Refer to Brief Exercise 10-4. Required:

Refer to Brief Exercise 10-4. Required: 1. If Carreker, Inc., has a transfer pricing policy that requires transfer at full product cost, what would the transfer price be? Do you suppose that Alamosa a...

Q: Alejandro’s Moab Grill features authentic Mexican dishes delivered in a relaxing Western

Alejandro’s Moab Grill features authentic Mexican dishes delivered in a relaxing Western motif. Given the short summer tourist season, Alejandro (the owner) decided to identify his t...

Q: Woodruff Company is currently producing a snowmobile that uses five specialized parts

Woodruff Company is currently producing a snowmobile that uses five specialized parts. Engineering has proposed replacing these specialized parts with commodity parts, which will cost less and can be...

Q: Tulsa Company is a car brake repair and replacement company operating in

Tulsa Company is a car brake repair and replacement company operating in the after-sales market. Tulsa’s purchasing manager uses two suppliers (Stridulo and Fallimento) for the sourc...

Q: Deeds Company sells custom-made machine parts to industrial equipment manufacturers

Deeds Company sells custom-made machine parts to industrial equipment manufacturers by bidding cost plus 40 percent, where cost is defined as manufacturing cost plus order processing cost. There are t...