Questions from General Accounting

Q: How are allocated joint costs treated when making a sell-or

How are allocated joint costs treated when making a sell-or-process-further decision?

Q: Your roommate, Gale Dunham, is confused about sunk costs.

Your roommate, Gale Dunham, is confused about sunk costs. Explain to your roommate the meaning of sunk costs and their relevance to a decision to retain or replace equipment.

Q: Huang Inc. has one product line that is unprofitable. What

Huang Inc. has one product line that is unprofitable. What circumstances may cause overall company net income to be lower if the unprofitable product line is eliminated?

Q: The executive team at Current Designs has gathered to evaluate the company’s

The executive team at Current Designs has gathered to evaluate the company’s operations for the last month. One of the topics on the agenda is the special order from Huegel Hollow, which was presented...

Q: Managerial accounting techniques can be used in a wide variety of settings

Managerial accounting techniques can be used in a wide variety of settings. As we have frequently pointed out, you can use them in many personal situations. They also can be useful in trying to find s...

Q: In preparing the direct materials budget for Quan Company, management concludes

In preparing the direct materials budget for Quan Company, management concludes that required purchases are 64,000 units. If 52,000 direct materials units are required in production and there are 9,00...

Q: The production budget of Justus Company calls for 80,000 units

The production budget of Justus Company calls for 80,000 units to be produced. If it takes 45 minutes to make one unit and the direct labor rate is $16 per hour, what is the total budgeted direct labo...

Q: Ortiz Company’s manufacturing overhead budget shows total variable costs of $198

Ortiz Company’s manufacturing overhead budget shows total variable costs of $198,000 and total fixed costs of $162,000. Total production in units is expected to be 150,000. It takes 20 minutes to make...

Q: Everly Company’s variable selling and administrative expenses are 12% of net

Everly Company’s variable selling and administrative expenses are 12% of net sales. Fixed expenses are $50,000 per quarter. The sales budget shows expected sales of $200,000 and $240,000 in the first...

Q: For Goody Company, the budgeted cost for one unit of product

For Goody Company, the budgeted cost for one unit of product is direct materials $10, direct labor $20, and manufacturing overhead 80% of direct labor cost. If 25,000 units are expected to be sold at...