Questions from General Accounting

Q: Your boss, the vice president of corporate accounting, has just

Your boss, the vice president of corporate accounting, has just returned from a two-week seminar in Maui on activity-based cost accounting. He says he wants to completely overhaul the company’s existi...

Q: New York Fashions owns 87 women’s clothing stores in shopping malls.

New York Fashions owns 87 women’s clothing stores in shopping malls. Corporate headquarters of New York Fashions uses flexible budgets to control the operations of each of the stores...

Q: Kay Enterprises is a small, family-owned and managed business

Kay Enterprises is a small, family-owned and managed business. It has a patented production process for manufacturing a digital switch used in large telephone switches. It manufactures two models in i...

Q: Two genetically engineered enzymes are produced simultaneously from a series of chemical

Two genetically engineered enzymes are produced simultaneously from a series of chemical and biological processes: Q enzyme and Y enzyme. The cost per batch of Q and Y enzymes is $200,000, resulting i...

Q: Beckett is a large car dealership that sells several different automobile manufacturers

Beckett is a large car dealership that sells several different automobile manufacturers new cars (Toyota, Ford, Lexus, and Subaru). Beckett also consists of a Pre-owned Cars Department and a large ser...

Q: Chemtrex is an agricultural chemical producer. Process costing is used in

Chemtrex is an agricultural chemical producer. Process costing is used in its mixing department. At the beginning of July, Chemtrex had 700,000 gallons 70 percent complete in work in process. During J...

Q: CLIC manufactures two types of cigarette lighters: Basic and Super.

CLIC manufactures two types of cigarette lighters: Basic and Super. A new plant began producing both lighter models this year. The following variable costing statement summarizes the first year of ope...

Q: Houston Milling is a subcontractor to Pratt & Whitney, which makes

Houston Milling is a subcontractor to Pratt & Whitney, which makes jet engines. Houston Milling makes two different fuel pump housings for two Pratt & Whitney jet engines: the A11 housing and...

Q: Marian Health Care is a large hospital system outside Chicago that offers

Marian Health Care is a large hospital system outside Chicago that offers both hospital (inpatient) and clinic (outpatient) services. It has a centralized admissions office that admits and registers c...

Q: Simple Plant manufactures DNA test strips. Manufacturing overhead is applied to

Simple Plant manufactures DNA test strips. Manufacturing overhead is applied to units produced using direct labor dollars as the allocation base. The overhead rate is calculated prior to the beginning...