Questions from General Accounting

Q: Increased global competition has spurred most firms to take a hard look

Increased global competition has spurred most firms to take a hard look at their costs and become “lean and mean.” Rochco, a large industrial complex, has seen offshore competition erode its market sh...

Q: Navisky designs, manufactures, and sells specialized GPS (Global Positioning

Navisky designs, manufactures, and sells specialized GPS (Global Positioning System) devices for commercial applications. For example, Navisky currently sells a system for environmental studies and is...

Q: Massey Electronics manufactures heat sinks. Heat sinks are small devices attached

Massey Electronics manufactures heat sinks. Heat sinks are small devices attached to solid-state circuit boards that dissipate the heat from the circuit board components. Made of aluminum, the devices...

Q: You are working as a loan officer at TransPacific Bank and are

You are working as a loan officer at TransPacific Bank and are analyzing a loan request for a client when you come across the following footnote in the client’s annual report: Inventories are priced a...

Q: The admissions office of a large hospital has an annual operating budget

The admissions office of a large hospital has an annual operating budget of $700,000. These costs are distributed to inpatient departments (surgery, medicine, pediatrics, psychiatry) and to outpatient...

Q: Cibo Leathers manufactures a line of designer purses and handbags, some

Cibo Leathers manufactures a line of designer purses and handbags, some selling for as much as $1,000 per bag. One particular style requires a hand-stitched shoulder strap of cow leather that has been...

Q: The purchasing department at Feder buys all of its raw materials,

The purchasing department at Feder buys all of its raw materials, supplies, and parts. This department is a cost center. It uses a flexible budget based on the number of different items purchased each...

Q: Warren City, with sales of $2 billion, produces and

Warren City, with sales of $2 billion, produces and sells farm equipment. The manufacturing division produces some parts internally and purchases other parts from external suppliers and assembles farm...

Q: Golf ball manufacturer Trevino is generally regarded as the industry leader.

Golf ball manufacturer Trevino is generally regarded as the industry leader. It commands a 40 percent market share in its targeted channels of distribution and reported net profits of $31.5 million on...

Q: Karsten Mills is one of the premier carpet manufacturers in the world

Karsten Mills is one of the premier carpet manufacturers in the world. It manufactures carpeting for both residential and commercial applications. Home sales and commercial sales each account for abou...