Questions from General Accounting

Q: A company must decide between scrapping or reworking units that do not

A company must decide between scrapping or reworking units that do not pass inspection. The company has 22,000 defective units that cost $6 per unit to manufacture. The units can be sold as is for $2....

Q: Varto Company has 7,000 units of its sole product in

Varto Company has 7,000 units of its sole product in inventory that it produced last year at a cost of $22 each. This year’s model is superior to last year’s and the 7,000 units cannot be sold at last...

Q: Cobe Company has already manufactured 28,000 units of Product A

Cobe Company has already manufactured 28,000 units of Product A at a cost of $28 per unit. The 28,000 units can be sold at this stage for $700,000. Alternatively, the units can be further processed at...

Q: Colt Company owns a machine that can produce two specialized products.

Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is five units per hour. The machine’s...

Q: Suresh Co. expects its five departments to yield the following income

Suresh Co. expects its five departments to yield the following income for next year. Recompute and prepare the departmental income statements (including a combined total column) for the company unde...

Q: Xinhong Company is considering replacing one of its manufacturing machines. The

Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $45,000 and a remaining useful life of 5 years, at which time its salvage value will be zero...

Q: This chapter explained two methods to evaluate investments using recovery time,

This chapter explained two methods to evaluate investments using recovery time, the payback period and break-even time (BET). Refer to QS 25-26 and (1) compute the recovery time for both the payback p...

Q: A machine can be purchased for $150,000 and used

A machine can be purchased for $150,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied, using a five-year life and a zero...

Q: Refer to the information in Exercise 25-3 and assume instead

Refer to the information in Exercise 25-3 and assume instead that double-declining depreciation is applied. Compute the machine’s payback period (ignore taxes). (Round the payback pe...

Q: Compute the payback period for each of these two separate investments (

Compute the payback period for each of these two separate investments (round the payback period to two decimals): a. A new operating system for an existing machine is expected to cost $520,000 and hav...