Questions from Managerial Accounting


Q: Merit Bay Communications operates a customer call center that handles billing inquiries

Merit Bay Communications operates a customer call center that handles billing inquiries for several large insurance firms. Since the center is located on the outskirts of town, where there are no rest...

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Q: Balloon, Inc. produces three types of balloons—small,

Balloon, Inc. produces three types of balloons—small, medium, and large—with the following characteristics: The company has only 2,000 machine hours available eac...

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Q: Umbrella Co. is considering the introduction of three new products.

Umbrella Co. is considering the introduction of three new products. Per unit sales and cost information are as follows: The company has only 1,800 direct labor hours available to commit to productio...

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Q: Will Jones, LLP is a small CPA firm that focuses primarily

Will Jones, LLP is a small CPA firm that focuses primarily on preparing tax returns for small businesses. The company pays a $500 annual fee plus $10 per tax return for a license to use Mega Tax softw...

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Q: Wendy’s Wind Toys manufactures decorative kites, banners, and windsocks.

Wendy’s Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Wendy received orders for 3,000 Valentine’s Day banners and 1,200 Easter kites. Because several se...

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Q: In response to a growing awareness of gluten allergies, Outland Bakery

In response to a growing awareness of gluten allergies, Outland Bakery tried using gluten-free fl our in its three most popular cookies. After several attempts and a lot of inedible cookies, the compa...

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Q: In 2015, Yum! Brands, Inc., the world’s largest

In 2015, Yum! Brands, Inc., the world’s largest quick-service restaurant company (Pizza Hut, Kentucky Fried Chicken, and Taco Bell), opened 577 new Pizza Hut restaurants and closed 456 others. Requir...

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Q: Twinkie Trivia Co. manufactures and sells two trivia products, the

Twinkie Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter’s operating profits, by product, and for the company as...

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Q: Physical Phitness, Inc. operates three divisions, Weak, Average

Physical Phitness, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. “...

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Q: Luis Herrera, an up-and-coming fashion designer,

Luis Herrera, an up-and-coming fashion designer, created a new line of men’s fashion socks in response to the growing number of celebrities who are expressing their individuality by replacing traditio...

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