Question: Bridges Optics manufactures two products:

> a. James Shaw owns several shaved ice stands that operate in the summer along the Outer Banks of North Carolina. His contribution margin ratio is 60%. If James increases his sales revenue by $25,000 without any increase in fixed costs, by how much will h

> Carr Orthotics Company distributes a specialized ankle support that sells for $30. The company’s variable costs are $18 per unit; fixed costs total $360,000 each year. Required: a. If sales increase by $39,000 per year, by how much should operating inco

> MathTot sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company’s income statement from last month is as follows: Required: a. What is MathTot’s contributi

> For each of the following managers, identify the information that would be useful for monitoring strategic performance. a. The store manager of a Wendy’s in Austin, Texas b. The regional manager for all Wendy’s restaurants in the state of Texas c. Wendy’

> Josh Ward is a young entrepreneur preparing to start a company that will sell floating lounge chairs for use in private pools. As part of a loan package, the bank has asked him to prepare a business plan that includes a breakeven analysis. The lounge cha

> Reid Recreation Products sells the Amazing Foam Frisbee for $12. The variable cost per unit is $3; fixed costs are $36,000 per month. Required: a. What is the annual breakeven point in units? In sales dollars? b. How many frisbees must Reid sell to earn

> Greer Golf Supplies is an online store that sells two types of golf balls: practice balls and tournament balls. The golf balls are sold in plastic sleeves containing three golf balls. Practice balls sell for $4 per sleeve; tournament balls sell for $12 p

> Three years ago, Marissa Moore started a business that creates and delivers holiday and birthday gift baskets to students at the local university. Marissa sells the baskets for $25 each, and her variable costs are $15 per basket. She incurs $12,000 in fi

> “I’ll never understand this accounting stuff,” Blake Dunn yelled, waving the income statement he had just received from his accountant in the morning mail. “Last month, we sold 1,000

> In 1999, Blue Nile, Inc. began selling diamonds and other fi ne jewelry over the Internet. Using an online retailing model, Blue Nile prices its diamonds at an average of 35% less than traditional brick-and-mortar jewelers. In fewer than fi ve years, the

> Julianna Abdallah owns and operates FirstCakes, a bakery that creates personalized birthday cakes for a child’s first birthday. The cakes, which sell for $40 and feature an edible picture of the child, are shipped throughout the country

> Scott Confectionery sells its Stack-o-Choc candy bar for $0.80. The variable cost per unit for the candy bar is $0.45; total fixed costs are $175,000. Required: a. What is the contribution margin per unit for the Stack-o-Choc candy bar? b. What is the c

> Lasley Cash, Ltd. operates a chain of exclusive ski hat boutiques in the western United States. The stores purchase several hat styles from a single distributor at $12 each. All other costs incurred by the company are fixed. Lasley Cash, Ltd. sells the h

> Harris Horticulture provides and maintains live plants in office buildings. The company’s 850 customers are charged $40 per month for this service, which includes weekly watering visits. The variable cost to service a customer’s location is $20 per month

> Classify each of the following activities as planning, controlling, evaluating, or decision making. a. A corporate chef prepares a menu and shopping list for the upcoming board of directors meeting. b. The human resources manager reviews the monthly payr

> J Bryant, Ltd. is a local coat retailer. The store’s accountant prepared the following income statement for the month ended January 31: Bryant sells its coats for $300 each. Selling expenses consist of fixed costs plus a commission of

> Mighty Bright Window Cleaners’ monthly income statement at several levels of activity is as follows: Required: a. Identify each expense as fixed, variable, or mixed. b. Prepare a contribution margin income statement based on a volume o

> Smythe, Ltd., provides nationwide passenger train service on 21,000 miles of routes. Selected operating data for the latest fiscal year are shown below. Required: a. The above data provide three possible activity measures that could influence fuel expen

> Harlan Gravity Grips produces spike sets for track shoes. CEO Brittany Harlan has gathered the following information about the company’s sales volume and marketing cost for the past six months. Required: a. Using the high-low method, c

> Angie March owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Angie has gathered the fo

> The Aust Corporation has gathered the following data on its copy machine costs for the first eight months of the year. Required: a. Prepare a scatter graph of the cost information and then choose a line that you believe best represents the cost function

> Southwest Phone Services offers a cellular phone plan for $50 per month. Under this plan, you can make an unlimited number of phone calls and talk as long as you like. Required: a. Prepare a table that shows the cost per minute of airtime and the total

> The city of Brownswood is trying to understand its road repair costs. As a starting point, Mark Winston, the city’s finance manager, asked public works manager Rachel Morris to gather relevant data. Rachel provided Mark with a data set containing a list

> Bohlander Botanicals develops hybrid tea roses. A relative newcomer to the field, Bohlander is looking for innovative ways to advertise its products to potential customers. Rose Mayfield, sales manager and avid online shopper, wonders about advertising t

> In each of the following situations, identify whether the setting is primarily financial accounting or managerial accounting. a. Volkswagen has experienced a decline in U.S. sales, which dropped 18% in 2005 and 24% between 2002 and 2004. Then chief execu

> Refer to Exhibit 2-11 on page 65. Required: a. What is Universal Sports Exchange’s operating profit equation? b. If Universal Sports Exchange sells 55,000 jerseys, what total expense will be reported on the income statement? c. The Dai

> Identify each of the following costs incurred by Universal Sports Exchange in terms of its cost behavior—variable, fixed, mixed, or step. Required: a. Monthly sales staff payroll of $650 plus 6% sales commission on jerseys b. $100 monthly rental for cre

> Restate the following income statement for a retailer in contribution format. Sales revenue ($100 per unit) Less cost of goods sold ($60 per unit) $50,000 30,000 Gross margin Less operating costs: Commissions expense ($6 per unit) Salaries expense Ad

> Managers of Tom Brown Distributors are evaluating the compensation system for the company’s sales personnel. Currently, the two salespeople have a combined salary of $60,000 per year and earn a 3% sales commission. The company is consid

> After preparing the budget for the second quarter based on the parameters in Case 5-38, Kim Klandon was not satisfied with the projected results and began to investigate the following alternatives. Each of the alternatives is independent of all others. a

> Klandon Company manufactures decorative rocks for aquariums. Kim Klandon is preparing the budget for the quarter ended June 30. She has gathered the following information. 1. Klandon’s sales manager reported that the company sold 12,00

> Maverick Wings, Inc. manufactures airplanes for use in stunt shows. Maverick’s factory is highly automated, using the latest in robotic technology. To keep costs low, the company employs as few factory workers as possible. Since each pl

> Lassen Artworks creates hand-painted picture frames. The frames are cast from resin in an automated process. Once the casting is done, talented artisans hand-paint one of fifteen designs on each frame. In the final assembly process, a worker inserts the

> Refer to the data in Exercise 2.4. Using the form y = mx + b, estimate the cost formula for each cost incurred by Furman Flower Cart. Bouquets Sold 3,000 5,000 7,000 $ 9,000 $ 7,500 $ 5,300 $11,000 $ 2,000 $15,000 $ 7,500 $ 8,300 $15,000 $ 2,000 $21

> Benson ProSystems needs a new signal conditioner module for a large process control system it is designing. Current market conditions will support annual sales of 1,000 systems. Engineers estimate the following unit manufacturing costs for the module: D

> Parkside, Inc. has several divisions that operate as decentralized profit centers. Parkside’s Entertainment division manufactures handheld gaming systems using the products of two of Parkside’s other divisions. The Pla

> Marlys Consolidated has several divisions, two of which transfer their products to other divisions. The Mining division refines toldine, which it then transfers to the Metals division. The Metals division processes the toldine into an alloy and sells it

> Hannalinn Corporation operates three divisions—Archer, Barrett, and Corvell. Division managers are evaluated based on the division’s return on investment, and historically, the Corvell division has consistently outperf

> Mims Corporation recently announced a bonus plan to reward the manager of its most profitable division. The three divisional managers are to decide which performance measure will be used to evaluate profitability. Mims Corporation requires a 10% minimum

> Sanders Siding produces and sells two products—aluminum and vinyl. Each of these products is made in a dedicated manufacturing facility, and the product line managers are evaluated based on the product line’s return on

> Shoe Shock Innovations manufactures athletic shoe inserts that cushion the foot and reduce the impact of exercise on the joints. The company has two divisions, Sole Inserts and Heel Inserts. A segmented income statement from last month follows. Chris K

> Jim Coston was reviewing the latest income statement for Trenton Communications. For the second year in a row, the Audio division was showing a negative segment margin, and Jim thought it was time to close the division to increase the companyâ&#128

> Jordan Williams, a divisional manager, is evaluated based on return on investment. In the last quarter her division achieved a 15% margin and an 18% return on investment. The division had $4,000,000 in operating assets that quarter. Required: a. What wa

> Dale Decor sells home decor items through three distribution channels—retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows:

> Refer to the data in Exercise 2-8. Required: a. Using the high-low method, compute the variable cost of electricity per machine hour. b. Compute the total fixed cost of electricity. c. Represent the electricity cost function in equation form. d. What is

> Joyner Pickled Pepper Company produces pickled jalapeno pepper relish. Selected results from the most current year were as follows: Sales revenue……………….$3,375,000 Operating income………………540,000 Average total assets…………1,687,500 Production manager Veroni

> Jane Baldwin, Anderson Flooring’s accounting intern, has prepared the following income statement for the month of June. In preparing the income statement, Jane was unsure what to do with $250,000 in corporate fixed expenses that canno

> Kimball Equipment sells equipment to sports enthusiasts. Doug Kimball, the company’s president, just received the following income statement reporting the results of the past year. Doug is concerned that two of the companyâ&#128

> Magellan & Columbus, Ltd. manufactures boats and personal watercraft. The company operates three separate divisions: yachts, sailboats, and jet skis. The company’s latest income statement is presented by product line as follows: R

> Hewett and Hefner, LLP is a regional public accounting firm with 34 offices throughout the southeastern United States. To provide employees with cost-effective continuing professional education, the company maintains an in-house education and training st

> Paula Boothe, president of the Armange Corporation, has mandated a minimum 10% return on investment for any project undertaken by the company. Given the company’s decentralization, Paula leaves all investment decisions to the divisional managers as long

> North Town Medical Arts is a new healthcare provider in Baytown. The company operates a community hospital, an outpatient surgery center, and a medical offices building. Indicate whether each of the following responsibility centers is a cost center, a pr

> Blakefield, Inc. has grown significantly over the past decade through innovation and acquisition. Information on several of its divisions follows. • The OlliePods division sells children’s recreational shoes. The division’s president is responsible for a

> Stratton, Inc., has collected the following information on its cost of electricity: Required: a. Prepare a scatter graph of Stratton’s electricity costs for the year. Plot the total electricity cost on the y-axis. Draw a line that you

> Thompson Manufacturing has been in business for over 50 years, making a variety of consumer electronics products. Mary Felix recently joined the business as vice president of the Conley division, one of the company’s newest divisions. During her first we

> Preston Plastics is about to wrap up its capital budgeting cycle, and department managers across the company have submitted 500 capital project requests for consideration in the next round of funding. Preston’s CFO, Dan LaMontagne, is trying to decide wh

> Jewel Pix currently uses a six-year-old molding machine to manufacture silver picture frames. The company paid $85,000 for the machine, which was state of the art at the time of purchase. Although the machine will likely last another ten years, it will n

> Jonathan Lark’s lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest

> Cindy Alexander, Turner, Inc.’s vice president of marketing, has received a sales call from a vendor of customer relationship management (CRM) software. The vendor claims that the software and other data her company provides will enable

> TimeTrends integrated time clock and payroll system sells for $271,673. At this price, the annual cost savings that the system will generate for Building Keepers, a facilities management company, over its ten-year life will yield an internal rate of retu

> Bill Zimmerman is evaluating two new business opportunities. Each of the opportunities shown below has a ten-year life. Bill uses a 10% discount rate. Required: a. Calculate the net present value of the two opportunities. b. Calculate the profitability

> Farmville Regional Airport is modernizing its terminal facilities in anticipation of significant growth in the number of passengers using the airport. A consultant’s study commissioned by the airport’s board predicts that the number of passengers using t

> AutoQuest has been selling auto parts to the general public for over 70 years. It has built a reputation for outstanding customer service, becoming the third largest auto parts retailer in the Southwest. Hoping to expand its sales to other regions, manag

> Martha Gentry won an $18 million lottery and elected to receive her winnings in 30 equal annual installments. After receiving the first 10 installments, Martha and her husband divorced, and the remaining 20 payments became part of the property settlement

> To calculate the unit cost of the video games that he sells at his mall kiosk, Joel Lawson added up all his costs and divided by the number of units he sold during the year. He then used this unit cost to estimate total costs for the coming year. Requir

> Farrior Fashions needs to replace a beltloop attacher that currently costs the company $40,000 in annual cash operating costs. This machine is of no use to another company, but it could be sold as scrap for $2,160. Managers have identified a potential re

> Margaret wants to buy a car when she graduates from Central University four years from now. She believes that she will need $30,000 to buy the car. Required: a. Calculate how much money Margaret must put into her savings account today to have $30,000 in

> The Seago Company is planning to purchase $500,000 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment. Year……………….Projected Cash Flows 1………………………………

> Tom Falkland is considering refinancing his home mortgage to reduce his house payment by $125 per month. Closing costs associated with the refinancing will total $5,000. Tom will finish medical school in four years, at which time he will sell the house a

> Boyer Cosmetics is planning to expand its product line to include stage makeup. The expansion will require the company to purchase special mixing equipment at a cost of $125,532. The equipment will have a useful life of 16 years. Required: a. If Boyer u

> Garrett Boone, Farish Enterprises’ vice president of operations, needs to replace an automatic lathe on the production line. The model he is considering has a sales price of $285,000 and will last for 9 years. It will have no salvage value at the end of

> Harrison Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $88,235 and will save the company $14,000 in direct labor costs. It is expected to last 14 years. Required:

> Larry’s Lawn Service needs to purchase a new lawnmower costing $7,756 to replace an old lawnmower that cannot be repaired. The new lawnmower is expected to have a useful life of four years, with no salvage value at the end of that period. Required: a. I

> Review the data provided in Exercise 9-2. Reference from Exercise 9-2: Mighty Vita produces a wide range of herbal supplements sold nationwide through independent distributors. In response to an increasing demand for its products, the company is consi

> Review the data provided in Exercise 9-1. Reference from Exercise 9-1: Metro Industries is considering the purchase of new equipment costing $1,200,000 to replace existing equipment that will be sold for $180,000. The new equipment is expected to have a

> Marla Mason owns and operates a home health care agency. She reported the following cost information for the first four months in 2017. Identify each of the following costs as fixed, variable, or mixed and calculate the missing values. Home Visit Hou

> Chuck has just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $200,000 cash payment today. The second option is to receive $20,000 at the end of each of the next 19 years and a $50,000 lump sum paymen

> Review the data provided in Exercise 9-1. Reference Data Exercise 9-1: Metro Industries is considering the purchase of new equipment costing $1,200,000 to replace existing equipment that will be sold for $180,000. The new equipment is expected to have a

> “Maybe I should have stuck with teaching high school art. No matter what I try, I can’t seem to turn that Roanoke plant around.” That’s how the meeting between Warren Wingo, CEO of clothing manufacturer Wingo Designs, and Angie Tillery, vice president of

> Preston Plastics is about to wrap up its capital budgeting cycle, and department managers across the company have submitted 500 capital project requests for consideration in the next round of funding. Preston’s CFO, Dan LaMontagne, is trying to decide wh

> Capital Toys’ management is considering eliminating product A, which has been showing a loss for several years. The company’s annual income statement, in $000s, is as follows: Required: a. Restate the income statemen

> PlayTime, Inc., is a leading manufacturer of sporting equipment. The company is in the process of evaluating the best use of its Plastics Division, which is currently manufacturing molded fishing tackle boxes. The company manufactures and sells 8,000 tac

> Betsy Willis owns Test Tutor, an educational tutoring center in Baytown, Florida. The center offers private tutoring in math, writing, and science. Information about the tutoring sessions is as follows: Since the company opened fi ve years ago, demand h

> Marwick Innovations, Inc. produces exercise and fitness gear. Two of its newer products require a finishing process that can only be completed on machines that were recently purchased for this purpose. The machines have a maximum capacity of 6,000 machin

> Elizabeth Lee is a top seller on eBay®. In fact, her business has grown so large that she can no longer manage her items on eBay’s website and ship her products to the auction winners in a timely manner. When she first started, she had to ship only a few

> Wright Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 50,000 timers, the company has calculated the following unit costs.

> Identify each of the following costs, incurred monthly by Furman Flower Cart, as fixed, variable, or mixed. Explain your reasoning. Bouquets Sold 5,000 3,000 7,000 $ 9,000 $ 7,500 $ 5,300 $11,000 $ 2,000 Balloons (10 per bouquet) $15,000 $ 7,500 $ 8,

> Managerial accounting information is not just for accountants. All areas within an organization can use the information to support decision making. Choose a position in an organization that is appealing to you and identify several decisions that you migh

> Klump Trekkers, Inc., manufactures engines that are used in recreational equipment, such as motorcycles and personal watercraft. The company currently assembles the camshafts for these motors in its assembly department, which employs 40 skilled technicia

> Wilson Vistas is a leading producer of vinyl replacement windows. The company’s growth strategy focuses on developing domestic markets in large metropolitan areas. The company operates a single manufacturing plant in Kansas City with an annual capacity o

> Guilford Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of the company’s major product lines is custom-printed cake boxes that are sold to some of the country’s best known bakeries at a price of

> Ridley and Scott Mercantile operates two stores, one on Maple Avenue and the other on Fenner Road. Results for the month of May, which is representative of all months, are as follows: The following information pertains to Ridley and Scottâ€&

> 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 traditional navy and black socks with brighter colors and bold

> 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. “Survival of the fittest, I say!” wa

> 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 a whole, were as follows: Forty percent of the Round

> 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. Required: If you were in charge of these decisions, what inf

> 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 company perfected new recipes that yield delicious gluten-f

> 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 sewing machines are in the shop for repairs, Wendy’s has

> 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 software. Required: a. What is the company’s total annual

> 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 production of any new products. Required: How many of each pro