Question: Choo-Foo Company makes and sells artistic

> Journalize the following transactions for Orkin Manufacturing. a. Purchased 6,000 units of raw materials on account for $11,500. The standard cost was $12,000. b. Issued 5,600 units of raw materials for production. The standard units were 5,800. Journali

> Engles Oil Company is considering investing in a new oil well. It is expected that the oil well will increase annual revenues by $130,000 and will increase annual expenses by $70,000, including depreciation. The oil well will cost $470,000 and will have

> The Transcanadian Transportation Company uses a responsibility reporting system to measure the performance of its three investment centres: planes, taxis, and limos. It measures segment performance using a system of responsibility reports and return on i

> The Medina and Haley Dental Clinic provides both preventive and orthodontic dental services. The two owners, Martin Medina and Cybil Haley, operate the clinic as two separate investment centres: preventive services and orthodontic services. Each owner is

> The green division of Campana Company reported the following data for the current year: Calculate ROI for current year and for possible future changes. Sales …………………………………………………. $3,000,000 Variable costs ………………………………………. 1,980,000 Controllable fixed co

> The sports equipment division of Brandon McCarthy Company is operated as a profit centre. Sales for the division were budgeted for 2020 at $900,000. The only variable costs budgeted for the division were cost of goods sold ($440,000) and selling and admi

> Longhead Manufacturing Limited has three divisions that are operated as profit centres. Actual operating data for the divisions are as follows: Calculate missing amounts in responsibility reports for three profit centres, and prepare a responsibility re

> The mixing department manager of Crede Company is able to control all overhead costs except rent, property taxes, and salaries. Budgeted monthly overhead costs for the mixing department, in alphabetical order, are as follows: Prepare a responsibility rep

> Marcum Company's organization chart includes the president; the vice-president of production; three assembly plants—Vancouver, Hamilton, and Saint John; and two departments within each plant—machining and finishing. Budgeted and actual manufacturing cost

> Sherrer Company has two production departments: fabricating and assembling. At a department managers' meeting, the controller uses flexible budget graphs to explain the total budgeted costs. Separate graphs based on direct labour hours are used for each

> Viera Corporation is considering investing in a new facility. The estimated cost of the facility is $2,045,000. It will be used for 12 years, then sold for $716,000. The facility will generate annual cash inflows of $400,000 and will need new annual cash

> Tilger Farm Supply Company manufactures and sells a fertilizer called Snare. The following data are available for preparing budgets for Snare for the first two quarters of 2020. Prepare a budgeted income statement and supporting budgets. 1. Sales: Quarte

> Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: Prepare a cash budget for two months. All sales are on account. Lorch expects collections to be 50% in the month of sale, 40% in the first month

> Lyon Factory Ltd. manufactures two products: chairs and stools. Each chair requires 3 m of upholstery and 4 kg of steel. Each stool requires 2 m of upholstery and 5 kg of steel. Upholstery costs $2 per metre and steel costs $5 per kilogram. Calculate cas

> Colt Industries had sales in 2019 of $5.6 million and gross profit of $1.1 million. Management is considering two alternative budget plans to increase its gross profit in 2020. Prepare sales and production budgets and calculate the cost per unit under tw

> Colt Division had the following results for the year just ended: Compare ROI and residual income with supporting calculations. Colt is considering a new product line that would involve the following: Colt's parent company, North Inc., has a company-w

> National Motors is a major car manufacturer with a wide variety of models, including its most recent one, the Mountaineer. The new model uses parts and components from external suppliers, as well as some from the following divisions of National Motors: C

> Lawton Homes, founded by a former vice-president of Haniwall Industries in P11.45A, has been manufacturing prefabricated houses for the past five years. To compete with Haniwall, Lawton also expanded into the precut housing market by acquiring one of its

> Haniwall Industries has manufactured prefabricated houses for over 20 years. Calculate ROI and residual income and discuss impact on manager performance. The houses are constructed in sections that are assembled on customers' lots. Haniwall expanded into

> Kanjak Company uses a responsibility reporting system. It has divisions in Calgary, Winnipeg, and Sudbury. Each division has three production departments: cutting, shaping, and finishing. Responsibility for each department belongs to a manager who report

> Iqaluit Corporation recently announced a bonus plan to be awarded to the vice-president of the most profitable division. The three managers are to choose whether the ROI or residual income (RI) will be used to measure profitability. In addition, they mus

> Frost Company is evaluating the purchase of a rebuilt spotwelding machine to be used in the manufacture of a new product. The machine will cost $176,000, has an estimated useful life of seven years and a salvage value of zero, and will increase net annua

> Chudzik Manufacturing Company makes garden and lawn equipment. The company operates through three divisions. Each division is an investment centre. Operating data for the lawn mower division for the year ended December 31, 2020, and relevant budget data

> Korene Manufacturing Inc. operates the home appliance division as a profit centre. Operating data for this division for the year ended December 31, 2020, are shown in the following table: Prepare a responsibility report for a profit centre. In addition

> Laesecke Company uses budgets to control costs. The May 2020 budget report for the company's packaging department is as follows: State the total budgeted cost formula, and prepare flexible budget reports for two time periods. The monthly budget amounts

> Rotech Co. began operations in January 2019. The information below is for Rotech Co.'s operations for the three months from January to March (the first quarter) of 2020: Prepare a cash budget. Expenses for Quarter 1 …………………………………………… Depreciation ………………

> The Big Sister Company is in a seasonal business and prepares quarterly budgets. Its fiscal year runs from January 1 through December 31. Production occurs only in the first quarter (January to March), but sales take place throughout the year. The sales

> Kurian Industries' balance sheet at December 31, 2019, follows. Prepare budgeted income statement and balance sheet. / / Budgeted data for the year 2020 include the following: To meet sales requirements and to have 3,000 units of finished goods on ha

> Kirkland Ltd. estimates sales for the second quarter of 2020 will be as follows: Prepare a raw materials purchase budget in dollars. April …………… 2,550 units May ……………. 2,475 units June ………….. 2,390 units The target ending inventory of finished products

> The budget committee of Ridder Company collects the following data for its Westwood Store in preparing budgeted income statements for July and August 2020: Prepare purchases and income statement budgets for a merchandiser. 1. The store expects sales for

> The controller of Harrington Company estimates sales and production for the first four months of 2020 as follows: Prepare a cash budget for a quarter. Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the month of the sale

> Montreal Inc. manufactures garden hoses for large stores. The standard costs for a dozen garden hoses are as follows: Calculate variances. Direct materials …………â€

> Martelle Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $250,000, would have a useful life of nine years and zero salvage value, and would result in net annual cash flows of

> Toronto Manufacturing Company uses a standard cost system. John Robert, a financial analyst for Toronto Manufacturing Company, has been given information with respect to standard cost variances for one of the plants. These variances are given below. Calc

> Fayman Manufacturing Company uses standard costs with its job-order cost accounting system. In January, an order (Job 84) was received for 5,500 units of product D. The standard cost of one unit of product D is as follows: Journalize and post standard co

> Pointe Claire Company applies overhead based on direct labour hours. Two direct labour hours are required for each unit of product. Planned production for the period was set at 9,000 units. Manufacturing overhead is budgeted at $135,000 for the period (2

> Hi-Tek Labs performs steroid testing services for colleges and universities. Because the company works only with educational institutions, the price of each test is strictly regulated. Therefore, the costs incurred must be carefully monitored and control

> Crede Manufacturing Company uses a standard cost accounting system. In 2020, 28,000 units were produced. Each unit took several kilograms of direct materials and 1.6 standard hours of direct labour at a standard hourly rate of $12. Normal capacity was 50

> You have been given the following information about ALG Co. Ltd., which uses a standard cost system in accounting for its one product: Calculate various amounts from standard costs and variances. 1. In the month of November 2020, 5,000 units were produce

> Kohler Clothiers manufactures women’s business suits. The company uses a standard cost accounting system. In March 2020, 15,700 suits were made. The following standard and actual cost data applied to the month of March when normal capac

> Under a contract with the provincial government, ChemLabs Ltd. analyzes the chemical and bacterial composition of well water in various municipalities in the interior of British Columbia. The contract price is $25.20 per test performed. The normal volume

> Soriano Manufacturing Company uses a standard cost accounting system to account for the manufacturing of exhaust fans. In July 2020, it accumulates the following data for 1,500 units started and finished: Calculate variances and prepare an income stateme

> Inman Corporation manufactures a single product. The standard cost per unit of product is as follows: Calculate variances. Direct materials—2 kg of plastic at $5 per kilogram ………………… $10.00 Direct labour—2 hours at $12 per hour …………………………………… 24.00 Vari

> Jonczyk Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $395,000, has an expected useful life of 10 years and a salvage value of zero, and is expected to increase net annual cash flows by $70,00

> You have been given the following information about the production of Gamma Co., and are asked to provide the plant manager with information for a meeting with the vice-president of operations: Determine amounts from the variance report. ………………………………………

> Doggone Groomers is in the dog-grooming business. Its operating costs are described by these formulas: Prepare a flexible budget report; compare flexible and static budgets. Grooming supplies (variable) y = $0 + $4.00x Direct labour (variable) y = $0 +

> High Arctic Manufacturing Company produces one product, Kebo. Because of wide fluctuations in the demand for Kebo, the assembly department has significant variations in its monthly production levels. Prepare a flexible budget, budget report, and graph fo

> Kitchen Care Inc. (KCI) is a manufacturer of toaster ovens. To improve control over operations, the president of KCI wants to begin using a flexible budgeting system, rather than use only the current master budget. The following data are available for KC

> Alcore Company estimates that 240,000 direct labour hours will be worked in the assembly department during 2020. Based on that, the following budgeted manufacturing overhead data are calculated: Prepare a flexible budget and a budget report for manufactu

> Greish Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants have provided the following data: Prepare sales, production, direct materials, direct labour, and income statement budgets. An accounting assistant

> The budget committee of Urbina Company has collected the following data for its Eastwood Store in preparing budgeted income statements for July and August 2020. Prepare purchases and income statement budgets for a merchandiser. 1. Expected sales: July $4

> Raymond Co. began operations in January 2019. The information below is for Raymond Co.'s operations for the three months from January to March (the first quarter) of 2020: Prepare a cash budget. Expenses for Quarter 1 Depreciation …

> Nigh Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: Prepare cash budget for two months. All sales are on account. The company expects collections to be 60% in the month of sale, 30% in the first mon

> Michener Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $200,000 and has an estimated useful life of eight years with zero salvage value. Management estimates that the new bottling machine will provide

> Steelwall Inc. uses the return on investment as a performance measure and defines investment as the average operating assets. The company bases management bonuses in part on the ROI and expects all investments to earn a minimum rate of return of 18%. Cal

> Health Care Inc. (HCI) uses a flexible budgeting system, rather than only the current master budget. The following data are available for HCI's expected costs at production levels of 100,000, 110,000, and 120,000 units: Prepare a flexible budget report f

> Return on investment is often expressed as follows: Compare and contrast performances under ROI and residual income. Instructions a. Explain the advantages of breaking down the ROI calculation into two separate components. b. 1.Comparative data on three

> Kappa Company has three divisions: A, B, and C. Each year the vice-president incharge of the best-performing division is entitled to a sizeable bonus. The results for the year are now in and each vice-president has claimed that the bonus should be his or

> Northern Pride Inc., a diversified company, operates four departments. The company has collected the following departmental information for 2020: Calculate ROI and residual income and rank department performances. Instructions a. Rank the four departme

> South division had the following results for the year just ended: Compare ROI and residual income with supporting calculations. South is considering a new product line that would involve the following: South's parent company, Globe Inc., has a compan

> Alosio Manufacturing Company manufactures a variety of tools and industrial equipment. The company operates three divisions. Each division is an investment centre. Operating data for the home division for the year ended December 31, 2020, and relevant bu

> Henning Manufacturing Ltd. operates its patio furniture division as a profit centre. Operating data for this division for the year ended December 31, 2020, are as follows: Prepare a responsibility report for a profit centre. In addition, Henning Manufa

> Yaeger Company uses budgets in controlling costs. The company based the monthly budget amounts in the report on an expected production of 60,000 units per month or 720,000 units per year. The assembling department manager is pleased with the report and e

> The controller of Kari Company estimates sales and production for the first four months of 2020 as follows: Prepare a cash budget for a month. January … February … March … April Sales $40,000 … $50,000 … $60,000 … $35,000 Production in units 2,000 …

> Timo Corporation, which operates an amusement park, is considering a capital investment in a new ride. The ride would cost $136,000 and have an estimated useful life of five years. The park will sell it for $65,000 at that time. (Amusement parks need to

> Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and creditors. Using that rate, Waterways then uses different methods to determi

> Raddington Inc. makes and sells chairs. The controller is responsible for preparing the master budget and has accumulated the following information for 2020: Prepare production and direct labour budgets. Raddington Inc. has a labour contract that calls

> Vergados Brothers is trying to estimate the amount of inventory it needs to purchase next month (April). The controller likes to have twice the number of units he expects to sell on hand at the beginning of the month. He always takes the 3/10, net 30 pur

> Azim Shirts Inc. manufactures sweatshirts for large stores. The standard costs for a dozen sweatshirts are: Calculate variances and prepare journal entries. Direct materials ………â€&br

> Berman Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,950 units of product B was received. The standard cost of one unit of product B is as follows: Journalize and post standard cost ent

> Finley Manufacturing Corporation accumulates the following data for jobs started and finished during the month of June 2020: Calculate variances and prepare an income statement. Overhead is applied based on standard machine hours. Three hours of machin

> Service Farm Labs Inc. provides mad cow disease testing for both provincial and federal government agriculture agencies. Because the company’s customers are government agencies, prices are strictly regulated. Farm Labs must therefore constantly monitor a

> The Multi-Tool Manufacturing Company uses a standard cost system. Stéphanie Roget, a financial analyst for Multi-Tool Manufacturing Company, has been given information with respect to standard cost variances for one of the plants. These variances are giv

> Biotech Inc. applies overhead based on direct labour hours. Three direct labour hours are required for each unit of product. Planned production for the period was set at 8,100 units. Manufacturing overhead is budgeted at $405,000 for the period (30% of t

> You have been given the following information about the production of Theta Co. and are asked to provide the plant manager with information for a meeting with the vice-president of operations: Determine amounts from the variance report. â€&br

> Ronaldo Manufacturing Company uses a standard cost system in accounting for the cost of one of its products. The budgeted monthly production is 1,750 units per month. The standard direct labour cost is 15 hours per unit at $5 per hour. The budgeted cost

> Nien Company accumulates the following data for a proposed capital investment: cash cost, $215,000; net annual cash flows, $40,000; present value factor of cash inflows for 10 years, 5.65 (rounded). Determine the net present value, and indicate whether t

> Harbaugh Manufacturing company uses a standard cost accounting system. In 2020, 45,000 units were produced. Each unit took several kilograms of direct materials and two standard hours of direct labour at a standard hourly rate of $12. Normal capacity wa

> Milberg Co. uses absorption costing and standard costing to improve cost control. Calculate variances. In 2020, the total budgeted overhead rate was $1.55 per direct labour hour. When preparing the budget, Milberg expected a monthly activity level of 10,

> Sasha Clothiers is a small company that manufactures oversize suits. The company uses a standard cost accounting system. In May 2020, it produced 11,200 suits. Calculate variances and identify significant variances. The following standard and actual cost

> Ranier Corporation manufactures a single product. The standard cost per unit of the product is shown below: Calculate variances. Direct materials—1.5 kg of plastic at $8 per kilogram ………….. $12.00 Direct labour—2 hours at $15 per hour ………………………………... 30

> Finesse Company manufactures tablecloths. Sales have grown rapidly over the past two years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget

> Oakley Company estimates that 360,000 direct labour hours will be worked in the packaging department during 2020. Based on that, it has calculated the following budgeted manufacturing overhead cost data for the year. Prepare a flexible budget and budget

> Return on investment is often expressed as follows: Compare and contrast performances under ROI and residual income. Instructions a. Explain the advantages of breaking down the ROI calculation into two separate components. 1. Comparative data on three c

> The Big Boy Company is in a seasonal business and prepares quarterly budgets. Its fiscal year runs from July 1 through June 30. Production occurs only in the first quarter (July to September), but sales take place throughout the year. The sales forecast

> The following data are for the operations of Zoë's Fashion Footwear Ltd., a retail store: Prepare a merchandise purchases budget and a budgeted income statement. 1. Sales Forecast—2020 April …………………. $70,000 May …………………… 60,000 June …………………. 80,000 July

> Litwin Industries had sales in 2019 of $5.6 million (800,000 units) and a gross profit of $1,344,000. Management is considering two alternative budget plans to increase its gross profit in 2020. Prepare sales and production budgets and calculate the cost

> Mega Company is considering the purchase of a new machine. The invoice price of the machine is $75,000, freight charges are estimated to be $4,000, and installation costs are expected to be $6,000. The annual cost savings are expected to be $20,000 for 1

> Quinn Ltd. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants provide the following data: Prepare sales, production, direct materials, direct labour, and income statement budgets.. An accounting assistant has p

> Wahlen Farm Supply Company manufactures and sells a pesticide called Basic II. The following data are available for preparing budgets for Basic II for the first two quarters of 2020. Prepare a budgeted income statement and supporting budgets. 1. Sales: Q

> Platteville Eye Clinic is considering investing in new optical-scanning equipment. It has two options: Option A would have an initial lower cost but would require a significant expenditure for rebuilding after three years. Option B would require no rebui

> ICA Corporation is reviewing an investment proposal. The schedule below presents the initial cost and estimates of the investment’s book value at the end of each year, the net cash flows for each year, and the net income for each year.

> Aqua Tech Testing is considering investing in a new testing device. It has two options. Option A would have an initial lower cost but would require a significant expenditure for rebuilding after five years. Option B would require no rebuilding expenditur

> Benjamin Corp. is thinking about opening a hockey camp in Barrie, Ontario. In order to start the camp, the company would need to purchase land and build four ice rinks and a dormitory-type sleeping and dining facility to house 110 players. Each year, the

> The Fort McMurchy Sanitation Company is considering the purchase of a garbage truck. The $77,000 price tag for a new truck would represent a major expenditure for the company. Kalia Vang, owner of the company, has compiled the following estimates in tryi

> Vorteck Inc. manufactures snowsuits. Vorteck is considering purchasing a new sewing machine at a cost of $2.5 million. Its existing machine was purchased five years ago at a price of $1.8 million, and six months ago Vorteck spent $55,000 to keep it opera

> A company currently sells 850,000 units per year of a product to one customer at a price of $0.80 per unit. The customer requires that the product be exclusive and expects no increase in sales during the next year. The product is manufactured with a mach

> K&M International is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Depreciation is $20,000 per year for the old equipmen

> Pagley Company’s standard labour cost of producing one unit of product DD is four hours at the rate of $12.00 per hour. During August, 40,800 hours of labour are incurred at a cost of $12.10 per hour to produce 10,000 units of product DD. Calculate labou

> Biotec Inc. wants to replace its R&D equipment with new high-tech equipment. The existing equipment was purchased five years ago at a cost of $150,000. At that time, the equipment had an expected life of 10 years, with no expected salvage value. The equi