Question: Deere & Company (DE) manufactures and distributes

> Hannon Retailing Company prices its products by adding 30% to its cost. Hannon anticipates sales of $715,000 in July, $728,000 in August, and $624,000 in September. Hannon’s policy is to have on hand enough inventory at the end of the month to cover 25%

> When compared to static budgets, flexible budgets: a. offer managers a more realistic comparison of budgeted and actual fixed cost items under their control. b. provide a better understanding of the capacity (volume) variances during the period being eva

> Bethany Company has just completed the first month of producing a new product but has not yet shipped any of this product. The product incurred variable manufacturing costs of $5,000,000, fixed manufacturing costs of $2,000,000, variable marketing costs

> Mill Corporation had the following unit costs for the recent calendar year: Inventory for Mill’s sole product totaled 6,000 units on January 1 and 5,200 units on December 31. When compared to variable costing income, Millâ€&

> Chassen Company, a cracker and cookie manufacturer, has the following unit costs for the month of June: Variable manufacturing cost ………………. $5.00 Variable marketing cost ………………………. 3.50 Fixed manufacturing cost …………………… 2.00 Fixed marketing cost ……………………

> Data for the last fiscal year for Merlene Company are as follows: *Denominator level of activity is 750 units for the year Actual selling and administrative costs equaled the budgeted amount, and there were no work in process inventories at the end of t

> Eagle Brand Inc. produces two products as follows: Eagle Brand has 1,000 lbs. of raw materials that can be used to produce Products X and Y. Which of the following alternatives should Eagle Brand accept to maximize the contribution margin? a. 100 units

> Bolger and Co. manufactures large gaskets for the turbine industry. Bolger’s per-unit sales price and variable costs for the current year are as follows: Sales price per unit …………………… $300 Variable costs per unit ………………… 210 Bolger’s total fixed costs ag

> Kimber Company has the following unit costs for the current year: Raw materials ……………………….…………….. $20.00 Direct labor …………………….…………………….. 25.00 Variable manufacturing overhead …………... 10.00 Fixed manufacturing overhead …….……….… 15.00 Total unit cost …………

> Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for the upcoming year. Past trends have indicated the following dollars were spent at three different levels of output: In establishing a budget for 14,000 uni

> How are strategic objectives and strategic initiatives different? How are they related?

> Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in 1,000-gallon drums for $2,000. Processing costs are $3,000 to process the 1,000 gallons of Duo into 800 gallons of Big and 200 gallons of Mini. The selling price is

> Breegle Company produces three products (B-40, J-60, and H-102) from a single process. Breegle uses the physical volume method to allocate joint costs of $22,500 per batch to the products. Based on the following information, which product(s) should Breeg

> Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support depart

> Logo Inc. has two data services departments (Systems and Facilities) that provide support to the company’s three production departments (Machining, Assembly, and Finishing). The overhead costs of the Systems Department are allocated to

> Cynthia Rogers, the cost accountant for Sanford Manufacturing, is preparing a management report that must include an allocation of overhead. The budgeted overhead for each department and the data for one job are as follows: Using the departmental overhe

> Young Company is beginning operations and is considering three alternatives to allocate manufacturing overhead to individual units produced. Young can use a plantwide rate, departmental rates, or activity-based costing. Young will produce many types of p

> The Chocolate Baker specializes in chocolate baked goods. The firm has long assessed the profitability of a product line by comparing revenues to the cost of goods sold. However, Barry White, the firm’s new accountant, wants to use an a

> Pelder Products Company manufactures two types of engineering diagnostic equipment used in construction. The two products are based upon different technologies, X-ray and ultrasound, but are manufactured in the same factory. Pelder has computed the manuf

> A company is using process costing with the first-in, first-out (FIFO) method, and all costs are added evenly throughout the manufacturing process. If there are 5,000 units in beginning work in process inventory (30% complete), 10,000 units in ending wor

> Kimbeth Manufacturing uses a process cost system to manufacture dust density sensors for the mining industry. The following information pertains to operations for the month of May: The beginning inventory was 60% complete for materials and 20% complete

> What is the purpose of the performance perspectives of a balanced scorecard?

> Jones Corporation uses a first-in, first-out (FIFO) process cost system. Jones has the following unit information for the month of August: The equivalent units of production for conversion costs for the month of August were: a. 87,300 units. b. 88,000 u

> During December, Krause Chemical Company had the following selected data concerning the manufacture of Xyzine, an industrial cleaner: All materials are added at the beginning of processing in this department, and conversion costs are added uniformly dur

> Patterson Corporation expects to incur $70,000 of factory overhead and $60,000 of general and administrative costs next year. Direct labor costs at $5 per hour are expected to total $50,000. If factory overhead is to be applied per direct labor hour, how

> Lucy Sportswear manufactures a specialty line of T-shirts using a job order cost system. During March, the following costs were incurred in completing Job ICU2: direct materials, $13,700; direct labor, $4,800; administrative, $1,400; and selling, $5,600.

> John Sheng, a cost accountant at Starlet Company, is developing departmental factory overhead application rates for the company’s Tooling and Fabricating departments. The budgeted overhead for each department and the data for one job ar

> Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: Direc

> Quetzal Inc. is a manufacturer of after-market parts for automobiles. The company has 23 support departments that provide services for 55 production departments. Quetzal management is looking to revamp the company’s outdated cost accounting system and is

> Gigabody, Inc., a nutritional supplement manufacturer, produces five lines of protein supplements. Each product line is managed separately by a senior-level product engineer who is evaluated, in part, based on his or her ability to keep costs low. The fi

> The fundamental concept behind strategic performance measurement systems is that an organization’s strategy can be represented by a set of performance measures. This basic concept of representing a complex idea (like strategy) with something more tangibl

> Young Manufacturing Company is a startup manufacturing firm looking to build and develop its balanced scorecard. Gunner Young, the company owner, has told you the following: Our company was built on the shoulders of our hard-working, diligent employees.

> What is the difference between a leading indicator and a lagging indicator?

> Blake & McKenzie Tax Services is a company serving 72 clients (as of the beginning of last month) that is working on reorganizing its balanced scorecard. Currently, the company has the following performance metrics: online client satisfaction rating, cli

> Biases like motivated reasoning and surrogation are very prevalent in the business world. Managers are often compensated and evaluated based on performance measures such as production costs and profit margin. Hence, when subjective decisions need to be m

> MGM Holdings (MGMB) operates Metro-Goldwyn-Mayer Studios Inc. and is a major producer and distributor of movie and television filmed entertainment. Regarding movies (films), MGM states, “Our feature films are exploited through a series of sequential dome

> CEO, Worthington Industries (WOR) (a high-technology steel company): “We try to find the best technology, stay ahead of the competition, and serve the customer. . . . We’ll make any investment that will pay back quickly … but if it is something that we r

> Some cost problems have been identified in the Assembly Department of Schumann Electronics Co., a consumer electronics company. The department’s budget performance report for the last quarter follows: The performance reports from the P

> In teams, find the website of a state that interests you. The web address may be of the form www.statename.gov or similar. For example, the website for the state of Ohio can be found at www.Ohio.gov. At the site’s home page, search for links to the state

> Bon Jager Inc. manufactures and sells medical devices used in cardiovascular surgery. The sales team consists of two salespeople, Dean and Martin. A contribution margin report by salesperson was prepared as follows: Write a brief memo to Anna Berenson,

> BendOR, Inc., manufactures control panels for the electronics industry and has just completed its first year of operations. The following discussion took place between the controller, Gordon Merrick, and the company president, Matt McCray: Matt: I’ve bee

> The Southern Division manager of Texcaliber Inc. is growing concerned that the division will not be able to meet its current period income objectives. The division uses absorption costing for internal profit reporting and had an appropriate level of inve

> Edward Seymour is a financial consultant to Cornish Inc., a real estate syndicate. Cornish finances and develops commercial real estate (office buildings) projects. The completed projects are then sold as limited partnership interests to individual inves

> How can the balanced scorecard be used to address CSR objectives?

> Somerset Inc. has finished a new video game, Snowboard Challenge. Management is now considering its marketing strategies. The following information is available: Two managers, James Hamilton and Thomas Seymour, had the following discussion of ways to in

> Timpanogos Clinical Laboratories Inc. manufactures two products: Mackalite and Jemmerite. These two products go through a joint production process costing $260,000 in materials, labor, and overhead. Though the production process is inseparable for both p

> Sunrise Suites and Nationwide Inns operate competing hotel chains across the region. Hotel capacity information for both hotels is as follows: Information on the number of guests for each hotel and the average length of visit for June were as follows:

> A recent annual report of Hilton Worldwide Holdings Inc. (HLT) and Marriott International Inc. (MAR) provided the following occupancy data for two recent years: a. Is the change in the occupancy rate favorable or unfavorable for Hilton Hotels? b. Is the

> Comfort Plus, Inc., has a hotel with 300 rooms in a metropolitan city. Its main competitor, Connors Hotel, has a hotel with 350 rooms in the same city. The following operating data are available for April for the two hotels: a. Determine the guest night

> Financial information for Apple Inc. (AAPL), The Coca-Cola Company (KO), and Verizon Communications (VZ) follows (in millions): a. Compute the free cash flow for each company. b. Compute the ratio of free cash flow to sales for each company. Round to on

> Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Best Buy Co., Inc. (BBY) is a leading retailer of consumer electronics and media products in the United States, while Wal-Mart Stores, Inc. (WMT) is the leading retailer in th

> Green Manufacturing is a traditional manufacturing company located in the midwestern United States. The company’s operations manager is developing a strategy to become more CSR-oriented. In an effort to evaluate possible areas where CSR

> Boxwood Company is a wholesale plant nursery that is considering implementing two CSR initiatives. Information about these initiatives is summarized as follows: Replace old greenhouse fans with new energy-efficient fans: Old greenhouse fan electricity co

> How does a strategic performance measurement system improve upon an ordinary performance measurement system?

> Den-Tex Company is evaluating a proposal to replace its HID (high intensity discharge) lighting with LED (light emitting diode) lighting throughout its warehouse. LED lighting consumes less power and lasts longer than HID lighting for similar performance

> Northern Highlands Hospital is evaluating its admissions process by measuring the time elapsed between patient check-in and arrival in the clinical area. The present process involves a patient checking in at a centralized area and providing information t

> Assume Home Garden Inc. in MAD 12-5 assigns the following probabilities to the estimated construction cost of the warehouse and annual net cash flows: a. Compute the expected value of the construction cost. b. Compute the expected value of the annual ne

> Home Garden Inc. is considering the construction of a distribution warehouse in West Virginia to service its east coast stores based on the following estimates: Construction cost of warehouse ……. $20,000,000 to $25,000,000 Residual value …………………………………………

> Assume Boulder Creek Industries in MAD 12-3 assigns the following probabilities to the estimated annual net cash flows: a. Compute the expected value of the annual net cash flows. b. Determine the expected net present value of the equipment, assuming a

> Boulder Creek Industries is considering an investment in equipment based on the following estimates: Cost of equipment …… $3,000,000 Residual value …………….. 200,000 Useful life ……………………. 10 years a. Determine the net present value of the equipment, assumi

> Assume San Lucas Corporation in MAD 12-1 assigns the following probabilities to the estimated annual net cash flows: a. Compute the expected value of the annual net cash flows. b. Determine the expected net present value of the equipment, assuming a des

> San Lucas Corporation is considering investment in robotic machinery based upon the following estimates: Cost of robotic machinery ……….. $4,000,000 Residual value …………………………….. 300,000 Useful life ……………………………………. 10 years a. Determine the net present val

> Pacific Airways provides air travel services between Los Angeles and Seattle. Cost information per flight is as follows: Each flight has a capacity of 150 seats, with an average of 125 seats sold per flight at an average ticket price of $180. Assume Pac

> McDonald’s Corporation (MCD) operates company-owned and franchised restaurants in over 100 countries. The company operates primarily as a franchisor with approximately 85% of its current restaurants operated by franchisees. McDonald&aci

> A chemical company has a commodity-grade and premium-grade product. Why might the company elect to process the commodity-grade product further to the premium-grade product?

> Compare Panera Bread (PNRA) and Papa John’s (PZZA) using your computations from MAD 10-2 and MAD 10-3. MAD 10-2: United States and Canada and serves over 9 million customers per week. Panera’s operations are divided i

> Papa John’s International, Inc. (PZZA), operates over 5,000 restaurants in the United States and 45 countries. The company operates primarily as a franchisor with 4,353 franchised restaurants and 744 company-operated restaurants. Recent

> United States and Canada and serves over 9 million customers per week. Panera’s operations are divided into the following segments: â–ª Company-Operated Bakery-Cafes â–ª Franchised Bakery-Cafes â&#1

> Kelly Kitchens operates both franchised and company-operated restaurants under the brand name Kelly Kitchens. Operating income, sales, and invested assets for both segments are provided as follows: a. Determine the profit margin for company-operated and

> Advent Software uses standards to manage the cost of the programming staff. There are two programmer levels, Level 1 and Level 2. Level 1 programmers normally work on the easier projects. Level 1 and Level 2 programmers are paid $25 and $35 per hour, res

> Johnson Stores is planning its staffing for the upcoming holiday season. From past history, the store determines that it needs one additional sales clerk for each $12,000 in daily sales. The average daily sales is anticipated to increase by $96,000 from

> Segment disclosure by Apple Inc. (AAPL) provides sales information for its major product lines for three recent years as follows (in millions): The Services segment includes sales from iTunes Store, App Store, Mac App Store, TV App Store, iBooks Store,

> The Walt Disney Company (DIS) is a leading worldwide entertainment company. Disney operates four business segments. These segments and some of their larger businesses are: â–ª Media Networks: ABC Network, ESPN, Disney Channel, and A&E

> Yum! Brands, Inc. (YUM) is a worldwide operator and franchisor of fast-food restaurants, under the familiar brands of KFC, Pizza Hut, and Taco Bell. Segment revenues, operating income, and depreciation and amortization expense for Yum!’

> Comcast Corporation (CMCSA) is a global media and entertainment company with operations divided into five major segments: â–ª Cable Communications (XFINITY) â–ª Cable Networks (USA Network, Syfy, E!, CNBC, others) â&

> (a) Explain how return on investment might lead a divisional manager to reject new investments that could be profitable for the company as a whole. (b) How can this disadvantage be overcome?

> How do the multiple production department and the single plantwide factory overhead rate methods differ?

> Global Air is considering a new flight between Atlanta and Los Angeles. The average fare per seat for the flight is $760. The costs associated with the flight are as follows: The airline estimates that the flight will sell 175 seats. a. Determine the br

> William’s Ball & Jersey Shop is a small athletic products company currently trying to determine cost allocations. Accurate costing numbers are important but not crucial; no employee bonuses depend on them, and the company wants to k

> Joyous Julius, Inc., is a large retail chain that has grown quickly thanks to its successful leveraging of homemade-style orange julius. The company would like to narrow down the number of flavors it offers to three. Joyous Julius, Inc., currently produc

> Horsepower Hookup, Inc., is a large automobile company that specializes in the production of high-powered trucks. The company is determining cost allocations for purposes of performance evaluation. A portion of company bonuses depends on divisions achiev

> Milkrageous, Inc., a large, private dairy products company, is determining cost allocations for performance evaluation purposes. Company bonuses are based on cost containment, so accurate costing numbers are imperative. The general managers (GMs) over th

> Life Force Fitness, Inc., assembles and sells treadmills. Activity-based product information for each treadmill is as follows: All of the activity costs are related to labor. Management must remove $2.00 of activity cost from the product in order to rem

> Dura-Conduit Corporation manufactures plastic conduit that is used in the cable industry. A conduit is a tube that encircles and protects the underground cable. In the process for making the plastic conduit, called extrusion, the melted plastic (resin) i

> Antolini Enterprises produces men’s sports coats that are sold by popular department stores. Each retail order is treated as a job that accumulates materials, labor, and overhead costs for a batch of sports coats. Management has obtaine

> Valley Hospital measures the in-patient occupancy of the hospital by determining the number of patient days divided by the number of available bed days in the hospital for a time period. The following in-patient data are available for the months of April

> Rosie’s Roses produces three colors of roses: red, white, and peach. The roses are produced jointly in the same garden, and aggregately cost a total of $110 per harvest. One harvest produces 80 red roses, 70 white roses, and 50 peach roses. Rosie also no

> At the end of the period, the factory overhead account has a credit balance of $10,000. (a) Is the total factory cost variance favorable or unfavorable? (b) Are the controllable and volume variances favorable or unfavorable?

> A partial list of The Grand Hotel’s costs follows: a. Advertising in local newspaper b. Bedding (sheets, blankets, pillows) c. Bellhop wages d. Champagne for special guest packages e. Coffee and tea for rooms f. Cost of customer surveys g. Depreciation o

> The following is a list of costs incurred by several manufacturing companies: a. Bonus for vice president of marketing b. Costs of operating a research laboratory c. Cost of unprocessed milk for a dairy d. Depreciation of factory equipment e. Entertainme

> Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the

> Eye Swear Inc. has a balanced scorecard that includes the following relationships: Actual results for this year and last year are as follows: Instructions: 1. Analyze these statistics to verify whether they support the expected relationships between th

> Blue Skies Inc. is a retail gardening company that is piloting a new strategic initiative aimed at increasing gross profit. Currently, the company’s gross profit is 25% of sales, and its target gross profit percentage is 30%. The company’s current monthl

> 1. Based on the balanced scorecard and the following descriptions of the predicted relationships between strategic objectives, draw the scorecard’s strategy map. a. Training employees effectively and reducing employee turnover can both

> J. Burns Motorcycle Company manufactures a variety of motorcycles. J. Burns’s purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by

> A condensed income statement for the Electronics Division of Gihbli Industries Inc. for the year ended December 31, 20Y9, is as follows: Assume that the Electronics Division received no allocations from support departments. The president of Gihbli Indus

> Newport Inc. gathered the following data for use in developing the budgets for the first quarter (June, July, August) of its fiscal year: a. Estimated sales at $36 per unit: June ………â&#128

> Kimbrell Inc. manufactures three sizes of utility tables—small (S), medium (M), and large (L). The income statement has consistently indicated a net loss for the M size, and management is considering three proposals: (1) continue Size M

> How does software aid firms in the budgeting process?

> Pachec Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended June 30 are as follows: Instructions: 1. Prepare a table indicating contribution