Question: Dominic & Sons buys T-shirts in bulk,

> Tasty, Inc., is a producer of potato chips. A single production process at Tasty, Inc., yields potato chips as the main product and a byproduct that can also be sold as a snack. Both products are fully processed by the splitoff point, and there are no se

> Illinois Soy Products (ISP) buys soy- beans and processes them into other soy products. Each ton of soybeans that ISP purchases for $340 can be converted for an additional $190 into 575 pounds of soy meal and 160 gallons of soy oil. A pound of soy meal c

> Fancy Foods produces two types of microwavable products: beef-flavored ramen and shrimp-flavored ramen. The two products share common inputs such as noodle and spices. The production of ramen results in a waste product referred to as stock, which Fancy d

> Sinclair Oil & Gas, a large energy conglomerate, jointly processes purchased hydrocarbons to generate three nonsalable intermediate products: ICR8, ING4, and XGE3. These intermediate products are further processed separately to produce crude oil, nat

> The KZee Company operates a simple chemical process to convert a single material into three separate items, referred to here as A, B, andC. All three end products are separated simultaneously at a single splitoff point. Products A and B are ready for sal

> Stenback Company is one of the world’s leading corn refiners. It produces two joint products—corn syrup and corn starch—using a common production process. In July 2020, Stenback reported the following

> Quality Chicken is computing the ending inventory values for its July 31, 2020, balance sheet. Ending inventory amounts on July 31 are 15 pounds of breasts, 4 pounds of wings, 6 pounds of thighs, 5 pounds of bones, and 2 pounds of feathers. Quality Chick

> Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2020 follows: Joint cost of production in July 2020 was $50. A special shipment of 40 pounds of breasts and 15 p

> Hall Auto Sales uses all types of media to advertise its products (television, radio, newspaper, and so on). At the end of 2019, the company president, Tina Hall, decided that all advertising costs would be incurred by corporate headquarters and allocate

> Vortex Consulting has issued a report recommending changes for its newest high-tech manufacturing client, Precision Instruments. Precision currently manufactures a single product, a surgical robot that is sold and distributed internationally. The report

> 16. Which of the following is not correct regarding variable costs and fixed costs. a. Variable costs change in proportion to changes in the related level of activity while fixed costs remain unchanged irrespective of the level of activity within the rel

> Essence Company blends and sells designer fragrances. It has a Men’s Fragrances Division and a Women’s Fragrances Division, each with different sales strategies, distribution channels, and product offerings. Essence is

> E-books, an online book retailer, has two operating departments— corporate sales and consumer sales—and two support departments—human resources and information sys- tems. Each sales department conduct

> Refer to the data given in Exercise 16-19. Required 1. Allocate the two support departments’ costs to the two operating departments using the reciprocal method. Use (a) linear equations and (b) repeated iterations. 2. Compare and explain differences i

> Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments—administrative services (AS) and information systems (IS)—and two operating departments&

> Ebbelly Transport Services is a trucking business in the United States. The company has two divisions (Loading and Off-loading) and uses the dual-rate method for allocating trucking costs to each round-trip to both divisions. At the start of 2019, the bu

> Soda-King prepared the budget for 2020 assuming a 12.5% market share based on total sales in the western region of the Australia. The total soft drinks market was estimated to reach sales of 10 million cartons in the region. However, actual total sales v

> Soda-King manufactures and sells two soft drinks: Kola and Limor. Budgeted and actual results for 2020 are as follows: Required 1. Compute the total sales-volume variance, the total sales-mix variance, and the total sales-quantity variance. (Calculate a

> The Hiro Corporation sells two brands of wine glasses: Plain and Chic. Hiro provides the following information for sales in the month of June 2020: All variances are computed in contribution-margin terms. Required 1. Calculate the sales-quantity varianc

> Lofty Bread Ltd is a baking company that operates in Thailand. The company produces two types of bread—a full loaf and a mini loaf. A full loaf is 8 inches long and a mini loaf is 3 inches long. Each full loaf is sold for à&cedil

> Holbrook Corporation has three divisions: pulp, paper, and fibers. Holbrook’s new controller, Paul Weber, is reviewing the allocation of fixed corporate-overhead costs to the three divisions. He is presented with the following informati

> Taco Bell, a fast-food restaurant, incurs the following costs: a. Cost of oil for the deep fryer b. Wages of the counter help who give customers the food they order c. Cost of tortillas and lettuce d. Cost of salsa packets given away with customer orders

> Martini Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a 300-room hotel, a casino, and a restaurant. As Martini’s new controller, your manager asks you to recommend the basis the hotel should use

> Blueback Manufacturing has four divisions named after its locations: China, Cambodia, Bangladesh, and India. Corporate headquarters is in Minnesota. Blueback corporate headquarters incurs $8,400,000 per period, which is an indirect cost of the divisions.

> HQ Drugs is a distributor of pharmaceutical products. Its ABC system has five activities: Rick Flair, the controller of HQ Drugs, wants to use this ABC system to examine individual customer profit- ability within each distribution market. He focuses firs

> Lapworth County Council has been awarded the office window cleaning contract against competition from private firms. The contract price is $6.20 per of- fice window and budget and actual results for first quarter are as follows: Required 1. Calculate th

> Enviro-Tech has only two retail and two whole- sale customers. Information relating to each customer for 2020 follows (in thousands): Enviro-Tech’s annual distribution-channel costs are $33 million for wholesale customers and $12 millio

> Dave Meltzer vacationed at Lake Tahoe last winter. Unfortunately, he broke his ankle while skiing and spent 2 days at the Sierra University Hospital. Meltzer’s insurance company received a $4,800 bill for his 2-day stay. One item that c

> Fun Stay Express operates a 100-room hotel near a busy amusement park. During June, a 30-day month, Fun Stay Express experienced a 65% occupancy rate from Monday evening through Thursday evening (weeknights). On Friday through Sunday evenings (weekend ni

> Jurgensen Manufacturing, Inc., plans to develop a new industrial-powered vacuum sweeper for household use that runs exclusively on rechargeable batteries. The product will take 6 months to design and test. The company expects the vacuum sweeper to sell 1

> TinRoof, Inc., manufactures and sells a do-it-your- self storage shed kit. In 2019, it reported the following: Required 1. What was TinRoof’s operating income in 2019? What was the full cost per unit? What was the selling price? What w

> John Branch is the managing partner of a business that has just finished building a 60-room motel. Branch anticipates that he will rent these rooms for 16,000 nights next year (or 16,000 room-nights). All rooms are similar and will rent for the same pric

> Pfizer, a pharmaceutical company, incurs the following costs: a. Payment of booth registration fee at a medical conference to promote new products to physicians b. Cost of redesigning an insulin syringe to make it less painful c. Cost of a toll-free tele

> Sun Systems provides energy audits in residential areas of southern Ohio. The energy audits provide information to homeowners on the benefits of solar energy. A consultant from Sun Systems educates the homeowner about federal and state rebates and tax cr

> Neuro Instruments uses a manufacturing costing system with one direct-cost category (direct materials) and three indirect-cost categories: a. Setup, production-order, and materials-handling costs that vary with the number of batches b. Manufacturing-oper

> Snappy Tiles is a small distributor of marble tiles. Snappy identifies its three major activities and cost pools as ordering, receiving and storage, and ship- ping, and it reports the following details for 2019: For 2019, Snappy buys 250,000 marble tiles

> Europa Associates prepares architectural drawings to conform to local structural-safety codes. Its income statement for 2020 is as follows: The percentage of time spent by professional staff on various activities follows: Assume administrative and suppor

> Refer to Exercise 13-29. Required 1. Calculate the amount and cost of unused architectural support capacity at the beginning of 2020, based on the number of jobs actually done in 2020. 2. Suppose Krater can add or reduce its architectural support capaci

> Suppose that during 2020, the market for architectural jobs increases by 10%. Assume that any increase in market share more than 10% and any decrease in selling price are the result of strategic choices by Krater’s management to implement its strategy. R

> Refer to Exercise 13-29. Required 1. Calculate the operating income of Krater Associates in 2019 and 2020. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020. 3. Comment on

> Krater Associates is an architectural firm that has been in practice only a few years. Because it is a relatively new firm, the market for the firm’s services is very competitive. To compete successfully, Krater must deliver quality ser

> Refer to Exercise 13-25. Required 1. Calculate the amount and cost of (a) unused manufacturing capacity and (b) unused selling and customer-service capacity at the beginning of 2020 based on actual production and actual number of customers served in 2

> Suppose that during 2020, the market for Methuen’s special-purpose machines grew by 3%. All increases in market share (that is, sales increases greater than 3%) are the result of Methuen’s strategic actions. Required Calculate how much of the change in

> Chocolat Inc. is a producer of premium chocolate based in Palo Alto. The company has a separate division for each of its two products: dark chocolate and milk chocolate. Chocolat purchases ingredients from Wisconsin for its dark chocolate division and fr

> Refer to Exercise 13-25. Required 1. Calculate the operating income of Methuen Corporation in 2019 and 2020. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020. 3. Comment o

> Methuen Corporation makes a special-purpose machine, D4H, used in the textile industry. Methuen has designed the D4H machine for 2020 to be distinct from its competitors. It has been generally regarded as a superior machine. Methuen presents the followin

> Refer to Exercise 13-21. Required 1. Calculate the amount and cost of unused administrative capacity at the beginning of 2020, based on the actual number of customers Dominic served in 2020. 2. Suppose Dominic can only add or reduce administrative capac

> Refer to Exercise 13-22. Suppose that the market for silk-screened T-shirts grew by 10% during 2020. All increases in sales greater than 10% are the result of Dominic’s strategic actions. Required Calculate the change in operating income from 2019 to 20

> Refer to Exercise 13-21. Required 1. Calculate Dominic’s operating income in both 2019 and 2020. 2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020. 3. Comment on your answe

> An analysis of Pineway’s operating-income changes between 2019 and 2020 shows the following: The industry market size for electric motors did not grow in 2020, input prices did not change, and Pineway reduced the prices of its motors. R

> Pineway Electric manufactures electric motors. It competes and plans to grow by selling high-quality motors at a low price and by delivering them to customers in a reasonable time after receiving customers’ orders. There are many other manufacturers who

> Papa’s Pizza is considering replacement of its pizza oven with a new, more energy-efficient model. Information related to the old and new pizza ovens follows: The old oven had been purchased a year ago. Papa’s Pizza es

> Rodeo Printers operates a printing press with a monthly capacity of 4,000 machine-hours. Rodeo has two main customers: Trent Corporation and Julie Corporation. Data on each customer for January are: Julie Corporation indicates that it wants Rodeo to do a

> The Ukraine power plant that services all manufacturing departments of CC Engineering has a budget for the coming year. This budget has been expressed in the following monthly terms: The expected monthly costs for operating the power plant during the bud

> LMTC Ltd manufactures PE clothes for primary schools in Northamptonshire, the United Kingdom. The company produces 30,000 units per academic session. The following is the cost per unit: It has been established that £16 of the overhead is fix

> The Pierce Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: Each cabinet sells for $70 and has direct material costs of $30 incurred at the start of the machining operation. Pierc

> Isochlorine is produced in a chemical process that is very threatening to the environment. As a result of this, the government has limited the yearly production. Company Soleil uses isochlorine to produce four cosmetic products A, B, C, and D. Soleil has

> Alpha Cables Ltd manufactures electric cables for households. The company has capacity to produce 16,000 units per month. However, the current plans call for monthly production and sales of 10,000 units at €15 each. Cost per unit are as

> Oscar Ltd manufactures small electrical parts in Hamburg, Germany. The company has a production capacity of 18,000 electrical units per year and the unit cost is as follows: The company’s accountant has established that 40% of the overh

> The Svenson Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBs in 2020 and the expecte

> The Gold Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to pro- duce 11,000 medals each month. Current production and sales are 10,000 medals per month. The company normally ch

> Edward Jingo runs a modern sawmill in Old Trafford, Manchester. The company received an order for its MIC wood for which the labor and machine time is available but requires three types of wood materials namely: Mahogany, Iroko, and Cedar (MIC). Mahogany

> Graham Douglas is a guard dog training business based in Coventry, the United Kingdom. The business trains and sells different breeds of guard dogs. The dogs are usually purchased from local dog breeders for £250 each. The cost of feeding ea

> Assume the same information for Blanda Brothers as in Problem 11-29. Due to increased competition among grocery stores, the cost to Blanda of selling a low-quality apple to the grocery store as an acceptable-quality apple is now $0.75 in- stead of $1.05

> Fresh Products, Inc. incurred the following costs during December related to the production of its 162,500 frozen ice cream cone specialty items: What is the December per-unit inventory cost allocated to the company’s frozen ice cream c

> Blanda Brothers is a produce processing company that specializes in fruits, with apple sales representing the majority of their revenue. Their main facility receives a daily shipment of apples, which are then sorted and shipped to grocery stores and to p

> Sun TV sells TV sets. It does not sell smart TVs so customers do not come to Sun TV if they want to purchase smart TVs. Sun TV wants to start selling smart TVs and will only sell smart TVs to customers to whom they advertise. Managers use customer inform

> An ROC curve plots the false positive rate (x-axis) against the true positive rate (y-axis) for different model thresholds. The graph below shows three different ROC curves labeled 1, 2, and 3. Required 1. Compare the curves labeled 1, 2, and 3 in the c

> Margo London is the management accountant at Norse Credit. Norse Credit spends a lot of time and resources trying to detect fraudulent activity within customers’ accounts. For most customers this is a low probability event. However, if

> Assume the same information for TelMark as in Exercise 11-24. A member of the data science team points out that overfitting is often an issue with decision trees. To avoid this issue, he suggests pruning the tree at depth 3 so that the third cut is not m

> TelMark Mobile Services provides mobile phone services to millions of customers in the U.S. TelMark’s customer base is constantly changing as old customers leave the service and new customers join. This is called churn and it is a very

> The data science team at Swift Investments uses a sample of 16 loans to build a decision tree that predicts whether a loan will repay or default. Although the data science team is very familiar with decision trees and other machine learning models, they

> Laurie Rech is a management accountant at Donnelly Bank, which has recently suffered significant loan losses. Rech and her team are worried that they do not fully understand the risk profile of their loans, so they would like some way of identifying loan

> Kevin Brown is the management accountant at Boehm and Sons Bank. Some of his colleagues attended a conference recently where they learned that machine learning can be used to accurately predict loan performance. Excited by the possibilities, they asked K

> Coronavirus disease (COVID-19) caused by a new virus results in respiratory illness (like the flu). The disease was first identified in December 2019 and has since spread globally, resulting in the coronavirus pandemic of 2020. The cost of health care in

> Use the information below to answer questions 15-16 and 15-17. Juliet Brazier is a Scottish firm which manufactures carpentry tools. The company uses standard ab- sorption costing system. The following information was recorded by the company for January

> Global Defender manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: Calculate the total variable costs of producing 2, 4, and 8 units.

> Mandy Knox is the new manager of the materials storeroom for Timken Manufacturing. Mandy has been asked to estimate future monthly purchase costs for part #696, used in two of Timken’s products. Mandy’s purchase cost a

> Lucy Hall owns a professional character business in a large metropolitan area. She hires local college students to play these characters at children’s parties and other events. Linda provides balloons, cupcakes, and punch. For a standar

> Carney Cabinets Ltd is a furniture manufacturing company with its factories located in six cities in the United Kingdom. The company has recently introduced an automated system, but management is still unsure of the best way to estimate the overhead cost

> Terry Lawler, managing director of the Little Rock Reviewers Company, is examining how overhead costs behave with changes in monthly professional labor-hours billed to clients. Assume the following historical data: Required 1. Compute the linear cost fu

> Lynda Donovan is examining customer-service costs in the southern region of Clement Products. Clement Products has more than 200 separate electrical products that are sold with a 6-month guarantee of full repair or replacement with a new product. When a

> FlyHigh Vacations offers helicopter service from suburban towns to Heathrow Airport in the United Kingdom. Each of its 10 helicopters makes between 1,000 and 2,000 round-trips per year. The records indicate that a helicopter that has made 1,000 round-tri

> Hamwey, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2020. Hamwey, Inc., produced 75,000 units of product in 2020. Hamwey’s manag

> Karil Teeze Building Ltd is an estate developer based in Laos. The company’s overhead costs fluctuate considerably from year to year according to the number of direct labor-hours worked in the various building sites. The business has th

> Given here are a number of graphs. The horizontal axis of each graph represents the units produced over the year, and the vertical axis represents total cost or revenues. Required Indicate by number which graph best fits the situation or item described

> Which of the following statements is/are true regarding the implementation of a balanced score- card in an organization? a. To sustain long-run financial performance, a company must strengthen all links across its different balanced scorecard perspective

> The Rolling Boulders Corporation operates car rental agencies at more than 20 airports. Customers can choose from one of three contracts for car rentals of one day or less: ■ Contract 1: £50 for the day ■ Contract 2: £30 for the day plus £0.20 per mile t

> Khan Sunil Enterprises, a soft- ware engineering firm, uses the account analysis approach to identify the cost behavior of production costs for its premium software. The following details relate to the company’s activities for June 2019

> Prepare an income statement under throughput costing for the year ended December 31, 2020 for Stenback Company. 2. Reconcile the difference between the contribution margin and the throughput margin for Stenback in 2020. Then reconcile the operating incom

> The Stenback Company uses an absorption-costing system based on standard costs. Variable manufacturing cost consists of direct material cost of $4 per unit and other variable manufacturing costs of $1.20 per unit. The standard production rate is 20 units

> Artesa, a leading firm in the semiconductor industry, produces digital integrated circuits (ICs) for the communications and defense markets. For the year ended December 31, 2020, Artesa sold 242,400 ICs at an average selling price of $47 per unit. The fo

> Thunder Bolt, Inc., is a manufacturer of the very popular G36 motor- cycles. The management at Thunder Bolt has recently adopted absorption costing and is debating which denominator-level concept to use. The G36 motorcycles sell for an average price of $

> Match each of the following numbered descriptions with one or more of the denominator-level capacity concepts by putting the appropriate letter(s) by each item: a. Theoretical capacity b. Practical capacity c. Normal capacity utilization d. Master-budget

> Smart Safety, a 3-year- old company, has been producing and selling a single type of bicycle helmet. Smart Safety uses standard costing. After reviewing the income statements for the first 3 years, Stuart Weil, president of Smart Safety, commented, &acir

> Regina Company manufacturers a professional-grade vacuum cleaner and began operations in 2020. For 2020, Regina budgeted to produce and sell 20,000 units. The company had no price, spending, or efficiency variances and writes off production-volume varian

> PAMO Medicals Ltd. makes face masks for the prevention of high contagious virus. For December 2020, PAMO Medicals incurred the following production costs: Required 1. Compute PAMO Medicals’ profit using absorption costing if 10,800 uni

> Opportunity cost. Jacobs Enterprise rents a small workshop for £50 per week, but at present does not use it. The firm could sub-let the workshop for £80 per week, but they are considering using it them- selves for a new project. In assessing whether the

> The Zeta Company manufactures trendy, good-looking, moderately priced umbrellas. As Zeta’s senior financial analyst, you are asked to recommend a method of inventory costing. The CFO will use your recommendation to prepare Zetaâ&#

> EntertainMe Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2020 are as follows: The selling price per unit is $3,300. The budgeted level of production used to cal