Question: For the list of product manufacturers below,

> Information Technology, Inc., is a supplier of math coprocessors (computer chips) used to speed the processing of data for analysis on personal computers. Based on an analysis of monthly cost and output data, the company has estimated the following relat

> Eye-de-ho Potatoes is a product of the Coeur d’Alene Growers’ Association. Producers in the area are able to switch back and forth between potato and wheat production depending on market conditions. Similarly, consumers tend to regard potatoes and wheat

> The following relations describe monthly demand and supply conditions in the metropolitan area for recyclable aluminum QD = 317,500 - 10,000P (Demand)  QS = 2,500 + 7,500P, (Supply)   where Q is quantity measured in pounds of scrap aluminum and P

> Spreadsheet analysis is an appropriate means for studying the demand and supply effects of possible changes in various exogenous and endogenous variables. Endogenous variables include all important demand and supply-related factors that are within the co

> The Sacramento plant of Montero Food Corporation produces a gourmet cheese. The following data pertain to the year ended December 31, 2017: During the year, the company started 200,000 pounds of material into production. Required: Prepare a schedule a

> Tempe Chemicals refines a variety of chemicals for cleaning products. The following data are from the company’s Greenville plant: Work in Process, May 1 2,300,000 gallons Direct material 100% complete Conversion costs 40% complete Units started in proces

> Magi-Clean Vacuum produces a single product, a vacuum cleaner, in a continuous production process. At the beginning of production, 85 percent of materials are added; the other 15 percent are added immediately before transfer to the finished goods warehou

> For the month of September, the Wilber Pickle Company had cost per equivalent unit of $0.80 for materials (pickles, vinegar, spices, etc.) and $.90 for conversion costs (labor and overhead). At Wilber Pickle, units are measured in quarts. The company beg

> The McMillian Tire Company produces tires used on small trailers. The month of June ended with 600 tires in process, 90 percent complete as to direct materials, and 50 percent complete as to conversion costs; 2,000 tires were transferred to finished good

> In each case below, fill in the missing amount. Work in Process, October 1 Units started during October Units completed during October Work in Process, October 31 Case #1 5,000 gallons ? 15,000 gallons 2,500 gallons Work in Process, March 1 Units sta

> Write a paragraph explaining the calculation of the cost per equivalent unit (i.e., explain what goes in the numerator and what goes in the denominator of the calculation). Be sure to explain why the denominator may be different for the cost per equivale

> Techno Enterprises is a manufacturer of microchips (referred to as chips). Its production process is complex and involves more than 100 steps, starting with production of small, round silicon wafers and ending with chips being put into individual package

> Woodinville Cement uses a process costing system. In 2017, the company produced and sold 100,000 bags of cement and incurred the following costs: The current selling price is $4 per unit, and the profit for 2017 was ($4 × 100,000) â&#

> The Amigo Glass Company manufactures glass for sliding glass doors. At the start of August 2,000 units were in process. During August, 15,000 units were complete and 3,000 units were in process at the end of August. These in-process units were 100 percen

> Consider a large manufacturing company like Boeing that rewards its sales force with bonuses based on sales. For this purpose, should the company record sales when orders are placed or, to be consistent with GAAP, wait until orders are delivered?

> The Simon Fishing Company processes salmon for various distributors. The two departments involved are Cleaning and Packing. The next table summarizes the data related to pounds of salmon processed in the Cleaning Department during June: All materials ar

> At the start of November, Penco Refinery had Work in Process inventory consisting of 4,000 units that were 90 percent complete with respect to materials and 50 percent complete with respect to conversion costs. The cost of the units was $43,000 ($30,000

> At the start of July, the Classic Car Wax Company had beginning Work in Process of 2,500 units that were 90 percent complete with respect to material and 45 percent complete with respect to conversion costs. The cost of the units was $7,000 ($5,000 of ma

> The Western Beverage Company is marketing a new product, Tech-Tonic Sports Drink Syrup. The product sells for $16 per gallon, and in recent months the company has had sales of more than 525,000 gallons per month. Consumers mix 1 part syrup with 5 parts w

> Jensen PVC, Inc., produces polyvinyl chloride (PVC) irrigation pipes. In 2017, the cost of producing a foot of pipe was $0.30, and the selling price was $0.39 per foot. In 2018, production costs increased to $0.40 per foot, although the selling price rem

> What is the difference between product and period costs?

> As companies move to computer-controlled manufacturing systems, what happens to the mix of product costs (direct material, direct labor, and manufacturing overhead)?

> What is a job cost sheet? What information does it contain?

> Discuss an important characteristic of a good overhead allocation base.

> Why do companies apply overhead to jobs using a predetermined (budgeted) overhead rate instead of applying actual overhead to jobs?

> Bob Stevens is taking Managerial Accounting at State University next term and asked his friend, Summer Adams, who has already taken the course, to explain its focus. “Are we going to learn more about balance sheets and income statements? Is it just an ex

> Identify the two most common types of product costing systems and discuss the manufacturing environments associated with each system.

> What is the difference between manufacturing and nonmanufacturing costs?

> Would an unexpected increase in sales and production result in underapplied or overapplied overhead? Explain.

> When might it be necessary to assign over- or underapplied overhead to Finished Goods, Work in Process, and Cost of Goods Sold?

> Some modern, capital-intensive production facilities have significantly reduced the proportion of direct labor cost to total production cost. Discuss the effect this might have on the selection of an allocation base for the application of overhead.

> Fill in the missing information: Raw Materials Inventory Beginning Balance 30,000 Purchases 40,000 (a) Ending Balance 15,000 Work in Process Inventory Beginning Balance 80,000 (a) 45,000 63,000 DM (b) DL OH Ending Balance 82,000 Manufacturing Overhea

> The following cost data relate to the office overhead costs of the Charles Wright Tax Preparation Company during the just-completed year: Overhead costs incurred: Office rent…………………………………………$ 25,000 Office supplies……………………………………….6,000 Utilities, offic

> Wolf Manufacturing expects the following overhead costs in the current year: Indirect material…………………………………………….$ 45,000 Indirect labor……………………………………………………..55,000 Depreciation of machinery………………………………..160,000 Repair and maintenance on machinery……………..

> Custom Auto Parts manufactures parts to order for antique cars. Custom Auto Parts makes everything from fenders to engine blocks. Each customer order is treated as a job. The company currently has two jobs, Job 9823 and Job 9824, that are complete, altho

> Retter Shoe Company has expected overhead costs of $12,000,000. The majority of the overhead costs are incurred providing production support to the direct labor force. Direct labor rates vary from $10 to $20 per hour, and more complex tasks are assigned

> At Designs by Deirdre, the budgeted income statement for December 2017 indicated sales of $600,000 and cost of sales of $400,000. Actual sales and cost of sales were $700,000 and $425,000, respectively. Should Deirdre Nelson, owner of the company, be con

> Renton Custom Windows produces custom windows for business and residential customers who supply Renton with architectural specifications. At the start of 2017, three jobs were in process: Cost incurred as of 1/1/2017 Job 258……………………………….$5,000 Job 259……

> Terra Cotta Designs manufactures custom tiles. The following information relates to the fiscal year ending December 31, 2017: Beginning balance in Raw Material Inventory……………………$ 450,000 Purchases of raw material………………………………………………….1,500,000 Ending bala

> Southwest Community Hospital uses a job-order costing system to track charges for each patient. The following charges relate to Candice O’Dea, who had laparoscopic knee surgery: Pharmacy……………………………………………….$ 450 Sterile supply…………………………………………….1,500 Sup

> Rosemont Music is a musical instrument repair facility located in Akron, Ohio. The repair shop uses a job-order costing system and applies overhead costs to repair jobs on the basis of repair technician hours. The following estimates were used in prepari

> Lane Confectioners produces special orders of sugar candies and chocolates for airlines and hotels. During March, Lane purchased, on credit, 2,100 pounds of confectioner’s sugar at $.80 per pound, 2,300 pounds of granulated sugar at $.90 per pound, 900 p

> Vulcan Molding has three production departments: A, B, and C. At the start of the year, the company estimated that it would incur $3,080,000 of direct labor cost and $10,000,000 of manufacturing overhead as follows: Along with many others, Vulcan Moldin

> Vulcan Molding produces molded rubber components. At the start of the year, the company estimated that it would incur $3,500,000 of direct labor cost and $9,000,000 of manufacturing overhead. Overhead is allocated to production on the basis of direct lab

> LaPlatt & Associates is an accounting firm that provides audit, tax, and accounting services to medium-size retail companies. It employs 50 professionals (10 partners and 40 associates) who work directly with clients. The average expected total compensat

> World Window Company produces custom windows to specifications provided by architects. At the end of its accounting period, its account balances indicated the following: Raw Materials Inventory………………………………..$ 80,000 Work in Process Inventory……………………………….

> In the past year, Oak Crafters Cabinets had total revenue of $2,500,000, cost of goods sold of $1,000,000 (before adjustment for over- or underapplied overhead), administrative expenses of $600,000, and selling expenses of $400,000. During the year, over

> Which of the following statements related to performance reports is false? a. Performance reports may provide a comparison of actual performance with planned performance. b. Performance reports may provide a comparison of actual performance with perfor

> At Precision Custom Molds, manufacturing overhead was estimated to be $20,000,000 at the start of the year and direct labor hours were estimated to be 200,000. Overhead is applied to jobs using a predetermined overhead rate with direct labor hours as the

> Just-in-time production systems seek to reduce the amount of material, work in process, and finished goods inventory. However, companies must hold some amount of inventory to buffer themselves from various negative events. List three such events and brie

> Milton Company is a steel fabricator, and job 325 consists of producing 500 steel supports for Wendell Construction Company. Overhead is applied on the basis of direct labor hours, using a predetermined overhead rate of $25 per hour. Direct costs associa

> During the month of August, Star Plastics applied overhead to jobs using an overhead rate of $3 per dollar of direct labor. Direct labor in August was $100,000. Actual overhead in August was $260,000. Assume that actual overhead was composed of the foll

> During the month of August, Star Plastics had $70,000 of labor costs that were traced to specific jobs. The company also had $50,000 of indirect labor related to supervisory pay. Required: Prepare journal entries to record labor cost during August. (H

> During the month of August, Star Plastics had material requisitions for $200,000 of materials related to specific jobs and $10,000 of miscellaneous materials classified as overhead. Required: Prepare journal entries to record the issuance of materials

> Place Y (yes) beside the general ledger accounts related to inventory in a job-order cost system and N (no) by those that are not. a. Raw Materials Inventory b. Administrative Expense c. Work in Process Inventory d. Finished Goods Inventory e. Presi

> Franklin Computer Repair treats each repair order as a job. Overhead is allocated based on the cost of technician time. At the start of the year, annual technician wages were estimated to be $800,000, and company overhead was estimated to be $500,000. R

> Lawler Manufacturing Company expects annual manufacturing overhead to be $900,000. The company also expects 60,000 direct labor hours costing $1,800,000 and machine run time of 30,000 hours. Required: Calculate predetermined overhead allocation rates b

> Megan Kelly is the chief financial officer of a chain of 25 drugstores. Explain how she can use budgets in both planning profit and controlling operations.

> At Star Plastics, the balance in manufacturing overhead (which represents over- or underapplied overhead) is always closed to Cost of Goods Sold. This is done even when the balance is relatively large. Suzette Barger, the controller, explains that this m

> Consider three very similar companies. Company A allocates manufacturing overhead to jobs using labor hours as the allocation base; Company B allocates manufacturing overhead to jobs using machine hours as the allocation base; and Company C allocates man

> Select one or two concepts from this chapter and describe how you might use those concepts in your future career. Briefly describe the career or job you will be performing. Then specifically describe the type of situation for which the concept could be a

> At the start of the year, Vencor Company estimated manufacturing overhead to be $2,000,000. Eighty percent of the overhead is fixed and relates to depreciation of equipment. The remaining 20 percent is variable. The company estimated machine hours to be

> Injection Molding Services uses a job-order costing system. The account balances at the end of the period for the product cost-related accounts are as follows: Raw Materials Inventory…………………..$300,000 Work in Process Inventory………………….500,000 Finished Go

> Smith and Baker Legal Services employs five full-time attorneys and nine paraprofessionals. Budgeted salaries are $100,000 for each attorney and $50,000 for each paraprofessional. Budgeted indirect costs (e.g., rent, secretarial support, copying, etc.) a

> Refer to the information in Exercise 2-13. Required: a. Determine the balance in manufacturing overhead, and prepare a journal entry to close the balance to cost of goods sold. b. Why is it important to close the balance in manufacturing overhead? c.

> Brixton Surgical Devices, a public company with sales of over $900,000,000, is one of the world’s largest producers of surgical clamps, saws, screws, and stents. Its business involves production of both stock items and custom pieces for doctors at resear

> DuPage Powder Coating applies powder coating finishes to a variety of materials and parts used by small and medium-size manufacturing firms. Essentially, powder coating involves the application of powder (finely divided particles of organic polymer conta

> YSL Marketing Research is a small firm located in Seattle, Washington. On behalf of its clients, the firm conducts focus group meetings, telephone and mail opinion surveys, and evaluations of marketing strategies. The firm has three partners and six nonp

> The Wellington Hotel is a posh hotel in Manhattan that uses a customer relationship management (CRM) system to track customer preferences and purchases. Provide two examples of specific information the CRM system might capture and how the hotel could use

> List three examples of nonmonetary information that might appear in a managerial accounting report.

> In a performance report, current-period performance is compared with some benchmark. What might be a useful benchmark?

> What is the goal of managerial accounting?

> If an action is legal, is it necessarily ethical? Explain.

> What is meant by the statement “You get what you measure!”?

> What is incremental analysis? How is the concept used in decision making?

> Consider the manager of the home appliance department at a Sears store. For this manager, list a cost that is controllable and a cost that is noncontrollable.

> Explain the difference between fixed and variable costs.

> How have changes in information technology impacted management of the value chain?

> List three differences between financial and managerial accounting.

> Rachel Cook owns Campus Copies, a copy business with several high-speed copy machines. One is a color copier that was purchased just last year at a cost of $25,000. Recently a salesperson got Rachel to witness a demo of a new $23,000 color copier that pr

> Matthew Gabon, the sales manager of Office Furniture Solutions, prepared the following budget for 2017: After he submitted his budget, the president of Office Furniture Solutions reviewed it and recommended that advertising be increased to $100,000. Fur

> At the end of 2017, Cyril Fedako, CFO for Central Products, received a report comparing budgeted and actual production costs for the company’s plant in Forest Lake, Minnesota: His first thought was that costs must be out of control sin

> A performance report that compares budgeted and actual profit in the sporting goods department of Maxwell’s Department Store for the month of December follows: Required: a. Evaluate the department in terms of its increases in sales an

> Search the Web for the Code of Conduct for Sears Holdings Corporation (the parent company for Sears and Kmart). For each of the following cases, indicate whether it is allowable under the Code of Conduct. In your answer, cite specific language in the cod

> The Riverview Hotel is a deluxe four-star establishment. Late on Friday, it had 20 of its 300 rooms available when the desk clerk received a call from the Pines Hotel. The Pines Hotel made a booking error and did not have room for four guests (each of wh

> Each year the president of Smart-Toys Manufacturing selects a single performance measure and offers significant financial bonuses to all key employees if the company achieves a 10 percent improvement on the measure in comparison to the prior year. She re

> Linda Vendetto is the manager of contact lenses and related products sold online by a large retail chain (think Walmart.com). In this capacity, she is responsible for approximately 250 different products. Required: a. Explain why the level of detail in

> Guthrie Wilson is an accountant at Bellwether Systems, a company that sells and installs customer relationship management (CRM) systems. The company sells third party software at cost plus 25 percent and charges a fee of $300 per hour of installation/int

> Why would the difference between income computed under full costing and income computed under variable costing be relatively small if a company used a JIT inventory management system?

> What are the benefits of variable costing for internal reporting purposes?

> Explain the difference between variable costing and full costing.

> If fixed manufacturing overhead per unit under full costing is multiplied by the change units in inventory between the beginning of the period and the end of the period, what does the resulting number represent?

> Explain how fixed manufacturing costs are treated under variable costing. How are fixed manufacturing costs treated under full costing?

> If a company produces less than it sells (the extra units sold are from beginning inventory), which method of computing net income will result in the higher net income? Why?

> If a company produces 50,000 units and sells 46,000 units during a period, which method of computing net income will result in the higher net income? Why?

> A key idea in this book is that “You get what you measure!” Essentially, this means that performance measures have a great influence on the behavior of managers. Required: Select a company with which you are familiar. Identify three performance measure

> Explain why income computed under full costing will exceed income computed under variable costing if production exceeds sales.

> Explain how a manufacturing company can “bury” fixed production costs in ending inventory under full costing.

> Explain why the ending inventory balance (assuming it is not zero) computed under full costing will always be greater than the ending inventory balance computed under variable costing.

> The Octavius Company produces a 10-inch chef knife used by commercial chefs. The knives sell for $50 each. In 2017, the company produced 50,000 units and sold 45,000 units. There was no beginning inventory. Following are variable and full costing income