Question: Identify the budgets in Column B from

> M. C. Jones purchased a truck for $30,500 to be used in his business. He is considering depreciating the truck by two methods: units-of-output (assuming total miles to be driven of 80,000) and double-declining-balance (assuming a 5-year useful life). The

> Miller Mining acquired rights to a tract of land with the intent of extracting from the land a valuable mineral. The cost of the rights was $2,500,000 and an estimated 10,000 tons of the mineral are expected to be extracted. Assuming that 1,600 tons of t

> Taylor Company purchased equipment for $27,500. It depreciated the equipment over a 5-year life by the double-declining-balance method until the end of the second year, at which time the asset was sold for $8,300. Calculate the gain or loss on the sale a

> Frequently, the disadvantages of budgeting are not discussed in textbooks. Go to the website www.strategiccontrol.24xls.com/en211. What dysfunctional aspects of budgeting are highlighted by the authors?

> Define (a) contribution margin, (b) contribution margin ratio, and (c) average contribution margin ratio.

> Should depreciation continue to be recorded on a building when ample evidence exists that the current market value is greater than original cost and that the rising trend of market Values are continuing? Explain.

> Alexander Company purchased a piece of equipment for $14,000 and depreciated it for three years over a 5-year estimated life with an expected residual value at the end of 5 years of $2,000. At the end of the third year, Alexander decided to upgrade to eq

> Fin, Inc., purchased a truck for $40,000. The truck is expected to be driven 15,000 miles per year over a 5-year period and then sold for approximately $5,000. Determine depreciation for the first year of the truck’s useful life by the straight-line and

> Equipment costing $86,000 was purchased by Spence, Inc., at the beginning of the current year. The company will depreciate the equipment by the declining-balance method, but it has not determined whether the rate will be at 150 percent or 200 percent of

> The following expenditures were incurred in connection with a new machine acquired by a metals manufacturing company. Identify those that should be included in the cost of the asset. (a) Freight charges, (b) sales tax on the machine, (c) payment to a pas

> Identify the basic “accountable events” in the life of a depreciable plant asset. Which of these events directly affect the net income of the current period? Which directly affect cash flows (other than income tax payments)?

> Notes to the financial statements of two clothing manufacturers follow: Inventories: The inventories are stated at the lower of cost, determined principally by the LIFO method, or market. Inventories: Inventories are stated at the lower of cost (first-in

> Coca-Cola’s distinctive trademark is more valuable to the company than its bottling plants. But the company’s bottling plants are listed in the balance sheet, and the famous Trademark is not. Explain

> Explain two approaches to computing depreciation for fractional period in the year in which an asset is purchased.(Neither of your approaches should require the computation of depreciation to the nearest day or week.)

> Dorsal Ranch raises fish for sale in the restaurant industry. The company can obtain batches of two million eggs from its supplier. Management is trying to decide whether to raise cod or salmon. Cod eggs cost $14,000 per batch, while salmon eggs cost $18

> Evaluate the following quotation: “We shall have no difficulty in paying for new plant assets needed during the coming year because our estimated outlays for new equipment amount to only $80,000, and we have more than twice that amount in our Accumulated

> One accelerated depreciation method is called fixed percentage-of-declining-balance. Explain what is meant by the terms fixed-percentage and declining-balance. For what purpose is this method most widely used?

> Assume you are the manager of the finished goods warehouse of a stereo manufacturer. What costs are being incurred as stereos are stored while awaiting shipment to retail stores?

> Explain what is meant by an accelerated depreciation method. Are accelerated methods more widely used in financial statements or in income tax returns? Explain.

> Should depreciation continue to be recorded on a building when ample evidence exists that the current market value is greater than original cost and that the rising trend of market values is continuing? Explain.

> Shoppers’ Market purchased a site on which it planned to build a new store for $265,000. The site consisted of three acres of land and included an old house and two barns. County property tax records showed the following appraised values for this propert

> If a capital expenditure is erroneously treated as revenue expenditure, will the net income of the current year be overstated or understated? Will this error have any effect on the net income reported in future years? Explain.

> What is the distinction between a capital expenditure and a revenue expenditure?

> Hamlet College recently purchased new computing equipment for its library. The following information refers to the purchase and installation of this equipment. 1. The list price of the equipment was $285,000; however, Hamlet College qualified for an “edu

> A friend offers you a ticket to a Chicago Cubs baseball game for $40. You know you can sell the ticket to another friend for $50. What is the opportunity cost of buying the ticket but thenchoosingto go to the game?

> Selected information taken from the financial statements of Wiley Company for two successive years follows. Compute the percentage change from year 1 to year 2 whenever possible. Round all calculations to the nearest whole percentage.

> It’s Alarming! produces alarm systems for cars and trucks. The company is trying to decide whether to outsource its Installation Department to A-One Technicians for $50 per installation. Although the company estimates that its current costs are only $40

> Vermont Treats makes blueberry jam and blueberry syrup. Both products come out of a joint process costing $60,000 per year. The sales value of the blueberry jam is $20,000 per year. The sales value of the blueberry syrup is $80,000 per year. Use the rela

> Yi Corporation produces a large number of fishing products. The costs per unit of a particular fishing reel are as follows. The company recently decided to buy 8,000 fishing reels from another manufacturer for $28 per unit because “it

> A company regularly sells 100,000 washing machines at an average price of $250. The average cost of producing these machines is $180. Under what circumstances might the company accept especial order for 20,000 washing machines at $175 per machine?

> Explain how the high-low method determines a. The variable portion of a semi variable cost. b. The fixed portion of a semi variable cost.

> Vickery Machining Company is nearly finished constructing a specially designed piece of machining equipment when the customer declares bankruptcy and cannot pay for the equipment. Vickeryestimates that the cost associated with making the uncompleted equi

> A variety of products—chicken wings, drumsticks, thighs, and so on—are the result of a joint production process of butchering a chicken that costs $0.25 per pound. The wings can be sold at the split-off point for $0.35 per pound, or they can be processed

> Match the following decisions in column 1 (a through e) to all relevant costs or revenue in column 2 (1 through 5):

> A local gym has 20 stationary bicycles that are available for classes a combined total of 840 hours per week. The bicycles are used in two different exercise programs. A cycling class lasts one hour and earns a contribution margin of $18 per customer. A

> During the current year, Rothschild, Inc., purchased two assets that are described as follows. Rothschild depreciates heavy equipment by the declining-balance method at 150 percent of the straight-line rate. It amortizes intangible assets by the straigh

> An analysis of the annual financial statements of O’Connell Corporation reveals the following. a. The company had a $5 million loss from a fire that destroyed an uninsured factory building. b. Depreciation for the year amounted to $9 million. c. During t

> Which of the following are sunk, out-of-pocket, or opportunity costs? a. The amount you will pay to go to the movies next week. b. The insurance payment on your car last year. c. The amount of rent you could receive if you were to sublet your apartment a

> Patterson Company reported net income for the current year of $722,000. During the year the company’s accounts receivable increased by $50,000, inventory decreased by $23,000, accounts payable decreased by $55,000, and accrued expenses payable increased

> Mississippi Products Co. had the following positive cash flows during the current year: received cash from customers of $750,000; received bank loans of $35,000; and received cash from the sale of common stock of $145,000. During the same year, cash was

> Garagiola Company had net income in the current year of $470,000. Depreciation expense for the year totaled $67,000. During the year the company experienced an increase in accounts receivable (all from sales to customers) of $35,000 and an increase in ac

> Presley, Inc., had the following positive and negative cash flows during the current year. Determine the amount of cash provided by or used for operating activities by the direct method.

> Many managers complain about the budgeting process. They claim it takes too long, requires too much management time, encourages managers to “pad the budget” because of uncertainties, and creates unnecessary tension among managers. As a result of these ch

> Distinguish between value-added and non–value-added activities and provide an example of each.

> Does a statement of cash flows or an income statement best measure the profitability of a financially sound business? Explain.

> Last month, Hildebrand Corporation generated sales of $800,000 and incurred selling and administrative expenses of $320,000, of which half were variable. This month, the company estimates that it will generate sales of $900,000. Management does not antic

> Flag stags Brewery’s flexible budget estimates are $74,000, $77,000, and $80,000 to manufacture04,000, 4,500, and 5,000 gallons of beer, respectively, next quarter. What are the variable and fixed manufacturing costs in the flexible budget for Flag stags

> Indicate how you would expect the following strategies to affect the company’s net cash flows from operating activities (1) in the near future and (2) in later periods (after the strategy’s long-term effects have “taken hold”). Explain your reasoning. a.

> Haxtun, Inc., purchased a truck to use for deliveries and is attempting to determine how much depreciation expense would be recognized under three different methods. The truck cost $20,000and is expected to have a value of $4,000 at the end of its 5-year

> Cheri Standish, the controller at Harmonics International, overheard the following conversation among two of her product line department heads, Bob, manager of Pianos and Keyboards, and Fran, manager of Horns and Stringed Instruments. What comments shou

> On January 1, Howard Corporation determined that its direct materials inventory needs to contain 4,000 pounds of materials by March 31. To achieve this goal, Howard will have to use three pounds of direct materials for every pound that it purchases durin

> Expected quarterly unit sales of cured hams at Rod’s Meat World are 1,200, 2,000, 1,400, and 1,000 for the next 2 years. At the start of the current year, cured ham inventory on hand is 120 units. Rod’s has a desired ending inventory of 15 percent of the

> Body Builders Corporation is opening a chain of five health clubs in the Minneapolis area. Body Builders’ marketing manager has suggested a marketing plan designed to generate new memberships. The plan would allow new members to delay payment for the fir

> Harry Blackmun, manager of the Dry Goods Department at Good right’s Grocery, has a budget of $6,000 per month for the current year. This budget includes the allocation of $500 of storewide Common costs based on the square feet occupied by Dry Goods. Rece

> Renaldo’s Boutiques, Inc., has 14 stores located in a Midwestern part of the United States. Renaldo, the president of the company, has set budgets for each store that do not allow for lost, stolen, or misplaced merchandise (inventory shrinkage). Research

> You have been hired as a consultant to assist the following companies with cost-volume-profit analysis. Freeman’s Retail Floral Shop Susquehanna Trails Bus Service Wilson Pump Manufacturers McCauley & Pratt, Attorneys-at-Law suggest an appropriate activ

> Define the relevant range of activity.

> The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the current year ended December 31. Using this information, prepare a statement of cash flows. Include a proper heading for the financial statement, and classi

> Chaps & Saddles, a retailer of tack and Western apparel, earns an average contribution margin of 30 percent on its sales volume. Recently, the advertising manager of a local country radio station offered to run numerous radio advertisements for Chaps & S

> Kiwi Service Stations is considering expanding its operations to include the greater Dubuque area. Rather than build new service stations in the Dubuque area, management plans to acquire existing service stations and convert them into Kiwi outlets. Kiwi

> Ferrule Furriers has a contribution margin ratio of 80 percent and must sell 12,000 stoles at a unit price of $400 to break even. a. Compute total fixed costs. b. Compute variable cost per unit. c. Develop the company’s cost formula.

> Dominic’s Deli recently calculated its annual break-even sales revenue to be $210,000. For each dollar of sales revenue, $0.30 goes to cover variable costs. Compute the following. a. The contribution margin ratio. b. Total fixed costs. c. The sales reven

> New Berlin Corporation has annual fixed costs of $800,000, variable costs of $48 per unit, and a contribution margin ratio of 40 percent. Compute the following. a. Unit sales price and unit contribution margin for the given product. b. The sales volume

> Applying the high-low method, Bemidji Wilderness Resort estimates the total costs of providing guide services to be $9,000 per month, plus 25 percent of guide service revenue. a. What is the contribution margin ratio of the resort’s guide service operati

> Wadena Search and Rescue estimates the monthly cost of responding to emergency calls to be $90,000, plus $450 per call. a. In a month in which the company responds to 90 emergency calls, determine the estimated 1. Total cost of responding to emergency ca

> Explain whether you regard each of the following costs or categories of costs as fixed, variable, or semi variable with respect to net sales. Briefly explain your reasoning. If you do not believe that a cost fits into any of these classifications, explai

> Glow Worm Corporation makes flashlights and batteries. Its monthly fixed costs average $1,690,000. The company has provided the following information about its two product lines. a. Determine the company’s monthly break-even point in s

> Explain the effects of an increase in the volume of activity on the following costs. (Assume volume remains within the relevant range.) a. Total variable costs. b. Variable cost per unit. c. Total fixed cost. d. Fixed cost per unit. e. Total semi variabl

> During the current year, Maine Salvage Company took out new loans of $17 million. In addition, the company repaid $2 million of prior loans and paid $1.5 million of interest expense. Explain how these cash flows will appear in the company’s statement of

> Using the information presented in Problem 13.4B, prepare a partial statement of cash flows for the current year, showing the computation of net cash flows from operating activities using the indirect method. Explain why the increase in accounts receivab

> Acme International hired a consulting firm to determine if it had any quality-related problems. The consulting firm spent two months reviewing all production processes at Acme and suggested that Acme buy new equipment to reduce throughput time. Then the

> What activities would make up the marketing and distribution component of the value chain of a local fire department?

> During the current year, Riddick Corporation incurred the following expenditures, which must be recorded either as operating expenses or as intangible assets. a. Expenditures were made for the training of new employees. The average employee remains with

> Mark each of the following as true or false. a. Total quality costs are covered by external failure and appraisal costs. b. Traditional job order costing systems identify and account for quality costs. c. A rise in internal failures means higher appraisa

> Assume you’ve just started a new business to manufacture Fry-Plate, a new solar-powered cooking pan for camping. Your business analyst tells you that in the long run Fry-Plate will sell for $32.50 because, after a few years pass, similar products will be

> An activity analysis at Sky High Pie Company found the following activities for its pie makers: 25 percent of time, adding ingredients; 50 percent of time, mixing and kneading pie dough; 7 percent of time, shaping into pans; and 18 percent of time, clean

> Hall’s, a maker of handheld video games, recently analyzed its manufacturing process to identify value-added and non–value-added activities. Hall’s found that the total non–value-added manufacturing time associated with producing the average game was 0.0

> Identify a non–value-added activity at a grocery store, a bank, and a hotel. Explain how each organization might be able to eliminate the non–value-added activity identified.

> Identify a restaurant where you have dined. Identify some of the types of costs that the restaurant incurs in each of the four cost-of-quality categories. Consider how those costs are related to each other.

> Assume Gamma’s, a retail establishment, wants to capture a 20 percent share of its local evening gown market. In order to capture that share, it has determined that the average selling price of an evening gown should be no more than $520. Gamma’s current

> The general ledger of AXM, Inc., provides the following information relating to purchases of merchandise. The company’s cost of goods sold during the year was $2,882,000. Compute the amount of cash payments made during the year to supp

> Team members involved in the target costing process should consider the current and future effects of their proposed solutions to arrive at the proposed target cost. Assume in the Boards & More example illustrated in Exhibit 19–8 that one proposed soluti

> Sail Right Boat Company builds and sells small sailboats. Identify at least four specific components of Sail Right’s value chain. For each component describe what activities might take place in that part of the value chain.

> Mains, Inc., had a cash balance at the beginning of the year of $72,000. During the year, the following cash flows occurred. Prepare an abbreviated statement of cash flows, including a reconciliation of the beginning and mending cash balances for the ye

> During the current year, Hitchcock Developers disposed of plant assets in the following transactions. Instructions: a. Prepare journal entries to record each of the disposal transactions. Assume that depreciation expense on each asset has been recorded

> The simplifying assumption that costs and volume vary in straight-line relationships makes the analysis of cost behavior much easier. What factors make this a reasonable and useful assumption in many cases?

> Zephyr Company reported net income for the year of $68,000. Depreciation expense for the year was $15,000. During the year, accounts receivable increased by $4,000, inventory decreased by $6,000, accounts payable increased by $3,000, and accrued expenses

> Tyler, Inc.’s cash balance at December 31 of the current year, the end of its financial reporting year, was $155,000. During the year, cash provided by operations was $145,000, cash used in investing activities was $67,000, and cash provided by financing

> Sphinx, Inc., reported cost of goods sold of $100,800 during the current year. Following are the beginning and ending balances of merchandise inventory and accounts payable for the year. Determine the amount of cash payments for purchases during the yea

> New Mexico, Inc., sold common stock for $560,000 and preferred stock for $56,000 during the current year. In addition, the company purchased treasury stock for $47,000 and declared dividends on common and preferred stock for $36,000, of which $12,000 was

> Old South Company purchased investments for $55,000 and plant assets for $147,000 during the current year, during which it also sold plant assets for $66,000, at a gain of $6,000. The company also purchased treasury stock for $78,000 and sold a new issue

> During the current year, Taconic, Inc., made cash sales of $289,000 and credit sales of $472,000. During the year, accounts receivable decreased by $32,000. a. Compute for the current year the amounts of 1. Net sales reported as revenue in the income sta

> Record the following selected transactions in general journal form for the Weston Gastroenterology Clinic. Include a brief explanation of the transaction as part of each journal entry May 1 The clinic issued 1,000 additional shares of capital stock to Do

> On November 1, Petree Corporation purchased a six-month insurance policy from The Avenson Agency for $5,400. a. Prepare the necessary adjusting entry for Petree Corporation on November 30, assuming it recorded the November 1 expenditure as Unexpired Ins

> The Cook County Authority is considering the purchase of a small plane to transport government officials. It is hoped that the plane will save money on travel costs for government employees. Assume the county requires a 8 percent rate of return. If the p

> Ron Jasper manages a factory for Barth Corporation. A salesperson for new factory equipment has persuaded Ron that the new equipment offered by her company would be less dangerous for the employees and lower the sound level in the factory significantly.

> Dr. Schechter, DVM, opened a veterinary clinic on May 1, current year. The business transactions for May are shown as follows A partial list of account titles used by Dr. Schekter includes the following Instructions: a. Analyze the effects that each o

> Best Buy is a leading provider of technology products, services, and solutions. The following selected information is adapted from the company’s January 28, 2017, annual report. (Dollar amounts are stated in millions.) The company has

> Assume that the required rate of return for capital investments at Knorr Foods is 12 percent. The Produce Department has proposed an investment in refrigeration equipment with a 10-year life. The present value of its expected annual cash flows is $84,000

> Suppose you are interested in opening up a new restaurant in your area. What specific activities would you undertake in the research and development and design stage of the value chain for the restaurant?