Question: Lees Corp. is deciding whether to keep

> Wilson Products uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor-hours (DLH). Wilson Products develops its manufacturing overhead rate from the current an

> Consider the following two situations—cases A and B— independently. Data refer to operations for April 2017. For each situation, assume standard costing. Also assume the use of a flexible budget for control of variable

> Best Around, Inc., is a manufacturer of vacuums and uses standard costing. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In 2017, budgeted fixed manufacturing overhead cost was $17,000,0

> Cooking Whiz manufactures premium food processors. The following are some manufacturing overhead data for Cooking Whiz for the year ended December 31, 2017: Budgeted number of output units: 915 Planned allocation rate: 2 machine-hours per unit Actual

> Cooking Whiz manufactures premium food processors. The following are some manufacturing overhead data for Cooking Whiz for the year ended December 31, 2017: Budgeted number of output units: 915 Planned allocation rate: 2 machine-hours per unit Actual

> It is the end of 2017. Z-Var Corporation began operations in January 2016. The company is so named because it has no variable costs (Zero VARiable). All its costs are fixed; they do not vary with output. Z-Var Corp. is located on the bank of a river and

> ABC Inc. desires to maintain a capital structure of 80% equity and 20% debt. They currently have an effective tax rate of 30%. The company’s cost of equity capital is 12%. To obtain their debt financing, they issue bonds with an interest rate of 10%. Wha

> The Long Haul Trucking Company is developing metrics for its drivers. The company computes variable costs of each load based upon miles driven and allocates fixed costs based upon time consumed. Load costing standards consider safe driving speeds and Dep

> Rowan Company produces pipes for concert quality organs. Each job is unique. In April 2016, it completed all outstanding orders, and then, in May 2016, it worked on only two jobs, M1 and M2: Direct manufacturing labor is paid at the rate of $25 per hour

> If ROI is used to evaluate a manager’s performance for a relatively new division, which of the following measures for assets (or investment) will increase ROI? a. Gross book value used instead of net book value. b. Net book value using accelerated rather

> Assuming an increase in price levels over time, which of the following asset valuations will produce the highest return on assets? a. Net book value b. Gross book value c. Replacement cost d. Depreciated replacement cost

> During the current year, a strategic business unit (SBU) within Roke Inc. saw costs increase by $2 million, revenues increase by $4 million, and assets decrease by $1 million. SBUs are set up by Roke as follows I. Cost SBU II. Revenue SBU III. Profit S

> Nick’s Enterprises has purchased a new machine tool that will allow the company to improve the efficiency of its operations. On an annual basis, the machine will produce 20,000 units with an expected selling price of $10, prime costs of $6 per unit, and

> The following information pertains to the January 2, year 2 transaction replacing a print machine for Hidden Creek Enterprises, Inc. Net book value – old print machine…………. $20,000 Total cost of new machine……………………..$180,000 Down payment on new machine…

> Which of the following statements is true if the NPV of a project is –$4,000 (negative $4,000) and the required rate of return is 5 percent? a. The project’s IRR is less than 5 percent. b. The required rate of return is lower than the IRR. c. The NPV ass

> Which of the following items describes a weakness of the internal rate-of-return method? a. The internal rate of return is difficult to calculate and requires a financial calculator or spreadsheet tool such as Excel to calculate efficiently. b. Cash flow

> A company should accept for investment all positive NPV investment alternatives when which of the following conditions is true? a. The company has extremely limited resources for capital investment. b. The company has excess cash on its balance sheet. c.

> Just-in-time inventory assumes all of the following, except: 1. Zero defects. 2. Resources will only be introduced as they are needed. 3. Just-in-time inventory presumes first-in, first-out costing. 4. Production of components only occurs only when reque

> Lyle Co. has only one product line. For that line, the reorder point is 500 units, the lead time for production is three weeks, and the sales volume is estimated at 50 units per week. Lyle has established which of the following amounts as its safety stoc

> Donald Transport assembles prestige manufactured homes. Its job costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead allocated at a budgeted $31 per machine-hou

> Jill’s Custom Bags manufacturers and sells 12,000 customer designer bags per year, each requiring three yards of a specially manufactured fabric. These bags are sold evenly throughout the year. The materials for these bags require two months’ lead time.

> Jack’s Tracks sells 24,000 custom-designed GoKarts per year. These GoKarts are sold evenly throughout the year. The manufacturer charges Jack a $50 processing cost per order, and Jack incurs a carrying cost of $240 per year including storing each GoKart

> The order size associated with the economic-order-quantity (EOQ) model will necessarily decline if: a. Ordering costs rise b. Storage costs rise c. Insurance costs for materials in storage fall d. Stockout costs rise

> Six Sigma is a continuous quality improvement methodology that is designed to promote: 1. Improvements for existing products and business processes. 2. Development of new products or business processes. 3. Both existing product/process improvement and ne

> Rector Corporation is examining its quality control program. Which of the following statements is/are correct? I. Rework costs should be regarded as a cost of quality when the rework is caused by internal failure. II. Prevention costs are costs that are

> Fresh Products, Inc. incurred the following costs during December related to the production of its 162,500 frozen ice cream cone specialty items: Food product labor………………$175,000 Ice cream cone ingredients……325,000 Sales and marketing costs………10,000 Fact

> 18-18 Healthy Dinners Co. produces frozen dinners for the health conscious consumer. During the quarter ended September 30, the company had the following cost data: Dinner ingredients…………………………..$3,550,000 Preparation labor…………………………………900,000 Sales an

> Which of the following is a TRUE statement regarding the treatment of scrap by a firm? a. Scrap is always allocated to a specific job. b. Scrap is separated between normal and abnormal scrap. c. Revenue received from the sale of scrap on a job lowers the

> All of the following are accurate regarding the treatment of normal or abnormal spoilage by a firm with the exception of: a. Abnormal spoilage is excluded in the standard cost of a manufactured product. b. Normal spoilage is capitalized as part of invent

> Kimberly Manufacturing uses a process-costing system to manufacture Dust Density Sensors for the mining industry. The following information pertains to operations for the month of May, Year 5.

> Visual Company produces gadgets for the coveted small appliance market. The following data reflect activity for the year 2017: Costs Incurred Purchases of direct materials (net) on credit………. $1

> Describe two generic strategies.

> Penn Manufacturing Corporation uses a process-costing system to manufacture printers for PCs. The following information summarizes operations for its NoToner model during the quarter ending September 30, Year 1: Beginning work-in-process inventory was 5

> Sepulveda Corporation uses a process costing system to manufacture laptop PCs. The following information summarizes operations for its VeryLite model during the quarter ending March 31, Year 1: Beginning work-in-process inventory was 50% complete for di

> The following information concerns Westheimer Corporation’s equivalent units in May 20X1: Units Beginning work-in-process (50% complete)………

> Assuming beginning work in process is zero, the equivalent units of production computed using FIFO versus weighted average will have the following relationship: 1. FIFO equivalent units will be greater than weighted-average equivalent units. 2. FIFO equi

> Earl’s Hurricane Lamp Oil Company produces both A-1 Fancy and B Grade Oil. There are approximately $9,000 in joint costs that Earl may allocate using the relative sales value at splitoff or the net realizable value approach. Before splitoff, A-1 sells fo

> Dallas Company produces joint products, TomL and JimmyJ, each of which incurs separable production costs after the splitoff point. Information concerning a batch produced at a $200,000 joint cost before splitoff follows: What is the joint cost assigned

> Houston Corporation has two products, Astros and Texans, with the following volume information: Volume Product Astros……. 20,000 gal Product Texans………………..10,000 gal Total………………………………. 30,000 gal The joint cost to produce the two products is $120,000. Wha

> Joint costs of $8,000 are incurred to process X and Y. Upon splitoff, $4,000 and $6,000 in costs are incurred to produce 200 units of X and 150 units of Y, respectively. In order to justify processing further at the splitoff point, revenues for product:

> Select Manufacturing Co. produces three joint products and one organic waste byproduct. Assuming the byproduct can be sold to an outside party, what is the correct accounting treatment of the byproduct proceeds received by the firm? a. Apply sale proceed

> Lexota, Inc., an auto manufacturer, reported the following budgeted and actual sales of its vehicles during September, Year 2: The budgeted contribution margin is 20% for both vehicle types. Which of the following statements is true concerning the sales

> The University of Chicago Press is wholly owned by the university. It performs the bulk of its work for other university departments, which pay as though the press were an outside business enterprise. The press also publishes and maintains a stock of boo

> The actual contribution margin per unit will impact the following sales variance: a. Flexible-budget variance b. Market-size variance c. Market-share variance. d. Sales-quantity variance

> Which of the following statements regarding price elasticity is incorrect? a. A product with a perfectly inelastic demand would have the same demand even as prices change. b. A product with a perfectly inelastic demand would see demand change as prices c

> Canarsie Corporation uses a balanced scorecard to evaluate its digital camera manufacturing operation. Which of the following statements with respect to balanced scorecards is/are correct? I. A balanced scorecard reports management information regarding

> The balanced scorecard describes all of the following except which one? a. The descriptions of critical initiatives for the organization’s performance. b. The strategic goals. c. The related measures associated with strategic and tactical goals. d. The d

> Jacobs Inc. is a relatively new company that has established a position in the highly competitive biotechnology industry. Which of the following statements is correct regarding Jacobs’ profitability? a. Profits will increase when buyers have lower switch

> Ace Cleaning Service is considering expanding into one or more new market areas. Which costs are relevant to Ace’s decision on whether to expand? Sunk Costs Variable Costs Opportunity Costs а. No Yes Yes b. Yes Yes Yes с. No Yes No

> In order to determine whether a special order should be accepted at full capacity, the sales price of the special order must be compared to the per unit: a. Contribution margin of the special order. b. Variable cost and contribution margin of the special

> Chade Corp. is considering a special order brought to it by a new client. If Chade determines the variable cost to be $9 per unit, and the contribution margin of the next best alternative of the facility to be $5 per unit, then if Chade has: a. Full capa

> Which of the following is not a qualitative factor that Atlas Manufacturing should consider when deciding whether to buy or make a part used in manufacturing their product? a. Quality of the outside producer’s product. b. Potential loss of trade secrets.

> Creative Woodworking uses normal costing and allocates manufacturing overhead to jobs based on a budgeted labor-hour rate and actual direct labor-hours. Under- or overallocated overhead, if immaterial, is written off to Cost of Goods Sold. During 2017, C

> What would be the approximate value of the coefficient of correlation between advertising and sales where a company advertises aggressively as an alternative to temporary worker layoffs and cuts off advertising when incoming jobs are on backorder? a. 1.0

> A regression equation is set up, where the dependent variable is total costs and the independent variable is production. A correlation coefficient of 0.70 implies that: a. The coefficient of determination is negative. b. The level of production explains

> In regression analysis, the coefficient of determination: a. Is used to determine the proportion of the total variation in the dependent variable (y) explained by the independent variable (X). b. Ranges between negative one and positive one. c. Is used t

> A firm uses simple linear regression to forecast the costs for its main product line. If fixed costs are equal to $235,000 and variable costs are $10 per unit, how many units does it need to sell at $15 per unit to make a $300,000 profit? a. 21,400 b. 4

> HL Co. uses the high-low method to derive a total cost formula. Using a range of units produced from 1,500 to 7,500, and a range of total costs from $21,000 to $45,000, producing 2,000 units will cost HL: a. $8,000 b. $12,000 c. $23,000 d. $29,000

> Which of the following statements is not true regarding the use of variable and absorption costing for performance measurement? a. The net income reported under the absorption method is less reliable for use in performance evaluations because the cost of

> The following information relates to Drexler Inc.’s Year 3 financials: Direct labor………………….$. 420,000 Direct materials………………210,000 Variable overhead…………. 205,000 Fixed overhead……………..355,000 Variable SG&A expenses…150,000 Fixed SG&A expenses……. 195,000

> King Tooling has produced and sold the following number of units of their only product during their first two years in business: Production costs per unit have not changed over the two-year period. Under variable costing, what is the amount of cost of s

> Queen Sales, Inc. has just completed its first year of operations. The company has not had any sales to date. Queen has incurred the following costs associated with its production as of December 31, Year 1: Direct materials…………………………..$45,000 Production

> In comparing the absorption and variable cost methods, each of the following statements is true except: a. SG&A fixed expenses are not included in inventory in either method. b. Only the absorption method may be used for external financial reporting. c.

> Capitola Manufacturing produces surfboards. The company uses a normal-costing system and allocates manufacturing overhead on the basis of direct manufacturing labor-hours. Most of the company’s production and sales occur in the first an

> Fordham Corporation produces a single product. The standard costs for one unit of its Concourse product are as follows: Direct materials (6 pounds at $0.50 per pound)……………………………$ 3 Direct labor (2 hours at $10 per hour)…………………………………………….20 Variable manuf

> Culpepper Corporation had the following inventories at the beginning and end of the month of January: The following additional manufacturing data was available for the month of January. Direct materials purchased…â€&brvbar

> As part of her annual review of her company’s budgets versus actuals, Mary Gerard isolates unfavorable variances with the hope of getting a better understanding of what caused them and how to avoid them next year. The variable overhead efficiency varianc

> Steed Co. budgets production of 150,000 units in the next year. Steed’s CFO expects that each unit will take 8 hours to produce at an hourly wage rate of $10 per hour. If factory overhead is applied on the basis of direct labor hours at $6 per hour, the

> Each of the following statements is correct regarding overhead variances except: a. Actual overhead greater than applied overhead is unfavorable. b. The efficiency overhead variance ignores the standard variable overhead rate. c. Variable overhead rates

> Wayne Mueller, financial analyst at CELL Corporation, is examining the behavior of quarterly utility costs for budgeting purposes. Mueller collects the following data on machine-hours worked and utility costs for the past 8 quarters: Required: 1. Estima

> Assume the same information for Northern Defense as in Exercise 10-33, except that Northern Defense uses an 85% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours. (An 85% learning curve means b = -0.234465.)

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

> May Blackwell is the new manager of the materials storeroom for Clayton Manufacturing. May has been asked to estimate future monthly purchase costs for part #696, used in two of Clayton’s products. May has purchase cost and quantity dat

> Linda Olson 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 stand

> Frontier Partners, a management consulting firm, has the following condensed budget for 2017: Frontier has a single direct-cost category (professional labor) and a single indirect-cost pool (client support). Indirect costs are allocated to jobs on the b

> Relling Corporation manufactures a drink bottle, model CL24. During 2017, Relling produced 210,000 bottles at a total cost of $808,500. Kraff Corporation has offered to supply as many bottles as Relling wants at a cost of $3.75 per bottle. Relling antici

> Dr. Young, of Young and Associates, LLP, is examining how overhead costs behave as a function of monthly physician contact hours billed to patients. The historical data are as follows: Required: 1. Compute the linear cost function, relating total overhe

> Lacy Dallas is examining customer-service costs in the southern region of Camilla Products. Camilla 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 pr

> Reisen Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. 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 1,0

> Gower, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2017. Gower, Inc., produced 75,000 units of product in 2017. Gower’s managem

> Stein Corporation wants to find an equation to estimate some of their monthly operating costs for the operating budget for 2018. The following cost and other data were gathered for 2017: Required: 1. Which of the preceding costs is variable? Fixed? Mixe

> 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 describ

> The vertical axes of the graphs below represent total cost, and the horizontal axes represent units produced during a calendar year. In each case, the zero point of dollars and production is at the intersection of the two axes. Select the graph that mat

> The Sunrise 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: $45 for the day ■ Contract 2: $25 for the day plus $0.30 per mile travel

> The controller of the Javier Company is preparing the budget for 2018 and needs to estimate a cost function for delivery costs. Information regarding delivery costs incurred in the prior two months are: Required: 1. Estimate the cost function for deliver

> The Matthew Company uses a normal job-costing system at its Minneapolis plant. The plant has a machining department and an assembly department. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and tw

> The Garvis Company uses an absorption-costing system based on standard costs. Variable manufacturing cost consists of direct material cost of $4.50 per unit and other variable manufacturing costs of $1.50 per unit. The standard production rate is 20 unit

> The Garvis Company uses an absorption-costing system based on standard costs. Variable manufacturing cost consists of direct material cost of $4.50 per unit and other variable manufacturing costs of $1.50 per unit. The standard production rate is 20 unit

> Camino, a leading firm in the sports industry, produces basketballs for the consumer market. For the year ended December 31, 2017, Camino sold 400,000 basketballs at an average selling price of $12 per unit. The following information also relates to 2017

> Thunder Bolt, Inc., is a manufacturer of the very popular G36 motorcycles. 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 $8,

> Candyland uses standard costing to produce a particularly popular type of candy. Candyland’s president, Jack McCay, was unhappy after reviewing the income statements for the first three years of business. He said, “I w

> Horace Company manufactures a professional-grade vacuum cleaner and began operations in 2017. For 2017, Horace budgeted to produce and sell 25,000 units. The company had no price, spending, or efficiency variances and writes off production-volume varianc

> Miami, Inc., planned and actually manufactured 250,000 units of its single product in 2017, its first year of operation. Variable manufacturing cost was $19 per unit produced. Variable operating (nonmanufacturing) cost was $13 per unit sold. Planned and

> The Tomlinson Company manufactures trendy, high-quality, moderately priced watches. As Tomlinson’s senior financial analyst, you are asked to recommend a method of inventory costing. The CFO will use your recommendation to prepare Tomlinson’s 2017 income

> The variable manufacturing costs per unit of EntertainMe Corporation are as follows: Required: 1. Prepare income statements for EntertainMe in January, February, and March 2017 under throughput costing. 2. Contrast the results in requirement 1 of this

> EntertainMe Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2017 are as follows: The selling price per unit is $3,300. The budgeted level of production used to ca

> Taylor Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2017: Budgeted manufacturing overhead costs………$3,800,000 Budgeted machine-hours…………………………………. 200,0

> The variable manufacturing costs per unit of Nascar Motors are as follows: Required: 1. Prepare income statements for Nascar Motors in April and May 2017 under throughput costing. 2. Contrast the results in requirement 1 with those in requirement 1 of

> Nascar Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2017 are as follows: The selling price per vehicle is $24,000. The budgeted level of production used to calculate the budgeted fixed manufa

> Eric Williams is a cost accountant and business analyst for Diamond Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Williams feels that manufacturin