Match each of the terms with the appropriate definition. Not all definition will be used. Terms: 1. Budget 2. Controlling 3. Direct Costs 4. Financial Accounting 5. Fixed Costs 6. General and Administrative Expenses 7. Merchandising Companies 8. Product Cost 9. Sunk Costs 10. Sustainability Definition: A. Accounting information that is aimed at external users. B. Accounting information that is aimed at those working inside the organization. C. The establishment of goals and objectives along with the tactics that will be used to achieve them. D. The process of putting a plan into action. E. The measurement and monitoring of a company’s performance to see if planned objectives are being met. F. A company that purchases raw materials and converts them into finished products. G. A company that sells manufactured products H. The cost of not doing something I. Costs that can be reasonably traced to a cost object J. Costs that cannot be reasonably traced or are not worth the effort to trace to a cost object. K. Costs that change in direct proportion to changes in activity level. L. Costs that remain the same per unit of activity M. Costs that vary inversely per unit of activity N. Direct materials plus direct labor O. Money that has already been spent P. Costs that differ between alternatives Q. A plan in monetary or financial terms R. Inventoriable costs S. The ability to meet today’s needs without sacrificing the ability of future generations to meet their own needs. T. Period costs
> Old Camp Company manufactures awnings for its own line of tents. The company is currently operating at capacity and has received an offer from one of its suppliers to make the 10,000 awnings it needs for $18 each. Old Camp’s costs to make the awning are
> Vista Vacuum Company has the following production information for the month of March. All materials are added at the beginning of the manufacturing process. Units ∙ Beginning inventory of 6,000 units that are 100 percent complete for materials and 25 per
> Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by the celebrity. During the most recent year, Camino Company had the following operating
> Chino Company manufactures fabric and clothing. Managers can either sell the unfinished fabric to other clothing manufacturers or incur additional conversion costs to create a finished garment. The costs incurred to produce the unfinished fabric are $400
> Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products follows: Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model fol
> Ben Blum recently graduated from Moonshadow University’s accounting program. He has been hired as an analyst by Primrose Tire Company and one of his first assigned tasks was to evaluate the North East division of Primrose. This division
> The Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with no decoration. The company is considering changing this product to a much more decorative model by adding a silk-screened design and embellishments. A summary of the e
> Mohave Corp. is considering eliminating a product from its Sand Trap line of beach umbrellas. This collection is aimed at people who spend time on the beach or have an outdoor patio near the beach. Two products, the Indigo and Verde umbrellas, have impre
> Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,000 units per year for $7.50 each. Mohave has the following information
> Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special-order umbrellas wit
> Hoodys for Good manufactures and sells hooded sweatshirts. The company locates its manufacturing facilities in areas with high unemployment rates and provides on-site day care and education for its employees’ children. The company recen
> Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion’s products is given below: Pin Cushion’s fixed costs total $35,200. Required: 1. Determine Pin Cushion’s weighte
> Refer to E3-15 for information regarding Mirada Company. Required: Complete all requirements for E3-15 using the FIFO method of process costing. Data from E3-15: Mirada Company manufactures handheld calculators and has the following information availabl
> Lindstrom Company produces two fountain pen models. Information about its products follows: Lindstrom’s fixed costs total $78,500. Required: 1. Determine Lindstrom’s weighted-average unit contribution margin and weight
> Ramada Company produces one golf cart model. A partially complete table of company costs follows: Required: 1. Complete the table. 2. Ramada sells its carts for $1,200 each. Prepare a contribution margin income statement for each of the three production
> Hawk Homes, Inc., makes one type of birdhouse that it sells for $30 each. Its variable cost is $15 per house, and its fixed costs total $13,840 per year. Hawk currently has the capacity to produce up to 2,000 birdhouses per year, so its relevant range is
> Russell Preston delivers parts for several local auto parts stores. He charges clients $0.75 per mile driven. Russell has determined that if he drives 3,000 miles in a month, his average operating cost is $0.55 per mile. If he drives 4,000 miles in a mon
> Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Required: 1. Complete the table. 2. Calculate Hermosa’s contribution margin ratio and its total contribution margin at each sales level in
> Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties, and other functions. During its first year of business, the company incurred the following costs: Dance Creations charg
> Refer to the information for Presidio, Inc., in PA5–4. Additional information for Presidio’s most recent year of operations follows: Required: 1. Without any calculations, explain whether Presidio’s p
> Presidio, Inc., produces one model of mountain bike. Partial information for the company follows: Required: 1. Complete Presidio’s cost data table. 2. Calculate Presidio’s contribution margin ratio and its total contri
> Refer to your solutions for Leslie’s Sporting Goods in PA5–2. Required: 1. Consider the pattern of Leslie’s activity and costs throughout the year. Would you consider this to be a seasonal business? E
> Leslie Sporting Goods is a locally owned store that specializes in printing team jerseys. The majority of its business comes from orders for various local teams and organizations. While Leslie’s prints everything from bowling team jerse
> Mirada Company manufactures handheld calculators and has the following information available for the month of July: Required: Using the weighted-average method of process costing, complete each of the following steps: 1. Reconcile the number of physical
> Garfield Company manufactures a popular brand of dog repellant known as DogGone It, which it sells in gallon-size bottles with a spray attachment. The majority of Garfield’s business comes from orders placed by homeowners who are trying
> In recent years, the managerial concepts of activity-based management (ABM), activity-based costing (ABC), and total quality management (TQM) have received considerable attention from manufacturing and other companies. The development of a global economy
> Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information follows: Keller has monthly overhead of $22,360, which is divided into the following cost pools: The company has also compiled th
> Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Harbour has monthly overhead of $175,200, which is divided into the following cost pools: The company has also compiled the following inf
> Carlise has identified the following information about its overhead activity cost pools and the two product lines: Required: 1. Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assi
> Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $171,500 in overhead. The company has identified the following information about its overhead activity cost pools and the tw
> Refer to the information in PA3-5 for Glencove Company. Required: Complete all requirements for PA3-5 using the FIFO method. Data from PA3-5: Glencove Co. makes one model of radar gun used by law enforcement officers. All direct materials are added at t
> Glencove Co. makes one model of radar gun used by law enforcement officers. All direct materials are added at the beginning of the manufacturing process. Information for the month of September follows: Required: 1. Using the weighted-average method of pr
> Refer to the information in PA3-3 for Saddleback Company. Required: Complete all requirements for PA3-3 using the FIFO method. Data from PA3-3: Saddleback Company makes camping lanterns using a single production process. All direct materials are added a
> Saddleback Company makes camping lanterns using a single production process. All direct materials are added at the beginning of the manufacturing process. Information for the month of March follows: Required: 1. Using the weighted-average method of proce
> Refer to E3-13 for information regarding Arboles Company. Required: Complete all requirements for E3-13 using the FIFO method of process costing. Data from E3-13: Arboles Company manufactures pencils and has the following information available for the m
> Wilson’s Furniture Company incurs the costs listed in the following table. Required: Use an X to categorize each of the following costs. You may have more than one X for each item.
> Refer to the information for Sandia Corporation in PA3-1. Required: Complete all requirements for PA3-1 using the FIFO method. Data from PA3-1: Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing
> Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing process. The company has provided the following information: Required: 1. Using the weighted-average method of process costing, complete each of
> Refer to the information in PA2–3 for Tyler Tooling Company. Required: 1. Prepare a journal entry showing the transfer of Job 102 into Finished Goods Inventory upon its completion. 2. Prepare the journal entries to recognize the sales r
> Tyler Tooling Company uses a job order cost system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at $420,000 and total machine hours at 60,000. During t
> Refer to the information presented in PA2–1 for Lamonda Corp. Required: Prepare all of Lamonda’s necessary journal entries for the month of April. Data from PA2-1: Lamonda Corp. uses a job order cost system. On April
> Lamonda Corp. uses a job order cost system. On April 1, the accounts had the following balances: The following transactions occurred during April: a. Purchased materials on account at a cost of $136,000. b. Requisitioned materials at a cost of $122,000,
> Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $65,000 an
> Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a d
> The following information was obtained from the records of Appleton Corporation during 2018. - Manufacturing Overhead was applied at a rate of 125 percent of direct labor dollars. . Beginning value of inventory follows: . Beginning Work in Process Invent
> Christopher’s Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2018 follow: The following transactions occurred during January: a. Pu
> Arboles Company manufactures pencils and has the following information available for the month of July: Required: Using the weighted-average method of process costing, complete each of the following steps: 1. Reconcile the number of physical units worked
> Assume that Suzie Whitson (PA1-2) has decided to begin production of her outdoor children’s toy. Her company is Jiffy Jet and costs for last month follow. Required: 1. Identify each of the preceding costs as either a product or a period
> Match each of the terms with the appropriate definition. Not all definitions will be used. Terms: 1. Conversion Costs 2. Differential Costs 3. Indirect Costs 4. Manufacturing Costs 5. Manufacturing Firms 6. Nonmanufacturing Costs 7. Opportunity Costs 8.
> Comparing Financial and Managerial Accounting Match each of the following characteristics that describe financial accounting, managerial accounting, both financial and managerial accounting, or neither financial nor managerial accounting. 1. Is future or
> Mystic Laboratories reported total assets of $11,200,000 and noncurrent assets of $1,480,000. The company also reported a current ratio of 1.5. What amount of current liabilities did the company report?
> A manufacturer reported an inventory turnover ratio of 8.6 last year. During the current year, management introduced a new inventory control system that was expected to reduce average inventory levels by 25 percent without affecting sales volume. Given t
> Given the following data, compute the return on equity ratio for the current year (expressed as a percentage with one decimal place).
> A consumer products company reported a 25 percent increase in sales from last year to this year. Sales last year were $200,000. This year, the company reported Cost of Goods Sold in the amount of $150,000. What was the gross profit percentage this year?
> Your campus computer store reported Sales Revenue of $168,000. The company’s gross profit percentage was 60.0 percent. What amount of Cost of Goods Sold did the company report?
> Refer to the calculations from M13–2. Which of the ratios from Exhibit 13–5 have been included in these calculations? Have these two ratios improved or deteriorated in the current year compared to the previous year? D
> Refer to E3-11 for information regarding Legacy Company. Required: Complete all requirements for E3-11 using the FIFO method. Data from E3-11: Legacy Company manufactures umbrellas and has the following information available for the month of May:
> Refer to the calculations from M13–1. What are the two most significant year-over-year changes in terms of dollars and in terms of percentages? Give one potential cause of each of these changes. Data from M13-1: Using the following inc
> Refer to M13–1. Perform the calculations needed for vertical analyses. Round percentages to one decimal place. Data from M13-1: Using the following income statements, perform the calculations needed for horizontal analyses. Round perce
> Generally speaking, do the following indicate good news or bad news? a. Increase in times interest earned ratio. b. Decrease in days to sell. c. Increase in gross profit percentage. d. Decrease in EPS. e. Increase in fixed asset turnover ratio.
> Identify the ratio that is relevant to answering each of the following questions. a. How much net income does the company earn from each dollar of sales? b. Is the company financed primarily by debt or equity? c. How many dollars of sales were generated
> Last year, Big W Company reported earnings per share of $2.50 when its stock was selling for $50.00. If its earnings this year increase by 10 percent and the P/E ratio remains constant, what will be the price of its stock? Explain.
> Using the following income statements, perform the calculations needed for horizontal analyses. Round percentages to one decimal place
> Which of the following transactions would be considered noncash investing and financing activities? 1. Additional borrowing from bank. 2. Purchase of equipment with investments. 3. Dividends paid in cash. 4. Purchase of a building with a promissory note.
> Using the data from M12–6, calculate the maximum investing cash inflows that could be reported under IFRS. Using data from M12–7, calculate the maximum financing cash flows that could be reported under IFRS. Data From
> Based on the following information, compute cash flows from financing activities under GAAP.
> Based on the following information, compute cash flows from investing activities under GAAP.
> Legacy Company manufactures umbrellas and has the following information available for the month of May: Required: Using the weighted-average method of process costing, complete each of the following steps: 1. Reconcile the number of physical units worked
> For the following two independent cases, show the cash flows from operating activities section of the statement of cash flows for year 2 using the indirect method.
> For each of the following independent cases, compute cash flows from operating activities. Assume the list below includes all balance sheet accounts related to operating activities.
> Indicate whether each item would be added (+) or subtracted (−) in the computation of cash flows from operating activities using the indirect method. 1. Depreciation. 2. Inventory decrease. 3. Accounts payable decrease. 4. Accounts receivable increase. 5
> The Buckle, Inc., included the following in its statement of cash flows presented using the indirect method. Indicate whether each item is disclosed in the operating activities (O), investing activities (I), or financing activities (F) section of the sta
> Refer to the two cases presented in M12–5, and for each case show the cash flow from operating activities section of the Year 2 statement of cash flows using the direct method. Data from M12-5: For the following two independent cases,
> For each of the following independent cases, compute cash flows from operating activities using the direct method. Assume the list below includes all items relevant to operating activities.
> Prestige Manufacturing Corporation reports the following items in its statement of cash flows presented using the direct method. Indicate whether each item is disclosed in the operating activities (O), investing activities (I), or financing activities (F
> Quantum Dots, Inc., is a nanotechnology company that manufactures “quantum dots,” which are tiny pieces of silicon consisting of 100 or more molecules. Quantum dots can be used to illuminate very small objects, enablin
> Based on the cash flows shown, classify each of the following cases as a growing start-up company (S), a healthy established company (E), or an established company facing financial difficulties (F).
> Cullumber Corp. is considering three projects. Project A has a present value of $265,000 and an initial investment of $110,000. Project B has a present value of $400,000 and an initial investment of $220,000. Project C has a present value of $115,000 and
> Refer to E3-9 for information regarding Ridgecrest Company. Required: Complete all requirements for E3-9 using the FIFO method. Data from E3-9: Ridgecrest Company manufactures plastic storage crates and has the following information available for the mo
> Vaughn Company has the following information about a potential capital investment: 1. Calculate and evaluate the net present value of this project. 2. Without any calculations, explain whether the internal rate of return on this project is more or less t
> Olive Company is considering a project that is estimated to cost $286,500 and provide annual net cash flows of $57,523 for the next five years. What is the internal rate of return for this project?
> Citrus Company is considering a project that has estimated annual net cash flows of $32,000 for six years and is estimated to cost $150,000. Citrus’s cost of capital is 8 percent. Calculate the net present value of the project and whether it is acceptabl
> Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $250,000 and have a $50,000 salvage value in five years. The annual net income from the equipment is expected to be $25,000, and depreciation is $40,000 per ye
> A project has estimated annual net cash flows of $80,000 and is estimated to cost $340,000. What is the payback period?
> What is the accounting rate of return for a project that is estimated to yield total income of $390,000 over three years and costs $920,000?
> Matching Terminology 1. Compounding 2. Discounted cash flow methods 3. Discounting 4. Discount rate 5. Sensitivity analysis 6. Simple rate of return A. How changing underlying assumptions affect decisions. B. The rate at which the current value of future
> An investment manager is currently evaluating three projects: 1. Project 1 requires an initial investment of $10,000, will provide future cash flows of $26,000, and the PV of the future cash flows is $17,000. 2. Project 2 requires an initial investment o
> Tremaine Company is considering two mutually exclusive long-term investment projects. Project ABC would require an investment of $240,000, have a useful life of 4 years, and annual cash flows of $78,000. Project XYZ would require an investment of $230,00
> You plan to retire in 20 years. Calculate whether it is better for you to save $30,000 a year for the last 10 years before retirement or $15,000 for each of the next 20 years. Assume you are able to earn 8 percent interest on your investments.
> Suppose your sister Becky and her three best friends start a small business making beaded bracelets. They plan to purchase the materials, assemble the jewelry themselves, and sell the finished pieces to friends at school. Other than minor color and desig
> As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $100,000 cash paid today; $50,000 to be paid in one year; and an annuity of $20,000 to be paid each year for 20 years. What is
> A number of terms and concepts from this chapter and a list of descriptions, definitions, and explanations appear as follows. For each term listed (1 through 9), choose at least one corresponding item (a through k). Note that a single term may have more
> Augusta Corp’s Golf Division has sales of $200,000, cost of goods sold of $105,000, operating expenses of $35,000, average invested assets of $900,000, and a hurdle rate of 12 percent. Calculate the Golf Division’s return on investment and its residual i
> Myrtle Company has sales of $140,000, cost of goods sold of $70,000, operating expenses of $20,000, average invested assets of $400,000, and a hurdle rate of 6 percent. Calculate Myrtle’s return on investment and its residual income.
> Violet Company has sales of $520,000, net operating income of $310,000, average invested assets of $940,000, and a hurdle rate of 10 percent. Calculate Violet’s return on investment and its residual income.
> Choose a company that has an online sales segment; it can be a company that operates entirely online or a brick-and-mortar store with an online site. Assuming a balanced scorecard approach, identify five specific measures that the company could use to me
> Consider the manager of your local Applebee’s restaurant. Using a balanced scorecard approach, identify three measures for each of the four dimensions of the balanced scorecard.
> In each of the following situations, identify which type of responsibility center is appropriate based on the decision-making authority the manager would possess: 1. The manager of the accounting department in Ford’s corporate office. 2. The sales manage
> Responsibility centers can be created in a variety of ways. Give a real-world example of a company whose responsibility centers would likely be created on the basis of each of the following: functional area, product line, and geographic area.
> Lupe Bornes recently graduated from college and received job offers in management from two different companies. The positions are similar in terms of title, salary, and benefits, but the companies vary in organizational structure. Alpha Company is centra
