Question: Milberg Co. uses absorption costing and standard

> The controller of Harrington Company estimates sales and production for the first four months of 2020 as follows: Prepare a cash budget for a quarter. Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the month of the sale

> Montreal Inc. manufactures garden hoses for large stores. The standard costs for a dozen garden hoses are as follows: Calculate variances. Direct materials …………â€

> Martelle Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $250,000, would have a useful life of nine years and zero salvage value, and would result in net annual cash flows of

> Toronto Manufacturing Company uses a standard cost system. John Robert, a financial analyst for Toronto Manufacturing Company, has been given information with respect to standard cost variances for one of the plants. These variances are given below. Calc

> Fayman Manufacturing Company uses standard costs with its job-order cost accounting system. In January, an order (Job 84) was received for 5,500 units of product D. The standard cost of one unit of product D is as follows: Journalize and post standard co

> Pointe Claire Company applies overhead based on direct labour hours. Two direct labour hours are required for each unit of product. Planned production for the period was set at 9,000 units. Manufacturing overhead is budgeted at $135,000 for the period (2

> Hi-Tek Labs performs steroid testing services for colleges and universities. Because the company works only with educational institutions, the price of each test is strictly regulated. Therefore, the costs incurred must be carefully monitored and control

> Crede Manufacturing Company uses a standard cost accounting system. In 2020, 28,000 units were produced. Each unit took several kilograms of direct materials and 1.6 standard hours of direct labour at a standard hourly rate of $12. Normal capacity was 50

> You have been given the following information about ALG Co. Ltd., which uses a standard cost system in accounting for its one product: Calculate various amounts from standard costs and variances. 1. In the month of November 2020, 5,000 units were produce

> Kohler Clothiers manufactures women’s business suits. The company uses a standard cost accounting system. In March 2020, 15,700 suits were made. The following standard and actual cost data applied to the month of March when normal capac

> Under a contract with the provincial government, ChemLabs Ltd. analyzes the chemical and bacterial composition of well water in various municipalities in the interior of British Columbia. The contract price is $25.20 per test performed. The normal volume

> Soriano Manufacturing Company uses a standard cost accounting system to account for the manufacturing of exhaust fans. In July 2020, it accumulates the following data for 1,500 units started and finished: Calculate variances and prepare an income stateme

> Inman Corporation manufactures a single product. The standard cost per unit of product is as follows: Calculate variances. Direct materials—2 kg of plastic at $5 per kilogram ………………… $10.00 Direct labour—2 hours at $12 per hour …………………………………… 24.00 Vari

> Jonczyk Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $395,000, has an expected useful life of 10 years and a salvage value of zero, and is expected to increase net annual cash flows by $70,00

> You have been given the following information about the production of Gamma Co., and are asked to provide the plant manager with information for a meeting with the vice-president of operations: Determine amounts from the variance report. ………………………………………

> Doggone Groomers is in the dog-grooming business. Its operating costs are described by these formulas: Prepare a flexible budget report; compare flexible and static budgets. Grooming supplies (variable) y = $0 + $4.00x Direct labour (variable) y = $0 +

> High Arctic Manufacturing Company produces one product, Kebo. Because of wide fluctuations in the demand for Kebo, the assembly department has significant variations in its monthly production levels. Prepare a flexible budget, budget report, and graph fo

> Kitchen Care Inc. (KCI) is a manufacturer of toaster ovens. To improve control over operations, the president of KCI wants to begin using a flexible budgeting system, rather than use only the current master budget. The following data are available for KC

> Alcore Company estimates that 240,000 direct labour hours will be worked in the assembly department during 2020. Based on that, the following budgeted manufacturing overhead data are calculated: Prepare a flexible budget and a budget report for manufactu

> Choo-Foo Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2020: Prepare production and direct labour budgets. Choo-Foo has a labour con

> Greish Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants have provided the following data: Prepare sales, production, direct materials, direct labour, and income statement budgets. An accounting assistant

> The budget committee of Urbina Company has collected the following data for its Eastwood Store in preparing budgeted income statements for July and August 2020. Prepare purchases and income statement budgets for a merchandiser. 1. Expected sales: July $4

> Raymond Co. began operations in January 2019. The information below is for Raymond Co.'s operations for the three months from January to March (the first quarter) of 2020: Prepare a cash budget. Expenses for Quarter 1 Depreciation …

> Nigh Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: Prepare cash budget for two months. All sales are on account. The company expects collections to be 60% in the month of sale, 30% in the first mon

> Michener Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $200,000 and has an estimated useful life of eight years with zero salvage value. Management estimates that the new bottling machine will provide

> Steelwall Inc. uses the return on investment as a performance measure and defines investment as the average operating assets. The company bases management bonuses in part on the ROI and expects all investments to earn a minimum rate of return of 18%. Cal

> Health Care Inc. (HCI) uses a flexible budgeting system, rather than only the current master budget. The following data are available for HCI's expected costs at production levels of 100,000, 110,000, and 120,000 units: Prepare a flexible budget report f

> Return on investment is often expressed as follows: Compare and contrast performances under ROI and residual income. Instructions a. Explain the advantages of breaking down the ROI calculation into two separate components. b. 1.Comparative data on three

> Kappa Company has three divisions: A, B, and C. Each year the vice-president incharge of the best-performing division is entitled to a sizeable bonus. The results for the year are now in and each vice-president has claimed that the bonus should be his or

> Northern Pride Inc., a diversified company, operates four departments. The company has collected the following departmental information for 2020: Calculate ROI and residual income and rank department performances. Instructions a. Rank the four departme

> South division had the following results for the year just ended: Compare ROI and residual income with supporting calculations. South is considering a new product line that would involve the following: South's parent company, Globe Inc., has a compan

> Alosio Manufacturing Company manufactures a variety of tools and industrial equipment. The company operates three divisions. Each division is an investment centre. Operating data for the home division for the year ended December 31, 2020, and relevant bu

> Henning Manufacturing Ltd. operates its patio furniture division as a profit centre. Operating data for this division for the year ended December 31, 2020, are as follows: Prepare a responsibility report for a profit centre. In addition, Henning Manufa

> Yaeger Company uses budgets in controlling costs. The company based the monthly budget amounts in the report on an expected production of 60,000 units per month or 720,000 units per year. The assembling department manager is pleased with the report and e

> The controller of Kari Company estimates sales and production for the first four months of 2020 as follows: Prepare a cash budget for a month. January … February … March … April Sales $40,000 … $50,000 … $60,000 … $35,000 Production in units 2,000 …

> Timo Corporation, which operates an amusement park, is considering a capital investment in a new ride. The ride would cost $136,000 and have an estimated useful life of five years. The park will sell it for $65,000 at that time. (Amusement parks need to

> Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and creditors. Using that rate, Waterways then uses different methods to determi

> Raddington Inc. makes and sells chairs. The controller is responsible for preparing the master budget and has accumulated the following information for 2020: Prepare production and direct labour budgets. Raddington Inc. has a labour contract that calls

> Vergados Brothers is trying to estimate the amount of inventory it needs to purchase next month (April). The controller likes to have twice the number of units he expects to sell on hand at the beginning of the month. He always takes the 3/10, net 30 pur

> Azim Shirts Inc. manufactures sweatshirts for large stores. The standard costs for a dozen sweatshirts are: Calculate variances and prepare journal entries. Direct materials ………â€&br

> Berman Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,950 units of product B was received. The standard cost of one unit of product B is as follows: Journalize and post standard cost ent

> Finley Manufacturing Corporation accumulates the following data for jobs started and finished during the month of June 2020: Calculate variances and prepare an income statement. Overhead is applied based on standard machine hours. Three hours of machin

> Service Farm Labs Inc. provides mad cow disease testing for both provincial and federal government agriculture agencies. Because the company’s customers are government agencies, prices are strictly regulated. Farm Labs must therefore constantly monitor a

> The Multi-Tool Manufacturing Company uses a standard cost system. Stéphanie Roget, a financial analyst for Multi-Tool Manufacturing Company, has been given information with respect to standard cost variances for one of the plants. These variances are giv

> Biotech Inc. applies overhead based on direct labour hours. Three direct labour hours are required for each unit of product. Planned production for the period was set at 8,100 units. Manufacturing overhead is budgeted at $405,000 for the period (30% of t

> You have been given the following information about the production of Theta Co. and are asked to provide the plant manager with information for a meeting with the vice-president of operations: Determine amounts from the variance report. â€&br

> Ronaldo Manufacturing Company uses a standard cost system in accounting for the cost of one of its products. The budgeted monthly production is 1,750 units per month. The standard direct labour cost is 15 hours per unit at $5 per hour. The budgeted cost

> Nien Company accumulates the following data for a proposed capital investment: cash cost, $215,000; net annual cash flows, $40,000; present value factor of cash inflows for 10 years, 5.65 (rounded). Determine the net present value, and indicate whether t

> Harbaugh Manufacturing company uses a standard cost accounting system. In 2020, 45,000 units were produced. Each unit took several kilograms of direct materials and two standard hours of direct labour at a standard hourly rate of $12. Normal capacity wa

> Sasha Clothiers is a small company that manufactures oversize suits. The company uses a standard cost accounting system. In May 2020, it produced 11,200 suits. Calculate variances and identify significant variances. The following standard and actual cost

> Ranier Corporation manufactures a single product. The standard cost per unit of the product is shown below: Calculate variances. Direct materials—1.5 kg of plastic at $8 per kilogram ………….. $12.00 Direct labour—2 hours at $15 per hour ………………………………... 30

> Finesse Company manufactures tablecloths. Sales have grown rapidly over the past two years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget

> Oakley Company estimates that 360,000 direct labour hours will be worked in the packaging department during 2020. Based on that, it has calculated the following budgeted manufacturing overhead cost data for the year. Prepare a flexible budget and budget

> Return on investment is often expressed as follows: Compare and contrast performances under ROI and residual income. Instructions a. Explain the advantages of breaking down the ROI calculation into two separate components. 1. Comparative data on three c

> The Big Boy Company is in a seasonal business and prepares quarterly budgets. Its fiscal year runs from July 1 through June 30. Production occurs only in the first quarter (July to September), but sales take place throughout the year. The sales forecast

> The following data are for the operations of Zoë's Fashion Footwear Ltd., a retail store: Prepare a merchandise purchases budget and a budgeted income statement. 1. Sales Forecast—2020 April …………………. $70,000 May …………………… 60,000 June …………………. 80,000 July

> Litwin Industries had sales in 2019 of $5.6 million (800,000 units) and a gross profit of $1,344,000. Management is considering two alternative budget plans to increase its gross profit in 2020. Prepare sales and production budgets and calculate the cost

> Mega Company is considering the purchase of a new machine. The invoice price of the machine is $75,000, freight charges are estimated to be $4,000, and installation costs are expected to be $6,000. The annual cost savings are expected to be $20,000 for 1

> Quinn Ltd. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants provide the following data: Prepare sales, production, direct materials, direct labour, and income statement budgets.. An accounting assistant has p

> Wahlen Farm Supply Company manufactures and sells a pesticide called Basic II. The following data are available for preparing budgets for Basic II for the first two quarters of 2020. Prepare a budgeted income statement and supporting budgets. 1. Sales: Q

> Platteville Eye Clinic is considering investing in new optical-scanning equipment. It has two options: Option A would have an initial lower cost but would require a significant expenditure for rebuilding after three years. Option B would require no rebui

> ICA Corporation is reviewing an investment proposal. The schedule below presents the initial cost and estimates of the investment’s book value at the end of each year, the net cash flows for each year, and the net income for each year.

> Aqua Tech Testing is considering investing in a new testing device. It has two options. Option A would have an initial lower cost but would require a significant expenditure for rebuilding after five years. Option B would require no rebuilding expenditur

> Benjamin Corp. is thinking about opening a hockey camp in Barrie, Ontario. In order to start the camp, the company would need to purchase land and build four ice rinks and a dormitory-type sleeping and dining facility to house 110 players. Each year, the

> The Fort McMurchy Sanitation Company is considering the purchase of a garbage truck. The $77,000 price tag for a new truck would represent a major expenditure for the company. Kalia Vang, owner of the company, has compiled the following estimates in tryi

> Vorteck Inc. manufactures snowsuits. Vorteck is considering purchasing a new sewing machine at a cost of $2.5 million. Its existing machine was purchased five years ago at a price of $1.8 million, and six months ago Vorteck spent $55,000 to keep it opera

> A company currently sells 850,000 units per year of a product to one customer at a price of $0.80 per unit. The customer requires that the product be exclusive and expects no increase in sales during the next year. The product is manufactured with a mach

> K&M International is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Depreciation is $20,000 per year for the old equipmen

> Pagley Company’s standard labour cost of producing one unit of product DD is four hours at the rate of $12.00 per hour. During August, 40,800 hours of labour are incurred at a cost of $12.10 per hour to produce 10,000 units of product DD. Calculate labou

> Biotec Inc. wants to replace its R&D equipment with new high-tech equipment. The existing equipment was purchased five years ago at a cost of $150,000. At that time, the equipment had an expected life of 10 years, with no expected salvage value. The equi

> The partnership of Lou and Bud is considering three long-term capital investment proposals. Relevant data on each project are as follows: The salvage value is expected to be zero at the end of each project. Depreciation is calculated by the straight-li

> Azim Electronics Inc. reported a cost of goods sold of $900,000 last year, when it produced and sold 25,000 units. The cost of goods sold was 25% materials, 65% direct labour, and 10% overhead. The company is considering the purchase of a machine costing

> Bonita Corp. is thinking about opening a soccer camp in southern Ontario. In order to start the camp, the company would need to purchase land and build four soccer fields and a dormitory-type sleeping and dining facility to house 150 soccer players. Each

> Berens River Clinic is considering investing in new heart monitoring equipment. It has two options: Option A would have an initial lower cost but would require a significant expenditure for rebuilding after four years. Option B would require no rebuildin

> Prestige Auto Care is considering the purchase of a new tow truck. The garage currently has no tow truck, and the $60,000 price tag for a new truck would be a major expenditure for it. Jenna Lind, owner of the garage, has compiled the following estimates

> MCA Corporation is reviewing an investment proposal. The schedule below presents the initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year. All cash flow

> Magenta Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Calculate the payback period, annual rate of return, and net pre

> ALGS Ltd. wants to purchase a new machine for $30,000, excluding $1,500 in installation costs. The old machine was bought five years ago and had an expected economic life of 10 years without salvage value. This old machine now has a book value of $2,000

> The Three Stages partnership is considering three long term capital investment proposals. Each investment has a useful life of five years. Relevant data on each project are as follows: Calculate the annual rate of return and net present value, and apply

> The standard cost of product B manufactured by Bhaskara Company includes three units of direct materials at $5.00 per unit. During June, the company purchases 29,000 units of direct materials at a cost of $4.70 per unit and uses 29,000 units of direct ma

> K&G Company currently sells 1 million units per year of a product to one customer at a price of $3.80 per unit. The customer requires that the product be exclusive and expects no increase in sales during the five year contract. The company manufactures t

> Madden Limited is the largest Canadian producer of dairy products. The company needs to replace its equipment. The current equipment was purchased 18 years ago at a cost of $2 million, and it was depreciated over a 20-year period using the straight-line

> Saskatoon First Company must expand its manufacturing capabilities to meet the growing demand for its products. The first alternative is to expand its current manufacturing facility, which is located next to a vacant lot in the heart of the city. The sec

> The Taylor Company Limited reported a cost of goods sold of $640,000 last year, when 20,000 units were produced and sold. The cost of goods sold was 35% materials, 42% direct labour, and 23% overhead. The company is considering the purchase of a machine

> BioFarm Inc. wants to replace its current equipment with new high-tech equipment. The existing equipment was purchased five years ago at a cost of $120,000. At that time, the equipment had an expected life of 10 years, with no expected salvage value. The

> Pronto Plumbing Company is a newly formed company that specializes in plumbing services for home and business. The owner, Paul Pronto, had divided the company into two segments: home plumbing services and business plumbing services. Each segment is run b

> As sales manager, Kajsa Keyser was given the following static budget report for selling expenses in the clothing department of Dunham Company for the month of October: Prepare and discuss a flexible budget report. / / As a result of this budget report,

> Sublette Company's manufacturing overhead budget for the first quarter of 2020 contained the following data: Prepare a flexible budget report and a responsibility report for manufacturing overhead. Actual variable costs were as follows: indirect materi

> The actual selling expenses incurred in March 2020 by Vincent Company are as follows: Prepare flexible budget reports for selling expenses. / / Instructions a. Prepare a flexible budget performance report for March using the budget data in E11.21, assu

> Vincent Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are as follows: sales commissions 6%; advertising 4%; travelli

> Muhsin Company has gathered the following information about its product: Direct materials: Each unit of product contains 4.5 kg of materials. The average waste and spoilage per unit produced under normal conditions is 0.5 kg. Materials cost $5 per kilogr

> Using the information in E11.19, assume that in July 2020, Raney Company incurs the following manufacturing overhead costs: Prepare flexible budget reports for manufacturing overhead costs, and comment on findings. Instructions a. Prepare a flexible bu

> Raney Company uses a flexible budget for manufacturing overhead that is based on direct labour hours. The variable manufacturing overhead costs per direct labour hour are as follows: Prepare flexible budget reports for manufacturing overhead costs. Indi

> Pargo Company budgeted selling expenses of $30,000 in January, $35,000 in February, and $40,000 in March. Actual selling expenses were $31,200 in January, $34,525 in February, and $46,000 in March. Prepare and evaluate a static budget report. Instructio

> Jim Thome has prepared the following list of statements about budgetary control. Understand the concept of budgetary control. 1. Budget reports compare actual results with planned objectives. 2. All budget reports are prepared on a weekly basis. 3. Manag

> In May 2020, the budget committee of Big Jim Stores assembles the following data for preparing the merchandise purchases budget for the month of June: Prepare a purchases budget and budgeted income statement for a merchandiser. 1. Expected sales: June $5

> Pisani Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the budget for the first two quarters of 2020. It still needs to do only the cash budget. It has collected the following informati

> NIU Company's budgeted sales and direct materials purchases are as follows: Prepare schedules of expected collections and payments. NIU's sales are 40% cash and 60% credit. It collects credit sales 10% in the month of sale, 50% in the month following s

> Lockwood Company combines its operating expenses for budget purposes in a selling and administrative expenses budget. For the first six months of 2020, the following data are available: Prepare a selling and administrative expenses budget for two quarter

> Keyser Company is preparing its manufacturing overhead budget for 2020. Relevant data are as follows: Prepare a manufacturing overhead budget for the year. 1. Units to be produced (by quarters): 10,000, 12,000, 15,000, 18,000 2. Direct labour: 1.5 hours