Question: On April 1, two jobs were in

> Kresge Lodging has an elite program for its card members. There are three levels, based on total nights stayed: Diamond (50 nights or more); Platinum (25 nights or more); and Base (fewer than 25 nights). In order to facilitate reservations and answer cus

> Lozier Catering and Events (LCE) offers a variety of services from small gatherings to large weddings and corporate retreats. Sales for year 1 totaled $877,500. Information regarding resources for the year includes the following: Required Management has

> Refer to Exercise 10-50. Sales revenue for Hosmer Industries is $720,000. Required a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statement like the one in Exhibit 10.12. c. Prepare a short re

> Refer to the information in Exercise 9-52. The manager of the Personnel Department decides that the estimate of the activities might be too simple in two ways. First, the time to interview depends on the level of the position for which a candidate is sou

> Refer to Exercise 9-50. Until now, Meadow Logistics, Inc. (MLI) has used a commercial vendor to ship orders. The manager of Distribution believes the system described in Exercise 9-50 is too simple in two ways. First, if a retailer is ordering from MLI f

> Refer to the information in Exercise 7-34. The amount of overhead applied in each of the inventory accounts at the end of Year 1 is as follows. Required Prepare an entry to allocate the over- or underapplied overhead. Exercise 7-34: Linzee Liners estima

> Commonwealth Devices makes three wearable fitness devices at its Lake Plant: CFit-1, CFit-2, and CFit-Xtra. The company has for many years allocated overhead to products using machine-hours. Last year, the Lake Plant produced and shipped 8,000 units of C

> Chadwick Industries has several manufacturing facilities that make a wide variety of industrial and consumer products. Two of the plants, River North and River South, make components for road construction equipment. The River North plant was built when t

> Montana Precision Products (MPP) produces parts for small machine tools. The typical product goes through two processes, machining and finishing, before being packaged and shipped to the customer. All jobs at MMP are produced to order, and the company ho

> Miller Manufacturing (2M) makes a variety of components for mechanized agricultural equipment. The products are similar but not identical, and all go through many of the same processes. 2M sells products worldwide and has to comply with various regulatio

> Burgess Business School has two degree programs, BBA and MBA. The school uses an ABC system to cost the three support services it provides to students from both programs: Career Center, Events, and Library. Following are the costs of these three activiti

> Refer to Problem 9-63. The study team decides to look more closely at the assembly activity and determines that it can be broken down into two activities: production and engineering. Production covers the costs of ongoing manufacturing, while engineering

> Lauder Company manufactures and distributes various fixtures used primarily in new building construction. At the company’s Bayside plant, Lauder produces two models of one widely used fixture designated by model names LC-20 and LC-50. C

> Kensington Electronics (KE) is a wholly owned subsidiary of CWD Enterprises, a global manufacturing company. Unlike most CWD companies, KE uses a traditional costing system to compute product costs. After the last review by CWD staff, the financial manag

> Warren Furniture produces three models of desk chairs: Basic, Ergo, and Exec. The cost system at the Warren production facility allocates overhead cost on the basis of direct labor hours. The company is considering updating its cost system to an activity

> Nall Products manufactures a wide variety of products in several facilities. It produces three models of mobility scooters in its St. Claire plant: models NP-10, NP-20, and NPX-70. The machine and labor times for the three models are similar. The differe

> Linzee Liners estimates that its manufacturing overhead will be $1,725,000 in Year 1. It further estimates that direct labor costs will amount to $750,000. During March, Linzee worked on four jobs with actual direct labor costs of $35,000 for Job 0301, $

> What is the cost hierarchy?

> Ellis Equipment (EE) manufactures three models of lawn tractor: EE-1000, EE-1800, and EE-2800. Because of the different materials used, production processes for each model differ significantly in terms of machine types and time requirements. Once parts a

> Delaware Electronics makes three models of a controller for measurement and testing equipment: Models X-100, X-200, and X-500. The three models differ in their capabilities and also in the materials they use. The X-100 model is a low-technology, standard

> Clairepoint Medical Devices, Inc. (CMDI) makes three types of a diagnostic device. For internal purposes, these models are referred to as Alpha, Beta, and Gamma, respectively. Although they are designed to provide the same information, the models differ

> Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that

> Refer to Problem 9-54. Assume that you have prepared financial statements that show the operating profit for each of the two models manufactured by Thatcher Supply. Further assume that under the activity-based costing approach (requirement [b] in Problem

> Thatcher Supply manufactures and sells two types of pet doors—Standard and Hi-Tech. The Standard model is a basic opening installed in a door. The Hi-Tech model is automated and includes several safety features using electronics. The Hi

> Normandy Office Products (NOP) makes two types of office desks, Manager and Executive. The Executive model is adjustable using electric motors and is made with upgraded materials. The manufacturing process for the Executive model is more complex than tha

> Refer to the data in Exercise 8-56 (Hedwig Optical). Information for January is copied here. There are never any work-in-process inventories. The plant controller believes that keeping track of the three models and separating costs in the Assembly and Ca

> Drew Implements makes four models of utility and light construction tractors. The model names are DI-1400, DI-3800, DI-5000, and DI-8000. Drew manufactures the tractors in two departments— Fabrication and Detailing. All four models are

> Chateaufort Craft (CC) makes three models of sea kayaks: CC-100, CC-200, and CC-500. CC manufactures the boats in two departments: Department A (Assembly) and Department B (Finishing). All three models are processed initially in Department A, where all m

> Refer to the information in Exercise 7-32. Overhead applied in each of the inventory accounts is as follows. Required Prepare an entry to allocate the under- or overapplied overhead. Exercise 7-32: Antoine Machining estimated its manufacturing overhead

> Saratoga Systems produces a single product. The production process requires all material to be brought to the shop floor before any work begins. The material is then processed and assembled and then transferred to finished goods inventory. Every unit is

> For each of the following independent cases, determine the units or equivalent units requested (assuming weighted-average costing). a. Beginning inventory consisted of 64,000 units with a direct materials cost of $113,600. The equivalent work represented

> For each of the following independent cases, use FIFO costing to determine the information requested. a. At the start of the period, 7,000 units were in the work-in-process inventory; 5,250 units were in the ending inventory. During the period, 16,625 un

> Refer to the information in Problem 8-67. The Mixing Department at the Stadium Plant uses FIFO process costing to account for production. In May, beginning work-in-process inventory consisted of 150,000 units, 40 percent complete with respect to conversi

> Howell Food Products (HFP) produces the most popular of its canned soup varieties at the Stadium Plant. The Stadium Plant has two departments: Mixing and Canning. Raw materials are added at two points in the production of the soup. First, vegetables are

> The Erskine Inc. Metals Division manufactures an industrial compound used in metal working at the division’s only plant. The production process uses two materials. The first is a lubricant produced by the Chemicals Division of Erskine. The Chemicals Divi

> Ambassador Lubricants (AL) produces various oil and synthetic-based products. One of the products is produced at the company’s Bridge Plant in a single department. Two materials are used in the production process. Material A is introduc

> Refer to the facts in Problem 8-59. Required a. Prepare a production cost report using FIFO. b. Answer requirement (b) in Problem 8-59. Problem 8-59: Required a. Prepare a production cost report for September using the weighted-average method. b. Manage

> Refer to the data in Exercise 8-56 and Problem 8-74 (Hedwig Optical). The marketing manager cannot believe that the controller wants to treat all binocular models the same. The marketing manager says that in order to understand where to target marketing

> Spokane, Inc. is a manufacturing company that produces parts both for inventory and to custom specifications. Parts produced for inventory are sold at prices determined in the market. Custom parts are sold at a price equal to production cost plus a profi

> Antoine Machining estimated its manufacturing overhead to be $279,000 and its direct materials costs to be $450,000 in Year 1. Three of the jobs that Antoine Machining worked on in Year 1 had actual direct materials costs of $15,000 for Job AM002, $55,00

> Buelow, LLP, is a consulting firm that helps organizations become more efficient. A supervisor on two consulting jobs discusses an issue that arose recently. One of the consulting jobs is for a large technology firm, and the other is for a major automobi

> Jerome Shipyards does work for both the U.S. Navy and private shipping companies. Jerome’s major business is renovating ships, which it does at one of two company dry docks referred to by the names of the local towns: Casgrain and Lyndo

> Plainview Paving Contractors (PPC) is a rapidly growing, recently established company that has not been profitable despite increases in sales. It has hired you as a consultant to find ways to improve profitability. You believe that the problem results fr

> Accounting records for Antoinette Designs (AD) for November show the following (each entry is the total of the actual entries for the account for the month): The Work-in-Process Inventory ending account balance on November 30 was 125 percent of the begin

> Mechanic Implements manufactures miscellaneous parts for building construction and maintenance. The company uses a normal job costing system and overhead is applied on the basis of direct labor cost. Any over- or underapplied overhead is written off to C

> The following financial information about the manufacturing plant of Continental Company for the year-to-date and the month of July appears on the company’s records: A count of the inventories on hand July 31 shows the following: Interv

> Manor Painting is a commercial interior and exterior painting contractor specializing in commercial buildings. An inventory of materials and equipment is on hand at all times, so work can start as quickly as possible. Special equipment is ordered as requ

> Hyde Restorations rebuilds factory facilities. It employs 130 full-time workers at $25 per hour. Despite operating at capacity, last year’s performance was a great disappointment to the managers. In total, nine jobs were accepted and co

> Refer to the facts in Problem 8-64. Required The financial managers at Ambassador Lubricants are trying to decide between whether to continue using the weighted-average method or switch to FIFO. They tell you that the June results are fairly typical. Wha

> Cranshaw Business Services (CBS) operates an information technology (IT) consulting firm out of two offices: Detroit and Los Angeles. Corporate services, such as legal, finance, and personnel, are centralized at the main office, and the costs of these se

> The records of Tillman Corporation’s initial and unaudited accounts show the following ending inventory balances, which must be adjusted to actual costs: As the auditor, you have learned the following information. Ending work-in-process

> Rogell Academic Services (RAS) provides tutoring and test preparation services for children and young adults. Employees include a director and six facilitators. The director manages all marketing and administrative activities, sometimes with the help of

> Select the best answer for each of the following independent multiple-choice questions. a. Hillger Paints’s production cycle starts in Department A. The following information is available for April: Materials are added at the beginning

> Garvin, Inc. produces a specialized machine tool to order. Garvin uses a job costing system and applies overhead on the basis of direct labor-hours. Each unit varies according to customer specification, but for planning purposes, Garvin uses the followin

> Mercier Manufacturing produces a plastic part in three sequential departments: Extruding, Fabricating, and Packaging. Mercier uses the weighted-average process costing method to account for costs of production in all three departments. The following info

> Highway 1 Manufacturing (H1M) produces several, related products in multiple factories. At one facility, which produces only a single product, managers are debating whether to use a predetermined rate calculated on a monthly or annual basis. Overhead is

> A series of computer and backup system failures caused the loss of most of the company records at Stotter, Inc. Information technology consultants for the company could recover only a few fragments of the company’s factory ledger for Ju

> Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machine-hours is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the

> Whitlock Manufacturing uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct materials costs to apply overhead to individual jobs. The company prepared an estimate of overhead costs

> The following T-accounts represent September activity for Kelly Tools: Additional Data ∙ Sales are billed at 175 percent of Cost of Goods Sold before the over- or underapplied overhead is prorated. ∙ Materials of $75,7

> Refer to the facts in Exercise 11-25. Assume that both Fabricating and Finishing work on just two jobs during the month of March: MP-47 and MP-48. Costs are allocated to jobs based on laborhours in Fabricating and machine-hours in Finishing. The number o

> The following T-accounts for the Fitzpatrick Company represent April activity: Required Compute the missing amounts indicated by the letters (a) through (i).

> Bromley Custom Cabinetry (BCC) uses a job costing system and applies overhead based on direct materials cost. Last year, manufacturing overhead was expected to be $693,000 and direct materials cost was estimated to be $630,000. Actual manufacturing overh

> Hendricks Mining & Manufacturing is a global mineral resource company. At its Taylor site, the company mines and processes three grades of metal—IA, IB, and II—in fixed proportions. The joint costs of mining total $2,550,000. In a typical month, the comp

> Elsa Products processes Chem-Z into two products: Chem-A and Chem-B. Chem-Z costs $42,000 per batch. The joint process produces 11,250 units of Chem-A with a market value of $135,000, and 20,000 units of Chem-B with a market value of $33,750. The convers

> Longwood Corporation processes a liquid into three outputs: K-2, K-4, and K-5. The sales value of each of these products for a single batch follows: The joint costs total $850,000. There are no separable production costs. If K-5 is accounted for as a by-

> Goldsmith Processors produces two joint products from a special type of ore. Product X-1 sells for $8 per unit at the split-off point. After an additional $90,000 of processing costs are incurred, product X-2 sells for $25 per unit. In a typical period,

> Terry Chemicals processes a single raw material, Clean-Z, in Department 1 of its main production facility. Out of the joint process in Department 1, two products emerge: Azyne and Bethanol. Azyne is further processed in Department 2, which also is a join

> Wadsworth Processes manufactures three produces—ABC, DEF, and GHI—from a joint production process. Data on the operations at Wadsworth for the most recent period are as follow: Required Determine the value for each let

> Troester Manufacturing produces products X, Y, and Z from a joint process. Each product can be processed further and sold as X-Prime, Y-Prime, and Z-Prime. Information on the operations for the most recent period follows: Required Determine the value for

> Lipton Liquids produces three products by a joint production process. Raw materials are put into production in Department 1, and at the end of processing in this department, three products appear. Alpha is sold at the split-off point with no further proc

> Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the m

> Douglass Minerals mines ore and then processes it into other products. At the end of the mining process, the ore splits off into three products: Metal-A, Metal-B, and Metal-C. Douglass sells Metal-C at the split-off point, with no further processing. Met

> Morrell Financial Services (MFS) has three service departments: Accounting, Information Technology (IT), and Personnel. MFS also has two operating departments (Advice and Brokerage). Data on service department usage and service direct costs follow: Requi

> Filer Fabrication has three service departments (S1, S2, and S3) and two production departments (P1 and P2). Data on service department usage and service direct costs follow. Required Assume that Filer Fabrication uses the reciprocal method of service de

> Refer to the information in Problem 11-58 for Rohns Manufacturing. Required Assume that Rohns uses the reciprocal method of service department cost allocation. What is the total service department cost allocated to Fabrication? To Assembly? (Hint: Use th

> Refer to the facts in Problem 11-65. Required a. If Dunedin Bank outsources both the Transactions Department and the IT Department, the total savings (before considering the fee paid to the outside vendor) will be 1. More than the sum of the savings calc

> Refer to the facts in Problem 11-60. The cost accountant at Dunedin Bank estimates that the cost structures in its departments are as follows: Required a. If Dunedin Bank outsources the Transactions Department, what is the maximum it can pay an outside v

> Refer to the facts in Problem 11-57. Baldwin Enterprises estimates that the cost structure in its operations is as follows: Required a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total

> Lothrop Security Group (LSG) provides consulting and security services to various clients, including government agencies and commercial firms. It has two operating departments, Government and Commercial. The Government Department handles contracts with f

> Hessel Corporation has two operating departments (Domestic and Global) and three service departments: Human Resources (HR), Legal, and Testing. In the most recent period, the following costs and service department usage ratios were recorded: Required All

> Dunedin Bank has two operating departments (Retail and Commercial) and three service departments: Operations, Information Technology (IT), and Transactions. For the last period, the following costs and service department usage ratios were recorded: Requi

> The following data are taken from the production records at the Bay Plant of Charlevoix Chemicals for May. Work-in-process beginning inventory consisted of 43,000 units fully complete with respect to materials and 22 percent complete with respect to conv

> A&R Quality Advisors is a small consulting firm offering quality audits and advising services to small and mid-sized manufacturing firms. Quality audits entail reviewing, checking, and documenting quality practices within a firm. Quality advising ent

> O’Leary Corporation manufactures special-purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O’Leary use

> Refer to Integrative Case 9-75 in Chapter 9. Assume that all of the facts in Case 9-75 still hold except that the practical capacity of the machinery is 20,000 hours instead of 10,000 hours. Required a. Recompute the unit costs for each of the cola produ

> WSM Corporation is considering offering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to offer four flights every day (excluding certain holidays) for a total of 1,400 flights per year (= 350 days × 4 flights per day)

> Ag-Coop is a large farm cooperative with a number of agriculture-related manufacturing and service divisions. As a cooperative, it pays no federal income taxes. The company owns a fertilizer plant that processes and mixes petrochemical compounds into thr

> Vermont Company uses continuous processing to produce stuffed bears and FIFO process costing to account for its production costs. It uses FIFO because costs are quite unstable due to the volatile price of fine materials it uses in production. The bears a

> Refer to the data in Exercise 8-24. Required a. Compute the equivalent units for materials using FIFO. b. Compute the equivalent units for conversion costs using FIFO. Exercise 8-24: Kronk, Inc. provides the following information concerning the work in

> Consider the following actions of a retail store trying to manage the costs of its returns service. Required Match each of the process improvements listed with how they deliver cost reductions.

> Refer to the data in Exercise 8-22. Assume that beginning inventory is 20 percent complete with respect to materials and 40 percent complete with respect to conversion costs. Required a. Compute the equivalent units for materials using FIFO. b. Compute t

> By mistake, the production supervisor at East Manufacturing transposed the digits on the production report and reported a higher percentage of completion for each inventory component. Assume that there was no beginning inventory. Required What is the eff

> Kronk, Inc. provides the following information concerning the work in process at its plant: ∙ Beginning inventory was partially complete (materials are 100 percent complete; conversion costs are 10 percent complete). ∙ Started this month, 65,000 units. ∙

> Hoyt, Inc. has a process costing system at its Forest Street Plant. All materials are introduced when conversion costs reach 40 percent. The following information is available for physical units during August: Required a. Compute the equivalent units for

> Refer to the data in Exercise 8-28 for Charlevoix Chemicals. Required Charlevoix Chemicals uses FIFO process costing at the Bay Plant for product costing. The following equivalent units (materials; conversion) used to compute production costs for May wou

> When using the FIFO method of process costing, total equivalent units produced for a given period equal a. The number of units started and completed during the period plus the number of units in beginning work in process plus the number of units in endin

> Sturgis Manufacturing produces one model of precision tool and accounts for costs using a job cost system. Information from the most recent fiscal year indicates the following. ∙ Total manufacturing cost during the year was $2,578,125 based on actual dir

> The partially completed T-accounts and selected additional information for Hancock Parts for the month of February follow: Additional information for February follows: ∙ Sales revenue in February was $179,200. ∙ The op

> Partially completed T-accounts and additional information for Dumfries Designs for the month of August follow: Additional information for August follows: ∙ The labor wage rate was $28 per hour. ∙ During the month, sale