Question: Partially completed budget performance reports for
Partially completed budget performance reports for Garland Company, a manufacturer of light duty motors, follow:
a. Complete the budget performance reports by determining the correct amounts for the lettered spaces.
b. Compose a memo to Cassandra Reid, vice president of production for Garland Company, explaining the performance of the production division for November.
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Garland Company Budget Performance Report-Vice President, Production For the Month Ended November 30 Plant Actual Budget $2,420,000 3,000,000 Over Budget Under Budget $10,600) Eastern Region Central Region Western Region $2.409,400 2,998,400 (1,600) (g) () (k) $12,200) Garland Company Budget Performance Report-Manager, Western Reglon Plant For the Month Ended November 30 Actual Budget (b) Over Budget Under Budget Department Chip Fabrication Electronic Assembly (a) (C) $703,200 $ 3,200 $700,000 525,000 (e) Final Assembly $18,400) S18,400) 516,600 (d) Garland Company Budget Performance Report-Supervisor, Chip Fabrication For the Month Ended November 30 Actual Budget Over Budget $13,500 Under Budget Cost Factory wages Materials $ 95,500 $ 82,000 115,300 120,000 $(4,700) Power and light 49,950 45,000 4,950 Maintenance 37,200 $297,950 28,000 $275,000 9,200 $27,650 $(4,700)
> Tybee Industries Inc. uses a job order cost system. The following data summarize the operations related to production for January, the first month of operations: a. Materials purchased on account, $29,800. b. Materials requisitioned and factory labor u
> Munson Co. uses a job order cost system. The following data summarize the operations related to production for July: a. Materials purchased on account, $225,750 b. Materials requisitioned, $217,600, of which $17,600 was for general factory use c. Fact
> a. Where should a declared but unpaid cash dividend be reported on the balance sheet? b. Where should a declared but unissued stock dividend be reported on the balance sheet?
> Lexigraphic Printing Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are
> Ginocera Inc. is a designer, manufacturer, and distributor of low cost, high quality stainless steel kitchen knives. A new kitchen knife series called the Kitchen Ninja was released for production in early 20Y8. In January, the company spent $600,000
> Explain the meaning of each of the following terms as they relate to a bond issue: (a) convertible and (b) callable.
> During Year 1, its first year of operations, Galileo Company purchased two available-for- sale investments as follows: Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $50 per share and the Pavlov Co. s
> Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December. Instructions 1. Determine the amounts of the missing items, identifying them by letter.
> Briefly explain why firms might use nonfinancial performance measures.
> If variances are recorded in the accounts at the time the manufacturing costs are incurred, what does a debit balance in Direct Materials Price Variance represent?
> a. What are the two variances between the actual cost and the standard cost for direct labor? b. Who generally has control over the direct labor cost variances?
> Three phases of the management process are controlling, planning, and decision making. Match the following descriptions to the proper phase: Phase of management process Controlling Description a. Monitoring the operating results of implemented plan
> Fire Rock Company manufactures designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for June: In addition, the following information is available: a. Materials
> The materials cost variance report for Nickols Inc. indicates a large favorable materials price variance and a significant unfavorable materials quantity variance. What might have caused these offsetting variances?
> A partial list of The Grand Hotel’s costs follows: Instructions 1. What would be The Grand Hotel’s most logical definition for the final cost object? Explain. 2. Identify whether each of the costs is to be classified
> What is meant by reporting by the “principle of exceptions” as the term is used in reference to cost control?
> How does the target cost concept differ from cost- plus approaches?
> Many fast-food restaurant chains such as McDonald’s occasionally discontinue restaurants in their system. What are some financial considerations in deciding to eliminate a store?
> A company fabricates a component at a cost of $6.00. A supplier offers to supply the same component for $5.50. Under what circumstances is it reasonable to purchase from the supplier?
> A company accepts incremental business at a special price that exceeds the variable cost. What other issues must the company consider in deciding whether to accept the business?
> A company could sell a building for $250,000 or lease it for $2,500 per month. What would need to be considered in determining if the lease option would be preferred?
> Explain the meaning of (a) differential revenue, (b) differential cost, and (c) differential income.
> Under what conditions might a company use activity-based costing to allocate factory overhead to products?
> Valotic Tech Inc. sells electronics over the Internet. The Consumer Products Division is organized as a cost center. The budget for the Consumer Products Division for the month ended January 31 is as follows (in thousands): During January, the costs inc
> The following is a list of costs incurred by several businesses: a. Salary of quality control supervisor b. Packing supplies for products sold. These supplies are a very small portion of the total cost of the product. c. Factory operating supplies d.
> Identify the following costs as a product cost or a period cost for a magazine publisher: a. Sales salaries b. Paper used for the magazine c. Maintenance on printing machines d. Depreciation expense—corporate headquarters
> Garcon Inc. manufactures electronic products, with two operating divisions, the Consumer and Commercial divisions. Condensed divisional income statements, which involve no intracompany transfers and include a breakdown of expenses into variable and fixed
> The vice president of operations of Pavone Company is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: Instructions 1. P
> A condensed income statement for the Commercial Division of Maxell Manufacturing Inc. for the year ended December 31 is as follows: Assume that the Commercial Division received no charges from service departments. The president of Maxell Manufacturing h
> The Whole Life Baked Goods Company is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year e
> Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense account
> Materials used by the Instrument Division of T_Kong Industries are currently purchased from outside suppliers at a cost of $175 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity
> Hit-n-Run Inc. owns and operates 10 food trucks (mobile kitchens) throughout metropolitan Los Angeles. Each food truck has a different food theme, such as Irish-Mexican fusion, traditional Mexican street food, Ethiopian cuisine, and Lebanese-Italian fusi
> American Express Company is a major financial services company, noted for its American Express ® card. Some of the performance measures used by the company in its balanced scorecard follow: For each measure, identify whether the measure best
> H&R Block Inc. provides tax preparation services throughout the United States and other parts of the world. These services are provided through two segments: company-owned offices and franchised operations. Recent financial information provided by H
> When is the negotiated price approach preferred over the market price approach in setting transfer prices?
> Differentiate between a profit center and an investment center.
> A business issued a 45-day, 6% note for $210,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest.
> Identify the following costs as a product cost or a period cost for an automobile manufacturer: a. Steel b. Wages of employees that operate painting equipment c. Rent on office building d. Sales staff salaries
> Data for Uberto Company are presented in the following table of returns on investment and residual incomes: Determine the missing items, identifying each item by the appropriate letter. Minimum Acceptable Income from Operations (b) $93,000 $58,500
> The Walt Disney Company has four profitable business segments, described as follows: • Media Networks: The ABC television and radio network, Disney channel, ESPN, A&E, E!, and Disney.com • Parks and Resorts: Walt
> The condensed income statement for the Consumer Products Division of Fargo Industries Inc. is as follows (assuming no service department charges): The manager of the Consumer Products Division is considering ways to increase the return on investment. a
> Glades Sporting Goods Co. operates two divisions—the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y8, the end of the fiscal year, after all adju
> Wild Sun Airlines Inc. has two divisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional income statements were prepared: The service department charge rate for the service department costs was based
> Grael Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: The other corporate administrative expenses inc
> Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an a
> An examination of the accounting records of Clowney Company disclosed a high contribution margin ratio and production at a level below maximum capacity. Based on this information, suggest a likely means of improving income from operations. Explain.
> The following data were summarized from the accounting records for Jersey Coast Construction Company for the year ended June 30, 20Y8: Prepare divisional income statements for Jersey Coast Construction Company. Cost of goods sold: Service departmen
> Identify the following costs as a prime cost (P), conversion cost (C), or both (B) for a magazine publisher: a. Paper used for the magazine b. Wages of printing machine employees c. Glue used to bind magazine d. Maintenance on print
> Based on T_Kong Industries’ data in Exercise 24-20, assume that a transfer price of $160 has been established and that 50,000 units of materials are transferred, with no reduction in the Components Division’s current sales. a. How much would T_Kong Indu
> Roanoke Company produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (5,200 bars) are as follows: Determine the standard direct materials cost per bar of
> Alpha University wants to monitor the efficiency and quality of its course registration process. a. Identify three input and three output measures for this process. b. Why would Alpha University use nonfinancial measures for monitoring this process?
> Diamond Inc. is an Internet retailer of woodworking equipment. Customers order wood- working equipment from the company, using an online catalog. The company processes these orders and delivers the requested product from its warehouse. The company wants
> In applying the high-low method of cost estimation to mixed costs, how is the total fixed cost estimated?
> The following data were taken from the records of Griggs Company for December: Administrative expenses …………………………………………………………..$100,800 Cost of goods sold (at standard) …………………………………………………..550,000 Direct materials price variance—unfavorable ……………………………
> The Assembly Department produced 5,000 units of product during March. Each unit required 2.20 standard direct labor hours. There were 11,500 actual hours used in the Assembly Department during March at an actual rate of $17.60 per hour. The standard dire
> The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: The wind turbines require an investment of $887,600, while the biofuel equipment requires a
> Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions: a. Purchased 2,450 units of copper tubing on acco
> The management of Style Networks Inc. is considering two TV show projects. The estimated net cash flows from each project are as follows: After Hours requires an investment of $913,600, while Sun Fun requires an investment of $880,730. No residual value
> Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 20,000 hours for production: Tannin has available 25,000 hours of monthly productive capacity
> First United Bank Inc. is evaluating three capital investment projects using the net present value method. Relevant data related to the projects are summarized as follows: Instructions 1. Assuming that the desired rate of return is 15%, prepare
> Social Circle Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows: Each product requires an investment of $125,000. A rate of 10% has been selected for the net present value analysis.
> The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: Each project requires an investment of $368,000. Str
> Renaissance Capital Group is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated income from operations, and net cash flow for each proposal are as follows: The company&ac
> Melinda Stoffers owns and operates ABC Print Co. During February, ABC incurred the following costs in acquiring two printing presses. One printing press was new, and the other was purchased from a business that recently file
> Junck Company has sales of $550,000, and the break-even point in sales dollars is $385,000. Determine the company’s margin of safety as a percent of current sales.
> During May, Bergan Company incurred factory overhead costs as follows: indirect materials, $8,800; indirect labor, $6,600; utilities cost, $4,800; and factory depreciation, $9,000. Journalize the entry to record the factory overhead incurred during May
> Liu Inc. has sales of $48,500,000, and the break-even point in sales dollars is $31,040,000. Determine the company’s margin of safety as a percent of current sales
> Westminster Co. reports the following data: Determine Westminster Co.’s operating leverage. Sales $875,000 Variable costs Contribution margin 425,000 $450,000 Fixed costs 150,000 $300,000 Income from operations
> SungSam Enterprises reports the following data: Determine SungSam Enterprises’s operating leverage Sales $340,000 Variable costs Contribution margin 180,000 $160,000 Fixed costs B0,000 S B0,000 Income from operations
> Scrushy Company sells a product for $150 per unit. The variable cost is $110 per unit, and fixed costs are $200,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of
> Identify the following costs as a prime cost (P), conversion cost (C), or both (B) for an automobile manufacturer: a. Wages of employees that operate painting equipment b. Wages of the plant manager c. Steel d. Oil used for assembly
> Ramirez Inc. sells a product for $80 per unit. The variable cost is $60 per unit, and fixed costs are $2,000,000. Determine (a) the break-even point in sales units and (b) the break- even point in sales units if the company desires a target profit of $
> Elrod Inc. sells a product for $75 per unit. The variable cost is $45 per unit, while fixed costs are $48,000. Determine (a) the break-even point in sales units and (b) the break- even point if the selling price were increased to $95 per unit.
> Bigelow Inc. sells a product for $800 per unit. The variable cost is $600 per unit, while fixed costs are $1,200,000. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $850 per unit.
> The manufacturing costs of Carrefour Enterprises for three months of the year follow: Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost Total Cost Units Produced July $300,000 2,700 units August Septe
> The manufacturing costs of Ackerman Industries for the first three months of the year follow: Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost Total Cost Units Produced January $1,900,000 2,250,000 2
> The following are inputs and outputs to the copying process of a copy shop: Number of employee errors Number of times paper supply runs out Copy machine downtime (broken) Number of pages copied per hour Number of customer complaints Percent of jobs done
> Dvorak Company produced 1,000 units that require 5 standard pounds per unit at $2.50 standard price per pound. The company actually used 4,500 pounds in production. Journalize the entry to record the standard direct materials used in production.
> Bellingham Company produced 15,000 units that require 2.5 standard pounds per unit at $3.75 standard price per pound. The company actually used 36,000 pounds in production. Journalize the entry to record the standard direct materials used in production.
> Dvorak Company produced 1,000 units of product that required 3 standard hours per unit. The standard fixed overhead cost per unit is $0.60 per hour at 3,500 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance
> Bellingham Company produced 15,000 units of product that required 4 standard hours per unit. The standard fixed overhead cost per unit is $1.15 per hour at 58,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume varian
> Blumen Textiles Corporation began April with a budget for 90,000 hours of production in the Weaving Department. The department has a full capacity of 100,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the begi
> Dvorak Company produced 1,000 units of product that required 3 standard hours per unit. The standard variable overhead cost per unit is $1.40 per hour. The actual variable factory overhead was $4,000. Determine the variable factory overhead controllable
> Bellingham Company produced 15,000 units of product that required 4 standard hours per unit. The standard variable overhead cost per unit is $0.90 per hour. The actual variable factory overhead was $52,770. Determine the variable factory overhead control
> Prepare an income statement through gross profit for Dvorak Company for the month ended July 31 using the variance data in Practice Exercises 23-1B through 23-4B. Assume that Dvorak sold 1,000 units at $90 per unit.
> Prepare an income statement through gross profit for Bellingham Company for the month ended March 31 using the variance data in Practice Exercises 23-1A through 23-4A. Assume that Bellingham sold 15,000 units at $172 per unit.
> Dvorak Company produces a product that requires 3 standard hours per unit at a standard hourly rate of $17 per hour. If 1,000 units required 2,800 hours at an hourly rate of $16.50 per hour, what is the direct labor (a) rate variance, (b) time variance
> Bellingham Company produces a product that requires 4 standard hours per unit at a standard hourly rate of $20 per hour. If 15,000 units required 61,800 hours at an hourly rate of $19.85 per hour, what is the direct labor (a) rate variance, (b) time va
> Dvorak Company produces a product that requires 5 standard pounds per unit. The standard price is $2.50 per pound. If 1,000 units required 4,500 pounds, which were purchased at $3.00 per pound, what is the direct materials (a) price variance, (b) quant
> Bellingham Company produces a product that requires 2.5 standard pounds per unit. The standard price is $3.75 per pound. If 15,000 units required 36,000 pounds, which were purchased at $4.00 per pound, what is the direct materials (a) price variance, (
> The following are inputs and outputs to the cooking process of a restaurant: Number of times ingredients are missing Number of customer complaints Number of hours kitchen equipment is down for repairs Number of server order mistakes Percent of meals prep
> What is the objective of transfer pricing?
> Why would a firm use a balanced scorecard in evaluating divisional performance?
> In a decentralized company in which the divisions are organized as investment centers, how could a division be considered the least profitable even though it earned the largest amount of income from operations?
> The capital investment committee of Nature’s Portrait Landscaping Company is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows: Each project requires an inve
> What is the major shortcoming of using income from operations as a performance measure for investment centers?
> Differentiate between centralized and decentralized operations.
> When using the negotiated price approach to transfer pricing, within what range should the transfer price be established?
> On July 1, Coastal Distribution Company is considering leasing a building and buying the necessary equipment to operate a public warehouse. Alternatively, the company could use the funds to invest in $740,000 of 5% U.S. Treasury bonds that mature in 14 y
