Question: Pearl Products Limited of Shenzhen, China,

> The following changes took place during the year in Pavolik Company’s balance sheet accounts: Long-term investments that had cost the company $6 were sold during the year for $16, and land that had cost $15 was sold for $9. In additio

> Comparative financial statement data for Carmono Company follow: For 2009, the company reported net income as follows: Sales ........................................................ $275 Cost of goods sold ..................................... 150 Gros

> Changes in various accounts and gains and losses on the sale of assets during the year for Argon Company are given below: Item ______________________________Amount Accounts receivable ................................................ $90,000 decrease Acc

> Apex Company prepared the statement of cash flows for the current year that is shown below: Required: Compute Apex Company’s free cash flow for the current year. Apex Company Statement of Cash Flows-Indirect Method Operating activ

> For the just completed year, Hanna Company had a net income of $35,000. Balances in the company’s current asset and current liability accounts at the beginning and end of the year were: The Deferred Income Taxes Payable account on the

> Mary Walker, president of Rusco Products, considers $14,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $8,000 in cash was available at the end of 2009. Because the company reported a large ne

> “See, I told you things would work out,” said Barry Kresmier, president of Lomax Company. “We expanded sales from $1.6 million to $2.0 million in 2009, nearly doubled our warehouse space, and ended th

> How does opportunity cost enter into the make or buy decision?

> Below are transactions that took place in Placid Company during the past year: a. Equipment was purchased. b. A cash dividend was declared and paid. c. Accounts receivable decreased. d. Short-term investments were purchased. e. Equipment was sold. f. Pre

> Bill has just returned from a duck hunting trip. He has brought home eight ducks. Bill’s friend, John, disapproves of duck hunting, and to discourage Bill from further hunting, John has presented him with the following cost estimate per duck: Camper and

> Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line foll

> Hollings Company sells and delivers office furniture in the Rocky Mountain area. The costs associated with the acquisition and annual operation of a delivery truck are given below: Insurance ........................................................ $1,600

> Han Products manufactures 30,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows: Direct materials .................................... $ 3.60 Direct labor .............

> Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: The same raw material is used in all three products. Barlow Company has only 5,000 pounds of raw ma

> Imperial Jewelers is considering a special order for 20 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $189.95 and its unit product cost is $149.00 as shown below: Direct mat

> Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor

> The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the dolls is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has pr

> Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs associated with this level of production and sales are given below: The Rets normally sell for $50

> What is a self-imposed budget? What are the major advantages of self-imposed budgets? What caution must be exercised in their use?

> “In my opinion, we ought to stop making our own drums and accept that outside supplier’s offer,” said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. “At a price of 18 florins per drum, we would be paying 5 florins less than it cost

> Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company’s unit costs at this level of activity are given below: A number of ques

> The Regal Cycle Company manufactures three types of bicycles—a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Management is concerned about the continued losses shown by the raci

> Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: The North Store has consistently shown losses over the past two years. For

> Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of wi

> Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, meals on whe

> Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, consideration is being given to dropping several flights that appear to be unprofitable. A typical income statement f

> Kristen Lu purchased a used automobile for $8,000 at the beginning of last year and incurred the following operating costs: Depreciation ($8,000 ÷ 5 years) ............. $1,600 Insurance .................................................. $1,200 Garage r

> For many years Futura Company has purchased the starters that it installs in its standard line of farm tractors. Due to a reduction in output, the company has idle capacity that could be used to produce the starters. The chief engineer has recommended ag

> Bed & Bath, a retailing company, has two departments, Hardware and Linens. The company’s most recent monthly contribution format income statement follows: A study indicates that $340,000 of the fixed expenses being charged to Line

> Describe the flow of budget data in an organization. Who are the participants in the budgeting process, and how do they participate?

> Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 60,000 units per year is: Direct materials ................................................... $5.10 Direc

> A number of costs are listed below that may be relevant in decisions faced by the management of Svahn, AB, a Swedish manufacturer of sailing yachts: Required: Copy the information above onto your answer sheet and place an X in the appropriate column to

> Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process: Budgeted unit sales ..................................................

> Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: The company’s beginning cash balance for the upcoming fiscal year will be

> The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below: The company’s variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include advertising expe

> The direct labor budget of Yuvwell Corporation for the upcoming fi scal year contains the following details concerning budgeted direct labor-hours: The company’s variable manufacturing overhead rate is $3.25 per direct labor-hour and

> The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour. Required: 1. C

> Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is 150 roubles per kilogram. (Siberia is located in Russia, whose currency is the rouble.) Bu

> Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: ____________Sales in Units April ................................. 50,000 May .................................. 75,000 June .......

> Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: a. As of December 31 (the end of the prior quart

> What is a master budget? Briefly describe its contents.

> Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: a. The Marketing Department has estimated sales as follows for the

> Westex Products is a wholesale distributor of industrial cleaning products. When the treasurer of Westex Products approached the company’s bank late in the current year seeking short-term financing, he was told that money was very tight

> The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash .................................................... $8,000 Accounts receivable ......................... $20,0

> Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following infor

> Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below: From past experience,

> The president of the retailer Prime Products has just approached the company’s bank with a request for a $30,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some d

> Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash ......................................................................

> You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company’s operations: a. The cash balance on December 1 is $40,000. b. Actua

> The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour.

> What is meant by the term responsibility accounting?

> The production department of Hareston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,400 pounds

> The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): The selling price of the company’s product is $18.00 per unit. Management expects to col

> The marketing department of Gaeber Industries has submitted the following sales forecast for the upcoming fiscal year: The company expects to start the first quarter with 1,600 units in finished goods inventory. Management desires an ending finished go

> A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $5,000 to start each quarter. Required: Fill in the missing amounts in the above table. Quarter 1 4 Year Cash bal

> The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year: __________________________Ending Balances Cash ..............................

> The following terms pertain to the budgeting process: Benchmarks Budget Control Motivation Responsibility accounting Bottlenecks Budget committee Imposed from above Planning Self-imposed budget Required: Fill in the blanks with the most appropriate word

> Harrison Company makes two products and uses a conventional costing system in which a single plant wide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: These products are cust

> Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. The direct labor

> Refer to the data in Exercise 3–6 for Sylvan Company. Activities during the year were distributed across the company’s four products as follows: Data in Exercise 3–6 Sylvan Company uses activity-bas

> Sylvan Company uses activity-based costing to determine product costs for external financial reports. The company’s partially completed Manufacturing Overhead T-account for the current year is shown below: Required: 1. What does the e

> Discuss some of the major benefits to be gained from budgeting.

> What is underapplied overhead? Overapplied overhead? What disposition is made of these amounts at the end of the period?

> Larker Corporation implemented activity-based costing several years ago and uses it for its external financial reports. The company has four activity cost pools, which are listed below. Activity Cost Pool __________________Activity Rate Machine related .

> Midwest Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 50,000 units next year and Product L is expected to sell 10,000 units. A unit of either product requires 0.2 direct labor-hours. The compan

> Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost ____________________________Pool Activit

> Kramer Corporation is a diversified manufacturer of consumer goods. The company’s activity based costing system has the following seven activity cost pools: Required: 1. Compute the activity rate for each activity cost pool. 2. Comput

> Ellix Company manufactures two models of ultra-high fidelity speakers, the X200 model and the X99 model. Data regarding the two products follow: Additional information about the company follows: a. Model X200 requires $72 in direct materials per unit,

> Hunter Corporation uses activity-based costing to determine product costs for external financial reports. At the beginning of the year, management made the following estimates of cost and activity in the company’s five activity cost poo

> Aucton Corporation is a manufacturing company that uses activity-based costing for its external financial reports. The company’s activity cost pools and associated data for the coming year appear below: At the beginning of the year, t

> Munoz Corporation uses activity-based costing to determine product costs for external financial reports. At the beginning of the year, management made the following estimates of cost and activity in the company’s five activity cost pool

> Siegel Corporation manufactures a product that is available in both a deluxe and a regular model. The company has made the regular model for years; the deluxe model was introduced several years ago to tap a new segment of the market. Since introduction o

> Jordan’s Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costin

> “The principal purpose of the cash budget is to see how much cash the company will have in the bank at the end of the year.” Do you agree? Explain.

> For many years, Zapro Company manufactured a single product called a mono-relay. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called a bi-relay that has become increasingly popular. T

> Juneau Company manufactures a variety of products in a single facility. Consultants hired by the company to do an activity-based costing analysis have identified the following activities carried out in the company on a routine basis: a. Machines are set

> The following activities are carried out in Greenberry Company, a manufacturer of consumer goods. a. Direct labor workers assemble a product. b. Engineers design a new product. c. A machine is set up to process a batch. d. Numerically controlled machines

> The following activities occur at Greenwich Corporation, a company that manufactures a variety of products. a. Receive raw materials from suppliers. b. Manage parts inventories. c. Do rough milling work on products. d. Interview and process new employees

> Osborn Manufacturing uses a predetermined overhead rate of $18.20 per direct labor-hour. This predetermined rate was based on 12,000 estimated direct labor-hours and $218,400 of estimated total manufacturing overhead. The company incurred actual total ma

> Jurvin Enterprises recorded the following transactions for the just completed month. The company had no beginning inventories. a. $94,000 in raw materials were purchased for cash. b. $89,000 in raw materials were requisitioned for use in production. Of t

> Primare Corporation has provided the following data concerning last month’s manufacturing operations. Required: 1. Prepare a schedule of cost of goods manufactured for the month. 2. Prepare a schedule of cost of goods sold for the mon

> Luthan Company uses a predetermined overhead rate of $23.40 per direct labor-hour. This predetermined rate was based on 11,000 estimated direct labor-hours and $257,400 of estimated total manufacturing overhead. The company incurred actual total manufact

> Larned Corporation recorded the following transactions for the just completed month. a. $80,000 in raw materials were purchased on account. b. $71,000 in raw materials were requisitioned for use in production. Of this amount, $62,000 was for direct mater

> Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year it estimated that its total manufacturing overhead would be $134,000 and the total direct labor would be 20,000 hours. Its a

> What is a budget? What is budgetary control?

> Cycle Gear Corporation has incurred the following costs on job number W456, an order for 20 special sprockets to be delivered at the end of next month. Direct materials: On April 10, requisition number 15673 was issued for 20 titanium blanks to be used i

> Which method of determining product costs, job-order costing or process costing, would be more appropriate in each of the following situations? a. An Elmer’s glue factory. b. A textbook publisher such as McGraw-Hill. c. An Exxon oil refinery. d. A facili

> Selected T-accounts of Moore Company are given below for the just completed year: Required: 1. What was the cost of raw materials put into production during the year? 2. How much of the materials in (1) above consisted of indirect materials? 3. How muc

> High Desert Potteryworks makes a variety of pottery products that it sells to retailers such as Home Depot. The company uses a job-order costing system in which predetermined overhead rates are used to apply manufacturing overhead cost to jobs. The prede

> Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). All materials are classified as direct materials. In computing a pred

> Almeda Products, Inc., uses a job-order costing system. The company’s inventory balances on April 1, the start of its fiscal year, were as follows: Raw materials ........................................... $32,000 Work in process ........................

> Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. A popular pastime among older Chinese men is to take their pet birds on daily excursions to teahouses and public parks where they meet wit

> White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department base

> Vista Landscaping uses a job-order costing system to track the costs of its landscaping projects. The company provides garden design and installation services for its clients. The table below provides data concerning the three landscaping projects that w

> Kingsport Containers, Ltd, of the Bahamas experiences wide variation in demand for the 200-liter steel drums it fabricates. The leak proof, rustproof steel drums have a variety of uses from storing liquids and bulk materials to serving as makeshift music

> Under absorption costing, how is it possible to increase net operating income without increasing sales?

> The following cost data relate to the manufacturing activities of Chang Company during the just completed year: Manufacturing overhead costs incurred: Indirect materials ....................................................................................

> Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, it was estimated that the company w

> Leeds Architectural Consultants began operations on January 2. The following activity was recorded in the company’s Work in Process account for the first month of operations: Leeds Architectural Consultants is a service firm, so the n

> The Polaris Company uses a job-order costing system. The following data relate to October, the first month of the company’s fiscal year. a. Raw materials purchased on account, $210,000. b. Raw materials issued to production, $190,000 ($178,000 direct mat