Question: Provide a two- or three-sentence response

> Quest Motors, Inc., operates as a decentralized multidivision company. The Vivo division of Quest Motors purchases most of its airbags from the airbag division. The airbag division’s incremental cost for manufacturing the airbags is $90 per unit. The air

> Tech Friendly Computer, Inc., with headquarters in San Francisco, manufactures and sells a desktop computer. Tech Friendly has three divisions, each of which is located in a different country: a. China division—manufactures memory devi

> Calgary Lumber has a raw lumber division and a finished lumber division. The variable costs are as follows: ■ Raw lumber division: $125 per 100 board-feet of raw lumber ■ Finished lumber division: $145 per 100 board-feet of finished lumber Assume that

> Host Hotels, a small chain of business hotels in the MidAtlantic region, is interested in gaining access to the boutique lodging market by acquiring a hotel group in that sector. Host Hotels intends to operate the newly acquired hotels independently from

> Fenster Corporation manufactures windows with wood and metal frames. Fenster has three departments: glass, wood, and metal. The glass department makes the window glass and sends it to either the wood or metal department where the glass is framed. The win

> Quick Stop operates 1,000 convenience stores throughout the United States. The company’s slogan is “Best Stop of the Day,” and its mission is to make every customer a return customer. Quick Stop’s corporate strategy supports this mission by stressing the

> The Cook Company is a national portable building manufacturer. Its Benton plant will become idle on December 31, 2017. Mary Carter, the corporate controller, has been asked to look at three options regarding the plant: ■ Option 1: The plant, which has b

> Body Image, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: The weight-lifting craze suggests that Body Image can sell enough of either Model 9 or Model 14 to keep the plant operating at f

> Ortel Telecom sells telecommunication products and services to a variety of small businesses. Two of Ortel’s key clients are Square and Cloudburst, both fast-growing technology start-ups located in New York City. Ortel has compiled info

> Klein Dermatology is contemplating purchasing new laser therapy equipment. This new equipment would cost $300,000 to purchase and $20,000 for installation. Klein estimates that this new equipment would yield incremental margins of $98,000 annually due to

> Walker Inc. is considering the purchase of new equipment that will automate production and thus reduce labor costs. Walker made the following estimates related to the new machinery: Cost of the equipment……………..$120,000 Reduced annual labor costs……...$40,

> Ella’s Bakery plans to purchase a new oven for its store. The oven has an estimated useful life of 4 years. The estimated pretax cash flows for the oven are as shown in the table that follows, with no anticipated change in working capit

> Laverty Clinic plans to purchase a new centrifuge machine for its New York facility. The machine costs $94,000 and is expected to have a useful life of 6 years, with a terminal disposal value of $9,000. Savings in cash operating costs are expected to be

> Andrews Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $5,000,000 for the year. Lori Bart, staff analyst at Andrews, is preparing an analysis of the three pro

> New Pharm Corporation is a rapidly growing biotech company that has a required rate of return of 14%. It plans to build a new facility in Santa Clara County. The building will take 2 years to complete. The building contractor offered New Pharm a choice o

> America Cola is considering the purchase of a special-purpose bottling machine for $65,000. It is expected to have a useful life of 4 years with no terminal disposal value. The plant manager estimates the following savings in cash operating costs: Ameri

> Assume the same facts as in Exercise 21-23 except that City Hospital is a taxpaying entity. The income tax rate is 30% for all transactions that affect income taxes. Required: 1. Do requirement 1 of Exercise 21-23. 2. How would your computations in re

> City Hospital, a nonprofit organization, estimates that it can save $28,000 a year in cash operating costs for the next 10 years if it buys a special-purpose eye testing machine at a cost of $110,000. No terminal disposal value is expected. City Hospital

> The Beach Comber is a take-out food store at a popular beach resort. Sara Miller, owner of the Beach Comber, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows: Miller has a max

> Yummy Candy Company is considering purchasing a second chocolate dipping machine in order to expand their business. The information Yummy has accumulated regarding the new machine is: Cost of the machine………………………………….$80,000 Increased annual contributio

> Assume the same facts as in Exercise 20-27, except now Grand Devices uses only two trigger points for making entries in the accounting system: â–  Completion of good finished units of product â–  Sale of finished goods Th

> Assume the same facts as in Exercise 20-27, except that Grand Devices now uses a backflush costing system with the following two trigger points for making entries in the accounting system: â–  Purchase of direct materials â–&

> Grand Devices Corporation assembles handheld computers that have scaled-down capabilities of laptop computers. Each handheld computer takes 6 hours to assemble. Grand Devices uses a JIT production system and a backflush costing system with three trigger

> The Knot manufactures men’s neckwear at its Spartanburg plant. The Knot is considering implementing a JIT production system. The following are the estimated costs and benefits of JIT production: a. Annual additional tooling costs $250,000 annually. b.

> Alpha Company’s annual demand for its only product, XT-590, is 10,000 units. Alpha is currently analyzing possible combinations of relevant carrying cost per unit per year and relevant ordering cost per purchase order, depending on the company’s choice o

> Sk8 Company produces skateboards and purchases 20,000 units of a wheel bearing each year at a cost of $1 per unit. Sk8 requires a 15% annual rate of return on investment. In addition, the relevant carrying cost (for insurance, materials handling, breakag

> The Fabric World sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming in

> Sportsman Textiles (ST) manufactures the Galaxy jerseys that Wonder Line (WL) sells to its customers. ST has recently installed computer software that enables its customers to conduct “one-stop” purchasing using state-of-the-art Web site technology. WL’s

> Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item

> Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. Best Trim estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of $9 per spark plug. The supplier also offers a sp

> Turnkey Manufacturing evaluates the performance of its production managers based on a variety of factors, including cost, quality, and cycle time. The following are nonfinancial measures for quality and time for 2016 and 2017 for its only product: The f

> For the past two years, Worldwide Cell Phones (WCP) has been working to improve the quality of its phones. Data for 2016 and 2017 follows (in thousands of phones): Required: 1. For each year, 2016 and 2017, calculate the following: a. Percentage of def

> Refer to the information presented in Exercise 19-25. The head of the registration advisors at SMU has decided that the advisors must finish their advising in 2 weeks (10 working days) and therefore must advise 420 students a day. However, the average wa

> The registration advisors at a small Midwestern university (SMU) help 4,200 students develop their class schedules and register for classes each semester. Each advisor works for 10 hours a day during the registration period. SMU currently has 10 advisors

> It’s a Dog’s World (IDW) makes toys for big breed puppies. IDW’s managers have recently learned that they can calculate the average waiting time for an order from the time an order is received till the time manufacturing starts. They have asked for your

> TidyCar washes vehicles using a nohands approach. Business is good but Jonathan, the manager, has noticed that customers complain because there are streaks on their vehicles at pickup. TidyCar warrants that each vehicle will sparkle at delivery and charg

> SpeedPrint manufactures and sells 18,000 high-technology printing presses each year. The variable and fixed costs of rework and repair are as follows: SpeedPrint’s current presses have a quality problem that causes variations in the sh

> iCover produces bags for carrying laptop computers. iCover sells 1,000,000 units each year at a price of $20 per unit and a contribution margin of 40%. To respond to customer complaints, iCover’s mangers want to modify the production processes to produce

> Safe Travel produces car seats for children from newborn to 2 years old. Safe Travel’s only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection. Inspection costs $5.00 per

> Adirondack Company makes chairs for outside living spaces. The company has been working on improving quality over the last year and wants to evaluate how well it has done on costs-of-quality (COQ) measures. Here are the results: Required: 1. Identify th

> The Svenson Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBs in 2017 and the expecte

> The Cincinnati power plant that services all manufacturing departments of Eastern Mountain Engineering has a budget for the coming year. This budget has been expressed in the following monthly terms: The expected monthly costs for operating the power pl

> Locate the most recent annual report of Carrefour Group, the French retail company and the second largest retailer in the world, on the company’s website: www.carrefour.com. You will find an electronic copy of the annual report in the “Finance: Publicati

> Locate the most recent annual report of Toshiba Corporation, the large Japanese electronics company, on the company’s website: www.toshiba.co.jp. You will find an electronic copy of the annual report in the “Investor Relations” section of the website. Re

> Friedman’s Inc. is a leading fine jewelry retailer. In November 2004, the company said that it might default on certain of the financial covenants contained in one of the company loan agreements. Here is an excerpt from the company’s press release: In pa

> The IASB and its predecessor organization have as a stated objective to narrow worldwide differences in accounting practices and the presentation of financial information. In February 2006 at a ceremony in Beijing, People’s Republic of China, the Chinese

> The New York Stock Exchange (NYSE) and the National Association of Securities Dealers (NASD) require that listed firms have audit committees of independent (that is, outside) company directors. Audit committees review the firm’s audited financial stateme

> “It’s time for the government to stop enabling accounting fraud. The Internal Revenue Service and the SEC let companies keep two sets of books, one for tax reporting and the other for financial reporting. There should be no difference in the figures corp

> In the early 1990s, the FASB issued new rules that dramatically altered the way in which many companies recorded their obligations for postretirement health care benefits. The Board found that most companies used “cash basis” accounting and waited until

> Suppose your company purchased land and a warehouse for $5 million. The price was steep, but you were told that a new interstate highway was going to be built nearby. Two months later, the highway project is canceled and your property is now worth only $

> Farmers State Bank is considering a $500,000 loan to Willard Manufacturing. Three items appearing on Willard’s balance sheet are: a. Cash on hand and in the bank, $20,000. b. Accounts receivable of $60,000, less an allowance for uncollectibles of $15,000

> You have decided to buy a new automobile and have been gathering information about the purchase price. The manufacturer’s website shows a “list price” of $24,500, which includes your preferred options: leather trim and digital audio player. You have also

> A friend of yours sent an e-mail asking about generally accepted accounting principles (GAAP). It seems your friend was browsing through Whirlpool Corporation’s recent annual report and she spotted the following statement: The financial statements have b

> Allocating resources in the most efficient manner maximizes the wealth of any country. It is generally acknowledged that financial information plays an important role in efficient resource allocation. Required: Given that both of the preceding statements

> 1. Define each of the following disclosure costs associated with financial accounting information, and provide an example of each cost: a. Information collection, processing, dissemination costs. b. Competitive disadvantage costs. c. Litigation costs. d.

> 1. Describe how the following market forces influence the supply of financial accounting information: a. Debt and equity financial markets. b. Managerial labor markets. c. The market for corporate control (for example, mergers, takeovers, and divestiture

> 1. Explain why each of the following groups might want financial accounting information. What type of financial information would each group find most useful? a. The company’s existing shareholders. b. Prospective investors. c. Financial analysts who fol

> You have been asked to attend a hastily called meeting of Landfil’s senior executives. The meeting was called to formulate a strategy for responding to questions from shareholders, analysts, and the media about Landfil’s accounting for site development c

> It is often alleged that the value of financial statement information is compromised by the latitude that GAAP gives to management. Companies can use different accounting methods to summarize and report the outcome of otherwise similar transactions. Inve

> The following excerpt is from Fortress International Group’s 2012 10-K report filed with the SEC and is a required disclosure: [W]e earned approximately 46% of our total revenue from two customers for the year ended December 31, 2012, and 43% from three

> As your first week at Henley Manufacturing Inc. draws to a close, you find a memorandum on your desk from the company’s CEO. The memo outlines sales and earnings goals for next year: Sales are expected to increase 15% with net income growing by 20%. The

> Novartis AG is a Swiss company that develops, manufactures, and markets pharmaceuticals and vaccines. As of January 2005, European firms, including Novartis, were required to compile their financial reports in accordance with International Financial Repo

> The vice president of operations of Free Ride Bike 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: Instruction

> A condensed income statement for the Electronics Division of Gihbli Industries Inc. for the year ended December 31 is as follows: Assume that the Electronics Division received no charges from service departments. The president of Gihbli Industries Inc. h

> E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: The management of E.F. L

> Last Resort Industries Inc. is a privately held diversified company with five separate divisions organized as investment centers. A condensed income statement for the Specialty Products Division for the past year, assuming no service department charges,

> The three divisions of Yummy Foods are Snack Goods, Cereal, and Frozen Foods. The divisions are structured as investment centers. The following responsibility reports were prepared for the three divisions for the prior year: 1. Which division is making t

> The Customer Service Department of Door Industries Inc. asked the Publications Department to prepare a brochure for its training program. The Publications Department delivered the brochures and charged the Customer Service Department a rate that was25% h

> The Norsk Division of Gridiron Concepts Inc. has been experiencing revenue and profit growth during the years 20Y6–20Y8. The divisional income statements follow: There are no service department charges, and the division operates as an i

> In teams, visit the website of a company that uses the balanced scorecard to evaluate its performance. Identify the performance measures used by the company on its balanced corecard. For each measure, identify whether the measure best fits the innovation

> Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance using income from operations as a percent of revenues. The follow

> The Eastern District of Adelson Inc. is organized as a cost center. The budget for the Eastern District of Adelson Inc. for the month ended December 31 is as follows (in thousands): Sales salaries ……………………………………………………$ 819,840 System administration sala

> Exoplex Industries Inc. is a diversified aerospace company, including two operating divisions, Semiconductors and Navigational Systems divisions. Condensed divisional income statements, which involve no intracompany transfers and include a breakdown of e

> Sembotix Company has several divisions including a Semiconductor Division that sells semiconductors to both internal and external customers. The company’s X-ray Division uses semiconductors as a component in its final product and is evaluating whether to

> The ARA Railroad owns a piece of land along one of its right-of-ways. The land originally cost ARA $100,000. ARA is considering building a new maintenance facility on this land. ARA determined that the proposal to build the new facility is acceptable if

> Kitchen Helper Company decides to produce and sell food blenders and is considering three different types of production facilities (“plants”). Plant A is a laborintensive facility, employing relatively little specializ

> Define Q as the level of output produced and sold, and suppose that a firm’s total revenue (TR) and total cost (TC) functions can be represented in tabular form as shown here. a. Compute the marginal revenue and average revenue functi

> A manufacturing plant has a potential production capacity of 1,000 units per month (capacity can be increased by 10 percent if subcontractors are employed). The plant is normally operated at about 80 percent of capacity. Operating the plant above this le

> From your knowledge of the relationships among the various cost functions, complete the following table. Q TTC TFC TVC АТС AFC AVC MC 125 - - - 10 - - - - - 20 10.50 30 110 40 255 - 50 60 3 70 - - 80 295

> From your knowledge of the relationships among the various production functions, complete the following table: VARIABLE TOTAL AVERAGE MARGINAL INPUT PRODUCT PRODUCT PRODUCT ТР. (- Q) APL MPL L. 1 8 28 18 | 4 26 | 5 20 6. 108 -10

> US Airways owns a piece of land near the Pittsburgh International Airport. The land originally cost US Airways $375,000. The airline is considering building a new training center on this land. US Airways determined that the proposal to build the new faci

> Despite a decade of subsidies and considerable success in Denmark, Germany, and Britain, renewable energy in the U.S. accounts for only 7 to 8 percent of total energy consumption. Hydroelectric power remains the most successful source of renewable energy

> Ethanol is again viewed as one part of a solution to the problem of shortages of petroleum products. Ethanol is made from a blend of gasoline and alcohol derived from corn or sugarcane. What would you expect the impact of this program to bem on the price

> If the decision to develop and license or wait and imitate in Table 16.6 is a simultaneous-play repeated game between Lucent and Motorola for each new generation of technology, what happens if the Motorola payoff in the southwest cell is positive $2 bill

> An industry produces its product, Scruffs, at a constant marginal cost of $50. The market demand for Scruffs is equal to: Q = 75,000 - 600P a. What is the value to a monopolist who is able to develop a patented process for producing Scruffs at a cost

> Explain how the optimal incentives contract would differ if the less risk-averse bank officer (Dashing in Figure 15.4) had generated the smaller expected profit (i.e., the lower hill-shaped curve). Data from figure 15.4: FIGURE 15.4 Sorting Manager

> In benchmarking sales representatives against one another, what problems arise from continuing to reassign the above-average trade representatives to previously unproductive sales territories?

> General Cereals is using a regression model to estimate the demand for Tweetie Sweeties, a whistle-shaped, sugar-coated breakfast cereal for children. The following (multiplicative exponential) demand function is being used:

> Television channel operating profits vary from as high as 45 to 55 percent at MTV and Nickelodeon down to 12 to 18 percent at NBC and ABC. Provide a Porter Five Forces analysis of each type of network. Why is MTV so profitable relative to the major netwo

> What organizational form would warehouse operators and truck hauling companies adopt?

> How might the lender in Figure 15.2 use knowledge of the type of asset booked by the borrower on its balance sheet to offset the liability for the loan extension? Commercial loan covenants often include a restriction on precisely this balance-sheet decis

> Savings-Mart (a chain of discount department stores) sells patio and lawn furniture. Sales are seasonal, with higher sales during the spring and summer quarters and lower sales during the fall and winter quarters. The company developed the following quar

> If contract promises were not excused because of acts of war, would the clearing and settlements clients of Bank of New York change their behavior? If so, how? What reliance behavior would be considered efficient? What reliance behavior would be consider

> Analyze the pure Nash equilibrium and mixed Nash equilibrium strategies in the following manufacturer–distributor coordination game. How would you recommend restructuring the game to secure higher expected profit for the manufacturer?

> In the Division of a Decaying Business game, what should you offer if the assets at the start of the game are $4 million rather than $3 million? Now is there a first mover or second-mover advantage? Why?

> Suppose an enhanced effectiveness of cooperative advertising occurs if the distributor shares its superior on-the-spot information about current trends in the marketplace with the manufacturer. Explain how each of the following would affect the informati

> The Pear Computer Company just developed a totally revolutionary new personal computer. It estimates that it will take competitors at least two years to produce equivalent products. The demand function for the computer is estimated to be: P = 2,500 &aci

> If notorious firm behavior (i.e., defrauding a buyer of high-priced experience goods by delivering low quality) becomes known throughout the marketplace only with a lag of three periods, profits on high-quality transactions remain the same, and interest

> General Medical makes disposable syringes for hospitals and doctor supply companies. The company uses cost-plus pricing and currently charges 150 percent of average variable costs. General Medical learned of an opportunity to sell 300,000 syringes to the

> In the face of stable (or declining) enrollments and increasing costs, many colleges and universities, both public and private, find themselves in progressively tighter financial dilemmas that require basic reexamination of the pricing schemes used by in