Question: Refer to the facts in Exercise 11-

> 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

> Selected information from the Iowa Instruments accounting records for April follows: Additional information for April follows: ∙ The labor wage rate was $30 per hour. ∙ During the month, sales revenue was $320,000, and

> The following partially complete T-accounts for the month of June along with additional information are from Renfrew & Co.: Additional information for June follows: ∙ Manufacturing overhead is applied at 90 percent of direct labor c

> Radford Products adds materials at the beginning of the process in Department A. The following information on physical units for Department A for the month of January is available. Required a. Compute the equivalent units for materials costs and for conv

> Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 22,000 pounds of Alph

> Elmira Tool and Die makes machine tools to order. The following transactions occurred in October: 1. Issued $2,800 of supplies from the materials inventory. 2. Purchased $42,000 of materials. 3. Issued $37,600 in direct materials to the production depart

> Refer to the facts in Exercise 11-50. The sale of FP-40 has been banned by a recent law. If FP-40 is produced, disposal in an approved manner costs $120,000 for every 55,000 units produced. Required a. Assume that Forest Products continues to use the phy

> Refer to the facts in Exercises 11-47 and 11-48. Required Which, if any, of the four products would you recommend Barrett Chemicals sell at split-off (and not process further)? Explain. Does your answer depend on the method used to allocate the joint cos

> Denver Fabricators manufactures products DF1 and DF2 from a joint process, which also yields a by-product, BP. The company accounts for the revenues from its by-product sales as other income. Additional information follows: Required Assuming that joint p

> Milo Manufacturing produces products Kappa and Lambda from a joint process. Total joint costs are $150,000. The sales value at split-off was $162,000 for 1,200 units of Kappa and $63,000 for 1,800 units of Lambda. Required a. What joint costs are allocat

> Gunston Processing produces two products, ALT-1 and ALT-2, from a batch using a single raw material, ALT-0. Both products require further processing before they be can be sold. A batch of ALT-1 can be sold for $150,000 after processing costs of $30,000.

> Refer to the data in Exercise 11-39. Suppose that Sanford Agricultural Chemicals uses the physical quantities method to allocate joint costs and the revenues from by-products are credited to joint costs. Required Under these assumptions, the following pr

> Sanford Agricultural Chemicals (SAC) produces two main products, M-4 and M-5, and one byproduct, BYP, from a single input, Gen-10. Products M-4 and M-5 can either be sold at split off or processed further and sold. A given batch begins with 2,500 pounds

> Refer to the facts in Exercise 11-27. Woodstock Binding estimates that the variable costs in the IT Department total $110,000, and in the HR Department variable costs total $140,000. Avoidable fixed costs in the IT Department are $18,000. Required If Woo

> Refer to Exercises 11-27, 11-29, and 11-32 (Woodstock Binding). Required a. Which method do you think is best? Why? b. How much would it be worth to the company to use the best method compared to the worst of the three methods? (Numbers are not required

> Ervin Equipment, a manufacturer of exercise and workout equipment for sale to institutions, uses job costing. The following transactions occurred in January: 1. Purchased $76,000 of materials. 2. Paid $81,000 cash for utilities, power, equipment maintena

> Refer to the data for Memorial Services, Inc. in Exercise 11-33. Required Use the reciprocal method to allocate the service department costs to the production departments. (Matrix algebra is not required.) Exercise 11-33:

> Refer to the data for Memorial Services, Inc. in Exercise 11-33. Required Use the step method to allocate the service department costs to the two production departments. Allocate HR costs first, followed by IT, and then Accounting. Exercise 11-33:

> Refer to the data for Woodstock Binding in Exercise 11-27. Required Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Exercise 11-27:

> Activity and selected costs for three production departments (Training, Independent, and Commercial) and two service departments (Accounting and Facilities) at DuBay Films for the past month follow: Required Allocate service department costs to Training,

> Refer to the data for Mack Precision Tool and Die in Exercise 11-25. Required Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Exercise 11-25:

> Refer to the data for Woodstock Binding in Exercise 11-27. Required Use the step method to allocate the service costs, using the following: a. The order of allocation starts with IT. b. The order of allocation starts with HR. Exercise 11-27:

> You are the division president of Wood Division of Underwood Enterprises. The only other division at Underwood Enterprises is Plastics Division. Each division has 12,000 employees. Last year, Wood Division had a turnover of 2,500 employees (2,500 employe

> Consider adapting the cost of quality framework to financial reporting issues. Assign costs to one of four categories: prevention (P), appraisal (A), internal failure (IF), and external failure (EF), where the categories refer to financial reporting acti

> Many companies have adapted the cost of quality framework to environmental issues. They assign costs to one of four categories: prevention (P), appraisal (A), internal failure (IF), and external failure (EF), where the categories refer to environmental a

> Cairney, Inc. manufactures a specialized part used in internal combustion engines. The annual demand for the part is 225,000 units. The facility has a practical capacity of 240,000 units annually. The company leased the current facility because facilitie

> Barker Products is a job shop. The following events occurred in September: 1. Purchased $13,000 of materials. 2. Issued $14,500 in direct materials to the production department. 3. Purchased $11,000 of materials. 4. Issued $900 of supplies from the mater

> Which method, weighted-average or FIFO, better reflects the current cost of production when using process costing?

> Basil’s Framing manufactures picture frames in one workshop, which has a practical capacity of 40,000 frames. The variable cost of a frame is $24 per unit, and the fixed costs of the workshop are $392,000 annually. Current annual demand is 28,000 frames.

> Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of 75,000 units. The variable cost of the sensor is $185.00 per unit, and the fixed costs of the plant are $12,375,000 annua

> Hosmer Industries provides the following information about resources and usage: Required a. Compute the cost driver rate for each resource. b. Describe what the term unused resource capacity means.

> Wykes Metal Working uses a special lathe to shape components. Data on the lathe and its usage follow: Required Compute the cost of unused resource capacity in energy and repairs for Wykes Metal Working.

> Ellery Products manufactures various components for the fashion industry. Ellery buys fabric from two vendors: Ewers Textiles and Bramford Materials. Ellery chooses the vendor based on price. Once the fabric is received, it is inspected to ensure that it

> Central State College (CSC) is a state-supported college with a large business school. The business school offers an undergraduate degree and training programs for a local manufacturer. The state does not support the training programs, which are paid for

> Lygon Food Distributors (LFD), introduced in the chapter, hired a consultant to update its system for reporting the cost of customers. The consultant showed Anjana Malik, the owner of LFD, an analysis that indicates that customer support costs are signif

> Refer to the data in Exercise 10-32. Required a. How can Northwestern Bank use the information from the activity-based costing analysis to manage its costs? b. What does Northwestern Bank need to consider before implementing your suggestions from require

> Northwestern Bank (NB) offers only checking accounts. Customers can write checks and use a network of automated teller machines. NB earns revenue by investing the money deposited; currently, it averages 4.1 percent annually on its investments of those de

> Rupert’s Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. The fina

> Under what conditions are the results from using the direct method of allocation the same as those from using the other two methods? Why?

> Alter’s Home Center (AHC) sells renovation and remodeling products to both contractors and individual home owners. One of the services AHC offers is delivery of the purchased products to the customer’s work site. Becau

> The following are various activities for EMS Law School. Required Suggest a feasible cost driver base for each of the following, and explain why each selected cost driver base is feasible. a. Course registration. b. Admissions: Attending recruiting fairs

> The following are various activities for Humphrey Insurance Agency. Required Suggest a feasible cost driver base for each of the following, and explain why each selected cost driver base is feasible. a. Consumer contract customer service. b. Consumer con

> Brentwood Disaster Relief (BDR) is a local not-for-profit organization working to help victims of disasters. Required The following are various resources and activities of the organization. Indicate whether each is likely to apply at the (1) unit level o

> Consider the following actions of a manufacturing firm trying to manage the costs of materials handling from the direct materials inventory to the production line. Required Match each of the process improvements listed with how it delivers cost reduction

> Consider the following actions of a college placement center trying to manage the costs of its placement services. Required Match each of the process improvements listed with how it delivers cost reductions.

> The manager of the Personnel Department at Binder City has been reading about time-driven ABC and wants to apply it to that department. The manager has identified four basic activities Personnel Department employees spend most of their time on: Interview

> Meadow Logistics, Inc. (MLI) distributes food purchased in bulk to small retailers. The firm is divided into two divisions: Purchasing and Distribution. Purchasing is responsible for ordering goods from the manufacturer, receiving them, and then moving t

> Exeter Group is a large retail company that has brick-and-mortar outlets throughout the Southeast. It has been in business for many years, but two years ago started an online sales channel to offset slowing in-store sales. The human resources (HR) depart

> Cathedral City Services (CCS) is a not-for-profit organization offering two services in a midsized city. The services are “Elder Meals” and “Jobs4U.” Elder Meals is a meals-on-wheels

> What argument(s) could be given in support of the reciprocal method as the preferred method for distributing the costs of service departments?

> Spencer’s Sports manufactures outdoor equipment at three regional plants. The Freeway Plant produces two models of fishing reels, the Stream and the Surf. The Surf model is heavier and more durable. Overhead costs are currently allocate

> Shady Fabrication Group (SFG) manufactures components for manufacturing equipment at several facilities. The company produces two, related, parts at its Park River Plant, the models SF-08 and SF-48. The differences in the models are the quality of the ma

> Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model.

> Richard’s Events provides catering services, among other services. The company has adopted activity-based costing (ABC) for the catering services. The ABC system classifies activities into two groups based on the cost driver used: diner

> Refer to the data in Exercise 9-38. Required a. Compute the unit (per visitor) costs for the two tour types (public and donor) assuming PCHS uses the current cost system. b. Compute the unit (per visitor) costs for the two tour types (public and donor) a

> The Philip County Historical Society (PCHS) collects and displays historical artifacts from the local area. One of its services is dedicated tours. PCHS offers dedicated tours to two groups: the general public (generally tourists and local residents) and

> Refer to the information in Exercise 9-34. Required a. Compute the unit costs for the two products, Standard and Premium, using the current costing system at Benton (using direct labor costs as the allocation basis for overhead). b. Compute the unit cost

> Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Manufacturing overhead in the plant has three main functions: supervision, setup labor, and

> After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC’s CenterPoint manufacturing facility, Tom Spencer, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine

> Refer to the information in Exercise 9-31. The manager of the Los Angeles office is now unhappy with the results of the controller’s study. The manager asks the controller to develop separate rates for fixed and variable costs in the Pe

> As the representative of the local accounting club, you have been asked by the dean to help them understand the costs of the different degrees offered at the school. You decide to use an activity-based costing system. Write a report outlining the first t

> Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant. The different backpack models are identified by the primary material used: canvas, nylon, or leather. The company uses a pl

> West State Furniture (WSF) manufactures desks and desk chairs using two departments within a single facility. The West Department produces the desks, and the State Department produces the chairs. WSF uses plantwide allocation to allocate its overhead to

> Edlie Accessories (EA) makes travel bags, both for sale under their own label (“Branded”) and for other resellers to put their label on the bags (“Private-Label”). The bags sold thro

> Wakefield Instruments manufactures three digital piano models, which differ only in the components included: Solo, Recital, and Concert. Production takes place in two departments, Assembly and Finishing. The Solo and Recital models are complete after the