Question: Refer to the information in Problem 18-

> Argone division of Gemini Corporation is located in the United States. Its effective income tax rate is 30%. Another division of Gemini, Calcia, is located in Canada, where the income tax rate is 42%. Calcia manufactures, among other things, an intermedi

> Industrial Diamonds, Inc., based in Los Angeles, has two divisions: South African mining division, which mines a rich diamond vein in South Africa U.S. processing division, which polishes raw diamonds for use in industrial cutting tools The processing di

> Cam Cody schedules book signings for science fiction authors and creates e-books and books on CD to sell at each signing. Cody uses a normal-costing system with two direct cost pools, labor and materials, and one indirect cost pool, general overhead. Gen

> Assume that Pat Borges, CEO of Crango, had mandated a transfer price equal to 200% of full cost. Now he decides to decentralize some management decisions and sends around a memo that states the following: “Effective immediately, each division of Crango i

> Crango Products is a cranberry cooperative that operates two divisions, a harvesting division and a processing division. Currently, all of harvesting’s output is converted into cranberry juice by the processing division, and the juice i

> Refer to Problem 22-28. Required: 1. Suppose the manager of division A has the option of (a) cutting the external price to $195, with the certainty that sales will rise to 1,000 units or (b) maintaining the external price of $200 for the 800 units and t

> Europa, Inc., has two divisions, A and B, that manufacture expensive bicycles. Division A produces the bicycle frame, and division B assembles the rest of the bicycle onto the frame. There is a market for both the subassembly and the final product. Each

> Sally wants to purchase a Burgers-N-Fries franchise. She can buy one for $500,000. Burgers-N-Fries headquarters provides the following information: Sally will also have to pay Burgers-N-Fries a franchise fee of 10% of her revenues each year. Sally want

> Best-Cost Foods is considering replacing all 10 of its old cash registers with new ones. The old registers are fully depreciated and have no disposal value. The new registers cost $749,700 (in total). Because the new registers are more efficient than the

> Unbreakable Manufacturing manufactures over 20,000 different products made from metal, including building materials, tools, and furniture parts. The manager of the furniture parts division has proposed that his division expand into bicycle parts as well.

> Ludmilla Quagg owns a fitness center and is thinking of replacing the old Fit-O-Matic machine with a brand new Flab-Buster 3000. The old Fit-O-Matic has a historical cost of $50,000 and accumulated depreciation of $46,000, but has a trade-in value of $5,

> Jack Garrett, a manager of the plate division for the Marble Top Manufacturing company, has the opportunity to expand the division by investing in additional machinery costing $420,000. He would depreciate the equipment using the straight-line method, an

> The Smacker Company is a family-owned business that produces fruit jam. The company has a grinding machine that has been in use for three years. On January 1, 2011, Smacker is considering the purchase of a new grinding machine. Smacker has two options: (

> Halsey Company sells women’s clothing. Halsey’s strategy is to offer a wide selection of clothes and excellent customer service and to charge a premium price. Halsey presents the following data for 2010 and 2011. For s

> Define cost-volume-profit analysis.

> You have the opportunity to expand your business by purchasing new equipment for $159,000. The equipment has a useful life of nine years. You expect to incur cash fixed costs of $96,000 per year to use this new equipment, and you expect to incur cash var

> Crumbly Cookie Company is considering expanding by buying a new (additional) machine that costs $62,000, has zero terminal disposal value, and has a 10-year useful life. It expects the annual increase in cash revenues from the expansion to be $28,000 per

> Whimsical Corporation is an international manufacturer of fragrances for women. Management at Whimsical is considering expanding the product line to men’s fragrances. From the best estimates of the marketing and production managers, annual sales (all for

> Assume the same facts as in Problem 21-27, except that the plant is located in Austin, Texas. Pro Chips has no special waiver on income taxes. It pays a 30% tax rate on all income. Proceeds from sales of equipment above book value are taxed at the same 3

> Pro Chips is a manufacturer of prototype chips based in Dublin, Ireland. Next year, in 2012, Pro Chips expects to deliver 552 prototype chips at an average price of $80,000. Pro Chips’ marketing vice president forecasts growth of 60 pro

> Flexible Security Devices (FSD) has introduced a just-in-time production process and is considering the adoption of lean accounting principles to support its new production philosophy. The company has two product lines: Mechanical Devices and Electronic

> Assume the same facts as in Problem 20-32 except now there are only two trigger points: Completion of good finished units of product and Sale of finished goods. Required: 1. Prepare summary journal entries for August, including the disposition of under-

> Assume that the second trigger point for Rippel Corporation is the sale—rather than the completion—of finished goods. Also, the inventory account is confined solely to direct materials, whether these materials are in a storeroom, in work in process, or i

> The Rippel Corporation manufactures electrical meters. For August, there were no beginning inventories of direct materials and no beginning or ending work in process. Rippel uses a JIT production system and backflush costing with three trigger points for

> The Margro Corporation is an automotive supplier that uses automatic turning machines to manufacture precision parts from steel bars. Margro’s inventory of raw steel averages $600,000. John Oates, president of Margro, and Helen Gorman,

> The Domestic Engines Co. produces the same power generators in two Illinois plants, a new plant in Peoria and an older plant in Moline. The following data are available for the two plants: All fixed costs per unit are calculated based on a normal capac

> Computers 4 U purchases one model of computer at a wholesale cost of $200 per unit and resells it to end consumers. The annual demand for the company’s product is 500,000 units. Ordering costs are $800 per order and carrying costs are $50 per computer, i

> Global Tunes Corp. produces J-Pods, music players that can download thousands of songs. Global Tunes forecasts that demand in 2011 will be 48,000 J-Pods. The variable production cost of each J-Pod is $54. Due to the large $10,000 cost per setup, Global T

> Chadwick Shoe Co. produces and sells an excellent quality walking shoe. After production, the shoes are distributed to 20 warehouses around the country. Each warehouse services approximately 100 stores in its region. Chadwick uses an EOQ model to determi

> Soothing Meadow, a retailer of bed and bath linen, sells 380,000 packages of Mona Lisa designer sheets each year. Soothing Meadow incurs an ordering cost of $57 per purchase order placed with Mona Lisa Enterprises and an annual carrying cost of $12.00 pe

> Wainwright Corporation manufactures auto parts for two leading Japanese automakers. Nancy Evans is the management accountant for one of Wainwright’s largest manufacturing plants. The plant’s General Manager, Chris Shel

> Pauli’s Pizza has recently begun collecting data on the quality of its customer order processing and delivery. Pauli’s made 1,800 deliveries during the first quarter of 2012. The following quality data pertains to firs

> Fun Time Toys (FTT) produces dolls in two processes: molding and assembly. FTT is currently producing two models: Chatty Chelsey and Talking Tanya. Production in the molding department is limited by the amount of materials available. Production in the as

> Aardee Industries manufactures pharmaceutical products in two departments: mixing and tablet making. Additional information on the two departments follows. Each tablet contains 0.5 gram of direct materials. The mixing department makes 200,000 grams of

> The Brandt Corporation makes wire harnesses for the aircraft industry only upon receiving firm orders form its customers. Brandt has recently purchased a new machine to make two types of wire harnesses, one for Boeing airplanes (B7) and the other for Air

> Seawall is still debating whether it should introduce Y28. The following table provides information on selling prices, variable costs, and inventory carrying costs for Z39 and Y28: Required: 1. Using the average manufacturing cycle times calculated in

> Mile-High Foods, Inc., was formed in March 2011 to provide prepackaged snack boxes for a new low cost regional airline beginning on April 1. The company has just leased warehouse space central to the two airports to store materials. To move packaged mate

> The Seawall Corporation uses an injection molding machine to make a plastic product, Z39, after receiving firm orders from its customers. Seawall estimates that it will receive 50 orders for Z39 during the coming year. Each order of Z39 will take 80 hour

> East Coast Healthcare operates two medical groups, one in Philadelphia and one in Baltimore. The semi-annual bonus plan for each medical group’s president has three components: a. Profitability performance. Add 0.75% of operating income

> The Tan Corporation uses multicolor molding to make plastic lamps. The molding operation has a capacity of 200,000 units per year. The demand for lamps is very strong. Tan will be able to sell whatever output quantities it can produce at $40 per lamp. Ta

> The Thomas Corporation sells 300,000 V262 valves to the automobile and truck industry. Thomas has a capacity of 110,000 machine-hours and can produce 3 valves per machine-hour. V262’s contribution margin per unit is $8. Thomas sells only 300,000 valves b

> Riposte Corporation manufactures a computer chip called XD1. Manufacturing costs of one XD1 chip, excluding rework costs, are direct materials, $60; direct manufacturing labor, $12; and manufacturing overhead, $38. At the inspection point, defective unit

> The Kim Company is a furniture manufacturer with two departments: molding and finishing. The company uses the weighted-average method of process costing. In August, the following data were recorded for the finishing department: Conversion costs are add

> Fantastic Furniture manufactures plastic lawn furniture in a continuous process. The company pours molten plastic into molds and then cools the plastic. Materials are added at the beginning of the process, and conversion is considered uniform through the

> Assume that Job #10 of Crystal Clear Machine Shop generates normal scrap with a total sales value of $650 (it is assumed that the scrap returned to the storeroom is sold quickly). Required: Prepare the journal entries for the recognition of scrap, assum

> Assume that the 7 spoiled units of Whitefish Machine Shop’s Job #10 can be reworked for a total cost of $1,700. A total cost of $10,150 associated with these units has already been assigned to Job #10 before the rework. Required: Prepare the journal ent

> Zeller Company uses standard costing. The company has two manufacturing plants, one in Nevada and the other in Ohio. For the Nevada plant, Zeller has budgeted annual output of 4,000,000 units. Standard labor hours per unit are 0.25, and the variable over

> Crystal Clear Machine Shop is a manufacturer of motorized carts for vacation resorts. Peter Cruz, the plant manager of Crystal Clear, obtains the following information for Job #10 in August 2010. A total of 32 units were started, and 7 spoiled units were

> Metal Works, Inc., manufactures various metal parts in batches as ordered by customers, and accounts for them using job costing. Job 2346-8, a large job for customer X, incurred $240,000 of direct materials costs and $620,000 of direct labor costs. Metal

> In Boston Company’s packaging department, conversion costs are added evenly during the process, and direct materials are added at the end of the process. Spoiled units are detected upon inspection at the end of the process and are dispo

> Refer to the information in Problem 18-30. Required: Do Problem 18-30 using the FIFO method of process costing. (Problem 18-33 explores additional facets of this problem.) Data from Problem 18-30: The Boston Company is a food-processing company based

> The Boston Company is a food-processing company based in San Francisco. It operates under the weighted-average method of process costing and has two departments: cleaning and packaging. For the cleaning department, conversion costs are added evenly durin

> Penelope’s Pearls Company (PPC) is a manufacturer of knock off jewelry. Penelope attends Fashion Week in New York City every September and February to gauge the latest fashion trends in jewelry. She then makes trendy jewelry at a fracti

> Frito-Lay, Inc., manufactures convenience foods, including potato chips and corn chips. Production of corn chips occurs in four departments: cleaning, mixing, cooking, and drying and packaging. Consider the drying and packaging department, where direct m

> Refer to the information in Problem 17-38. Suppose that Bookworm, Inc., uses the FIFO method instead of the weighted-average method in all of its departments. The only changes to Problem 17-38 under the FIFO method are that total transferred-in costs of

> Bookworm, Inc., has two departments: printing and binding. Each department has one direct-cost category (direct materials) and one indirect-cost category (conversion costs). This problem focuses on the binding department. Books that have undergone the pr

> Sol Electronics, a fast-growing electronic device producer, uses a standard costing system, with standards set at the beginning of each year. In the second quarter of 2011, Sol faced two challenges: It had to negotiate and sign a new short-term labor agr

> Required: Do Problem 17-35 using the FIFO method of process costing. If you did Problem 17-35, explain any difference between the cost of work completed and transferred out and the cost of ending work in process in the assembly department under the weigh

> Required: Prepare a set of summarized journal entries for all April transactions affecting Work in Process—Assembly. Set up a T-account for Work in Process—Assembly and post your entries to it.

> Ashworth Handcraft is a manufacturer of picture frames for large retailers. Every picture frame passes through two departments: the assembly department and the finishing department. This problem focuses on the assembly department. The process-costing sys

> Refer to the information in Problem 17-33. Suppose that Larsen Company uses the FIFO method instead of the weighted-average method in all of its departments. The only changes to Problem 17-33 under the FIFO method are that total transferred-in costs of b

> Larsen Company, as you know, is a manufacturer of car seats. Each car seat passes through the assembly department and testing department. This problem focuses on the testing department. Direct materials are added when the testing department process is 90

> Do Problem 17-30 using the FIFO method of process costing. Explain any difference between the cost per equivalent unit in the assembly department under the weighted-average method and the FIFO method. Data from Problem 17-30: Larsen Company manufacture

> Required: Prepare a set of summarized journal entries for all October 2012 transactions affecting Work in Process— Assembly. Set up a T-account for Work in Process—Assembly and post your entries to it.

> Larsen Company manufactures car seats in its San Antonio plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Larsen Company has a single di

> Taste Freez, Inc., produces two specialty ice cream mix flavors for soft serve ice cream machines. The two flavors, Extreme Chocolate and Very Strawberry, both start with a vanilla base. The vanilla base can be sold for $2 per gallon. The company did not

> Memory Manufacturing Company (MMC) produces memory modules in a two-step process: chip fabrication and module assembly. In chip fabrication, each batch of raw silicon wafers yields 400 standard chips and 600 deluxe chips. Chips are classified as standard

> Renewal Resorts, Inc., operates health spas in Ft. Meyers, Florida, Scottsdale, Arizona, and Monterey, California. The Ft. Meyers spa was the company’s first, opened in 1986. The Scottsdale spa opened in 1999, and the Monterey spa opene

> Rochester Mining Company (RMC) mines coal, puts it through a one-step crushing process, and loads the bulk raw coal onto river barges for shipment to customers. RMC’s management is currently evaluating the possibility of further process

> The Mat Place’s accountant needs to record the information about the joint and byproducts in the general journal, but is not sure what the entries should be. The company has hired you as a consultant to help its accountant. Required: 1. Show journal ent

> Mat Place purchases old tires and recycles them to produce rubber floor mats and car mats. The company washes, shreds, and molds the recycled tires into sheets. The floor and car mats are cut from these sheets. A small amount of rubber shred remains afte

> Elsie has decided that buttermilk may sell better if it was marketed for baking and sold in pints. This would involve additional packaging at an incremental cost of $0.35 per pint. Each pint could be sold for $0.75 (note: one quart = two pints). 1. If El

> Elsie Dairy Products Corp. buys one input, full-cream milk, and refines it in a churning process. From each gallon of milk Elsie produces three cups of butter and nine cups of buttermilk. During May 2010, Elsie bought 12,000 gallons of milk for $22,250.

> Sonimad Sawmill, Inc., (SSI) purchases logs from independent timber contractors and processes the logs into three types of lumber products: Studs for residential buildings (walls, ceilings) Decorative pieces (fireplace mantels, beams for cathedral ceilin

> The Chocolate Factory manufactures and distributes chocolate products. It purchases cocoa beans and processes them into two intermediate products: chocolate-powder liquor base and milk chocolate liquor base. These two intermediate products become separat

> The Southern Oil Company buys crude vegetable oil. Refining this oil results in four products at the split off point: A, B, C, and D. Product C is fully processed by the split off point. Products A, B, and D can individually be further refined into Super

> Sunny Day Juice Company produces oranges from various organic growers in Florida. The juice is extracted from the oranges and the pulp and peel remain. Sunny Day considers the pulp and peel byproducts of its juice production and can sell them to a local

> Spirit Training, Inc., manufactures athletic shoes and athletic clothing for both amateur and professional athletes. The company has two product lines (clothing and shoes), which are produced in separate manufacturing facilities; however, both manufactur

> The California Instrument Company (CIC) consists of the semiconductor division and the process-control division, each of which operates as an independent profit center. The semiconductor division employs craftsmen who produce two different electronic com

> Max Systems, Inc., sells computer hardware to end consumers. Its most popular model, the CX30 is sold as a “bundle,” which includes three hardware products: a personal computer (PC) tower, a 23-inch monitor, and a colo

> Wright Inc. and Brown Inc. are two small clothing companies that are considering leasing a dyeing machine together. The companies estimated that in order to meet production, Wright needs the machine for 800 hours and Brown needs it for 200 hours. If each

> The Central Valley Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: Management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. T

> State University completed construction of its newest administrative building at the end of 2011. The University’s first employees moved into the building on January 1, 2012. The building consists of office space, common meeting rooms (

> Lee Shu-yu Inc. produces and sells DVDs to business people and students who are planning extended stays in China. It has been very successful with two DVDs: Beginning Mandarin and Conversational Mandarin. It is introducing a third DVD, Reading Chinese Ch

> Perfection Department Store has a new promotional program that offers a free gift-wrapping service for its customers. Perfection’s customer service department has practical capacity to wrap 7,000 gifts at a budgeted fixed cost of $6,650

> Denise Nelson operates Interiors by Denise, an interior design consulting and window treatment fabrication business. Her business is made up of two different distribution channels, a consulting business in which Denise serves two architecture firms (Attr

> Sarah Reynolds recently started a job as an administrative assistant in the cost accounting department of Mize Manufacturing. New to the area of cost accounting, Sarah is puzzled by the fact that one of Mize’s manufactured products, SR4

> Trevor Joseph employs two workers in his guitar-making business. The first worker, George, has been making guitars for 20 years and is paid $30per hour. The second worker, Earl, is less experienced, and is paid $20 per hour. One guitar requires, on avera

> Nature’s Best Nuts produces specialty nut products for the gourmet and natural foods market. Its most popular product is Zesty Zingers, a mixture of roasted nuts that are seasoned with a secret spice mixture, and sold in one-pound tins.

> Phish Corporation is the largest manufacturer and distributor of novelty ice creams across the East Coast. The company’s products, because of their perishable nature, require careful packaging and transportation. Phish uses a special ma

> The Split Banana, Inc., operates a chain of Italian gelato stores. Although the Split Banana charges customers the same price for all flavors, production costs vary, depending on the type of ingredients. Budgeted and actual operating data of its three Wa

> Chicago Infonautics’ senior vice president of marketing prepared his budget at the beginning of the third quarter assuming a 25% market share based on total sales. The total handheld-organizer market was estimated by Fool instead Research to reach sales

> Chicago Infonautics, Inc., produces handheld Windows CEâ„¢-compatible organizers. Chicago Infonautics markets three different handheld models: Palm Pro is a souped-up version for the executive on the go, Palm CE is a consumer oriented ver

> Bizzan Manufacturing makes a component called P14-31. This component is manufactured only when ordered by a customer, so Bizzan keeps no inventory of P14-31. The list price is $100 per unit, but customers who place“ largeâ€&#

> Dusty Rhodes, controller of Richfield Oil Company, is preparing a presentation to senior executives about the performance of its four divisions. Summary data (dollar amounts in millions) related to the four divisions for the most recent year are as follo

> Refer to the data for Problem 13-37. Assume the fabric costs $3.70 per yard in 2012 and $3.85 per yard in 2011. Required: 1. Compute Gerhart Company’s total factor productivity (TFP) for 2012. 2. Compare TFP for 2012 with a benchmark TFP for 2011 inputs

> Gerhart Company manufactures wallets from fabric. In 2011, Gerhart made 2,520,000 wallets using 2,000,000 yards of fabric. In 2011, Gerhart has capacity to make 3,307,500 wallets and incurs a cost of $9,922,500 for this capacity. In 2012, Gerhart plans t

> Lee Corporation manufactures various types of color laser printers in a highly automated facility with high fixed costs. The market for laser printers is competitive. The various color laser printers on the market are comparable in terms of features and

> Caltex, Inc., refines gasoline and sells it through its own Caltex Gas Stations. On the basis of market research, Caltex determines that 60% of the overall gasoline market consists of “service-oriented customers,” medi

> Refer to the information for Music Master Company in 13-31. Required: 1. Calculate the amount and cost of (a) unused manufacturing capacity and (b) unused selling and customer-service capacity at the beginning of 2011 based on actual production and act