Question: Review the data provided in Exercise 9-

> Klandon Company manufactures decorative rocks for aquariums. Kim Klandon is preparing the budget for the quarter ended June 30. She has gathered the following information. 1. Klandon’s sales manager reported that the company sold 12,00

> Maverick Wings, Inc. manufactures airplanes for use in stunt shows. Maverick’s factory is highly automated, using the latest in robotic technology. To keep costs low, the company employs as few factory workers as possible. Since each pl

> Lassen Artworks creates hand-painted picture frames. The frames are cast from resin in an automated process. Once the casting is done, talented artisans hand-paint one of fifteen designs on each frame. In the final assembly process, a worker inserts the

> Refer to the data in Exercise 2.4. Using the form y = mx + b, estimate the cost formula for each cost incurred by Furman Flower Cart. Bouquets Sold 3,000 5,000 7,000 $ 9,000 $ 7,500 $ 5,300 $11,000 $ 2,000 $15,000 $ 7,500 $ 8,300 $15,000 $ 2,000 $21

> Benson ProSystems needs a new signal conditioner module for a large process control system it is designing. Current market conditions will support annual sales of 1,000 systems. Engineers estimate the following unit manufacturing costs for the module: D

> Parkside, Inc. has several divisions that operate as decentralized profit centers. Parkside’s Entertainment division manufactures handheld gaming systems using the products of two of Parkside’s other divisions. The Pla

> Marlys Consolidated has several divisions, two of which transfer their products to other divisions. The Mining division refines toldine, which it then transfers to the Metals division. The Metals division processes the toldine into an alloy and sells it

> Hannalinn Corporation operates three divisions—Archer, Barrett, and Corvell. Division managers are evaluated based on the division’s return on investment, and historically, the Corvell division has consistently outperf

> Mims Corporation recently announced a bonus plan to reward the manager of its most profitable division. The three divisional managers are to decide which performance measure will be used to evaluate profitability. Mims Corporation requires a 10% minimum

> Sanders Siding produces and sells two products—aluminum and vinyl. Each of these products is made in a dedicated manufacturing facility, and the product line managers are evaluated based on the product line’s return on

> Shoe Shock Innovations manufactures athletic shoe inserts that cushion the foot and reduce the impact of exercise on the joints. The company has two divisions, Sole Inserts and Heel Inserts. A segmented income statement from last month follows. Chris K

> Jim Coston was reviewing the latest income statement for Trenton Communications. For the second year in a row, the Audio division was showing a negative segment margin, and Jim thought it was time to close the division to increase the companyâ&#128

> Jordan Williams, a divisional manager, is evaluated based on return on investment. In the last quarter her division achieved a 15% margin and an 18% return on investment. The division had $4,000,000 in operating assets that quarter. Required: a. What wa

> Dale Decor sells home decor items through three distribution channels—retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows:

> Refer to the data in Exercise 2-8. Required: a. Using the high-low method, compute the variable cost of electricity per machine hour. b. Compute the total fixed cost of electricity. c. Represent the electricity cost function in equation form. d. What is

> Joyner Pickled Pepper Company produces pickled jalapeno pepper relish. Selected results from the most current year were as follows: Sales revenue……………….$3,375,000 Operating income………………540,000 Average total assets…………1,687,500 Production manager Veroni

> Jane Baldwin, Anderson Flooring’s accounting intern, has prepared the following income statement for the month of June. In preparing the income statement, Jane was unsure what to do with $250,000 in corporate fixed expenses that canno

> Kimball Equipment sells equipment to sports enthusiasts. Doug Kimball, the company’s president, just received the following income statement reporting the results of the past year. Doug is concerned that two of the companyâ&#128

> Magellan & Columbus, Ltd. manufactures boats and personal watercraft. The company operates three separate divisions: yachts, sailboats, and jet skis. The company’s latest income statement is presented by product line as follows: R

> Bridges Optics manufactures two products: microscopes and telescopes. Information for each product is as follows. Required: Prepare a segment margin income statement for Bridges Optics that provides detail on both the product lines and the company as a

> Hewett and Hefner, LLP is a regional public accounting firm with 34 offices throughout the southeastern United States. To provide employees with cost-effective continuing professional education, the company maintains an in-house education and training st

> Paula Boothe, president of the Armange Corporation, has mandated a minimum 10% return on investment for any project undertaken by the company. Given the company’s decentralization, Paula leaves all investment decisions to the divisional managers as long

> North Town Medical Arts is a new healthcare provider in Baytown. The company operates a community hospital, an outpatient surgery center, and a medical offices building. Indicate whether each of the following responsibility centers is a cost center, a pr

> Blakefield, Inc. has grown significantly over the past decade through innovation and acquisition. Information on several of its divisions follows. • The OlliePods division sells children’s recreational shoes. The division’s president is responsible for a

> Stratton, Inc., has collected the following information on its cost of electricity: Required: a. Prepare a scatter graph of Stratton’s electricity costs for the year. Plot the total electricity cost on the y-axis. Draw a line that you

> Thompson Manufacturing has been in business for over 50 years, making a variety of consumer electronics products. Mary Felix recently joined the business as vice president of the Conley division, one of the company’s newest divisions. During her first we

> Preston Plastics is about to wrap up its capital budgeting cycle, and department managers across the company have submitted 500 capital project requests for consideration in the next round of funding. Preston’s CFO, Dan LaMontagne, is trying to decide wh

> Jewel Pix currently uses a six-year-old molding machine to manufacture silver picture frames. The company paid $85,000 for the machine, which was state of the art at the time of purchase. Although the machine will likely last another ten years, it will n

> Jonathan Lark’s lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest

> Cindy Alexander, Turner, Inc.’s vice president of marketing, has received a sales call from a vendor of customer relationship management (CRM) software. The vendor claims that the software and other data her company provides will enable

> TimeTrends integrated time clock and payroll system sells for $271,673. At this price, the annual cost savings that the system will generate for Building Keepers, a facilities management company, over its ten-year life will yield an internal rate of retu

> Bill Zimmerman is evaluating two new business opportunities. Each of the opportunities shown below has a ten-year life. Bill uses a 10% discount rate. Required: a. Calculate the net present value of the two opportunities. b. Calculate the profitability

> Farmville Regional Airport is modernizing its terminal facilities in anticipation of significant growth in the number of passengers using the airport. A consultant’s study commissioned by the airport’s board predicts that the number of passengers using t

> AutoQuest has been selling auto parts to the general public for over 70 years. It has built a reputation for outstanding customer service, becoming the third largest auto parts retailer in the Southwest. Hoping to expand its sales to other regions, manag

> Martha Gentry won an $18 million lottery and elected to receive her winnings in 30 equal annual installments. After receiving the first 10 installments, Martha and her husband divorced, and the remaining 20 payments became part of the property settlement

> To calculate the unit cost of the video games that he sells at his mall kiosk, Joel Lawson added up all his costs and divided by the number of units he sold during the year. He then used this unit cost to estimate total costs for the coming year. Requir

> Farrior Fashions needs to replace a beltloop attacher that currently costs the company $40,000 in annual cash operating costs. This machine is of no use to another company, but it could be sold as scrap for $2,160. Managers have identified a potential re

> Margaret wants to buy a car when she graduates from Central University four years from now. She believes that she will need $30,000 to buy the car. Required: a. Calculate how much money Margaret must put into her savings account today to have $30,000 in

> The Seago Company is planning to purchase $500,000 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment. Year……………….Projected Cash Flows 1………………………………

> Tom Falkland is considering refinancing his home mortgage to reduce his house payment by $125 per month. Closing costs associated with the refinancing will total $5,000. Tom will finish medical school in four years, at which time he will sell the house a

> Boyer Cosmetics is planning to expand its product line to include stage makeup. The expansion will require the company to purchase special mixing equipment at a cost of $125,532. The equipment will have a useful life of 16 years. Required: a. If Boyer u

> Garrett Boone, Farish Enterprises’ vice president of operations, needs to replace an automatic lathe on the production line. The model he is considering has a sales price of $285,000 and will last for 9 years. It will have no salvage value at the end of

> Harrison Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $88,235 and will save the company $14,000 in direct labor costs. It is expected to last 14 years. Required:

> Larry’s Lawn Service needs to purchase a new lawnmower costing $7,756 to replace an old lawnmower that cannot be repaired. The new lawnmower is expected to have a useful life of four years, with no salvage value at the end of that period. Required: a. I

> Review the data provided in Exercise 9-2. Reference from Exercise 9-2: Mighty Vita produces a wide range of herbal supplements sold nationwide through independent distributors. In response to an increasing demand for its products, the company is consi

> Review the data provided in Exercise 9-1. Reference from Exercise 9-1: Metro Industries is considering the purchase of new equipment costing $1,200,000 to replace existing equipment that will be sold for $180,000. The new equipment is expected to have a

> Marla Mason owns and operates a home health care agency. She reported the following cost information for the first four months in 2017. Identify each of the following costs as fixed, variable, or mixed and calculate the missing values. Home Visit Hou

> Chuck has just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $200,000 cash payment today. The second option is to receive $20,000 at the end of each of the next 19 years and a $50,000 lump sum paymen

> “Maybe I should have stuck with teaching high school art. No matter what I try, I can’t seem to turn that Roanoke plant around.” That’s how the meeting between Warren Wingo, CEO of clothing manufacturer Wingo Designs, and Angie Tillery, vice president of

> Preston Plastics is about to wrap up its capital budgeting cycle, and department managers across the company have submitted 500 capital project requests for consideration in the next round of funding. Preston’s CFO, Dan LaMontagne, is trying to decide wh

> Capital Toys’ management is considering eliminating product A, which has been showing a loss for several years. The company’s annual income statement, in $000s, is as follows: Required: a. Restate the income statemen

> PlayTime, Inc., is a leading manufacturer of sporting equipment. The company is in the process of evaluating the best use of its Plastics Division, which is currently manufacturing molded fishing tackle boxes. The company manufactures and sells 8,000 tac

> Betsy Willis owns Test Tutor, an educational tutoring center in Baytown, Florida. The center offers private tutoring in math, writing, and science. Information about the tutoring sessions is as follows: Since the company opened fi ve years ago, demand h

> Marwick Innovations, Inc. produces exercise and fitness gear. Two of its newer products require a finishing process that can only be completed on machines that were recently purchased for this purpose. The machines have a maximum capacity of 6,000 machin

> Elizabeth Lee is a top seller on eBay®. In fact, her business has grown so large that she can no longer manage her items on eBay’s website and ship her products to the auction winners in a timely manner. When she first started, she had to ship only a few

> Wright Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 50,000 timers, the company has calculated the following unit costs.

> Identify each of the following costs, incurred monthly by Furman Flower Cart, as fixed, variable, or mixed. Explain your reasoning. Bouquets Sold 5,000 3,000 7,000 $ 9,000 $ 7,500 $ 5,300 $11,000 $ 2,000 Balloons (10 per bouquet) $15,000 $ 7,500 $ 8,

> Managerial accounting information is not just for accountants. All areas within an organization can use the information to support decision making. Choose a position in an organization that is appealing to you and identify several decisions that you migh

> Klump Trekkers, Inc., manufactures engines that are used in recreational equipment, such as motorcycles and personal watercraft. The company currently assembles the camshafts for these motors in its assembly department, which employs 40 skilled technicia

> Wilson Vistas is a leading producer of vinyl replacement windows. The company’s growth strategy focuses on developing domestic markets in large metropolitan areas. The company operates a single manufacturing plant in Kansas City with an annual capacity o

> Guilford Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of the company’s major product lines is custom-printed cake boxes that are sold to some of the country’s best known bakeries at a price of

> Ridley and Scott Mercantile operates two stores, one on Maple Avenue and the other on Fenner Road. Results for the month of May, which is representative of all months, are as follows: The following information pertains to Ridley and Scottâ€&

> Luis Herrera, an up-and-coming fashion designer, created a new line of men’s fashion socks in response to the growing number of celebrities who are expressing their individuality by replacing traditional navy and black socks with brighter colors and bold

> Physical Phitness, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. “Survival of the fittest, I say!” wa

> Twinkie Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter’s operating profits, by product, and for the company as a whole, were as follows: Forty percent of the Round

> In 2015, Yum! Brands, Inc., the world’s largest quick-service restaurant company (Pizza Hut, Kentucky Fried Chicken, and Taco Bell), opened 577 new Pizza Hut restaurants and closed 456 others. Required: If you were in charge of these decisions, what inf

> In response to a growing awareness of gluten allergies, Outland Bakery tried using gluten-free fl our in its three most popular cookies. After several attempts and a lot of inedible cookies, the company perfected new recipes that yield delicious gluten-f

> Wendy’s Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Wendy received orders for 3,000 Valentine’s Day banners and 1,200 Easter kites. Because several sewing machines are in the shop for repairs, Wendy’s has

> Will Jones, LLP is a small CPA firm that focuses primarily on preparing tax returns for small businesses. The company pays a $500 annual fee plus $10 per tax return for a license to use Mega Tax software. Required: a. What is the company’s total annual

> Umbrella Co. is considering the introduction of three new products. Per unit sales and cost information are as follows: The company has only 1,800 direct labor hours available to commit to production of any new products. Required: How many of each pro

> Balloon, Inc. produces three types of balloons—small, medium, and large—with the following characteristics: The company has only 2,000 machine hours available each month. Required: How many units of each type of bal

> Merit Bay Communications operates a customer call center that handles billing inquiries for several large insurance firms. Since the center is located on the outskirts of town, where there are no restaurants within a 20-minute drive, the company has alwa

> Every year Underwood Industries manufactures 15,000 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials…………………….…………..$ 6 Direct labor…………………………………………12 Variable manufacturing overhead….……..

> Steeple Rides makes bicycles. It has always purchased its bicycle tires from the Balyo Tires at $15 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials…

> The Outland Company manufactures 1,000 units of a part that could be purchased from an outside supplier for $12 each. Outland’s costs to manufacture each part are as follows: Direct materials……………………………..…$ 2 Direct labor………………………………………….3 Variable manu

> The following operating information reports the results of Chappell Company’s production and sale of 12,500 air-conditioned motorcycle helmets last year. Based on early market forecasts, Chappell expects the same results this year. Sales…….…………………………………

> Marston Manufacturing has an annual capacity of 85,000 units per year. Currently, the company is making and selling 78,000 units a year. The normal sales price is $120 per unit, variable costs are $90 per unit, and total fixed expenses are $2,000,000. An

> Jason McGregor manages an IT department for a large corporation. Kelly Preston, vice president for marketing, has asked him to help her evaluate two statistical packages for monitoring customer purchases. Stat- Max costs $912,000, requires 2 gigabytes of

> Madison Ironworks made 500 defective units last month. Fortunately, the units were identified as defective before they were sold to customers. They are currently included in Madison’s ending inventory balance at $200 each. At the end of the quarter, the

> Erin Brushwood sells gourmet chocolate chip cookies. The results of her last month of operations are as follows: Required: a. Prepare a contribution format income statement for Erin. b. If Erin sells her cookies for $2 each, how many cookies did she sell

> Can produce 50,000 units per year. Three years ago the company borrowed $200,000 to purchase the machine; it still owes $125,000 of that amount. Cherry could sell the machine for $70,000 and purchase a new, more efficient machine at a cost of $220,000. T

> Whirlwind Industries is a multiproduct company with several manufacturing plants. The Brownwood Plant manufactures and distributes two carpet cleaning products, Household and Commercial, under the Karpet Kleen label. The forecasted operating results for

> It had been a quiet Monday morning for Anna Hogue, senior project manager at Flagstone Consulting. Everything seemed to be falling into place for the company’s first conference, “Healthcare Management in the New Millen

> Several years ago, Roberson Robotics outsourced component BF-365, a key component of many of its products. At the time, CFO Sam Summers concluded that outsourcing was the correct decision, but she decided to revisit that decision after overhearing some c

> Highland Manufacturing produces two products in its Saratoga plant, balzene and galvene. Since it opened its doors in 1965, Highland has been using a single manufacturing overhead pool to accumulate overhead costs. Overhead has been allocated to products

> Elliot-Jones manufactures two large-screen television models. The 65-inch fl at-panel LED model has been in production since 2012 and sells for $900. The company introduced a 55-inch 4K ultra HD in 2016; it sells for $1,140. The companyâ€&#153

> Santamaria Skiffs manufactures three models of speedboats—Superior, Deluxe, and Ultra—which are sold through marine retail stores. Budgeted information for the coming year is as follows. Currently, the company allocat

> Best Test Laboratories was founded 25 years ago to evaluate the reaction of materials to extreme increases in temperature. Much of the company’s early growth was attributable to government contracts to test the suitability of weapons, t

> Nancy’s Nut House is a processor and distributor of a variety of different nuts. The company buys nuts from around the world and roasts, seasons, and packages them for resale. Nancy’s Nut House currently offers 15 diff

> Lancaster Orthopedics specializes in hip, knee, and shoulder replacement surgery. In addition to the actual surgery, the company provides its patients with preoperative and postoperative inpatient care in a fully equipped hospital. Lancaster pays its sur

> Anthony Herrera recently fulfilled his long-time dream of opening a gym that offers spinning exercise classes for $5 per person. To differentiate his gym and better serve his clients, Anthony provides a towel, a bottle of water, and an after-work out pro

> Chevis Consulting provides weekly payroll processing for a number of small businesses. Gia Chevis, the company’s owner, has been using an activity-based costing system for several years. She used the following information in preparing t

> Refer to the information about Voss Visuals in Problem 7-20. Voss’s managers have gathered the following information about selling and administrative costs. Reference from Problem 7-20: Required: a. Using the information given here

> Ellis Perry is an electronics components manufacturer. Information about the company’s two products follows: The company incurs $899,000 in overhead per year and has traditionally applied overhead on the basis of direct labor hours. R

> Voss Visuals produces tablets and books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decide

> The Trust Department of First National Bank offers two types of service, Basic and Premier. Trust customers with basic service do not grant trust officers any discretion in managing their accounts. The trust officers or their assistants merely execute th

> In the Reality Check on page 370, you read that the U.S. Postal Service altered its pricing strategy based on the results of an activity-based costing analysis. Specifically, the new rates were designed to encourage customers to use computer-readable mai

> Clive Franks was reviewing the product costs for his line of artist’s oil paints. The current production schedule calls for the paints to be produced in batches of 1,000 tubes. Between each batch, the mixing and packaging lines must be completely cleaned

> Jay Krue makes two products, Simple and Complex. As their names suggest, Simple is the more basic product, and Complex comes with all the bells and whistles. The company has always allocated overhead costs to products based on machine hours. Last year, t

> You’re killing me!” exclaimed Myles Werntz, product manager for Premium products. “All along I’ve been told that the Premium line costs the company $125; we charge $225 and make a $100 profi t. Now you’re saying that costs have increased to $200. That’s