Question: Sales volume has been dropping at Pinnacle

> Topeka Plastics Inc. prepared the following factory overhead cost budget for the Trim Department for July, during which it expected to use 25,000 hours for production: Topeka Plastics has 30,000 hours of monthly productive capacity available in the Tri

> The data related to Danville Sporting Goods Company’s factory overhead cost for the production of 40,000 units of product are as follows: Productive capacity at 100% of normal was 100,000 hours, and the factory overhead cost budgeted

> Osceola Textiles Corporation began May with a budget for 45,000 hours of production in the Weaving Department. The department has a full capacity of 60,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginn

> The following data relate to factory overhead cost for the production of 8,000 computers: If productive capacity of 100% was 10,000 hours and the factory overhead cost budgeted at the level of 8,000 standard hours was $284,000, determine th

> Southwest Iowa Hospital began using standards to evaluate its Admissions Department. The standards were broken into two types of admissions as follows: The unscheduled admission took longer, since name, address, and insurance information needed to be d

> The following conversation took place between Dean Lancaster, vice president of marketing, and Dina Conaway, controller of Redwood Computer Company: Dean: I am really excited about our new computer coming out. I think it will be a real market success. Di

> At the beginning of August, Havasu Printers Company budgeted 30,000 books to be printed in August at standard direct materials and direct labor costs as follows: Direct materials ……………………… $15,000 Direct labor ……………………………. 72,000 Total …………………………………….

> Death Valley Bicycle Company manufactures mountain bikes. The following data for October of the current year are available: Quantity of direct labor used …………………………………………… 1,100 hrs. Actual rate for direct labor ………………………………………… $18.50 per hr. Bicycles

> The following data relate to direct labor costs for the production of smart tablets. a. Determine the rate variance, time variance, and total direct labor cost variance. b. Discuss what might have caused these variances. Actual: 6,300 hrs. at $23.0

> H.J. Heinz Company uses standards to control its materials costs. Assume that a batch of ketchup (6,000 pounds) has the following standards: The actual materials in a batch may vary from the standard due to tomato characteristics. Assume that the actua

> The following data relating to direct materials cost for August of the current year are taken from the records of Happy Tots Inc., a manufacturer of plastic toys: Quantity of direct materials used ………………….……. 12,000 lbs. Actual unit price of direct mate

> The following data relate to the direct materials cost for the production of 20,000 automobile tires: a. Determine the price variance, quantity variance, and total direct materials cost variance. b. To whom should the variances be reported for analysis

> McAlisters Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of May, McAlisters Bottle’s management planned to produce 800,00

> Sorrento Furniture Company manufactures unfinished oak furniture. Sorrento uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:

> On August 1, 20Y4, the controller of Handy Dan Tools Inc. is planning capital expenditures for the years 20Y5–20Y8. The controller interviewed several Handy Dan executives to collect the necessary information for the capital expenditures budget. Excerpts

> Organic Physical Therapy Inc. is planning its cash payments for operations for the three months ending March 31. The Accrued Expenses Payable balance on January 1 is $12,000. The budgeted expenses for the next three months are as follows: Other operati

> If you are not familiar with The Priceline Group Inc. (PCLN), go to its Web site. Assume that an individual “names a price” of $90 on Priceline.com for a room in Miami, Florida, on September 3. Assume that September 3 is a Saturday, with low expected roo

> Tadpole Learning Systems Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows: March ……………………… $ 120,000 April ………………………… 140, 000 May ………………….……… 160, 000 Depr

> Innovative Office Inc. has “cash and carry” customers and credit customers. Innovative Office estimates that 30% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 75% pay their accounts in

> Pet Stop Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows: May ………………………. $ 1,200,000 June ………………………… 1,800,000 July …………………………. 2,200,000 All sales are on account. Of

> The controller of Pueblo Ceramics Inc. wishes to prepare a cost of goods sold budget for April. The controller assembled the following information for constructing the cost of goods sold budget: Use the preceding information to prepare a cost of good

> Nutty Candy Company budgeted the following costs for anticipated production for August: Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only factory fixed costs. Pr

> Levi Strauss & Co. manufactures slacks and jeans under a variety of brand names, such as Dockers® and 501 Jeans®. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Docke

> a. Matzinger Company budgets sales of $10,400,000, fixed costs of $1,100,000, and variable costs of $6,656,000. What is the contribution margin ratio for Matzinger Company? b. If the contribution margin ratio for Raynor Company is 41%, sales are $6,200,0

> Miss River Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Miss River Railroad is a measure of railroa

> Liberty Inc. has decided to use the high-low method to estimate costs. The data for various levels of production are as follows: Units Produced Total Costs 100,000 $ 1,800,000 180,000 2,800,000 300,000 4,300,000 a. Deter

> SunRise Inc. and SunSet Inc. have the following operating data: a. Compute the operating leverage for SunRise Inc. and SunSet Inc. b. How much would operating income increase for each company if the sales of each increased by 25%? c. Why is there a dif

> A manager of Coastal Sporting Goods Company is considering accepting an order from an overseas customer. This customer has requested an order for 50,000 dozen golf balls at a price of $12 per dozen. The variable cost to manufacture a dozen golf balls is

> Yellow Dove Airways provides air transportation services between Portland and Minneapolis. A single Portland to Minneapolis round-trip flight has the following operating statistics: Fuel and landing fees ……………………………………………………………………… $19,400 Flight crew sa

> Northwest Technology Inc. manufactures and sells two products, digital game players and computer tablets. The fixed costs are $936,000, and the sales mix is 70% game players and 30% computer tablets. The unit selling price and the unit var

> Using the data for Cabinet Inc. in Exercise 11-16, (a) determine the maximum possible operating loss, (b) compute the maximum possible operating income, (c) construct a profit volume graph, and (d) estimate the break-even sales (units) by using the profit-

> For the coming year, Cabinet Inc. anticipates fixed costs of $60,000, a unit variable cost of $70, and a unit selling price of $100. The maximum sales within the relevant range are $500,000. a. Construct a cost-volume-profit graph. b. Estimate the break-e

> Media outlets such as ESPN and Fox Sports often have Web sites that provide in-depth coverage of news and events. Portions of these Web sites are restricted to members who pay a monthly subscription to gain access to exclusive news and commentary. These

> The Garden Club of Palm Springs, California, collected recipes from members and published a cookbook entitled Desert Dishes. The book will sell for $40 per copy. The chairperson of the cookbook development committee estimated that the club needed to sell

> Molson-Coors Brewing Company (TAP) reported the following operating information for a recent year (in millions): Sales …………………………………………………………………………………. $3,568 Cost of goods sold ……………………………………………………………. (2,164) Gross profit ……………………………………………………………………… $

> Umbrella Insurance Company carries three major lines of insurance: auto, workers’ compensation, and homeowners. The company has prepared the following report for 20Y2: Management is concerned that the administrative expenses may make

> Deer Lodge Regional Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: The reco

> Jupiter Shirt Company manufactures various styles of men’s casual wear. Shirts are cut and assembled by a workforce that is paid by piece rate. This means that workers are paid according to the amount of work completed during a period of time. To illustr

> Break-even analysis is one of the most fundamental tools for managing any kind of business unit. Consider the management of your school. In a group, brainstorm some applications of break-even analysis at your school. Identify three areas where break-even

> The American textile industry has moved much of its operations offshore in the pursuit of lower labor costs. Over the past 50 years, textile imports have risen from 2% of all textile production to over 70%. Offshore manufacturers make long runs of standa

> The chief executive officer (CEO) of Kankakee Industries has just returned from a management seminar describing the benefits of the just-in-time philosophy. The CEO issued the following statement after returning from the conference: This company will beco

> Media Connect Inc. provides advertising services for clients across the nation. Media Connect is presently working on four projects, each for a different client. Media Connect accumulates costs for each account (client) on the basis of both direct costs

> The following events took place for Bridger Bikes Inc. during July 20Y6, the first month of operations, as a producer of road bikes: ▪ Purchased $340,000 of materials. ▪ Used $329,000 of direct materials in production. ▪ Incurred $160,000 of direct labor

> Wagner Printing Inc. began printing operations on July 1. Jobs 7-01 and 7-02 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 7-03 and 7-04 are still in process at the end of the month, and

> The following account appears in the ledger after all postings have been completed except for the entries to transfer the costs of the jobs completed in October. Work in Process Balance, October 1 ……â&#128

> Mt Ellis Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical

> Novus Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: Engine parts ………………………………………………………………………… $1,257,500 Shop direct labor …………………………………

> Prostheses Industries operates two factories. The manufacturing operations of Factory 1 are machine intensive, while the manufacturing operations of Factory 2 are labor intensive. The company applies factory overhead to jobs on the basis of machine hours

> Chamlee Industries Inc. manufactures recreational vehicles. Chamlee Industries uses a job order cost system. The time tickets from May jobs are summarized below. Job 5-100 ………………………………. $6,400 Job 5-101 …………………………………. 3,900 Job 5-102 …………………………………. 4,800

> The weekly time tickets indicate the following distribution of labor hours for three direct labor employees: The direct labor rate earned by the three employees is as follows: Leavitt ………&acir

> For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions): Assume that the variable costs consist of food and packaging, payroll, and 45% of the general, selling, and administrati

> Big Timber Furniture Company manufactures furniture. Big Timber Furniture uses a job order cost system. Balances on June 1 from the materials ledger are as follows: The materials purchased during June are summarized from the receiving reports as follow

> Materials issued for the current month are as follows: a. Determine the amount of materials transferred to Work in Process and Factory Overhead for the current month. b. Illustrate the effect on the accounts and financial statements of the materials tr

> An incomplete subsidiary ledger of wire cable for July is as follows: a. Complete the materials issuances and balances for the wire cable subsidiary ledger. Assume a first-in, first-out cost flow. b. Determine the balance of wire cable at the end of Ju

> The following information is available for the first month of operations of Lane Inc., a manufacturer of art and craft items: Using the above information, determine the following: a. Cost of goods sold b. Direct materials cost c. Direct

> Third World Gamer Inc. manufactures components for computer games within a relevant range of 500,000 to 1,000,000 disks per year. Within this range, the following partially completed manufacturing cost schedule has been prepared: Complete the cost sche

> Intuit Inc. (INTU) develops and sells software products for the personal finance market, including popular titles such as Quicken® and TurboTax®. Classify each of the following costs and expenses for this company as either variable or fixed to the number o

> For apparel manufacturer Ann Taylor, Inc., classify each of the following costs as either a product cost or a period cost: a. Advertising expenses b. Corporate controller’s salary c. Depreciation on office equipment d. Depreciation on sewing machines e.

> Steelcase Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Assembly. Assume the following information for the Assembly Department:

> The owner of Dawg Prints, a printing company, is planning direct labor needs for the upcoming year. The owner has provided you with the following information for next year’s plans Each color on the banner must be printed one at a time

> Ebenezer Manufacturing Company allows employees to purchase, at cost, manufacturing materials, such as metal and lumber, for personal use. To purchase materials for personal use, an employee must complete a materials requisition form, which must then be

> Each employer faces competitive weekly wages of $2,000 for whites and $1,400 for blacks. Suppose employers undervalue the efforts/skills of blacks in the production process. In particular, every firm is associated with a discrimination coefficient, d (0

> Use Table 220 of the 2008 U.S. Statistical Abstract to do the following. Conditioned on educational attainment (not a high school graduate, high school graduate, bachelor’s degree, master’s degree, and doctorate degree), how much did the average female w

> Cindy, a tenured, full professor of French literature at a large university, is paid $60,000. The university reports median salaries by gender and rank as a new initiative on faculty compensation. From reading the report, Cindy learns that she is paid $2

> Suppose the firm’s production function is given by where E w and E b are the number of whites and blacks employed by the firm respectively. It can be shown that the marginal product of labor is then Suppose the market wage for black wor

> Suppose years of schooling, s, is the only variable that affects earnings. The equations for the weekly salaries of male and female workers are given by w m = 500 + 100s and w f = 300 + 75s On average, men have 14 years of schooling and women have 12 yea

> In 1960, the proportion of blacks in southern states was higher than the proportion of blacks in northern states. The black–white wage ratio in southern states was also much lower than in northern states. Does the difference in the relative black–white w

> Suppose a restaurant hires only women to wait on tables, and only men to cook the food and clean the dishes. Is this most likely to be indicative of employer, employee, consumer, or statistical discrimination?

> Suppose black and white workers are complements in that the marginal product of whites increases when more blacks are hired. Suppose also that white workers do not like working alongside black workers. Under what conditions will this employee discriminat

> In 2006, Evo Morales assumed the presidency in Bolivia, a South American country in which official commerce is done in Spanish. Morales was the first Bolivian president of indigenous decent. As president, he quickly instituted reforms that were designed

> Consider a data set with the following descriptive statistics. Wage is the worker’s hourly wage; Black takes on a value of 1 if the worker is black and a value of 0 otherwise; work experience is actual years of work experience; school

> Suppose the discrimination coefficient increases as the firm employs more black workers. In particular, suppose the discrimination coefficient is d = 0.01 E B where E B is the number of blacks hired by the firm so that each employer facing competitive wa

> Suppose 100 men and 100 women graduate from high school. After high school, each can work in a low-skill job and earn $200,000 over his or her lifetime, or each can pay $50,000 and go to college. College graduates are given a test. If someone passes the

> Consider a town with a population that is 10 percent black (and the remainder is white). Because blacks are more likely to work the night shifts, 20 percent of all cars driven at night are driven by blacks. One out of every 20 people driving at night is

> After controlling for age and education, it is found that the average woman earns $0.80 for every $1.00 earned by the average man. After controlling for occupation to control for compensating differentials (that is, maybe men accept riskier or more stres

> Feeling that local firms follow discriminatory hiring practices, a nonprofit firm conducts the following experiment. It has 200 white individuals and 200 black individuals, all of whom are similar in age, experience, and education, apply for local retail

> Under 2001 tax legislation enacted in the United States, all income tax filers became eligible to deduct from their total income half of the expenses incurred when moving more than 50 miles to accept a new job. Prior to the change, only tax filers who it

> In addition to it being illegal to enter the U.S. without a visa or to over-stay one’s visa, it is also illegal for U.S. employers to hire undocumented or “illegal” immigrants. Meanwhile, federal U.S. enforcement of immigration laws tends to concentrate

> There are two reasons why the immigration surplus is greater when immigration is accompanied by human capital externalities compared to when there are no human capital externalities associated with immigration. Both reasons are evident in Figure 8-12. Th

> In the absence of any legal barriers on immigration from Neolandia to the United States, the economic conditions in the two countries generate an immigrant flow that is negatively selected. In response, the United States enacts an immigration policy that

> Suppose the United States enacts legislation granting all workers, including newly arrived immigrants, a minimum income floor of ̲̲ y dollars. (Assume there is positive selection of migrants from the home country to the United States before the policy ch

> Labor demand for low-skilled workers in the United States is w = 24 - 0.1E where E is the number of workers (in millions) and w is the hourly wage. There are 120 million domestic U.S. low-skilled workers who supply labor inelastically. If the U.S. opened

> Patrick and Rachel live in Seattle. Patrick’s net present value of lifetime earnings in Seattle is $125,000, while Rachel’s is $500,000. The cost of moving to Atlanta is $25,000 per person. In Atlanta, Patrick’s net present value of lifetime earnings wou

> Suppose high-wage workers are more likely than low-wage workers to move to a new state for a better job. a. Explain how this migration pattern can be due solely to differences in the distribution of wages. b. Explain how this migration pattern can take p

> Consider the Roy model of potential immigrant flows as discussed in the chapter. a. Why is it that a source country can experience both an outflow of low-skill workers and an outflow of high-skill workers at the same time? b. Provide a graph of the retur

> KAPC, a pharmaceutical company located in rural Kansas, is finding it difficult to retain its employees, who frequently leave after just six months of working at KAPC for jobs at pharmaceutical companies paying higher wages in Chicago. To address its pro

> The Immigration Reform Act of 2006 provided fewer work visas than were available in previous years for foreign-born college graduates to remain in the United States. The exception is that work visas remained plentiful for college graduates who majored in

> a. Explain how a universal health care system would likely cause a greater amount of efficient turnover. b. Defined-benefit retirement plans promise a fixed amount of retirement income to workers, but in order to receive benefits workers must be vested i

> a. According to standard migration theory, how will skill selection (positive versus negative) change on average as the distance between the source country and the destination country increases? b. Does Table 8-2 lend empirical support for the idea that

> Suppose the immigrant flow from Lowland to Highland is positively selected. In order to mitigate the “brain drain” Lowland experiences as a result of this migration, public officials of Lowland successfully convince all Lowlanders who migrate to Highland

> Suppose a worker with an annual discount rate of 10 percent currently resides in Pennsylvania and is deciding whether to remain there or to move to Illinois. There are three work periods left in the life cycle. If the worker remains in Pennsylvania, he w

> Before 1990, the 80-50 and the 50-20 log wage gap was higher for women than for men (see Figure 7-4). What are some likely reasons for this? Reference Figure 7-4: FIGURE 7-4 Earnings Inequality, 1937–2005 Wojciech Kopczuk, Emmanuel Saez, and Jae Son

> Consider the following (highly) simplified description of the U.S. wage distribution and income and payroll tax schedule. Suppose 50 percent of households earn $40,000, 30 percent earn $70,000, 15 percent earn $120,000, and 5 percent earn $500,000. Margi

> The two points for the international income distributions reported in Table 7-1 can be used to make a rough calculation of the Gini coefficient. Use a spreadsheet to estimate the Gini coefficient for each country. Which three countries have the most equa

> Recently President Obama has tried to focus public attention on inequality. a. What is the difference between income inequality and wealth inequality? b. Most policies that target inequality either target it at the low end of the income distribution by t

> Use the two wage ratios for each country in Table 7-4 to calculate the percent increase in the 90-10 wage ratio from 1984 to 1994. Which countries experienced a compression in the wage distribution over this time? Which three countries experienced the gr

> a. Is the presence of an underground economy likely to result in a Gini coefficient that overstates or understates poverty? b. Consider a simple economy where 90 percent of citizens report an annual income of $10,000 while the remaining 10 percent report

> From 1970 to 2000, the supply of college graduates to the labor market increased dramatically, while the supply of high school (no college) graduates shrank. At the same time, the average real wage of college graduates stayed relatively stable, while the

> What effect will each of the following proposed changes have on wage inequality? a. Indexing the minimum wage to inflation. b. Increasing the benefit level paid to welfare recipients. c. Increasing wage subsidies paid to firms that hire low-skill workers

> Explain why the intergenerational correlation of earnings would likely be higher or lower than average for the following groups or as a consequence of policy changes in the United States: a. Improved educational outcomes for all populations (for example,