Teledor Inc. manufactures boomboxes (music systems with radio, MP3, and compact disc players) for different well-known companies. The boomboxes differ significantly in their complexity and the batch sizes in which they are manufactured. The following costs were incurred in 2015: a. Indirect manufacturing labour costs such as supervision that supports direct manufacturing labour, $1,500,000. b. Procurement costs of placing purchase orders, receiving materials, and paying suppliers that are related to the number of purchase orders placed, $800,000. c. Cost of indirect materials, $450,000. d. Costs incurred to set up machines each time a different product needs to be manufactured, $900,000. e. Designing processes, drawing process charts, making engineering process changes for products, $900,000. f. Machine-related overhead costs such as depreciation, maintenance, production engineering, $1,200,000. These resources are related to the activity of running the machines. g. Plant management, plant rent, and insurance, $950,000. Required: 1. Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility sustaining. Explain your answers. 2. Consider two boomboxes made by Teledor Inc. One boombox is complex to make and is made in many small batches. The other boombox is simple to make and is made in a few large batches. Suppose that Teledor needs the same number of machine-hours to make either boombox. If Teledor allocated all overhead costs using machine-hours as the only allocation base, how, if at all, would the boomboxes be miscosted? Briefly explain why. 3. How is the cost hierarchy helpful to Teledor in managing its business?
> For three simple molecules of your own choice, apply the rules for writing Lewis structures. Write your discussion as if you are explaining the method to someone who is not familiar with Lewis structures.
> In writing Lewis structures for molecules, what is meant by the duet rule? To which element does the duet rule apply? What do we mean by the octet rule? Why is attaining an octet of electrons important for an atom when it forms bonds to other atoms? What
> It is important to be able to distinguish between the physical and the chemical properties of chemical substances. Choose a chemical substance you are familiar with, then use the Internet or a handbook of chemical information to list three physical prope
> Why does a Lewis structure for a molecule show only the valence electrons? What is the most important factor for the formation of a stable compound? How do we use this requirement when writing Lewis structures?
> Give evidence that ionic bonds are very strong. Does an ionic substance contain discrete molecules? With what general type of structure do ionic compounds occur? Sketch a representation of a general structure for an ionic compound. Why is a cation always
> How is the attainment of a noble gas electron configuration important to our ideas of how atoms bond to each other? When atoms of a metal react with atoms of a nonmetal, what type of electron configurations do the resulting ions attain? Explain how the a
> What does it mean to say that a molecule has a dipole moment? What is the difference between a polar bond and a polar molecule (one that has a dipole moment)? Give an example of a molecule that has polar bonds and that has a dipole moment. Give an exampl
> What is meant by electronegativity? How is the difference in electronegativity between two bonded atoms related to the polarity of the bond? Using Fig. 12.3, give an example of a bond that would be nonpolar and of a bond that would be highly polar.
> In the formation of a polynucleotide (a short portion of the DNA molecule), which components (sugar, base, or phosphate) on adjacent nucleotides bond to each other?
> What do we mean by covalent bonding and polar covalent bonding? How are these two bonding types similar and how do they differ? What circumstance must exist for a bond to be purely covalent? How does a polar covalent bond differ from an ionic bond?
> What do we mean by ionic bonding? Give an example of a substance whose particles are held together by ionic bonding. What experimental evidence do we have for the existence of ionic bonding? In general, what types of substances react to produce compounds
> In general, what do we mean by a chemical bond? What does the bond energy tell us about the strength of a chemical bond? Name the principal types of chemical bonds.
> You have learned how the properties of the elements vary systematically, corresponding to the electron structures of the elements being considered. Discuss how the ionization energies and atomic sizes of elements vary, both within a vertical group (famil
> What is matter? What is matter composed of? What are some of the different types of matter? How do these types of matter differ, and how are they the same?
> What does the average atomic mass of an element represent? What unit is used for average atomic mass? Express the atomic mass unit in grams. Why is the average atomic mass for an element typically not a whole number?
> Peterson Foods manufactures pumpkin scones. For January 2015, it budgeted to purchase and use 16,000 kilograms of pumpkin at $1.11 per kilogram; budgeted output was 60,000 scones. Actual purchases and use for January 2015 were 17,000 kilograms at 0.99 pe
> Consider the following data collected for Blakes Construction Trailers: Required: Compute the rate, efficiency, and flexible-budget variances for direct materials and direct manufacturing labour. Direct Direct Manufacturing Materials Labour Costs i
> Connor Company’s budgeted prices for direct materials, direct manufacturing labour, and direct marketing (distribution) labour per attaché case are $40, $8, and $12, respectively. The president is pleased with the following
> Brabham Enterprises manufactures tires for the Formula I motor racing circuit. For August 2015, it budgeted to manufacture and sell 3,000 tires at a variable cost of $74 per tire and total fixed costs of $54,000. The budgeted selling price was $110 per t
> A number of terms are listed below: Required: Select the terms from the above list to complete the following sentences. The question is whether or not the actual results met expectations, exceeded expectations or failed to meet expectations and a _____
> Your Mart (YM) has a Kaizen (continuous improvement) approach to budgeting activity area costs for each month of 2016. Each successive month, the budgeted cost driver rate decreases by 0.2% relative to the preceding month (so, for example, February’s bud
> The Parksville location of Your Mart (YM), a chain of small neighborhood grocery stores, is preparing its activity-based budget for January 2016. YM has three product categories: soft drinks, fresh produce, and packaged food. The following table shows th
> TabComp Inc. is a retail distributor for MZB-33 computer hardware and related software and support services. TabComp prepares annual sales forecasts of which the first six months for 2016 are presented here. Cash sales account for 25% of TabCompâ&#
> The All Frame Company makes and sells artistic frames for pictures of weddings, graduations, and other special events. Martin Flack, the company controller, is responsible for preparing the master budget and has accumulated the following information for
> The Suzuki Company in Japan has a division that manufactures two-wheel motorcycles. Its budgeted sales for Model G in 2016 are 985,000 units. Suzuki’s target ending inventory is 115,000 units, and its beginning inventory is 152,000 units. The company’s b
> What is the relevant range? What role does the relevant-range concept play in explaining how costs behave?
> Sheryl Blake, the owner of a small gift and souvenir shop, expects cash sales of $14,000 for October, $16,300 for November, and $21,100 for December. In addition, she expects credit card sales of $9,800 during October and $11,200 and $15,800, respectivel
> From its company-owned natural spring in northern Ontario, Fountain Springs Inc. bottles and distributes mineral water worldwide. Fountain Springs markets its product in 1-litre disposable plastic bottles and in 16-litre reusable plastic containers. Req
> In the preparation of the sales budget for the next three-month period, the Westing Company determined that 52,250 finished units would be needed to fulfill sales obligations. The company has an inventory of 27,300 units of finished goods on hand at Dece
> The wine-producing company Lebeau Vineyard expects to produce 2.1 million 3-litre bottles of Chablis in 2016. Lebeau purchases empty glass bottles from a reliable supplier. The target ending inventory of such bottles is 55,000; the beginning inventory is
> The Russell Company expects 2016 sales of 135,000 units of serving trays. Russell’s beginning inventory for 2016 is 9,700 trays; target ending inventory: 16,300 trays. Required: Compute the number of trays budgeted for production in 2016.
> In 2015, McGrath & Sons, a small environmental-testing firm, performed 11,000 radon tests for $250 each and 15,200 lead tests for $200 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 10% next
> Consider each of the following independent situations: 1. A very successful salesperson at Amcorp Computers regularly ignores the published sales catalogue and offers lowered prices to customers in order to close sales. The VP of sales notices that reven
> A number of terms are listed below: budget constraint(s) …………………………………..budgetary slack cash cycle …………………………………………………controllable cost investment budget ……………………………………..operating cycle rolling budget …………………………………….self-liquidating cycle Required: Sel
> Stanford Industries currently uses a normal job-costing system with a single overhead cost pool. It supplies parts to the aeronautic industry and, as a result, quality control is paramount. It currently applies the indirect costs of quality control on th
> Define direct costs and indirect costs .
> International Trust (IT) is examining the profitability of its Premier Account, a combined savings and chequing account. Depositors receive a 6% annual interest rate on their average deposit. IT earns an interest rate spread of 2.5% (the difference betwe
> PTech Ltd. manufactures two models of cordless phones. The Family Friend model has features designed for a multiple-user family, including the ability to have multiple ringtones and caller ID. The Office Assistant model is designed for use in home office
> Ames Wholesalers sells furniture items to four department store chains. Sharon Ames commented, “We apply ABC to determine profit line profitability. The same ideas apply to customer profitability, and we should find out our customer pro
> PEI Potatoes processes potatoes into potato cuts at its highly automated plant. For many years, it processed potatoes for only the retail consumer market where it had a superb reputation for quality. Recently, it started selling potato cuts to the instit
> The Medal Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 12,000 medals each month; current production and sales are 9,000 medals per month. The company normally char
> Heights Academy, a private school, serves 500 students: 200 in the middle school (Grades 6 to 8) and 300 in the high school (Grades 9 to 12). Each school group has its own assistant principal, and there is one principal, Brian Smith, for the academy. For
> Niagara Winery makes two different grades of wine—regular wines and specialty wines. Recently, Niagara has shown small profits on its regular wines and large profits on its specialty wines. As a result, management is considering getting out of the regula
> The Wolfson Group (WG) provides tax advice to multinational firms. WG charges clients for (a) direct professional time (at an hourly rate), and (b) support services (at 30% of the direct professional costs billed). The three professionals in WG and their
> Noble Industries manufactures two models of tiffany-style lamps: a table-top model and a floor model. Summary data for the two products for the most recent fiscal year showed the following: Under the company’s current costing, manufac
> Car Parts (CP) designs, manufactures, and sells automotive parts. Actual variable manufacturing overhead costs for 2015 were $308,600. CP’s simple costing system allocates variable manufacturing overhead to its three customers based on
> Management accounting deals only with costs.” Do you agree?
> Huey Parker produces mathematical and financial calculators. Data related to the two products are presented below Both products pass through Department 1 and Department 2. The departments’ combined manufacturing overhead costs are: C
> The following outlines a number of activities related to operations at Nordan Manufacturing Ltd.: a. Engineers design new products. b. Production workers set up machines. c. Completed goods are inspected for quality assurance. d. Direct materials are mov
> Select the terms from the above list to complete the following sentences. One common _____________to a traditional or _ ____________costing system is called an_____________ . The single MOH cost pool is separated into different_____________distinguished
> The Ride-On-Water (ROW) Company produces a line of non-motorized boats. ROW uses a normal job-costing system and allocates manufacturing overhead costs using direct manufacturing labour cost. The following data are available for 2015: Budgeted manufactu
> Consider the following selected cost data for KYM Inc. for 2016: Budgeted manufacturing overhead (MOH) ……………………………….$4,180,000 Budgeted machine-hours (MH)…………………………………………………….. 190,000 Actual manufacturing overhead (MOH) ending balance ……………..$4,230,000
> Production Company produces gadgets for the coveted small appliance market. The following data reflect activity for the most recent year, 2015: Costs incurred Purchases of direct materials (net) on account ……&acir
> (J. Watson) Rochester Ltd. has budgeted $435,000 for manufacturing overhead for the upcoming year. It forecast that 72,500 machine-hours will be used in the factory, and budgeted direct labour-hours were 17,400. The average direct labour rate is budgeted
> Coakwell Company worked on only two jobs during May. Information on the jobs is given below: At the beginning of the year, annual manufacturing overhead (MOH) was budgeted at $3,780,000 and Coakwell budgeted 35,000 DMLH per month. Job A701 was complete
> Duchess Ltd. manufactures and installs kitchen cabinetry. It uses normal job costing with two direct cost categories (direct materials and direct manufacturing labour) and one indirect cost pool for manufacturing overhead (MOH), applied on the basis of m
> Explain the term supply chain and its importance to cost management.
> Ronowski Company has three product lines of belts, A, B, and C, with contribution margins of $3.60, $2.40, and $1.20 respectively. The president forecasts sales of 200,000 units in the coming period, consisting of 20,000 units of A, 100,000 units of B, a
> Mike Rotundo, the president of Tax Assist, is examining alternative ways to compute indirect cost rates. He collects the following information from the budget for 2016: Budgeted variable indirect costs: $12 per hour of professional labour time Budgeted f
> Lytton Ltd. uses a normal job-costing system with two direct cost categories (direct materials and direct labour) and one indirect cost pool. It allocates manufacturing overhead to jobs using a predetermined overhead rate based on direct labour-hours. At
> Lynn Company uses a job-costing system at its Mississauga plant. The plant has a Machining Department and an Assembly Department. Its job-costing system has two direct cost categories (direct materials and direct manufacturing labour) and two manufacturi
> Trenton Ltd. uses a normal job-costing system and applies manufacturing overhead to products on the basis of machine-hours. At the beginning of 2015, the company controller budgeted annual overhead at $1,500,000. She also forecast that machine-hours woul
> New Fashions Inc. manufactures shirts for retail chains. Andy Jorgenson, the controller, is becoming increasingly disenchanted with New Fashions’ standard costing system. The budgeted and actual amounts for direct materials and direct m
> Rashid Daley is the manager of the athletic shoe division of Raider Products. Raider is a European-based company that has just purchased Fastfoot, a leading European shoe company. Fastfoot has long-term production contracts with suppliers in two East Eur
> David Tax is the athletics director of Maritime University (MU). He has been director for more than 10 years. MU is a men’s football and basketball powerhouse. The women’s athletics program, however, has had less succe
> Yummi-Lik makes really big lollipops in two sizes, large and giant. Yummi-Lik sells these lollipops to convenience stores, at fairs, and to schools for fundraisers, and in bulk on the internet. Summer is approaching and Yummi-Lik is preparing its budget
> Activity-based costing (ABC) systems are useful in helping companies make better decisions about pricing, product mix, and cost management related to product design and efficiency. In fact, General Mills used ABC to identify and analyze the costs associa
> How can management accountants help formulate strategy?
> Michael Scott books tours for new bands, and arranges to print T-shirts and produce demo CDs to sell on the tour. Scott’s agency uses a normal costing system with two direct cost pools, labour and materials, and one indirect cost pool,
> (J. Watson) Pearson Ltd. uses a normal job-costing system and applies overhead on the basis of direct labour-hours. At the beginning of the year, the company estimated that total overhead costs for the year would be $180,000, and it budgeted total labour
> Sam Nash is the head of new product development of Forever Young (FY). Nash is currently considering Enhance, which would be FY’s next major product in its beauty/cosmetics line and its estimated unit cost is currently $144. Enhance represents a new dire
> Kamal Diamond is the owner of the Galaxy chain of four-star prestige hotels. These hotels are in Chicago, London, Los Angeles, Montreal, New York, Seattle, Tokyo, and Vancouver. Diamond is currently struggling to set weekend rates for the Vancouver hotel
> XKY Manufacturing has recently opened a plant in Costa Melon in order to take advantage of certain tax benefits. In order to qualify for these tax benefits, the company’s direct manufacturing labour costs must be at least 20% of total manufacturing costs
> An auditor for Canada Revenue Agency is trying to reconstruct some partially destroyed records of two taxpayers. For each case in the accompanying list, find the unknowns designated by capital letters (figures are in thousands). Case 1 Case 2 Accoun
> Durdon Snowboards sells two models of snowboards: the Men’s Dominator and the Ladies’ Luxury. Information on the two models of snowboards follows: Durdon’s total sales, 70% are for the Menâ&#
> Saunders’ Electronics had the following results for the year just ended: Jeff Saunders, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $36,000 variable co
> Charles Rothman is an importer of silver cuff bracelets from Mexico. He has a three-month agreement with the local coffee shop, Dellano’s, to set up a booth to exhibit the jewellery. Rothman is under no obligation to keep any unsold items and can return
> Beans Unlimited sells specialty coffees in 1-kilogram packages. Fixed costs are budgeted at $730,000 per year. For the upcoming year, revenues are forecasted to be $3,240,000 (selling price is $36 per kilogram) and the company has an average contribution
> Management accounting should not fit the straitjacket of financial accounting.” Explain and give an example.
> The Chorus Company manufactures and sells pens. Present sales output is 5,000,000 units per year at a selling price of $0.60 per unit. Fixed costs are $1,080,000 per year. Variable costs are $0.36 per unit. Required: (Consider each case separately.) 1.
> Mirabel Cosmetics manufactures and sells a face cream to small family-run stores in the greater Montreal area. It presents the monthly operating statement of comprehensive income shown here to François Laval, a potential investor in the busi
> Sunshine Tours is a travel agency specializing in cruises between Miami and Jamaica. It books passengers on Carib Cruises. Sunshine’s fixed costs are $22,000 per month. Carib charges passengers $1,000 per round trip ticket. Required: Calculate the numbe
> Huron University is committed to improving access to higher education. Each year it makes $4,500,000 available for scholarships for students based on financial needs and academic achievement. The scholarship covers the full annual tuition (based on a ful
> The National Symphony is preparing for its annual appreciation dinner for contributing members. Last year, 500 members attended the dinner. Tickets for the dinner were $20 per attendee. Last year’s statement of comprehensive income was as follows: Ticke
> The Rapid Meal has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $450,000 per year. Service varies from a cup of coffee to full meals. The average sales bill per customer is $8.00. The average cost of fo
> Buger Research (BR) is a marketing research firm that organizes focus groups for consumer-product companies. Each focus group has eight individuals who are paid $50 per session to provide comments on new products. These focus groups meet in hotels and ar
> Each of the following cost items pertains to one of the following companies: Toyota (a manufacturing-sector company), Sobeys (a merchandising-sector company), and Google (a service-sector company): 1. Spring water purchased by Sobeys for sale to its cust
> In June 2016, the government of Vartan invited bids for the construction of a cellular telephone network. ZenTel, an experienced communications company, was eager to enter the growing field of cellular telephone networks in countries with poor infrastruc
> The data below are for Marvin Department Store. The account balances (in thousands) are for 2016. Marketing, distribution, and customer-service costs …………….$ 37,000 Merchandise inventory, January 1, 2016 …………………………………27,000 Utilities17,000General and ad
> Define cost smoothing and describe the consequences it can have on costs.
> The following are account balances relating to 2016 (in thousands): Property tax on plant building ……………………………………………..$4,200 Marketing, distribution, and customer-service costs …………….44,400 Finished goods inventory, January 1, 2016 …………………………….37,400 Pl
> The following are account balances relating to 2016 (in thousands): Property tax on plant building………………………………………………..$ 3,800 Marketing, distribution, and customer-service costs ………………44,400 Finished goods inventory, January 1, 2016 ………………………………32,400 P
> Rhonda Heninger is a well-known software engineer. Her specialty is writing software code used in maintaining the security of credit card information. Heninger is approached by the Electronic Commerce Group (ECG). They offer to pay her $120,000 for the r
> What are the two major types of organizational elements that managers focus on in companies using job costing?
> CVP is both simple and simplistic. If you want realistic analysis to underpin your decisions, look beyond CVP.” Do you agree? Explain.
> Do service-sector companies have inventoriable costs? Explain.
> Name three factors that affect the classification of a cost as direct or indirect.
> Yumball Candies manufactures jaw-breaker candies in a fully automated process. The machine that produces candies was purchased recently and can make 5,000 per month. The machine costs $6,000 and is depreciated using straight-line depreciation over 10 yea
> Define cost object and give three examples.
> Distinguish between processes where the inputs are non-substitutable and where they are substitutable.
