Question: The following computation of the materials
The following computation of the materials variances of Weitzen Foods is incomplete. The missing data are labeled (a) through (d). 
Supply the missing data for items (a) through (d). Prepare a caption describing the item, as well as indicating the dollar amount and physical quantity. Briefly explain each answer, including how you determined the amount.
> Winett Corporation is considering an investment in special-purpose equipment to enable the company to obtain a six-year municipal contract. The equipment costs $1,320,000 and would have no value when the contract expires at the end of six years. Estimate
> The following information relates to three independent investment decisions, each with a 10-year life and no salvage value. Using the present value tables in Exhibits 26–3 and 26–4, solve for the missing information p
> Refer to Exhibit 15–6 in this chapter. Assume a United Kingdom company, Brits International, lists on both the London Exchange using U.K. GAAP and the New York Stock Exchange. Brits International must prepare a reconciliation from U.K.
> Mineral World recognizes $20 depletion for each ton of ore mined. During the current year the company mined600,000 tons but sold only 500,000 tons, as it was attempting to build up inventories in anticipation of a possible strike by employees. How much d
> Global Motors is a U.S. corporation that purchases automobiles from European manufacturers for distribution in the United States. A recent purchase involved the following events: Instructions: a. Prepare in general journal form the entries necessary to
> Using the tables in Exhibits 26–3 and 26–4, determine the present value of the following cash flows, discounted at an annual rate of 15 percent. a. $60,000 to be received 20 years from today. b. $32,000 to be received
> Wabash, Inc., had revenue and expenses (including income tax) from ongoing business operations for the current year of $480,000 and $430,000, respectively. During the year, the company sold a division of the company that had revenue and expenses (not inc
> Foz Co. is considering four investment proposals (A, B, C, and D). The following table provides data concerning each of these investments. Solve for the missing information pertaining to each investment proposal.
> Baylor Lumber Products is considering the purchase of a high-efficiency conveyor system. Two manufacturers have approached Baylor with proposals: (1) Duke Industries and (2) Wake Manufacturing. Regardless of which vendor Baylor chooses, the following inc
> PC Connection is a leading mail-order retailer of personal computers. A recent financial report issued by the company revealed the following information. a. Compute the company’s cost of goods sold for the year. b. Approximately how mu
> The section entitled “Impairment of Long-Lived Assets” can be found in the Home Depot financial information in Appendix A. In this section, Home Depot explains procedures used to estimate the carrying value of impaired stores that it closes. How does the
> Over the next four years, the City of Mythica, New York, is expecting the following cash flows from a federal grant: year 1—$150,000; year 2—$220,000; year 3—$250,000; year 4—$175,00
> The radiology department at St. Joseph’s Hospital, a not-for-profit, is considering purchasing a magnetic resonance imaging (MRI) machine. The cost to purchase and install an MRI is approximately $2,000,000. Assume St. Josephâ
> Swirl Incorporated designs and manufactures fashionable women’s clothing. For the coming year, the company has scheduled production of 50,000 silk skirts. Budgeted costs for this product are as follows. The management of Swirl is cons
> Refer to Exercise 26.11. Assume Concrete Suppliers Inc. has assembled the following expected annual income statement data for each of its trucks Analyze this income statement data for expected cash flow effects each year. Data from exercise 26.11: Supp
> Suppose Concrete Suppliers Inc. sells one of its $155,000 concrete trucks, with an original fiveyear economic life, at the end of year 3 after taking three years of straight-line depreciation. Concrete Suppliers has a 40 percent tax rate. If the truck is
> EnterTech has noticed a significant decrease in the profitability of its line of its wireless headphones. The production manager believes that the source of the trouble is old, inefficient equipment used to manufacture the product. The issue raised, ther
> Eight Flags is a retail department store. The following cost-volume relationships were used in developing a flexible budget for the company for the current year. Management expected to attain a sales level of $20 million during the current year. At the
> The following are 10 technical accounting terms introduced or emphasized in this chapter. Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer &aci
> Match each of the following performance measures with one of the four perspectives of the balanced scorecard (Financial—F, Customer—C, Business Process—B, or Learning and Growth L).
> Explain how to compute the average collection period and why it is a critical factor in creating the collections of receivables budget
> Shown as follows are selected transactions of Konshock’s, a retail store that uses a perpetual inventory system. a. Purchased merchandise on account. b. Recognized the revenue from a sale of merchandise on account. (Ignore the related
> Consider the different responsibilities involved in the following three positions at Vortnoy Corporation: (1) supervisor of the second shift at the Fairfield, Rhode Island, plant, (2) manager for the Northeastern Division, and (3) corporatewide chief fin
> You are the manager of the Midwest Region, a 27-restaurant division that is part of the chain “Bites and Bits.” The restaurants offer casual dining and compete with such chains in your region as Olive Garden and Outback Steakhouse. You receive an annual
> Reconsider Exhibit panel B, in the chapter. Use current exchange rates to estimate the global costs of making a Barbie® doll. Has the total cost increased or decreased as a result of changes in exchange rates?
> The Home Depot, Inc., financial statements appear in Appendix A at the end of this textbook. a. Does the company use straight-line depreciation? How can you tell? b. At what point does the company recognize and record revenue from its customers? c. Us
> Jennifer Baskiter is president and CEO of Plants&More.com, an Internet company that sells plants and flowers. The success of her startup Internet company has motivated her to expand and create two divisions. One division focuses on sales to the general p
> An investment center in Shellforth Corporation was asked to identify three proposals for its capital budget. Details of those proposals are as follows. Shellforth uses residual income to evaluate all capital budgeting projects. Its minimum required retu
> Bailey uses ROI to measure the performance of its operating divisions and to reward its division managers. A summary of the annual reports from two of Bailey’s divisions is shown provided below. The company’s weighted-
> Assume that a recent survey revealed that 60 percent of Taylor Company employees spend time on social media and other online activities while at work. What performance evaluation incentives might encourage or discourage these behaviors?
> Assume you have just been hired as the management accountant in charge of providing your firm’s managers with product information. What activities might you undertake if you were participating in the design of a balanced scorecard?
> Ann Hoffman, owner of Hoffman Industries, is negotiating with the bank for a $250,000, 90-day, 15 percent loan effective July 1 of the current year. If the bank grants the loan, the net proceeds will be $240,000, which Hoffman intends to use on July 1 as
> Use Home Depot’s financial information in Appendix A to compute the ROI and EVA for the two most recent years reported. Use Net Earnings as a measure of earnings or returns, and Net Property and Equipment as the invested capital base. Assume the weighted
> Hendersonville Meats has two divisions. The company’s Outlets division sells smoked hams, sausages, steaks, and other delicacies through its traditional suburban stores. Its Online division was formed several years ago and sells the pro
> The Home Depot, Inc., financial statements appear in Appendix A at the end of this textbook. Use the statements to complete the following requirements. a. Calculate the gross profit percentage of Home Depot, Inc., for each of the years shown in the comp
> In Appendix A, you will find a table titled “Five-Year Summary of Financial and Operating Results” for Home Depot. Review the various performance measures listed in the table. Choose at least one measure for each category of the balanced scorecard. Expla
> Find the Consolidated Statement of Comprehensive Income section of the Home Depot 2018 financial statements in Appendix A. Locate the translation adjustment for 2018. Was the effect of the adjustment positive or negative on Comprehensive Income? What is
> In the current year, Hudson Company had revenue and expense numbers of $750,000 and $600,000, respectively, before income taxes and before the following item. The company had a gain of $115,000 that resulted from the passage of new legislation, which was
> Millennium Frozen Foods owes the bank $50,000 on a line of credit. Terms of the agreement specify that Millennium must maintain a minimum current ratio of 1.2 to 1, or the entire outstanding balance becomes immediately due in full. To date, the company h
> The following information for companies X, Y, and Z is incomplete. Supply the missing data for items (a) through (l).
> Easton’s Fabric Division has assets of $980,000, current liabilities of $130,000, and net operating income of $196,000. a. What is the Fabric Division’s ROI? b. If the weighted-average cost of capital is 15 percent, what is the division’s EVA? c. How mig
> Emily Adams is the manager of City Wide Door, a company specializing in installing and maintaining garage doors of many types. Her associate, Alyssa, has provided Emily with three proposals for different investments in machinery to help expand the busine
> Listed are eight terms introduced or emphasized in this chapter. Each of the following statements may (or may not) describe one of these terms. For each statement, indicate the term described, or answer “none” if the
> From the following information for Alfred Industries, compute the overhead spending variance and the volume variance.
> Sunder’s has been in business since January of the current year. The company buys fresh pasta and resells it to large supermarket chains in five states. The following information pertains to Sunder’s first four months
> The manager of a manufacturing firm received the following information related to the last period’s direct materials and direct labor variances. a. Ignoring all other variances, what are possible reasons for a favorable direct material
> State College Technology Store (SCTS) is a retail computer store in the university center of a large Midwestern university. SCTS engaged in the following transactions during November of the current year Assume that the other expenses incurred by SCTS du
> Match the following transactions, which are denominated in a foreign currency, with the appropriate foreign currency and exchange gain or loss effects. //
> Satka Fishing Expeditions, Inc., recorded the following transactions in July. 1. Provided an ocean fishing expedition for a credit customer; payment is due August 10. 2. Paid Marine Service Center for repairs to boats performed in June. (In June, Satka
> Margo Corporation produces air filtration systems. Information pertaining to the company’s monthly direct labor usage is provided as follows. a. Compute the company’s labor rate variance. b. Compute the companyâ
> Klinkhammer Corporation estimated overhead for the year as follows: fixed = $720,000; variable = $4 per unit. Klinkhammer expected to produce 72,000 units for the year. a. Compute the rate that will be used to apply overhead costs to products. b. During
> Gumchara Corporation reported the following information with respect to the materials required to manufacture amalgam florostats during the current month. a. Determine Gumchara’s materials price variance. b. Determine Gumcharaâ&#
> Explain why companies that undergo periods of rapid growth often experience cash flow problems.
> The cost accountant for Blue Pharmaceuticals has informed you that the company’s materials quantity variance for the drug Allegro was exactly equal to its materials price variance for the year. The company’s normal lev
> Blue Dingo uses a standard costing system. The company’s standard costs and variances for direct materials, direct labor, and factory overhead for the month of May are as follows. Determine the actual costs incurred during the month of
> It may be easier to think about setting standards to help manage manufacturing businesses, like the lumber business of Brice Mills, Inc., discussed in this chapter, than to help manage retail establishments. For a company like Home Depot, main inputs (di
> For each of the following variances, briefly explain at least one probable cause and indicate the department manager (if any) responsible for the variance. a. A favorable materials price variance. b. An unfavorable labor rate variance. c. A favorable vol
> The following are nine global business terms used in this chapter. Each of the following statements may describe one of these terms. For each statement, indicate the global business term described, or answer “None” if
> Peter Corporation sells its products to a single customer. At the beginning of the current quarter, the company reports the following selected account balances. Peter’s management has made the following budget estimates regarding opera
> Mountain Mabel’s is a small general store located just outside of Yellowstone National Park. The store uses a periodic inventory system. Every January 1, Mabel and her husband close the store and take a complete physical inventory while watching the Rose
> Nolan Mills uses a standard cost system. During May, Nolan manufactured 15,000 pillowcases, using 27,000 yards of fabric costing $3.05 per yard and incurring direct labor costs of $19,140 for 3,300 hours of direct labor. The standard cost per pillowcase
> Mastrolia’s overhead spending variance is unfavorable by $900. The company’s cost accountant credited the Cost of Goods Sold account for $6,300 to close out any over- or underapplied overhead at the end of the current period. Compute Mastrolia’s overhead
> Zeta, Inc., produces handwoven rugs. Budgeted production is 5,000 rugs per month, and the standard direct labor required to make each rug is 2 hours. All overhead is allocated based on direct labor hours. Zeta’s manager is interested in
> Use the information in Exercise 24.9 to prepare the journal entry to record the overhead at Alfred Industries. Data from Exercise 24.9: From the following information for Alfred Industries, compute the overhead spending variance and the volume variance.
> The following are seven technical terms introduced in this chapter. Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term discussed, or answer “None&ac
> Delmar Foods has two divisions: (1) a processed meat division and (2) a frozen pizza division. Delmar’s frozen pizzas use processed meat as a topping. The company’s processed meat division supplies the frozen pizza division with all of its meat toppings.
> For the year just ended, Fillips, Inc., had income before income taxes of $275,000 from its normal, recurring operations. In addition, during the year, a tornado damaged one of the company’s warehouses and its contents. Tornado damage is quite rare in Fi
> Shown as follows is a segmented income statement for Drexel-Hall during the current month. All stores are similar in size, carry similar products, and operate in similar neighborhoods. Store 1 was established first and was built at a lower cost than wer
> The financial statements of large public companies are often accompanied by a multiple-year summary of key financial and other information that is helpful in understanding the company. Appendix A of this text includes the financial statements of Home Dep
> Shown as follows is a segmented income statement for Drexel-Hall during the current month. All stores are similar in size, carry similar products, and operate in similar neighborhoods. Store 1 was established first and was built at a lower cost than wer
> Shown as follows is a segmented income statement for Drexel-Hall during the current month. All stores are similar in size, carry similar products, and operate in similar neighborhoods. Store 1 was established first and was built at a lower cost than wer
> Sky Probe sells state-of-the-art telescopes to individuals and organizations interested in studying the solar system. At December 31 last year, the company’s inventory amounted to $250,000. During the first week of January this year, th
> Barley, Inc., wants a projection of cash receipts and cash payments for the month of November. On November 28, a note will be payable in the amount of $102,250, including interest. The cash balance on November 1 is $37,200. Accounts payable to merchandis
> Nicholas Technologies operates two divisions: Hardware Services and Software Services. During the current month, the two divisions reported the following results. In addition, fixed costs common to both divisions amounted to $300,000. Prepare an income
> Consider the Home Depot “Five-Year Summary of Financial and Operating Results” shown at the end of Appendix A. Assume that Home Depot designates each of the countries in which it operates as an investment center (i.e., 87 percent of its stores are in the
> The controller of Maxwell Department Store is preparing an income statement divided by sales departments and including subtotals for contribution margin, performance margin, and responsibility margin. Indicate the appropriate classification of the seven
> Video World owns and operates a national chain of video game arcades. Indicate whether Video World would evaluate each of the following as an investment center, a profit center (other than an investment center), or a cost center. Briefly explain the reas
> Visit the Home Depot’s website and locate the “Investor Relations” link in the “About Us” section. From there, follow the “Financial Reports” link to access the company’s annual report (10-K) by selecting the “SEC Filings” link. In Part I of the annual r
> Jasper Golf Resort has a full-service hotel and three golf courses. The hotel, in addition to having over 100 hotel rooms, has two dining areas and a catering service for weddings and meetings. The hotel has a housekeeping staff and a repairs and mainten
> Obtain from your the Internet, your college library, or other source the most recent annual report of a publicly owned company of your choice. a. Using the annual report data, compute the basic measures of liquidity, long-term credit risk, and profitabil
> Motor Magic has two operating divisions: one in the UK and one in Mexico. The Mexican division produces a component part used in the production process of the UK division. If the UK division purchases the part from the Mexican division, a transfer price
> An article in Bloomberg Business week stated that approximately one-third of the total federal budget is considered “controllable.” What is meant by a budgeted expenditure being controllable? Give two examples of government expenditures that may be consi
> Consider Exhibit 22–5, which shows the responsibility margins for the sales department and repairs department profit centers at the 42nd Street store of NuTech Electronics. Assume that 25 percent of the repairs department repair work is
> This selected information is from annual reports of two large retail pharmaceutical companies in the United States. (Dollar amounts are stated in billions.) a. Fill in the missing amounts and percentages. (Round all amounts to one decimal place.) b. On
> The following discussion occurred between two division managers, Bob and Jalenne, and the chief operating officer, Harry Use your understanding of common and traceable costs to discuss the appropriateness of Harry’s response. Is there
> Akeley Corporation manufactures and sells a single product. In preparing the budget for the first quarter, the company’s cost accountant has assembled the following information. The company uses the first-in, first-out method to report
> Listed are parts of various well-known businesses. 1. The bookstore of Central Michigan University. 2. The billing department of Jackson Life Insurance Co. 3. The San Francisco factory of Ghirardelli Chocolates. 4. The textiles and rugs department of IKE
> The following are nine technical accounting terms introduced or emphasized in this chapter. Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer &a
> Guns Company produces three video games: Android, Bio-Mutant, and Cyclops. Cost and revenue data pertaining to each product are as follows At the present time, demand for each of the company’s products far exceeds its capacity to produ
> Road Master Shocks has 15,000 units of a defective product on hand that cost $80,000 to manufacture. The company can either sell this product as scrap for $6 per unit or it can sell the product for $9 per unit by reworking the units and correcting the de
> Selected information from the financial statements of Remmer, Inc., includes the following. a. Compute the percentage change in year 2 for the amounts of (1) net sales and (2) total expenses. b. Using the information developed in part a, express your op
> Barometer, Inc., makes part no. 566 on one of its production lines. Each month Barometer makes 6,000 of part no. 566 at a variable cost of $4 per part. Barometer has been provided a bid for part no. 566 from another manufacturer that will make the part f
> The cost to Swank Company of manufacturing 15,000 units of a particular part is $135,000, of which $60,000 is fixed and $75,000 is variable. The company can buy the part from an outside supplier for $6 per unit. Fixed costs will remain the same regardles
> Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants. Its main factory has the capacity to produce and sell 12,000 cases per month. The following information is available for the factory. Wildwood Camps is a youth or
> Text riles Company creates different types of bolts of cloth. These bolts of cloth are made on the same machinery. The textile machines have the capacity of 3,600 hours per month. Text riles is considering producing three different types of cloth: denim,
> Golf World sold merchandise to Mulligans for $10,000, offering terms of 1/15, n/30. Mulligans paid for the merchandise within the discount period. Both companies use perpetual inventory systems. a. Prepare journal entries in the accounting records of Go
> Explain the concept of complementary products and why this concept is important in incremental decisions about individual products.
> Olson manufactures and sells 5,000 gun cabinets each month. A principal component part in each cabinet is a lock mechanism to keep them secure. Olson’s plant currently has the monthly capacity to produce 8,000 lock mechanisms. The costs
> Walker Domestic manufactures and sells a single product. In preparing its master budget for the current quarter, the company’s controller has assembled the following information. Walker Domestic uses the average cost method to report i
> Refer to the section in Appendix A of this textbook entitled “Impairment of Long-Lived Assets.” Write a short paragraph regarding Home Depot’s policies for evaluating whether to close any of its stores. Identify the incremental, sunk, and opportunity cos
