Question: The following information is taken from the

> Devaney Foods Company manufactures single-serve mustard packets used in fast-food restaurants. Al Devaney, the company’s CFO, prepared the following standard cost card for a box of mustard packets (100 packets in a box), based on expected production of 5

> Scott Sykes publishes a pilot training course curriculum kit that he sells to fl ight schools across the country. He prepared the following static budget for the year based on expected sales of 30,000 curriculum kits. Sales revenue……………………………………………..$3,

> Merkt Merchandise planned to produce 40,000 fleece jackets in its Metairie, Louisiana, factory. Fixed overhead costs for the factory were budgeted to be $520,000. The company actually spent $534,000 on fixed overhead and produced 38,000 jackets. Require

> Delectable Dish Printery publishes the best-selling Captain Cajun Cookbook that sells for $8. The company incurs variable costs of $3 per cookbook and total fixed costs are $300,000. Required: If the company’s tax rate is 25%, how many cookbooks must be

> The following information is available for Harrison’s Hot Dogs: Actual production…………………………………………..12,320 packages Budgeted production………………………………………12,500 packages Standard direct labor hours…………….1.5 direct labor hours per package Actual direct labor

> Buddie Paper Company produces specialty papers. During August, the company produced 50,000 reams of paper. The standard wage rate is $7.50 per hour, and each ream of paper requires 12 minutes of direct labor. The direct labor efficiency variance for Augu

> Holleyman Industries is a leading manufacturer of golf balls. Each golf ball requires 1 minute of direct labor time to complete. Holleyman used 7,200 direct labor hours in July to produce 420,000 golf balls. Holleyman’s standard labor rate is $9 per dire

> Workers at Banner News were paid a total of $33,400 during the month of July. The company’s standard wage rate was $8 per hour, and the direct labor rate variance for the month was $1,400 U. Required: How many direct labor hours were worked during July

> Pochard Paints manufactures artist’s oil paints. Each 40 ml tube of paint requires 5 minutes of direct labor, and the standard labor rate is $9.00 per direct labor hour. In September, Pochard incurred 10,800 direct labor hours at a cost of $95,000 to pro

> ImpressMe Products embosses notebooks with school and corporate logos. Last year, the company’s direct labor payroll totaled $352,100 for 50,300 direct labor hours. The standard wage rate is $6.75 per direct labor hour. Required: Calculate ImpressMe’s d

> Pelligrini, Inc. makes high-quality swimsuits. During the year, the company produced 800 suits, using 1,025 yards of material, and the company purchased 900 yards of material for $4,482. The direct materials standard for the swimsuits allows 1.2 yards of

> TechSolvers produces 8-foot USB cables. During the past year, the company purchased 500,000 feet of plastic coated wire at a price of $0.25 per foot. The direct materials standard for the cables allows 8.5 feet of wire at a standard price of $0.23. Durin

> Shevlin Enterprises purchased 60,000 gallons of direct materials during the year at a price of $2.75 per gallon. Bennett’s direct materials price variance was $6,000 U. Required Calculate the standard price per gallon of direct materials.

> Phelps Gold manufactures award medals. In August, Phelps produced 5,000 medals, 100 more than expected. During the month, the company purchased 1,100 ounces of gold for $875,000. The standard price for the gold is $800 per ounce. The company actually use

> Interpretive Dimensions provides sign language interpreters for major business conferences. Interpreters are paid an hourly rate of $20. Fringe benefits are estimated to be 30% of wages, and employment taxes amount to 10% of wages. Required: Calculate t

> Washington WaterWorks manufactures snorkel gear. During the past month, Washington purchased 4,000 pounds of plastic to use in its dive masks, at a cost of $6,800. The standard price for the plastic is $1.60 per pound. The company actually used 3,800 pou

> Refer to the data in Exercise 6-1. Reference from Exercise 6-1: Rogers Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,000 kits was prepared for the year. Fixed operatin

> Refer to the data in Exercise 6-1. Reference from Exercise 6-1: Rogers Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,000 kits was prepared for the year. Fixed operati

> Justin Allen, a product engineer for L’Oso Gaming, is designing a new electronic game. Market research indicates that gamers will pay $36 for the game. Required: a. If L’Oso desires a 60% markup on production costs, what is the target cost for the new g

> The following is Talley Company’s income statement for the past year. Sales revenue…………………….….$540,000 Cost of goods sold…………………...324,000 Gross margin…………………………..216,000 Operating expenses………………….126,000 Operating income…………………..$ 90,000 Required: a.

> According to a March 3, 2012, EETimes.com article, Apple enjoyed a 56% gross margin on its iPad 2 when it was fi rst released in March 2011. Required: a. Given that the iPad 2 sold for $629, what was the cost to make it, assuming the 56% gross margin? b

> Joshua Hill, Bates & Hill Fabricators’ production manager, has just received the company’s sales budget for the first quarter (see Exercise 5-8). Company policy requires an ending finished goods inventory each month that will meet 20% of the following mo

> Payton Sanchez runs a popcorn stand in the local amusement park. Her cost to produce a bag of popcorn is $0.40, which she sells for $2.00. Required: a. What is Payton’s markup percentage on a bag of popcorn? b. If Payton wants to earn a 500% markup on a

> Bates & Hill Fabricators produces commemorative bricks that organizations use for fundraising projects. Aaron Bates, the company’s vice president of marketing, has prepared the following sales forecast for the first six months of th

> Mallet Music Company makes custom marimbas and xylophones. Since much of the work on these musical instruments is done by hand, the company uses direct labor hours as its manufacturing overhead application base. The company’s annual budgeted overhead cos

> Graymont Industries purchases Solvate, a chemical compound used in several of its products, from ChemMaster. ChemMaster has just increased the list price of Solvate to $6.50 per gallon. However, because Graymont purchases a high volume of Solvate, ChemMa

> Refer to the data in Exercise 4-12. Reference of Exercise 4-12: Rector Company manufactures a line of lightweight running shoes. CEO Mark Rector estimated that the company would incur $2,500,000 in manufacturing overhead during the coming year. Addition

> Palmer/Davis Designs sells customized mobile phone covers. The company’s controller prepared the following income statement for the upcoming monthly management meeting. Required: a. Assume that Palmer/Davis sells its phone covers for $

> Hammarstrom and Company makes and sells high-quality glare fi lters for computer monitors. John Stanford, controller, is responsible for preparing Hammarstrom’s master budget. He has received the following sales forecast for the coming

> Lucy Sportswear manufactures a line of specialty T-shirts using a job order costing system. In March the company incurred the following costs to complete Job ICU2: direct materials, $13,700, and direct labor, $4,800. The company also incurred $1,400 of a

> Hogue Sports Hut provides individual instruction and coaching to children participating in the city’s baseball, softball, basketball, and soccer youth leagues. Last year’s results were as follows: Sales revenue…………….$950,000 Variable expenses………..646,00

> Complete each of the following contribution format income statements by supplying the missing numbers. а. b. C. d. Sales revenue ? $425,000 ? $700,000 Variable expenses Contribution margin Fixed expenses Operating income 210,000 85,000 86,000 ? 150,0

> Mama Fran’s Bakery makes a variety of home-style cookies for upscale restaurants in the Atlanta metropolitan area. The company’s best-selling cookie is the double chocolate almond supreme. Mama Fran’s recipe requires 10 ounces of a commercial cookie mix,

> Rector Company manufactures a line of lightweight running shoes. CEO Mark Rector estimated that the company would incur $2,500,000 in manufacturing overhead during the coming year. Additionally, he estimated the company would operate at a level requiring

> Beltran Corporation produces wooden and aluminum baseball bats. In preparing the current budget, Beltran’s management estimated a total of $500,000 in manufacturing overhead costs and 10,000 machine hours for the coming year. In December, Beltran’s accou

> Rossano, Inc., makes and sells drum sets. Nick Ross, controller, is responsible for preparing the master budget. The sales manager has given Nick the following sales forecast for the coming months. Rossano expects to have 6,000 drum sets in ending invent

> 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 $200,000 salvage value at the end of its four-year life. During the per

> Paladin Parabolics Company produces high-quality microscopes for education and health care uses. The company uses a job order costing system. Because the microscopes’ optics require significant manual labor to ensure adherence to strict

> Oberti Guitar Company makes high-quality customized guitars. Oberti uses a job order costing system. Because the guitars are handmade, the company applies overhead based on direct labor hours. At the beginning of the year, the company estimated that tota

> Of all the times this hard drive could crash, it had to be now,” Marcy cried. “How can I finish the June financial reports without all the information? I knew I should have backed up the disk last night before I left work.” News of the disaster traveled

> The following passages are taken from the notes to the financial statements in Amazon.com’s 2003 annual report. Cost of Sales Cost of sales consists of the purchase price of consumer products sold by us, inbound and outbound shipping charges to us, packa

> Northcoast Manufacturing Company, a small manufacturer of appliance parts, has just completed its first year of operations. The company’s controller, Vic Trainor, has been reviewing the results for the year and is concerned about the application of facto

> Kim-Brooks, Inc. makes costumes for movies and television shows. Brooks Kimberly, the company’s owner, prepared the following estimates for the upcoming year: Manufacturing overhead cost………………..$800,000 Direct labor hours…………………………………….50,000 Direct lab

> The following events occurred over the course of a year at Bagby Corp., which uses a job order costing system: 1. Direct materials purchases totaled $460,000. 2. $230,000 of indirect materials were used in production. Bagby uses a separate Supplies Inven

> Jestus Church Furniture manufactures custom pews, altars, and pulpits for churches across the southern United States. Since each order is unique, Jestus uses a job order costing system. During the month of June, Jestus worked on orders for three churches

> Drew Corp. designs and manufactures mascot uniforms for high school, college, and professional sports teams. Since each team’s uniform is unique in color and design, Drew uses a job order costing system. On January 1, the T-accounts for

> Furr Fabricators produces protective covers for smart phones. Since the covers must be customized to each smart phone model, Furr uses a job order costing system. On September 1, the company reported the following inventory balances: Direct Materials………

> John Dough’s bakery in Waxahachie, Texas, specializes in chocolate chip cookies. While John’s business does not yet have a national presence, like Mrs. Fields, he does have a strong statewide reputation. Recently, John has been receiving some out-of-stat

> Discuss the appropriateness of the manufacturing overhead application base used in each of the following examples. Required: a. Barlowe Manufacturing produces cell phone covers. The manufacturing process is highly automated, requiring very little human

> Brinker International, Inc. is the parent company that owns casual dining chains Chili’s Grill and Bar and Maggiano’s Little Italy. You can learn more about the company at http://www.brinker.com. In its 2015 annual report, Brinker reported $23,035,000 in

> Rocket Company produces small gasoline-powered engines for model airplanes. Mr. Clemens, Rocket’s CFO, has presented you with the following cost information: Direct Materials Inventory, beginning………….…….……..$ 80,000 Direct Materials Inventory, ending………

> The following T-accounts record the operations of Roddick Co.: Required: a. Calculate the amount of direct materials purchased during the period. b. Calculate the direct materials used in production during the period. c. Calculate the total manufactur

> Carleton Closures, Inc., manufactures clamps used in the overhead bin latches of several leading airplane models. Greg Poole, president of Carleton Closures, Inc., has gathered the following cost information from the company’s accounting records for the

> Revisit Exercise 4-14 about Drew Corp. Reference from Exercise 4-14: Drew Corp. designs and manufactures mascot uniforms for high school, college, and professional sports teams. Since each team’s uniform is unique in color and design,

> Ethan Allen Interiors, Inc. is a leading manufacturer and retailer of furniture and home decorating accessories. Its company-owned operations include sawmills, manufacturing plants, and retail stores. Classify each of the following product costs as direc

> Friendly Ice Cream Corporation operates and franchises full-service restaurants from Maine to Florida. The company also manufactures the ice cream that is served in its restaurants and sold in supermarkets and other retail stores. Indicate whether each o

> Steinway Musical Instruments, Inc. is a leading manufacturer of pianos and band and orchestral instruments. The company also maintains ten retail showrooms throughout the world. Classify each of the following costs as a product or period cost. a. Sitka s

> The IMA’s Statement of Ethical Professional Practice was designed to help finance professionals “to link ethical perspectives directly to their ongoing workplace responsibilities.” Unfortunately, some individuals may choose to act unethically and perhaps

> Forrest Gump was one of the biggest movie hits of 1994. The movie’s fortunes continued to climb in 1995, as it took home Oscars in six of 13 categories in which it was nominated, including best picture, best director, and best actor. One analyst has esti

> Healthful Foods, Inc. a manufacturer of breakfast cereals and snack bars, has experienced several years of steady growth in sales, profits, and dividends while maintaining a relatively low level of debt. The board of directors has adopted a long-term str

> Thoni Manufacturing has gathered information from materials requisition sheets and labor time sheets for several jobs worked on during the last month and needs to calculate the job costs. Required: a. Use the SUMIF function to calculate the direct mater

> Gail Sawyer has just started a new catering business in Dallas, Texas. Instead of establishing a fixed menu, she has decided to make whatever the customer wants until she knows how well different dishes will be received. Gail has been invited to bid on t

> Taylor Pennington produces and sells hammocks. One day during lunch he complained to his friend Steven Green, an economist, that he was having trouble setting prices. When he raised his prices, demand went down as expected, but he could never predict how

> Herzog Industries sells two electrical components with the following characteristics. Fixed costs for the company are $200,000 per year. Required a. How many units of each product must Herzog Industries sell in order to break even? b. Herzogâ&#12

> Return to Problem 3-35. Kipmar Company’s managers are considering expanding the product line by introducing a leather briefcase. The new briefcase is expected to sell for $90; variable costs would amount to $36 per briefcase. If Kipmar introduces the lea

> Under Armour, a company that wants to “empower athletes everywhere,” started out to produce a superior T-shirt that would help regulate an athlete’s body temperature during workouts. The company has e

> Picasso’s Pantry is a chain of arts and crafts stores. Results for the most recent year are as follows: Required a. What is Picasso’s Pantry’s degree of operating leverage? b. If sales increase by 5

> Kipmar Company produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning purposes. Sales price………………………………..$ 40.00 Variable cost of goods sold…………….12.00 Varia

> For each of the following measures that could be incorporated into a balanced scorecard, identify which of the four balanced scorecard perspectives it would most likely belong to. a. Training hours per employee b. Average time to answer a customer compla

> Delphi Company has developed a new product that will be marketed for the fi rst time next year. The product will have variable costs of $16 per unit. Although the marketing department estimates that 35,000 units could be sold at $36 per unit, Delphi’s ma

> Adam Granger operates a kiosk in downtown Chicago, at which he sells one style of baseball hat. He buys the hats from a supplier for $14 and sells them for $20. Adam’s current breakeven point is 15,000 hats per year. Required a. What is Adam’s current le

> W Promotions sells T-shirts imprinted with high school names and logos. Last year the shirts sold for $18 each, and variable costs were $5.40 per shirt. At this cost structure, the breakeven point was 20,000 shirts. However, the company actually earned $

> JenSteel, Inc., had the following results for last year: Prepare a new income statement for each of the following scenarios. Consider each scenario independently. Required: a. Sales volume increases by 10%. b. The sales price decreases by 5%. c. Varia

> CB Markets imports and sells small bear-shaped piñatas. In planning for the coming year, the company’s owner is evaluating several scenarios. For each scenario under consideration, prepare a contribution margin income sta

> Briggs Herrera, president of Retro Recreation Products, Inc., is concerned about declines that he is beginning to see in the demand for the company’s line of old school logo basketballs as new competitors enter the market. At a current contribution margi

> The Stafford Company sells sports decals that can be personalized with a player’s name, a team name, and a jersey number for $6 each. Stafford buys the decals from a supplier for $2.50 each and spends an additional $0.50 in variable operating costs per d

> Pet Designs makes various accessories for pets. Their trademark product, PetBed, is perceived to be high quality but not extravagant, and is sold in a variety of pet stores. Wanda Foster, marketing manager, has convinced her boss that they are missing an

> On April 24, 2015, Apple entered the wearable technology market with the release of its Apple Watch. A May 1, 2015, article published in The Wall Street Journal estimated that the cost of materials and labor required to produce the watch totaled $83.70.

> Kitchenware, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $15 and are sold for $30. Glass pitchers cost $24 and are sold for $45. All other costs are fixed at $982,800 per year. Current sales plans call fo

> Choose a company you are familiar with and diagram its supply chain. For each entity in the supply chain, identify one or two specific decisions that might affect other members of the supply chain.

> Abado Profi les provides testing services to school districts that wish to assess students’ reading and mathematical abilities. Last year Abado evaluated 60,000 math tests and 20,000 reading tests. An income statement for last year foll

> Andrew Sinclair operates a lawn care business. He offers customers a choice of two services. The first service, basic lawn care, includes mowing and trimming of all lawn areas. Andrew bills these customers $30 per hour, and his variable cost for providin

> Amazon.com announced in a May 19, 2011, news release that the company was selling more Kindle books than traditional print books. From their first sales in November 2007, these ebooks have continued to grow in popularity, and by the beginning of 2011 had

> On March 1, 2004, Seagram Co. CEO Edgar Bronfman, Jr., purchased Warner Music Group for $2.6 billion. The next day he fi red 1,000 salaried employees and reduced top executives’ salaries, slashing overhead costs by more than $250 million. Required: a. W

> Mary Smith sells gourmet chocolate chip cookies. The results of her last month of operations are as follows: Sales revenue …………………………..……………..……. $50,000 Cost of goods sold (all variable)…………………………26,000 Gross margin…………………………………………………..24,000 Selling ex

> Wimpee’s Hamburger Stand sells the Super Tuesday Burger for $4.00. The variable cost per hamburger is $2.25; total fixed cost per month is $38,500. Required: a. How many hamburgers must Wimpee’s sell per month to break even? b. How many hamburgers must

> Matoaka Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $50 throughout the country to loyal alumni of over 1,000 schools. Matoaka’s variable costs are 40% of sales; fixed costs

> a. James Shaw owns several shaved ice stands that operate in the summer along the Outer Banks of North Carolina. His contribution margin ratio is 60%. If James increases his sales revenue by $25,000 without any increase in fixed costs, by how much will h

> Carr Orthotics Company distributes a specialized ankle support that sells for $30. The company’s variable costs are $18 per unit; fixed costs total $360,000 each year. Required: a. If sales increase by $39,000 per year, by how much should operating inco

> MathTot sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company’s income statement from last month is as follows: Required: a. What is MathTot’s contributi

> For each of the following managers, identify the information that would be useful for monitoring strategic performance. a. The store manager of a Wendy’s in Austin, Texas b. The regional manager for all Wendy’s restaurants in the state of Texas c. Wendy’

> Josh Ward is a young entrepreneur preparing to start a company that will sell floating lounge chairs for use in private pools. As part of a loan package, the bank has asked him to prepare a business plan that includes a breakeven analysis. The lounge cha

> Reid Recreation Products sells the Amazing Foam Frisbee for $12. The variable cost per unit is $3; fixed costs are $36,000 per month. Required: a. What is the annual breakeven point in units? In sales dollars? b. How many frisbees must Reid sell to earn

> Greer Golf Supplies is an online store that sells two types of golf balls: practice balls and tournament balls. The golf balls are sold in plastic sleeves containing three golf balls. Practice balls sell for $4 per sleeve; tournament balls sell for $12 p

> Three years ago, Marissa Moore started a business that creates and delivers holiday and birthday gift baskets to students at the local university. Marissa sells the baskets for $25 each, and her variable costs are $15 per basket. She incurs $12,000 in fi

> “I’ll never understand this accounting stuff,” Blake Dunn yelled, waving the income statement he had just received from his accountant in the morning mail. “Last month, we sold 1,000

> In 1999, Blue Nile, Inc. began selling diamonds and other fi ne jewelry over the Internet. Using an online retailing model, Blue Nile prices its diamonds at an average of 35% less than traditional brick-and-mortar jewelers. In fewer than fi ve years, the

> Julianna Abdallah owns and operates FirstCakes, a bakery that creates personalized birthday cakes for a child’s first birthday. The cakes, which sell for $40 and feature an edible picture of the child, are shipped throughout the country

> Scott Confectionery sells its Stack-o-Choc candy bar for $0.80. The variable cost per unit for the candy bar is $0.45; total fixed costs are $175,000. Required: a. What is the contribution margin per unit for the Stack-o-Choc candy bar? b. What is the c

> Lasley Cash, Ltd. operates a chain of exclusive ski hat boutiques in the western United States. The stores purchase several hat styles from a single distributor at $12 each. All other costs incurred by the company are fixed. Lasley Cash, Ltd. sells the h