Question: The national division of Nero International Company

> Family Inc. has two divisions. Division A makes and sells Tshirts. Division B manufactures and sells ties. Determine minimum transfer price under different situations. Each T-shirt has a tie as one of its components. Division A needs 10,000 ties for the

> Poole Corporation has collected the following information after its first year of sales. Net sales were $1.6 million on 100,000 units, selling expenses were $240,000 (40% variable and 60% fixed), direct materials were $511,000, direct labour was $285,000

> Santana Furniture Inc. is setting a target price on its newly designed leather recliner sofa. Cost data for the sofa at a budgeted volume of 3,000 units are as follows: Calculate various amounts using absorption-cost pricing and variable-cost pricing. /

> Refer back to P9.51B, where we learned that Wamser Corporation uses cost-plus pricing methods to set the target selling price of its product E2-D2. Because some managers prefer to work with absorption-cost pricing and other managers prefer variable-cost

> Love Inc. manufactures a line of men’s colognes and aftershave lotions. The manufacturing process is basically a series of mixing operations, with the addition of certain aromatic and colouring ingredients. The finished product is packa

> Garnett Printing Corp. uses a job-order cost system. The following data summarize the operations related to the first quarter's production: Prepare entries for manufacturing costs. 1. Materials purchased on account were $192,000, and factory wages incurr

> Comput Industries is a high-tech company in the United States with several subsidiaries, including Cancomput, which is located in Canada, and Heavencomput, which is located in another country with very favourable tax laws. Both subsidiaries are considere

> Heartland Engines is a division of EverGreen Lawn Equipment Company. Heartland makes engines for lawn mowers, snow blowers, and other types of lawn and garden equipment. It sells its engines to the company’s lawn mower division and snow blower division,

> Swayze Small Engine Repair charges $42 per hour of labour. It has a material loading percentage of 40%. On a recent job to replace the engine of a riding lawn mower, Swayze worked 10.5 hours and used parts with a cost of $700. Calculate Swayze’s total bi

> Chula Vista Pump Company makes irrigation pump systems. The company is divided into several autonomous divisions that can either sell to internal units or sell externally. All divisions are located in buildings on the same piece of property. The pump div

> Sun Motors Inc. operates as a decentralized multidivisional car company. Its safety division buys most of its airbags from the airbag division. The airbag division’s incremental costs for manufacturing the airbags are $270 per unit. The airbag division i

> Cosmic Sounds is a record company with different labels. Each label has contracts with various recording artists. It also owns a recording studio called Blast Off. The record labels and the recording studio operate as separate profit centres. The studio

> Alice Oritz is the advertising manager for Value Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of a new lighting system and increased display space that will add $18,000 in fixed costs to the $21

> The data for Pointe Claire Inc. are given in P9.55B. Assume that the transfer price has been set at $504, which is division A’s total cost plus a 20% markup. Division A’s total cost of a component is $420, which includes fixed overhead applied at the rat

> Pointe Claire Inc. operates as a decentralized multidivisional electronics company. It has two divisions. Division A transfers partially completed components to division B at a predetermined transfer price. Division A’s standard variable production cost

> Lemond Bike Repair Shop has budgeted the following time and material for 2020: Use time-and-material pricing to determine bill. // Lemond budgets 2,500 hours of repair time in 2020. It will bill a profit of $5 per labour hour along with a 15% profit m

> Bosworth Electronics Inc. is setting a selling price on a new CDL component it has just developed. The accounting department has provided the following cost estimates for this component for a budgeted volume of 100,000 units: Use cost-plus pricing to det

> During January, its first month of operations, Reyes Tool & Die accumulated the following manufacturing costs: raw materials $4,000 on account; factory labour $6,000, of which $5,200 relates to factory wages payable and $800 relates to payroll taxes paya

> Carrier Fabrication Company (CFC) manufactures and sells only one product, a special front-mounting bicycle rack for large vehicles. CFC entered into a one-time contract to produce an additional 1,000 racks for the local public transit authority at a pri

> Wamser Corporation needs to set a target price for its newly designed product, E2-D2. The following data relate to it: Use cost-plus pricing to determine various amounts. These costs are based on a budgeted volume of 1 million units produced and sold e

> The data for Kirkland Metal Corporation have been given in P9.49A. Assume that the transfer price for the component has been set at $374, which is the fabrication division’s total cost plus a 10% markup. The fabrication division’s total cost of a compone

> During the current year, Bierko Corporation expects to produce 10,000 units and has budgeted the following: net income $300,000; variable costs $1.1 million; and fixed costs $100,000. It has invested assets of $1.5 million. What was the company’s budgete

> Kirkland Metal Corporation has two divisions. The fabrication division transfers partially completed components to the assembly division at a predetermined transfer price. The fabrication division’s standard variable production cost per unit is $300. The

> The vice-president of marketing, Carol Chow, thinks that her firm can increase sales by 15,000 units for each $5-per-unit reduction in its selling price. The company's current selling price is $90 per unit and variable expenses are $60 per unit. Fixed ex

> Computech Company operates as a decentralized multidivisional electronics company. Its laptop division buys most of its monitors from the screen division. The screen division’s incremental costs for manufacturing the monitors are $280 per unit. The scree

> Weather Guard Windows Inc. is setting a target price on its newly designed tinted window. Cost data for the window at a budgeted volume of 4,000 units are as follows: Calculate various amounts using absorption-cost and variable-cost approaches. Weather

> Fast Buck Corporation needs to set a target price for its newly designed product EverRun. The following data relate to this new product: Calculate target price using absorption-cost and variable-cost approaches. The costs above are based on a budgeted

> Lemon Quench manufactures a soft drink. The company is organized into two divisions: glass and filling. The glass division makes bottles and sells them to the filling division. Each division manager receives a bonus based on the divisionâ€&#15

> The Atlantic Company is a multidivisional company. Its managers have full responsibility for profits and complete autonomy to accept or reject transfers from other divisions. Division A produces a sub-assembly part for which there is a competitive market

> A job cost sheet of Nilson Company is given below. Analyze a job cost sheet and prepare an entry for the completed job. Instructions a. Determine the source documents for direct materials, direct labour, and manufacturing overhead costs assigned to thi

> Next Level (NL) is a division of Global Electronics Inc. NL produces video game systems. These systems are sold to retailers. NL recently approached the manager of the personal computer (PC) division regarding a request to buy a special circuit board for

> Wood Inc. manufactures wood poles. Wood Inc. has two responsibility centres, harvesting and sawing, which are both evaluated as profit centres. The harvesting division does all the harvesting operations and transfers logs to the sawing division, which co

> Zapp Manufacturing Company makes various electronic products. The company is divided into autonomous divisions that can either sell to internal units or sell externally. All divisions are located in buildings on the same piece of property. The board divi

> Wordsmith is a publishing company with several different book lines. Each line has contracts with different authors. The company also owns a printing operation called Pronto Press. The book lines and the printing operation each operate as a separate prof

> Gorham Manufacturing's sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 60,000 units of product: net sales $1.8 million; total costs and expens

> Schuman Corporation produces microwave units. The following per-unit cost information is available: direct materials $36; direct labour $24; variable manufacturing overhead $18; fixed manufacturing overhead $40; variable selling and administrative expens

> Ampro Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Determine minimum transfer price under different situations. Each desk has a reading lamp as one of its components. Division A needs

> St-Cyr’s Electronic Repair Shop has budgeted the following time and material for 2020: Use time-and-material pricing to determine bill. St-Cyr’s budgets 5,000 hours of repair time in 2020 and will bill a profit of $5

> Bolus Computer Parts Ltd. is setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 50,000 units: Use cos

> Berg and Son Ltd. builds custom-made pleasure boats that range in price from $10,000 to $250,000. For the past 30 years, Mr. Berg Sr. has determined the selling price of each boat by estimating the cost of material, labour, and a prorated portion of over

> Lafleur Corporation needs to set a target price for its newl designed product, M14-M16. The following data relate to it: Use cost-plus pricing to determine various amounts. These costs are based on a budgeted volume of 250,000 units produced and sold e

> Millefeuille Company applies operating overhead to photocopying jobs on the basis of machine hours used. It expects overhead costs to total $290,000 for the year and estimates machine usage at 125,000 hours. For the year, the company incurs $295,000 of o

> Auto Glass Company (AGC) manufactures and sells windshield products. AGC entered into a one-time contract to produce an additional 1,000 windshields for the local public transit authority, at a price of “cost plus 20%.” The company has a plant with a cap

> Information for Caan Corporation is given in E9.22. Calculate various amounts using absorption-cost pricing and variable-cost pricing. Instructions a. Calculate the markup percentage and target selling price using absorption-cost pricing. b. Calculate t

> Firefly Corporation produces outdoor portable fireplace units. The following cost information per unit is available: direct materials $21, direct labour $26, variable manufacturing overhead $16, fixed manufacturing overhead $22, variable selling and admi

> Corn Company incurs a cost of $35 per unit, of which $20 is variable, to make a product that normally sells for $58. A foreign wholesaler offers to buy 6,000 units at $31 each. Corn will incur additional costs of $2 per unit to imprint a logo and to pay

> The information for Ahmed Corporation is given in E9.20. Calculate total cost per unit, ROI, and markup percentages. Instructions a. Using absorption-cost pricing, calculate the markup percentage. b. Using variable-cost pricing, calculate the markup per

> High Sound Corporation manufactures car stereos. It is a division of Quality Motors, which manufactures vehicles. High Sound sells car stereos to Quality Motors, as well as to other vehicle manufacturers and retail stores. The following information is av

> Travis Corporation produces high-performance rotors. It expects to produce 50,000 rotors in the coming year. It has invested $10 million to produce the rotors. The company has a required return on investment of 16%. What is its ROI per unit? Calculate RO

> The machining division has a capacity of 4,000 units. Its sales and cost data are: Determine minimum transfer price under different situations. Selling price per unit ………………………………….. $ 160 Variable manufacturing costs per unit ……………… 50 Variable selling

> The cycle division of TravelFast Company has the following cost data per unit for its most recent cycle, the Roadbuster: Determine minimum transfer price under different situations. The cycle division currently buys its body frames from an outside supp

> Alpha International Corporation has two divisions, beta and gamma. Beta produces an electronic component that sells for $75 per unit, with the following costs based on its capacity of 200,000 units: Determine minimum transfer price. Direct materials ………

> Manufacturing cost data for Pena Company, which uses a job-order cost system, are presented below. Analyze costs of manufacturing and determine missing amounts. Instructions Indicate the missing amount for each letter. Assume that in all cases manufact

> La Mode Design Inc., a high-fashion women’s dress manufacturer, is planning to market a new cocktail dress for the coming season. La Mode Design Inc. supplies retailers in Toronto, Montreal, and the Atlantic provinces. Four metres of ma

> Karl’s Klassic Kars restores classic automobiles to showroom status. Budgeted data for the current year are as follows: Use time-and-material pricing to determine bill. The company anticipated that the restorers would work a total of

> YUX Corporation sells a single product for $50. Its management estimates the following revenues and costs for the year 2020: Determine the contribution margin ratio, break-even point in dollars, margin of safety, and sales required to earn target operati

> Justin’s Custom Electronics (JCE) sells and installs complete security, computer, audio, and video systems for homes. On newly constructed homes, it provides bids using time-and-material pricing. The following budgeted cost data are available: Use time-a

> Padong Remanufacturing rebuilds spot welders for manufacturers. The following budgeted cost data for 2020 are available for Padong: Use time-and-material pricing to determine bill. The company wants a $30 profit margin per hour of labour and a 20% prof

> Caan Corporation produces industrial robots for high-precision manufacturing. The following information is given for Caan Corporation: Use cost-plus pricing to determine various amounts. The company has a desired ROI of 20%. It has invested assets of $

> Roxy’s Recording Studio rents studio time to musicians in two-hour blocks. Each session includes the use of the studio facilities, a digital recording of the performance, and a professional music producer/mixer. Anticipated annual volume is 1,000 session

> Ahmed Corporation makes a mechanical stuffed alligator. The following information is available for Ahmed Corporation’s expected annual volume of 500,000 units: Use cost-plus pricing to determine various amounts. The company has a desi

> Gruner Corporation produces snowboards. The following cost information per unit is available: direct materials $12; direct labour $8; variable manufacturing overhead $6; fixed manufacturing overhead $14; variable selling and administrative expenses $4; a

> Select Corporation makes a commercial-grade cooking griddle. The following information is available for Select Corporation’s expected annual volume of 30,000 units: Use cost-plus pricing to determine selling price. / The company uses a 40% markup perce

> Mucky Duck makes swimsuits and sells them directly to retailers. Although Mucky Duck has a variety of suits, it does not make the allbody suit used by highly skilled swimmers. The market research department believes that a strong market exists for this t

> Lasik Look produces and sells high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure distances on the golf course. The potential market for one small laser gun, the LittleLasik, appears to be

> A job cost sheet for Rolen Company is shown below. Analyze a job cost sheet and prepare entries for manufacturing costs. Instructions a. On the basis of the foregoing data, answer the following questions: 1. What was the balance in Work in Process Inve

> Montreal Seating Co., a manufacturer of chairs, had the following data for 2020: Determine the contribution margin ratio, break-even point in dollars, and margin of safety. Sales ……………………. 2,800 units Sales price …………… $50 per unit Variable costs …….. $

> In Lebeau Company, data for the contribution margin per unit and machine hours per unit for two products are as follows: product A, $10 and two hours; product B, $12 and three hours. Calculate the contribution margin per unit of the limited resource for

> Axia Inc. manufactures two electronic products, widgets and gadgets, and has a capacity of 1,000 machine hours. Prices and costs for each product are as follows: * Variable manufacturing overhead costs are applied at a rate of $40 per machine hour. Bro

> Castle Company is considering the purchase of a new machine. The invoice price of the machine is $150,000, freight charges are estimated to be $6,000, and installation costs are expected to be $4,000. The salvage value of the new equipment is expected to

> T&G Co. manufactures three types of computer desks. The income statement for the three products and the whole company is shown below: Calculate contribution margin and prepare incremental analysis for the elimination of product and special order. T

> Tandy Teck manufactures an electronic component for a highend computer. The company currently sells 50,000 units a year at a price of $280 per unit. These units are produced using a machine that was purchased five years ago at a cost of $1.5 million. It

> Manning Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all are good sellers. Manning is currently operating at full capacity with limited machine tim

> Green Inc. makes unfinished bookcases that it sells for $62. Production costs are $36 variable and $10 fixed. Because it has unused capacity, Green is considering finishing the bookcases and selling them for $70. Variable finishing costs are expected to

> The Kamloops Outdoors Corporation, which produces a highly successful line of summer lotions and insect repellents and sells them to wholesalers, has decided to diversify in order to stabilize its sales throughout the year. A natural area for the company

> Straus Company operates a small factory in which it manufactures two products: A and B. Production and sales results for this year were as follows: Calculate the contribution margin and prepare incremental analysis concerning the decision to keep or drop

> A company manufactures three products using the same production process. The costs incurred up to the split-off point are $200,000. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of units pr

> Ribeiro Manufacturing Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $145,000 and the following divisional results: Calculate contribution margin and prepare incremental an

> Last year (2019), Calway Condos installed a mechanized elevator for its tenants. The owner of the company, Cab Calway, recently returned from an industry equipment exhibition where he watched a computerized elevator demonstrated. He was impressed with th

> Miramichi Industrial Products Co. is a diversified industrial cleaner processing company. The company’s main plant produces two products: a table cleaner and a floor cleaner. They are made from a common set of chemical inputs (called CD

> Interdesign uses 1,000 units of the component IMC2 every month to manufacture one of its products. The unit costs incurred to manufacture the component are as follows: Calculate contribution margin and prepare incremental analysis concerning make-or-buy

> Jenson College provides its own housekeeping services. The College director would like to outsource this service and has found a company that will provide the service for $48 per hour. The following information has been collected about the cost per hour

> The management of Borealis Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called WISCO, is a component of the company’s finished product. Prepare incre

> Pro Sports Inc. manufactures basketballs for professional basketball associations. For the first six months of 2020, the company reported the following operating results while operating at 90% of plant capacity: Prepare incremental analysis for special-o

> Emil Manufacturing incurs unit costs of $7.50 ($4.50 variable and $3.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 10,000 of the parts for $5 per unit. If it accepts the offer, Emil will save all variable cos

> Clarington Company makes three models of phasers. Information on the three products is given below: Prepare incremental analysis for decision to eliminate a product line. Fixed expenses consist of $300,000 of common costs allocated to the three product

> Montel Firm is considering whether to outsource the manufacture of subcomponent JXY. The accounting department provides the following cost information for manufacturing 10,000 units of the subcomponent JXY per month. Prepare incremental analysis for deci

> Metropole Inc. can produce three different products interchangeably on two machines. The accounting department provides the following information on these products: Calculate the contribution margin and determine the products to be manufactured. Instru

> Dalton Company manufactures and sells two products. Relevant per-unit data concerning each product follow: Calculate the contribution margin and determine the products to be manufactured. Instructions a. Calculate the contribution margin per machine ho

> Spencer Company manufactures and sells three products. Relevant per-unit data for each product follow: Calculate the contribution margin and determine the products to be manufactured. Instructions a. Calculate the contribution margin per unit of the li

> Nicole Filippas, a recent graduate of Rollings University’s accounting program, evaluated the operating performance of Poway Company’s six divisions. Nicole made the following presentation to Poway’s board of directors and suggested the Erie division be

> Twyla Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra three hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating it

> On January 2, 2019, Riverside Hospital purchased a $100,000 special radiology scanner from Faital Inc. The scanner has a useful life of five years and will have no disposal value at the end of its useful life. The straight-line method of depreciation is

> Shynee Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Sarco, Barco, and Larco. Each of these products can be sold as is, or they can be processed further and sold for a h

> Bahrat, Inc. produces three separate products from a common process costing $100,000. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. The cost and selling price data for a recent perio

> Assume the same information as in BE7.3, except that Waterloo has no excess capacity. Indicate the net income (loss) that Waterloo would realize by accepting the special order. Determine whether to accept special order. Data from BE7.3: Waterloo Co. sel

> Josée Chabot recently opened her own basket-weaving studio. She sells finished baskets in addition to the raw materials needed by customers to weave baskets of their own. Josée has put together a variety of raw material kits, with each kit including mate

> SY Telc has recently started to manufacture RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a mobile phone. The cost structure to manufacture 20,000 RecRobos is as follows: Prepare an incr

> Young Mi Inc. has been manufacturing its own shades for its table lamps. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 50% of direct labour costs. The direct materials

> Hardy Fibre is the creator of Y-Go, a technology that weaves silver into fabrics to kill bacteria and odour on clothing while managing heat. Y-Go has become very popular in undergarments for sports activities. Operating at capacity, the company can produ