All Related Questions of Managerial Accounting

Q: Harris Company manufactures and sells a single product. A partially completed

Harris Company manufactures and sells a single product. A partially completed schedule of the company’s total and per unit costs over the relevant range of 30,000 to 50,000 units pro...

Q: Pittman Company is a small but growing manufacturer of telecommunications equipment.

Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its p...

Q: Superior Micro Products uses the weighted-average method in its process

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,000 units and transferred them to t...

Q: Alaskan Fisheries, Inc., processes salmon for various distributors. Two

Alaskan Fisheries, Inc., processes salmon for various distributors. Two departments are involved— Cleaning and Packing. Data relating to pounds of salmon processed in the Cleaning De...

Q: Quality Brick Company produces bricks in two processing departments—Molding and

Quality Brick Company produces bricks in two processing departments—Molding and Firing. Information relating to the company’s operations in March follows: a. Raw materials were issued for use in produ...

Q: Clonex Labs, Inc., uses a process costing system. The

Clonex Labs, Inc., uses a process costing system. The following data are available for one department for October: The department started 175,000 units into production during the month and transferre...

Q: Superior Micro Products uses the weighted-average method in its process

Superior Micro Products uses the weighted-average method in its process costing system. Data for the Assembly Department for May appear below: Required: 1. Compute the cost per equivalent unit for ma...

Q: Data concerning a recent period’s activity in the Prep Department, the

Data concerning a recent period’s activity in the Prep Department, the fi rst processing department in a company that uses process costing, appear below: A total of 20,100 units wer...

Q: Lubricants, Inc., produces a special kind of grease that is

Lubricants, Inc., produces a special kind of grease that is widely used by race car drivers. The grease is produced in two processing departments: Refining and Blending. Raw materials are introduced a...

Q: Sunspot Beverages, Ltd., of Fiji makes blended tropical fruit drinks

Sunspot Beverages, Ltd., of Fiji makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then blended in the Blending Department. The blended juices are the...

Q: Builder Products, Inc., manufactures a caulking compound that goes through

Builder Products, Inc., manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May: T...

Q: Miller Company’s most recent contribution format income statement is shown below:

Miller Company’s most recent contribution format income statement is shown below: Required: Prepare a new contribution format income statement under each of the following conditions...

Q: The Lakeshore Hotel’s guest-days of occupancy and custodial supplies expense

The Lakeshore Hotel’s guest-days of occupancy and custodial supplies expense over the last seven months were: Guest-days is a measure of the overall activity at the hotel. For examp...

Q: Weston Products manufactures an industrial cleaning compound that goes through three processing

Weston Products manufactures an industrial cleaning compound that goes through three processing departments—Grinding, Mixing, and Cooking. All raw materials are introduced at the sta...

Q: In what ways are job-order and process costing similar?

In what ways are job-order and process costing similar?

Q: Hokuriku-Seika Co., Ltd., of Yokohama, Japan,

Hokuriku-Seika Co., Ltd., of Yokohama, Japan, is a subcontractor to local manufacturing companies. The company specializes in precision metal cutting using focused high-pressure water jets and high-en...

Q: Bargain Rental Car offers rental cars in an off-airport location

Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination in California. Management would like to better understand the behaviour of the companyâ€
...

Q: George Caloz & Frères, located in Grenchen, Switzerland, makes

George Caloz & Frères, located in Grenchen, Switzerland, makes prestige high-end custom watches in small lots. One of the company’s products, a platinum diving watch,...

Q: Refer to the data for Archer Company in Exercise 5–6

Refer to the data for Archer Company in Exercise 5–6. Data from Exercise 5–6. Required: 1. Using the least-squares regression method, estimate a cost formula for s...

Q: Milden Company has an exclusive franchise to purchase a product from the

Milden Company has an exclusive franchise to purchase a product from the manufacturer and distribute it on the retail level. As an aid in planning, the company has decided to start using a contributio...

Q: Refer to the data for Pleasant View Hospital in Problem 5–

Refer to the data for Pleasant View Hospital in Problem 5–14. Data from Problem 5–14. Required: 1. Using the least-squares regression method, estimate a cost formul...

Q: Professor John Morton has just been appointed chairperson of the Finance Department

Professor John Morton has just been appointed chairperson of the Finance Department at Westland University. In reviewing the department’s cost records, Professor Morton has found the...

Q: 1. Referring to the data for Blue Nile in Research and

1. Referring to the data for Blue Nile in Research and Application 5–20 and the data on net sales available on the company’s website, estimate the variable and fixed components of the company’s quarte...

Q: St. Mark’s Hospital contains 450 beds. The average occupancy rate

St. Mark’s Hospital contains 450 beds. The average occupancy rate is 80% per month. In other words, on average, 80% of the hospital’s beds are occupied by patients. At this level of occupancy, the hos...

Q: Menlo Company distributes a single product. The company’s sales and expenses

Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Required: 1. What is the monthly break-even point in units sold and in sales doll...

Q: Maria Chavez owns a catering company that serves food and beverages at

Maria Chavez owns a catering company that serves food and beverages at parties and business functions. Chavez’s business is seasonal, with a heavy schedule during the summer months a...

Q: Angora Wraps of Pendleton, Oregon, makes fi ne sweaters out

Angora Wraps of Pendleton, Oregon, makes fi ne sweaters out of pure angora wool. The business is seasonal, with the largest demand during the fall, the winter, and Christmas holidays. The company must...

Q: The Alpine House, Inc., is a large retailer of winter

The Alpine House, Inc., is a large retailer of winter sports equipment. An income statement for the company’s Ski Department for a recent quarter is presented below: Skis sell, on t...

Q: Espresso Express operates a number of espresso coffee stands in busy suburban

Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.22. Requi...

Q: Oki Products, Ltd., has observed the following processing costs at

Oki Products, Ltd., has observed the following processing costs at various levels of activity over the last 15 months: Required: 1. Prepare a scatter graph using the above data. Plot cost on the vert...

Q: The Cheyenne Hotel in Big Sky, Montana, has accumulated records

The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rente...

Q: Pleasant View Hospital of British Columbia has just hired a new chief

Pleasant View Hospital of British Columbia has just hired a new chief administrator who is anxious to employ sound management and planning techniques in the business affairs of the hospital. According...

Q: Sawaya Co., Ltd., of Japan is a manufacturing company whose

Sawaya Co., Ltd., of Japan is a manufacturing company whose total factory overhead costs fluctuate considerably from year to year according to increases and decreases in the number of direct labour-ho...

Q: Amfac Company manufactures a single product. The company keeps careful records

Amfac Company manufactures a single product. The company keeps careful records of manufacturing activities from which the following information has been extracted: The company’s man...

Q: Question: Nova Company’s total overhead cost at various levels of activity

Nova Company’s total overhead cost at various levels of activity are presented below: Assume that the total overhead cost above consists of utilities, supervisory salaries, and main...

Q: The following data relating to units shipped and total shipping expense have

The following data relating to units shipped and total shipping expense have been assembled by Archer Company, a wholesaler of large, custom-built air-conditioning units for commercial buildings: Req...

Q: Marwick’s Pianos, Inc., purchases pianos from a large manufacturer and

Marwick’s Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $2,450 each from the manufacturer. Marwick&aci...

Q: Jaffre Enterprises distributes a single product whose selling price is $16

Jaffre Enterprises distributes a single product whose selling price is $16 and whose variable expense is $11 per unit. The company’s fixed expense is $16,000 per month. Required: 1. Prepare a profit g...

Q: Morrisey & Brown, Ltd., of Sydney is a merchandising company

Morrisey & Brown, Ltd., of Sydney is a merchandising company that is the sole distributor of a product that is increasing in popularity among Australian consumers. The company’s...

Q: Distinguish between ( a ) A variable cost, (

Distinguish between ( a ) A variable cost, ( b ) A mixed cost, and ( c ) A step-variable cost. Plot the three costs on a graph, with activity plotted horizontally and cost plotted vertically.

Q: Distinguish between discretionary fixed costs and committed fixed costs.

Distinguish between discretionary fixed costs and committed fixed costs.

Q: What is the difference between a contribution approach income statement and a

What is the difference between a contribution approach income statement and a traditional approach income statement?

Q: Distinguish between ( a ) A variable cost, (

Distinguish between ( a ) A variable cost, ( b ) A fixed cost, and ( c ) A mixed cost.

Q: Define the following terms: ( a ) Cost behaviour and

Define the following terms: ( a ) Cost behaviour and ( b ) Relevant range.

Q: The questions in this problem are based on Blue Nile, Inc

The questions in this problem are based on Blue Nile, Inc. To answer the questions, you will need to download Blue Nile’s 2004 Form 10-K at www.sec.gov/edgar/searchedgar/company sear...

Q: Mark Hansen is employed by Eastern Products and works on the company’s

Mark Hansen is employed by Eastern Products and works on the company’s assembly line. Mark’s basic wage rate is $20 per hour. The company’s union contract states that employees are to be paid time and...

Q: Lindon Company is the exclusive distributor for an automotive product that sells

Lindon Company is the exclusive distributor for an automotive product that sells for $40 per unit and has a CM ratio of 30%. The company’s fixed expenses are $180,000 per year. The company plans to se...

Q: A number of activities that are a part of a company’s quality

A number of activities that are a part of a company’s quality control system are listed below: Required: 1. Classify the costs associated with each of these activities into one of t...

Q: Several days ago you took your TV set into a shop to

Several days ago you took your TV set into a shop to have some repair work done. When you later picked up the set, the bill showed a $75 charge for labour. This charge represented two hours of service...

Q: Last month when Holiday Creations, Inc., sold 50,000

Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable expenses were $120,000, and fixed expenses were $65,000. Required: 1. What is the company’s contri...

Q: Paul Clark is employed by Aerotech Products where he assembles a component

Paul Clark is employed by Aerotech Products where he assembles a component part for one of the company’s product lines. He is paid $14 per hour for regular time and time and a half (i.e., $21 per hour...

Q: A number of terms relating to the cost of quality and quality

A number of terms relating to the cost of quality and quality management are listed below: Required: Choose the term or terms that most appropriately complete the following statements. The terms can...

Q: In response to intensive foreign competition, the management of Florex Company

In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been in...

Q: Hoi Chong Transport, Ltd., operates a fleet of delivery trucks

Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 105,000 kilometers during a year, the average operating cost is 11.4 c...

Q: Mercury, Inc., produces cell phones at its plant in Texas

Mercury, Inc., produces cell phones at its plant in Texas. In recent years, the company’s market share has been eroded by stiff competition from overseas. Price and product quality a...

Q: Hector P. Wastrel, a careless employee, left some combustible

Hector P. Wastrel, a careless employee, left some combustible materials near an open flame in Salter Company’s plant. The resulting explosion and fi re destroyed the entire plant and administrative of...

Q: Refer to the data for Lakeshore Hotel in Exercise 5–8

Refer to the data for Lakeshore Hotel in Exercise 5–8. Exercise 5–8 Required: 1. Prepare a scatter graph using the data from Exercise 5–8. Plot co...

Q: Fill in the missing amounts in each of the eight case situations

Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. ( Hint: One way to find the missing amounts would be to prepare a contribution format in...

Q: “I was sure that when our battery hit the market it

“I was sure that when our battery hit the market it would be an instant success,” said Roger Strong, founder and president of Solar Technology, Inc. â€&#...

Q: The PC Works assembles custom computers from components supplied by various manufacturers

The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a R...

Q: The following cost and inventory data are taken from the accounting records

The following cost and inventory data are taken from the accounting records of Mason Company for the year just completed: Required: 1. Prepare a schedule of cost of goods manufactured. 2. Prepare the...

Q: Data for Hermann Corporation are shown below: /

Data for Hermann Corporation are shown below: Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Required: 1. The marketing manager argues that a $5,000 increase i...

Q: The Devon Motor Company produces motorcycles. During April, the company

The Devon Motor Company produces motorcycles. During April, the company purchased 8,000 batteries at a cost of $10 per battery. Devon withdrew 7,600 batteries from the storeroom during the month. Of t...

Q: Suppose that you have been given a summer job as an intern

Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company,...

Q: Northwest Hospital is a full-service hospital that provides everything from

Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. Required: For each cost incurred at Northwest Hospital, indicat...

Q: Various cost and sales data for Meriwell Company for the just completed

Various cost and sales data for Meriwell Company for the just completed year appear in the worksheet below: Of the $105,000 of manufacturing overhead, $15,000 is variable and $90,000 is fixed. Requir...

Q: The Dorilane Company specializes in producing a set of wood patio furniture

The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoys great popularity, and the company has ample orders to keep production...

Q: Staci Valek began dabbling in pottery several years ago as a hobby

Staci Valek began dabbling in pottery several years ago as a hobby. Her work is quite creative, and it has been so popular with friends and others that she has decided to quit her job with an aerospac...

Q: Magic Realm, Inc., has developed a new fantasy board game

Magic Realm, Inc., has developed a new fantasy board game. The company sold 15,000 games last year at a selling price of $20 per game. Fixed costs associated with the game total $182,000 per year, and...

Q: Selected account balances for the year ended December 31 are provided below

Selected account balances for the year ended December 31 are provided below for Superior Company: Inventory balances at the beginning and end of the year were as follows: The total manufacturing cos...

Q: M. K. Gallant is president of Kranbrack Corporation, a

M. K. Gallant is president of Kranbrack Corporation, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Gallant had predicted t...

Q: Visic Corporation, a manufacturing company, produces a single product.

Visic Corporation, a manufacturing company, produces a single product. The following information has been taken from the company’s production, sales, and cost records for the just co...

Q: Supply the missing data in the following cases. Each case is

Supply the missing data in the following cases. Each case is independent of the others.

Q: Lin Corporation has a single product whose selling price is $120

Lin Corporation has a single product whose selling price is $120 and whose variable expense is $80 per unit. The company’s monthly fixed expense is $50,000. Required: 1. Using the equation method, sol...

Q: Listed below are costs found in various organizations. 1.

Listed below are costs found in various organizations. 1. Property taxes, factory. 2. Boxes used for packaging detergent produced by the company. 3. Salespersons’ commissions. 4. Sup...

Q: Wollogong Group Ltd. of New South Wales, Australia, acquired

Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building about 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building....

Q: Various costs associated with the operation of factories are given below:

Various costs associated with the operation of factories are given below: 1. Electricity to run production equipment. 2. Rent on a factory building. 3. Cloth used to make drapes. 4. Production superin...

Q: Swift Company was organized on March 1 of the current year.

Swift Company was organized on March 1 of the current year. After five months of start-up losses, management had expected to earn a profit during August. Management was disappointed, however, when the...

Q: You have just been hired by Ogden Company to fill a new

You have just been hired by Ogden Company to fill a new position that was created in response to rapid growth in sales. It is your responsibility to coordinate shipments of finished goods from the fac...

Q: Outback Outfitters sells recreational equipment. One of the company’s products,

Outback Outfitters sells recreational equipment. One of the company’s products, a small camp stove, sells for $50 per unit. Variable expenses are $32 per stove, and fixed expenses associated with the...

Q: Explain the difference between a product cost and a period cost.

Explain the difference between a product cost and a period cost.

Q: Describe how the income statement of a manufacturing company differs from the

Describe how the income statement of a manufacturing company differs from the income statement of a merchandising company.

Q: Describe the schedule of cost of goods manufactured. How does it

Describe the schedule of cost of goods manufactured. How does it tie into the income statement?

Q: Why are product costs sometimes called inventoriable costs? Describe the flow

Why are product costs sometimes called inventoriable costs? Describe the flow of such costs in a manufacturing company from the point of incurrence until they finally become expenses on the income sta...

Q: Is it possible for costs such as salaries or depreciation to end

Is it possible for costs such as salaries or depreciation to end up as assets on the balance sheet? Explain.

Q: Mauro Products distributes a single product, a woven basket whose selling

Mauro Products distributes a single product, a woven basket whose selling price is $15 and whose variable expense is $12 per unit. The company’s monthly fixed expense is $4,200. Required: 1. Solve for...

Q: Define the following terms: differential cost, opportunity cost, and

Define the following terms: differential cost, opportunity cost, and sunk cost.

Q: Describe the three major activities of a manager.

Describe the three major activities of a manager.

Q: What are the major differences between financial and managerial accounting?

What are the major differences between financial and managerial accounting?

Q: Define the following: (a) Direct materials,

Define the following: (a) Direct materials, (b) Indirect materials, (c) Direct labour, (d) Indirect labour, and (e) Manufacturing overhead.

Q: The Hartford Symphony Guild is planning its annual dinner-dance.

The Hartford Symphony Guild is planning its annual dinner-dance. The dinner-dance committee has assembled the following expected costs for the event: The committee members would like to charge $35 per...

Q: The questions in this exercise are based on Dell, Inc.

The questions in this exercise are based on Dell, Inc. To answer the questions, you will need to download Dell’s 2005 Form 10-K by going to www.sec.gov/edgar/searchedgar/companysearch.html. Input CIK...

Q: Refer to the data for Provost Industries in Case 4–19

Refer to the data for Provost Industries in Case 4–19. Assume that the company uses the FIFO method in its process costing system. Required: 1. Prepare a report for the Finishing Department for April...

Q: Schroeder Baking Corporation uses a process costing system in its large-

Schroeder Baking Corporation uses a process costing system in its large-scale baking operations. The Mixing Department is one of the company’s processing departments. In the Mixing Department in July,...

Q: MediSecure, Inc., produces clear plastic containers for pharmacies in a

MediSecure, Inc., produces clear plastic containers for pharmacies in a process that starts in the Molding Department. Data concerning that department’s operations in the most recent...

Q: Refer to the data for Pureform, Inc., in Exercise 4

Refer to the data for Pureform, Inc., in Exercise 4–8. Data from Exercise 4–8. Jarvene Corporation uses the FIFO method in its process costing system. The following...

Q: Refer to the data for Hielta Oy in Exercise 4–7

Refer to the data for Hielta Oy in Exercise 4–7. Assume that the company uses the FIFO method in its process costing system. Data from Exercise 4–7 Required: 1. Com...

Q: Molander Corporation is a distributor of a sun umbrella used at resort

Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below: Required: 1. Compute the companyâ€
...

Q: Jarvene Corporation uses the FIFO method in its process costing system.

Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:...

Q: Refer to the data for Alaskan Fisheries, Inc., in Exercise

Refer to the data for Alaskan Fisheries, Inc., in Exercise 4–12. Data from Exercise 4–12 Required: Compute the equivalent units for July for the Cleaning Department...

Q: Refer to the data for Clonex Labs, Inc., in Exercise

Refer to the data for Clonex Labs, Inc., in Exercise 4–2. Required: Compute the equivalent units of production for October assuming that the company uses the FIFO method of accounting for units and co...

Q: Engberg Company installs lawn sod in home yards. The company’s most

Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Required: 1. Compute the company’s...

Q: Seattle Western University has provided the following data to be used in

Seattle Western University has provided the following data to be used in its service department cost allocations: Required: Using the direct method, allocate the costs of the service departments to t...

Q: The Sendai Co., Ltd., of Japan has budgeted costs in

The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year: The Japanese currency is the yen, denoted by ¥. The company allocates service d...

Q: Karlik Enterprises distributes a single product whose selling price is $24

Karlik Enterprises distributes a single product whose selling price is $24 and whose variable expense is $18 per unit. The company’s monthly fixed expense is $24,000. Required: 1. Prepare a cost-volum...

Q: Woodbury Hospital has three service departments and three operating departments. Estimated

Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for all departments in the hospital for the forthcoming quarter are presented in the...

Q: “I think we goofed when we hired that new assistant controller

“I think we goofed when we hired that new assistant controller,” said Ruth Scarpino, president of Provost Industries. “Just look at this report th...

Q: Gary Stevens and Mary James are production managers in the Consumer Electronics

Gary Stevens and Mary James are production managers in the Consumer Electronics Division of General Electronics Company, which has several dozen plants scattered in locations throughout the world. Mar...

Q: Maria Am Corporation uses a process costing system. The Baking Department

Maria Am Corporation uses a process costing system. The Baking Department is one of the processing departments in its strudel manufacturing facility. In June in the Baking Department, the cost of begi...

Q: Chocolaterie de Geneve, SA, is located in a French-

Chocolaterie de Geneve, SA, is located in a French-speaking canton in Switzerland. The company makes chocolate truffles that are sold in popular embossed tins. The company has two processing departmen...

Q: Hielta Oy, a Finnish company, processes wood pulp for various

Hielta Oy, a Finnish company, processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp processed during June are provided below: Required: 1. Compute the number...

Q: Olongapo Sports Corporation is the distributor in the Philippines of two premium

Olongapo Sports Corporation is the distributor in the Philippines of two premium golf balls—the Flight Dynamic and the Sure Shot. Monthly sales, expressed in pesos (P), and the contr...

Q: Pureform, Inc., manufactures a product that passes through two departments

Pureform, Inc., manufactures a product that passes through two departments. Data for a recent month for the first department follow: The beginning work in process inventory was 80% complete with resp...

Q: Helix Corporation produces prefabricated flooring in a series of steps carried out

Helix Corporation produces prefabricated flooring in a series of steps carried out in production departments. All of the material that is used in the first production department is added at the beginn...

Q: Lucido Products markets two computer games: Claim jumper and Makeover.

Lucido Products markets two computer games: Claim jumper and Makeover. A contribution format income statement for a recent month for the two games appears on the following page: Required: 1. Compute...

Q: Scribners Corporation produces fi ne papers in three production departments—Pulping

Scribners Corporation produces fi ne papers in three production departments—Pulping, Drying, and Finishing. In the Pulping Department, raw materials such as wood fiber and rag cotton...

Q: Whirly Corporation’s most recent income statement is shown below: /

Whirly Corporation’s most recent income statement is shown below: Required: Prepare a new contribution format income statement under each of the following conditions (consider each...

Q: Superior Micro Products uses the FIFO method in its process costing system

Superior Micro Products uses the FIFO method in its process costing system. Data for the Assembly Department for May appear below: Required: Compute the cost per equivalent unit for materials, labour...

Q: Data concerning a recent period’s activity in the Assembly Department, the

Data concerning a recent period’s activity in the Assembly Department, the first processing department in a company that uses process costing, appear below: A total of 26,000 units...

Q: Refer to the data for the Blending Department of Sunspots Beverages,

Refer to the data for the Blending Department of Sunspots Beverages, Ltd., in Problem 4–13. Assume that the company uses the FIFO method rather than the weighted-average method in its process costing...

Q: Selzik Company makes super-premium cake mixes that go through two

Selzik Company makes super-premium cake mixes that go through two processing departments, Blending and Packaging. The following activity was recorded in the Blending Department during July: All mater...

Q: “This is really an odd situation,” said Jim Carter,

“This is really an odd situation,” said Jim Carter, general manager of Highland Publishing Company. “We get most of the jobs we bid on that requir...

Q: Madison Park Co-op, a whole foods grocery and gift

Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations: Required: Using the step-down method, allocate the cost...

Q: The Ferre Publishing Company has three service departments and two operating departments

The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: The company allocates service department c...

Q: Carbex, Inc., produces cutlery sets out of high-quality

Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a standard cutlery set and a deluxe set and sells them to retail department stores throughout the country. The...

Q: Guochang Li was hired as chief executive officer (CEO) in

Guochang Li was hired as chief executive officer (CEO) in late November by the board of directors of ContactGlobal, a company that produces an advanced global positioning system (GPS) device. The prev...

Q: Denton Company manufactures and sells a single product. Cost data for

Denton Company manufactures and sells a single product. Cost data for the product are given below: The product sells for $60 per unit. Production and sales data for July and August, the first two mon...

Q: In response to a request from your immediate supervisor, you have

In response to a request from your immediate supervisor, you have prepared a CVP graph portraying the cost and revenue characteristics of your company’s product and operations. Explain how the lines o...

Q: Far North Telecom, Ltd., of Ontario, has organized a

Far North Telecom, Ltd., of Ontario, has organized a new division to manufacture and sell specialty cellular telephones. The division’s monthly costs are shown below: Far North Tele...

Q: Starfax, Inc., manufactures a small part that is widely used

Starfax, Inc., manufactures a small part that is widely used in various electronic products such as home computers. Operating results for the first three years of activity were as follows (absorption...

Q: Carlos Cavalas, the manager of Echo Products’ Brazilian Division, is

Carlos Cavalas, the manager of Echo Products’ Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sel...

Q: During Heaton Company’s first two years of operations, the company reported

During Heaton Company’s first two years of operations, the company reported absorption costing net operating income as follows: The company’s $18 unit product cost...

Q: Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company

Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerab...

Q: What are the arguments in favour of treating fixed manufacturing overhead costs

What are the arguments in favour of treating fixed manufacturing overhead costs as product costs?

Q: What are the arguments in favour of treating fixed manufacturing overhead costs

What are the arguments in favour of treating fixed manufacturing overhead costs as period costs?

Q: If the units produced exceed unit sales, which method would you

If the units produced exceed unit sales, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?

Q: Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems

Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external repo...

Q: Under absorption costing, how is it possible to increase net operating

Under absorption costing, how is it possible to increase net operating income without increasing sales?

Q: How does Lean Production reduce or eliminate the difference in reported net

How does Lean Production reduce or eliminate the difference in reported net operating income between absorption and variable costing?

Q: Northwood Company manufactures basketballs. The company has a ball that sells

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable...

Q: What is the basic difference between absorption costing and variable costing?

What is the basic difference between absorption costing and variable costing?

Q: Explain how fixed manufacturing overhead costs are shifted from one period to

Explain how fixed manufacturing overhead costs are shifted from one period to another under absorption costing.

Q: This makes no sense at all,” said Bill Sharp, president

This makes no sense at all,” said Bill Sharp, president of Essex Company. “We sold the same number of units this year as we did last year, yet our proï¬
...

Q: Feather Friends, Inc., distributes a high-quality wooden birdhouse

Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable costs are $8 per unit, and fixed costs total $180,000 per year. Required: Answer the following...

Q: Gold Star Rice, Ltd., of Thailand exports Thai rice throughout

Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice—Fragrant, White, and Loonzain. (The currency in Thailand is the baht, w...

Q: The Fashion Shoe Company operates a chain of women’s shoe shops around

The Fashion Shoe Company operates a chain of women’s shoe shops around the country. The shops carry many styles of shoes that are all sold at the same price. Sales personnel in the s...

Q: What is meant by a product’s contribution margin ratio? How is

What is meant by a product’s contribution margin ratio? How is this ratio useful in planning business operations?

Q: The questions below pertain to two different scenarios involving a manufacturing company

The questions below pertain to two different scenarios involving a manufacturing company. In each scenario, the cost structure of the company is constant from year to year. Selling prices, unit variab...

Q: The questions in this exercise are based on the Benetton Group,

The questions in this exercise are based on the Benetton Group, a company headquartered in Italy and known in the United States primarily for one of its brands of fashion apparel—United Colors of Bene...

Q: A CVP graph such as the one shown below is a useful

A CVP graph such as the one shown below is a useful technique for showing relationships among an organization’s costs, volume, and profits. Required: 1. Identify the numbered compon...

Q: Angie Silva has recently opened The Sandal Shop in Brisbane, Australia

Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. Angie has just received a degree in business and she is anxious to apply the pr...

Q: Morton Company’s contribution format income statement for last month is given below

Morton Company’s contribution format income statement for last month is given below: The industry in which Morton Company operates is quite sensitive to cyclical movements in the ec...

Q: The Shirt Works sells a large variety of tee shirts and sweatshirts

The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring local high school students, on a commission basis, to sell sw...

Q: Neptune Company produces toys and other items for use in beach and

Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell...

Q: Explain how a shift in the sales mix could result in both

Explain how a shift in the sales mix could result in both a higher break-even point and a lower net income.

Q: “These statements can’t be right,” said Ben Yoder, president

“These statements can’t be right,” said Ben Yoder, president of Rayco, Inc. “Our sales in the second quarter were up by 25% over...

Q: Lynch Company manufactures and sells a single product. The following costs

Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: During the year, the company produced 25,000...

Q: Whitman Company has just completed its first year of operations. The

Whitman Company has just completed its first year of operations. The company’s absorption costing income statement for the year appears below: The company’s sellin...

Q: Chuck Wagon Grills, Inc., makes a single product—a

Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $210. Data for last year’s operations follow: Required: 1. A...

Q: Parker Products Inc, a manufacturer, reported $123 million in

Parker Products Inc, a manufacturer, reported $123 million in sales and a loss of $18 million in its annual report to shareholders. According to a CVP analysis prepared for management, the company’s b...

Q: Ida Sidha Karya Company is a family-owned company located in

Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan...

Q: Refer to the data in Exercise 7–1 for Ida Sidha

Refer to the data in Exercise 7–1 for Ida Sidha Karya Company. The absorption costing income statement prepared by the company’s accountant for last year appears be...

Q: Fairway Golf Corporation produces private label golf clubs for pro shops throughout

Fairway Golf Corporation produces private label golf clubs for pro shops throughout North America. The company uses activity-based costing to evaluate the profitability of serving its customers. This...

Q: The following activities occur at Greenwich Corporation, a company that manufactures

The following activities occur at Greenwich Corporation, a company that manufactures a variety of products. a. Receive raw materials from suppliers. b. Manage parts inventories. c. Do rough milling wo...

Q: The manager of the Westfield branch of Security Home Bank has provided

The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the branch during the past year: The lowest costs reported by other branches f...

Q: In what fundamental ways does activity-based costing differ from traditional

In what fundamental ways does activity-based costing differ from traditional costing methods such as those described in Chapters 2 and 3?

Q: This exercise should be assigned in conjunction with Exercise 8–8

This exercise should be assigned in conjunction with Exercise 8–8. The results of the first-stage allocation of the activity-based costing system at Durban Metal Products, Ltd., in w...

Q: Why is direct labor a poor base for allocating overhead in many

Why is direct labor a poor base for allocating overhead in many companies?

Q: CD Express, Inc., provides CD duplicating services to software companies

CD Express, Inc., provides CD duplicating services to software companies. The customer provides a master CD from which CD Express makes copies. An order from a customer can be for a single copy or for...

Q: Why are top management support and cross-functional involvement crucial when

Why are top management support and cross-functional involvement crucial when attempting to implement an activity-based costing system?

Q: The questions in this exercise are based on JetBlue Airways Corporation.

The questions in this exercise are based on JetBlue Airways Corporation. To answer the questions, you will need to download JetBlue’s Form 10-K/A for the year ended December 31, 2004 at www.sec.gov/ed...

Q: Tom Kemper is the controller of the Wichita manufacturing facility of Prudhom

Tom Kemper is the controller of the Wichita manufacturing facility of Prudhom Enterprises, Inc. The annual cost control report is one of the many reports that must be fi led with corporate headquarter...

Q: Boyne University offers an extensive continuing education program in many cities throughout

Boyne University offers an extensive continuing education program in many cities throughout the state. For the convenience of its faculty and administrative staff and to save costs, the university ope...

Q: Refer to the data for Advanced Products Corporation in Exercise 8–

Refer to the data for Advanced Products Corporation in Exercise 8–14. Data from in Exercise 8–14. Required: 1. Using Exhibit 8A–1 as a guide, pre...

Q: The Little Theatre is a nonprofit organization devoted to staging plays for

The Little Theatre is a nonprofit organization devoted to staging plays for children. The theater has a very small full-time professional administrative staff. Through a special arrangement with the a...

Q: Smoky Mountain Corporation makes two types of hiking boots—Xtreme and

Smoky Mountain Corporation makes two types of hiking boots—Xtreme and the Pathfinder. Data concerning these two product lines appear below: The company has a traditional costing sys...

Q: The Terminator Inc. provides on-site residential pest extermination services

The Terminator Inc. provides on-site residential pest extermination services. The company has several mobile teams who are dispatched from a central location in company-owned trucks. The company uses...

Q: Refer to the data for The Terminator Inc. in Exercise 10

Refer to the data for The Terminator Inc. in Exercise 10–6. A management intern has suggested that the budgeted revenues and costs should be adjusted for the actual level of activity...

Q: SecuriCorp operates a fleet of armored cars that make scheduled pickups and

SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system that has four activity cost...

Q: Lavage Rapide is a Canadian company that owns and operates a large

Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs: For ex...

Q: Question: Refer to the data for Lavage Rapide in Exercise 10

Refer to the data for Lavage Rapide in Exercise 10–8. The company actually washed 8,800 cars in August. / For example, electricity costs are $1,200 per month plus $0.15 per car washed. The c...

Q: Foam Products, Inc., makes foam seat cushions for the automotive

Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The company’s activity-based costing system has four activity cost pools, which are listed...

Q: Refer to the data for Lavage Rapide in Exercise 10–8

Refer to the data for Lavage Rapide in Exercise 10–8. The actual operating results for August appear on the following page. Data from Exercise 10–8 Required: Prepa...

Q: Refer to the data for Lavage Rapide in Exercises 10–8

Refer to the data for Lavage Rapide in Exercises 10–8 and 10–10. Data from Exercises 10–8 and 10–10. Required: Prepare a report...

Q: Refer to the data for Lavage Rapide in Exercises 10–8

Refer to the data for Lavage Rapide in Exercises 10–8 and 10–10. Data from Exercises 10–8 and 10–10. Required: Prepare a flexibl...

Q: Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing

Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs: For example, utilities should be $1,400 per month plus $0.05 per machine-hour. The company expects...

Q: Gallatin Carpet Cleaning is a small, family-owned business operating

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The...

Q: Jake’s Roof Repair has provided the following data concerning its costs:

Jake’s Roof Repair has provided the following data concerning its costs: For example, wages and salaries should be $23,200 plus $16.30 per repair-hour. The company expected to work...

Q: Refer to the data for Pixel Studio, Inc., in Problem

Refer to the data for Pixel Studio, Inc., in Problem 8–18. In addition, the company has provided the following details concerning its activity rates: Management has provided the fol...

Q: Via Gelato is a popular neighborhood gelato shop. The company has

Via Gelato is a popular neighborhood gelato shop. The company has provided the following data concerning its operations: While gelato is sold by the cone or cup, the shop measures its activity in ter...

Q: Green Thumb Gardening is a small gardening service that uses activity-

Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and other purposes. The proprietor of the company believes that costs are driven prima...

Q: AirQual Test Corporation provides on-site air quality testing services.

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations: The company uses the number of jobs as its measure of ac...

Q: The Gourmand Cooking School runs short cooking courses at its small campus

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers that it uses in its budgeting and performance reports—the numbe...

Q: Packaging Solutions Corporation manufactures and sells a wide variety of packaging products

Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for t...

Q: Model X100 sells for $120 per unit whereas Model X200 offers

Model X100 sells for $120 per unit whereas Model X200 offers advanced features and sells for $500 per unit. Management expects to sell 50,000 units of Model X100 and 5,000 units of Model X200 next yea...

Q: Puget Sound Divers is a company that provides diving services such as

Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below:...

Q: Flight Café is a company that prepares in-flight meals for

Flight Café is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The company’s planning budget for July appears belo...

Q: What are unit-level, batch-level, product-

What are unit-level, batch-level, product-level, customer-level, and organization-sustaining activities?

Q: Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The

Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 8,000 pounds of oysters in August. The company’s flexible budget for August appears...

Q: Vulcan Flyovers offers scenic overflights of Mount St. Helens, the

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appe...

Q: Alyeski Tours operates day tours of coastal glaciers in Alaska on its

Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers—the number of cruises and the number of p...

Q: The St. Lucia Blood Bank, a private charity partly supported

The St. Lucia Blood Bank, a private charity partly supported by government grants, is located on the Caribbean island of St. Lucia. The blood bank has just finished its operations for September, which...

Q: Klumper Corporation is a diversified manufacturer of industrial goods. The company’s

Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity based costing system contains the following six activity cost pools and activity rates:...

Q: Harrison Company makes two products and uses a traditional costing system in

Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for...

Q: Several years ago, Westmont Corporation developed a comprehensive budgeting system for

Several years ago, Westmont Corporation developed a comprehensive budgeting system for profit planning and control purposes. While departmental supervisors have been happy with the system, the factory...

Q: Milano Pizza is a small neighborhood pizzeria that has a small area

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determi...

Q: Frank Weston, supervisor of the Freemont Corporation’s Machining Department, was

Frank Weston, supervisor of the Freemont Corporation’s Machining Department, was visibly upset after being reprimanded for his department’s poor performance over th...

Q: Advanced Products Corporation has supplied the following data from its activity-

Advanced Products Corporation has supplied the following data from its activity-based costing system: During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises...

Q: Refer to the data for Foam Products, Inc., in Exercise

Refer to the data for Foam Products, Inc., in Exercise 8–12 and the following additional details concerning the activity rates in the activity-based costing system: Management has p...

Q: Exchange Corp. is a company that acts as a facilitator in

Exchange Corp. is a company that acts as a facilitator in tax-favored real estate swaps. Such swaps, know as 1031 exchanges, permit participants to avoid some or all of the capital gains taxes that wo...

Q: TipTop Flight School offers flying lessons at a small municipal airport.

TipTop Flight School offers flying lessons at a small municipal airport. The school’s owner and manager has been attempting to evaluate performance and control costs using a variance...

Q: What is a revenue variance and what does it mean?

What is a revenue variance and what does it mean?

Q: What is a spending variance and what does it mean?

What is a spending variance and what does it mean?

Q: What does a flexible budget performance report do that a simple comparison

What does a flexible budget performance report do that a simple comparison of budgeted to actual results does not do?

Q: Thermal Rising, Inc., makes paragliders for sale through specialty sporting

Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has design...

Q: How does a flexible budget based on two cost drivers differ from

How does a flexible budget based on two cost drivers differ from a flexible budget based on a single cost driver?

Q: What assumption is implicitly made about cost behaviour when a budget is

What assumption is implicitly made about cost behaviour when a budget is directly compared to actual results? Why is this assumption questionable?

Q: Java Source, Inc. (JSI), is a processor and

Java Source, Inc. (JSI), is a processor and distributor of a variety of blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. JSI offe...

Q: What assumption is implicitly made about cost behavior when all of the

What assumption is implicitly made about cost behavior when all of the items in a budget are adjusted in proportion to a change in activity? Why is this assumption questionable?

Q: Why is the first stage of the allocation process in activity-

Why is the first stage of the allocation process in activity-based costing often based on interviews?

Q: Why is it difficult to interpret a difference between how much expense

Why is it difficult to interpret a difference between how much expense was budgeted and how much was actually spent?

Q: Hiram’s Lakeside is a popular restaurant located on Lake Washington in Seattle

Hiram’s Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired...

Q: What is an activity variance and what does it mean?

What is an activity variance and what does it mean?

Q: Ellix Company manufactures two models of ultra-high fi delity speakers

Ellix Company manufactures two models of ultra-high fi delity speakers, the X200 model and the X99 model. Data regarding the two products follow: Additional information about the company follows: a....

Q: Stillicum Corporation makes ultra-light-weight backpacking tents. Data

Stillicum Corporation makes ultra-light-weight backpacking tents. Data concerning the company’s two product lines appear below: The company has a traditional costing system in which...

Q: Fogerty Company makes two products, titanium Hubs and Sprockets. Data

Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Additional information about the company follows: a. Hubs require $32 in direct materials per...

Q: Various activities at Ming Corporation, a manufacturing company, are listed

Various activities at Ming Corporation, a manufacturing company, are listed below. Each activity has been classified as a unit-level, batch-level, product-level, or customer-level activity. Required:...

Q: Durban Metal Products, Ltd., of the Republic of South Africa

Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. T...

Q: The operations vice president of Security Home Bank has been interested in

The operations vice president of Security Home Bank has been interested in investigating the efficiency of the bank’s operations. She has been particularly concerned about the costs...

Q: Pixel Studio, Inc., is a small company that creates computer

Pixel Studio, Inc., is a small company that creates computer-generated animations for films and television. Much of the company’s work consists of short commercials for television, b...

Q: When activity-based costing is used, why do manufacturing overhead

When activity-based costing is used, why do manufacturing overhead costs often shift from high-volume products to low-volume products?

Q: Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products

Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. There has been a long-simmering dispute between the company’s estim...

Q: How can the activity rates (i.e., cost per

How can the activity rates (i.e., cost per activity) for the various activities be used to target process improvements?

Q: Why is the activity-based costing described in this chapter unacceptable

Why is the activity-based costing described in this chapter unacceptable for external financial reports?

Q: Privack Corporation has a standard cost system in which it applies overhead

Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most r...

Q: Morton Company’s variable manufacturing overhead should be $4.50 per

Morton Company’s variable manufacturing overhead should be $4.50 per standard direct laborhour and fixed manufacturing should be $270,000 per year. The company manufactures a single...

Q: Dorsey Company manufactures three products from a common input in a joint

Dorsey Company manufactures three products from a common input in a joint processing operation.Joint processing costs up to the split-off point total $350,000 per quarter. The company allocatesthese c...

Q: Kristen Lu purchased a used automobile for $8,000 at

Kristen Lu purchased a used automobile for $8,000 at the beginning of last year and incurred the following operating costs: Depreciation ($8,000 ÷ 5 years) . . . . . . . . . $1,600 Insurance . . . ....

Q: How is it possible for a cost that is traceable to a

How is it possible for a cost that is traceable to a segment to become a common cost if thesegment is divided into further segments?

Q: In what way can the use of ROI as a performance measure

In what way can the use of ROI as a performance measure for investment centers lead tobad decisions? How does the residual income approach overcome this problem?

Q: Why does the balanced scorecard include financial performance measures as well as

Why does the balanced scorecard include financial performance measures as well as measuresof how well internal business processes are doing?

Q: What benefits result from decentralization?

What benefits result from decentralization?

Q: Barlow Company manufactures three products: A, B, and C

Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, andcontribution margin for one unit of each product follow: The same raw material is used in all three prod...

Q: Distinguish between a traceable cost and a common cost. Give several

Distinguish between a traceable cost and a common cost. Give several examples ofeach.

Q: The questions in this exercise are based on FedEx Corporation. To

The questions in this exercise are based on FedEx Corporation. To answer the questions youwill need to download FedEx’s Form 10-K for the fiscal year ended May 31, 2005 at www.sec.gov/edgar/searchedga...

Q: The questions in this exercise are based on the Nordstrom, Inc

The questions in this exercise are based on the Nordstrom, Inc., 2004 annual report at http:// phx.corporate-ir.net/phoenix.zhtml?c=93295&p=irol-reportsAnnual. You do not need to print theannual repor...

Q: TufStuff, Inc., sells a wide range of drums, bins

TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in thechemical industry. One of the company’s products is a heavy-duty corrosion-resistan...

Q: Chilczuk, S.A., of Gdansk, Poland, is

Chilczuk, S.A., of Gdansk, Poland, is a major producer of classic Polish sausage. The company uses a standard cost system to help control costs. Manufacturing overhead is applied to production on the...

Q: Lone Star Meat Packers is a major processor of beef and other

Lone Star Meat Packers is a major processor of beef and other meat products. The company has a large amount of T-bone steak on hand, and it is trying to decide whether to sell the T-bone steaks as the...

Q: The Scottie Sweater Company produces sweaters under the “Scottie” label

The Scottie Sweater Company produces sweaters under the “Scottie” label. The company buys raw wool and processes it into wool yarn from which the sweaters are woven...

Q: Haley Romeros had just been appointed vice president of the Rocky Mountain

Haley Romeros had just been appointed vice president of the Rocky Mountain Region of the Bank Services Corporation (BSC). The company provides check processing services for small banks. The banks sen...

Q: Wesco Incorporated’s only product is a combination fertilizer/weedkiller called GrowNWeed

Wesco Incorporated’s only product is a combination fertilizer/weedkiller called GrowNWeed. GrowNWeed is sold nationwide to retail nurseries and garden stores. Zwinger Nursery plans t...

Q: QualSupport Corporation manufactures seats for automobiles, vans, trucks, and

QualSupport Corporation manufactures seats for automobiles, vans, trucks, and various recreational vehicles. The company has a number of plants around the world, including the DenverCover Plant, which...

Q: Hollings Company sells and delivers office furniture in the Rocky Mountain area

Hollings Company sells and delivers office furniture in the Rocky Mountain area. The costs associated with the acquisition and annual operation of a delivery truck are given below: Insurance . . . ....

Q: Han Products manufactures 30,000 units of part S-6

Han Products manufactures 30,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows: Direct materials . . . . . . . ....

Q: Birch Company normally produces and sells 30,000 units of RG

Birch Company normally produces and sells 30,000 units of RG-6 each month. RG-6 is a small electrical relay used as a component part in the automotive industry. The selling price is $22 per unit, vari...

Q: Jackson County Senior Services is a nonprofit organization devoted to providing essential

Jackson County Senior Services is a nonprofit organization devoted to providing essential servicesto seniors who live in their own homes within the Jackson County area. Three services areprovided for...

Q: Silven Industries, which manufactures and sells a highly successful line of

Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural ar...

Q: Superior Markets, Inc., operates three stores in a large metropolitan

Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: The North Store has con...

Q: Andretti Company has a single product called a Dak. The company

Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company’s unit costs at this...

Q: “In my opinion, we ought to stop making our own

“In my opinion, we ought to stop making our own drums and accept that outside supplier’s offer,”said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. “At a price of 18 florins per...

Q: Flandro Company uses a standard cost system and sets predetermined overhead rates

Flandro Company uses a standard cost system and sets predetermined overhead rates on the basis of direct labor-hours. The following data are taken from the company’s budget for the c...

Q: Thalassines Kataskeves, S.A., of Greece makes marine equipment

Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencinglosses on its bilge pump product line for several years. The most recent quarterly contributionformat i...

Q: How does opportunity cost enter into the make or buy decision?

How does opportunity cost enter into the make or buy decision?

Q: Give at least four examples of possible constraints.

Give at least four examples of possible constraints.

Q: From a decision-making point of view, should joint costs

From a decision-making point of view, should joint costs be allocated among joint products?

Q: Airlines sometimes offer reduced rates during certain times of the week to

Airlines sometimes offer reduced rates during certain times of the week to members of a business person’s family if they accompany him or her on trips. How does the concept of relevant costs enter int...

Q: Define the following terms: incremental cost, opportunity cost, and

Define the following terms: incremental cost, opportunity cost, and sunk cost.

Q: “Variable costs and differential costs mean the same thing.” Do

“Variable costs and differential costs mean the same thing.” Do you agree? Explain.

Q: “If a product line is generating a loss, then it

“If a product line is generating a loss, then it should be discontinued.” Do you agree? Explain.

Q: Polaski Company manufactures and sells a single product called a Ret.

Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs associated with this level of productionand sa...

Q: “Wonderful! Not only did our salespeople do a good job

“Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as well,”...

Q: Genola Fashions began production of a new product on June 1.

Genola Fashions began production of a new product on June 1. The company uses a standard cost system and has established the following standards for one unit of the new product: During June, the foll...

Q: Bill has just returned from a duck hunting trip. He has

Bill has just returned from a duck hunting trip. He has brought home eight ducks. Bill’s friend, John, disapproves of duck hunting, and to discourage Bill from further hunting, John...

Q: Bliny Corporation makes a product with the following standard costs for direct

Bliny Corporation makes a product with the following standard costs for direct material and direct labor: During the most recent month, 5,000 units were produced. The costs associated with the month&...

Q: Maple Products, Ltd., manufactures a super-strong hockey stick

Maple Products, Ltd., manufactures a super-strong hockey stick. The standard cost of one hockey stick is: Last year, 8,000 hockey sticks were produced and sold. Selected cost data relating to last ye...

Q: Trueform Products, Inc., produces a broad line of sports equipment

Trueform Products, Inc., produces a broad line of sports equipment and uses a standard cost system for control purposes. Last year the company produced 8,000 varsity footballs. The standard costs asso...

Q: Stacy Cummins, the newly hired controller at Merced Home Products,

Stacy Cummins, the newly hired controller at Merced Home Products, Inc., was disturbed by what she had discovered about the standard costs at the Home Security Division. In looking over the past sever...

Q: You have recently accepted a position with Vitex, Inc., the

You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product. During your first week on the job, the vice president has been favorably impressed with your wor...

Q: Victoria Chocolates, Ltd., makes premium handcrafted chocolate confections in London

Victoria Chocolates, Ltd., makes premium handcrafted chocolate confections in London. The owner of the company is setting up a standard cost system and has collected the following data for one of the...

Q: Primara Corporation has a standard cost system in which it applies overhead

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most r...

Q: Dawson Toys, Ltd., produces a toy called the Maze.

Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy: Duri...

Q: Come-Clean Corporation produces a variety of cleaning compounds and solutions

Come-Clean Corporation produces a variety of cleaning compounds and solutions for both industrialand household use. While most of its products are processed independently, a few are related, such as t...

Q: Huron Company produces a commercial cleaning compound known as Zoom. The

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: During the most recent month, the following...

Q: Wexpro, Inc., produces several products from processing 1 ton of

Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $60,000 per ton, one-fourth of which is allocated to product X15. Seven th...

Q: Refer to the data in Exercise 11–8. Assume that

Refer to the data in Exercise 11–8. Assume that instead of producing 4,000 units during the month, the company produced only 3,000 units, using 14,750 pounds of material. (The rest of the material pur...

Q: Erie Company manufactures a small CD player called the Jogging Mate.

Erie Company manufactures a small CD player called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate CD player are as follo...

Q: The auto repair shop of Quality Motor Company uses standards to control

The auto repair shop of Quality Motor Company uses standards to control the labor time and labor cost in the shop. The standard labor cost for a motor tune-up is given below: The record showing the t...

Q: Martin Company manufactures a powerful cleaning solvent. The main ingredient in

Martin Company manufactures a powerful cleaning solvent. The main ingredient in the solvent is a raw material called Echol. Information concerning the purchase and use of Echol follows: Purchase of Ec...

Q: Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter end...

Q: SkyChefs, Inc., prepares in-flight meals for a number

SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most rec...

Q: Logistics Solutions provides order fulfillment services for dot.com merchants.

Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a...

Q: Management of Mittel Rhein AG of Köln, Germany, would like

Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of ope...

Q: Operating at a normal level of 30,000 direct labor-

Operating at a normal level of 30,000 direct labor-hours, Lasser Company produces 10,000 units of product each period. The direct labor wage rate is $12 per hour. Two and one-half yards of direct mate...

Q: The Walton Toy Company manufactures a line of dolls and a doll

The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for thedolls is increasing, and management requests assistance from you in determining an economicalsales and pr...

Q: Benoit Company produces three products, A, B, and C

Benoit Company produces three products, A, B, and C. Data concerning the three products follow(per unit): Demand for the company’s products is very strong, with far more orders each...

Q: John Fleming, chief administrator for Valley View Hospital, is concerned

John Fleming, chief administrator for Valley View Hospital, is concerned about the costs for tests in the hospital’s lab. Charges for lab tests are consistently higher at Valley View than at other hos...

Q: Danson Company is a chemical manufacturer that supplies various products to industrial

Danson Company is a chemical manufacturer that supplies various products to industrial users. The company plans to introduce a new chemical solution, called Nysap, for which it needs to develop a stan...

Q: Tombro Industries is in the process of automating one of its plants

Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Pr...

Q: Marvel Parts, Inc., manufactures auto accessories. One of the

Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fi t nearly any small car. The company has a standard...

Q: Sharp Company manufactures a product for which the following standards have been

Sharp Company manufactures a product for which the following standards have been set: During March, the company purchased direct materials at a cost of $55,650, all of which were used in the producti...

Q: ColdKing Company is a small producer of fruit-flavored frozen desserts

ColdKing Company is a small producer of fruit-flavored frozen desserts. For many years, Cold- King’s products have had strong regional sales on the basis of brand recognition; however, other companies...

Q: Becton Labs, Inc., produces various chemical compounds for industrial use

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for...

Q: DataSpan, Inc., automated its plant at the start of the

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many...

Q: Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant

Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Janet Dunn, wh...

Q: What is a statistical control chart, and how is it used

What is a statistical control chart, and how is it used?

Q: Delta Company produces a single product. The cost of producing and

Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 60,000 units per year is: Direct materials . . . . ....

Q: A number of costs are listed below that may be relevant in

A number of costs are listed below that may be relevant in decisions faced by the management of Svahn, AB, a Swedish manufacturer of sailing yachts: Required: Copy the information above onto your ans...

Q: Norwall Company’s variable manufacturing overhead should be $3.00 per

Norwall Company’s variable manufacturing overhead should be $3.00 per standard machine-hour and its fixed manufacturing overhead should be $300,000 per period. The following informat...

Q: Why can undue emphasis on labor efficiency variances lead to excess work

Why can undue emphasis on labor efficiency variances lead to excess work in process inventories?

Q: What is the difference between delivery cycle time and throughput time?

What is the difference between delivery cycle time and throughput time? What four elements make up throughput time? Into what two classes can these four elements be placed?

Q: The materials price variance can be computed at what two different points

The materials price variance can be computed at what two different points in time? Which point is better? Why?

Q: “Our workers are all under labor contracts; therefore, our

“Our workers are all under labor contracts; therefore, our labor rate variance is bound to be zero.” Discuss.

Q: If variable manufacturing overhead is applied to production on the basis of

If variable manufacturing overhead is applied to production on the basis of direct labor hours and the direct labor efficiency variance is unfavorable, will the variable overhead efficiency variance b...

Q: Hannibal Steel Company has a Transport Services Department that provides trucks to

Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company’s mine to its two steel mills—the Northern Plant and the Southern Plant. Budgeted costs for...

Q: Konig Enterprises, Ltd., owns and operates three restaurants in Vancouver

Konig Enterprises, Ltd., owns and operates three restaurants in Vancouver, B.C. The company allocates its fixed administrative expenses to the three restaurants on the basis of sales dollars. During 2...

Q: Korvanis Corporation operates a Medical Services Department for its employees. Charges

Korvanis Corporation operates a Medical Services Department for its employees. Charges to thecompany’s operating departments for the variable costs of the Medical Services Department...

Q: Lane Company manufactures a single product that requires a great deal of

Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. Variable manufacturing overhead should be $2...

Q: Sharp Motor Company has two operating divisions—an Auto Division and

Sharp Motor Company has two operating divisions—an Auto Division and a Truck Division. The company has a cafeteria that serves the employees of both divisions. The costs of operating the cafeteria are...

Q: The Regal Cycle Company manufactures three types of bicycles—a dirt

The Regal Cycle Company manufactures three types of bicycles—a dirt bike, a mountain bike, anda racing bike. Data on sales and expenses for the past quarter follow: Management is con...

Q: Tasman Products, Ltd., of Australia has a Maintenance Department that

Tasman Products, Ltd., of Australia has a Maintenance Department that services the equipment inthe company’s Forming Department and Assembly Department. The cost of this servicing is...

Q: Selected operating information on three different companies for a recent year is

Selected operating information on three different companies for a recent year is given below: Required: For each company, state whether the company would have a favorable or unfavorable volume varian...

Q: Music Teachers, Inc., is an educational association for music teachers

Music Teachers, Inc., is an educational association for music teachers that has 20,000 members. Theassociation operates from a central headquarters but has local membership chapters throughout theUnit...

Q: Haglund Department Store is located in the downtown area of a small

Haglund Department Store is located in the downtown area of a small city. While the store had been profitable for many years, it is facing increasing competition from large national chains that have s...

Q: Selected sales and operating data for three divisions of different structural engineering

Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Required: 1. Compute the return on investment (ROI) for each division using the f...

Q: Pecs Alley is a regional chain of health clubs. The managers

Pecs Alley is a regional chain of health clubs. The managers of the clubs, who have authority tomake investments as needed, are evaluated based largely on return on investment (ROI). TheSpringfield Cl...

Q: CommercialServices.com Corporation provides business-to-business services on

CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: Sales . . . . . . . . . . . . . . . . . . . . . . . . . ....

Q: Ariel Tax Services prepares tax returns for individual and corporate clients.

Ariel Tax Services prepares tax returns for individual and corporate clients. As the company has gradually expanded to 10 offices, the founder Max Jacobs has begun to feel as though he is losing contr...

Q: : Bed & Bath, a retailing company, has two departments

Bed & Bath, a retailing company, has two departments, Hardware and Linens. The company’smost recent monthly contribution format income statement follows: A study indicates that...

Q: A family friend has asked your help in analyzing the operations of

A family friend has asked your help in analyzing the operations of three anonymous companiesoperating in the same service sector industry. Supply the missing data in the table below:

Q: Raner, Harris, & Chan is a consulting firm that specializes

Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical anddental clinics. The firm has two offices—one in Chicago and one in Minneapolis....

Q: Troy Engines, Ltd., manufactures a variety of engines for use

Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outsi...

Q: Refer to the data in Exercise 12–13.

Refer to the data in Exercise 12–13. Data from Exercise 12-13: Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical anddental clinics....

Q: Wingate Company, a wholesale distributor of videotapes, has been experiencing

Wingate Company, a wholesale distributor of videotapes, has been experiencing losses for sometime, as shown by its most recent monthly contribution format income statement, which follows: Sales . . ....

Q: The standard cost card for the single product manufactured by Cutter,

The standard cost card for the single product manufactured by Cutter, Inc., is given below: Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the yea...

Q: Posters.com is a small Internet retailer of high-quality

Posters.com is a small Internet retailer of high-quality posters. The company has $1,000,000 in operating assets and fixed expenses of $150,000 per year. With this level of operating assets and fixed...

Q: Royal Lawncare Company produces and sells two packaged products, Weedban and

Royal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and cost information relating to the products follow: Common fixed expenses in the company total $33,000...

Q: There is often more than one way to improve a performance measure

There is often more than one way to improve a performance measure. Unfortunately, some of the actions taken by managers to make their performance look better may actually harm the organization. For ex...

Q: Selected operating data for two divisions of Outback Brewing, Ltd.,

Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below (the currency is the Australian dollar, denoted here as $): Required: 1. Compute the rate of return fo...

Q: Provide the missing data in the following table for a distributor of

Provide the missing data in the following table for a distributor of martial arts products:

Q: Imperial Jewelers is considering a special order for 20 handcrafted gold bracelets

Imperial Jewelers is considering a special order for 20 handcrafted gold bracelets to be given asgifts to members of a wedding party. The normal selling price of a gold bracelet is $189.95 and itsunit...

Q: Comparative data on three companies in the same service industry are given

Comparative data on three companies in the same service industry are given below: Required: 1. What advantages are there to breaking down the ROI computation into two separate elements,margin and tur...

Q: “I know headquarters wants us to add that new product line

“I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings Company’s Office Products Division. “But I want to see the numbers before I make any move. Ourdivisio...

Q: Selected information relating to Yost Company’s operations for the most recent year

Selected information relating to Yost Company’s operations for the most recent year is given below: The company applies overhead cost to products on the basis of standard machine-ho...

Q: Explain how the segment margin differs from the contribution margin.

Explain how the segment margin differs from the contribution margin.

Q: Why aren’t common costs allocated to segments under the contribution approach?

Why aren’t common costs allocated to segments under the contribution approach?

Q: Juniper Design Ltd. of Manchester, England, is a company

Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of £600,000on sales of £3,0...

Q: Mason Paper Company (MPC) manufactures commodity grade papers for use

Mason Paper Company (MPC) manufactures commodity grade papers for use in computer printers and photocopiers. MPC has reported net operating losses for the last two years due to intense price pressure...

Q: For many years Futura Company has purchased the starters that it installs

For many years Futura Company has purchased the starters that it installs in its standard line of farmtractors. Due to a reduction in output, the company has idle capacity that could be used to produc...

Q: Meiji Isetan Corp. of Japan has two regional divisions with headquarters

Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow (in millions of yen, denoted by ¥): Required: 1. F...

Q: As the discount rate increases, the present value of a given

As the discount rate increases, the present value of a given future cash flow also increases.Do you agree? Explain.

Q: Assume that two companies in the same industry have equal earnings.

Assume that two companies in the same industry have equal earnings. Why might these companies have different price-earnings ratios? If a company has a price-earnings ratio of 20 and reports earnings p...

Q: How is the project profitability index computed, and what does it

How is the project profitability index computed, and what does it measure?

Q: What is meant by the term payback period? How is the

What is meant by the term payback period? How is the payback period determined? How can the payback method be useful?

Q: What is the major criticism of the payback and simple rate of

What is the major criticism of the payback and simple rate of return methods of making capital budgeting decisions?

Q: Would a sale of equipment for cash be considered a financing activity

Would a sale of equipment for cash be considered a financing activity or an investing activity?Why?

Q: A company seeking a line of credit at a bank was turned

A company seeking a line of credit at a bank was turned down. Among other things, the bank stated that the company’s 2 to 1 current ratio was not adequate. Give reasons why a 2 to 1 current ratio migh...

Q: Distinguish between horizontal and vertical analysis of financial statement data.

Distinguish between horizontal and vertical analysis of financial statement data.

Q: What is the basic purpose for examining trends in a company’s financial

What is the basic purpose for examining trends in a company’s financial ratios and other data? What other kinds of comparisons might an analyst make?

Q: Would you expect a company in a rapidly growing technological industry to

Would you expect a company in a rapidly growing technological industry to have a high or low dividend payout ratio?

Q: What is meant by the dividend yield on a common stock investment

What is meant by the dividend yield on a common stock investment?

Q: What is meant by the term financial leverage?

What is meant by the term financial leverage?

Q: The president of a plastics company was quoted in a business journal

The president of a plastics company was quoted in a business journal as stating, “We haven’t had a dollar of interest-paying debt in over 10 years. Not many companies can say that.” As a stockholder i...

Q: If a stock’s market value exceeds its book value, then the

If a stock’s market value exceeds its book value, then the stock is overpriced. Do you agree? Explain.

Q: A business executive once stated, “Depreciation is one of our

A business executive once stated, “Depreciation is one of our biggest sources of cash.” Doyou agree that depreciation is a source of cash? Explain.

Q: Explain how the cost of capital serves as a screening tool when

Explain how the cost of capital serves as a screening tool when using (a) the net present value method and (b) the internal rate of return method

Q: Refer to Exhibit 14–4. Is the return on this

Refer to Exhibit 14–4. Is the return on this investment proposal exactly 14%, more than 14%, or less than 14%? Explain. Exhibit 14-4:

Q: Mary Adams is employed by Acme Company. Last week she worked

Mary Adams is employed by Acme Company. Last week she worked 34 hours assembling one of the company’s products and was idle 6 hours due to material shortages. Acme’s employees are engaged at their wor...

Q: Describe how the inventory accounts of a manufacturing company differ from the

Describe how the inventory accounts of a manufacturing company differ from the inventory account of a merchandising company.

Q: Under what conditions would it be appropriate to use a process costing

Under what conditions would it be appropriate to use a process costing system?

Q: The variable cost per unit varies with output, whereas the fixed

The variable cost per unit varies with output, whereas the fixed cost per unit is constant. Do you agree? Explain.

Q: Why is cost accumulation simpler in a process costing system than it

Why is cost accumulation simpler in a process costing system than it is in a job-order costing system?

Q: Only variable costs can be differential costs. Do you agree?

Only variable costs can be differential costs. Do you agree? Explain.

Q: How many Work in Process accounts are maintained in a company that

How many Work in Process accounts are maintained in a company that uses process costing?

Q: Assume that a company has two processing departments—Mixing and Firing

Assume that a company has two processing departments—Mixing and Firing. Prepare a journal entry to show a transfer of work in process from the Mixing Department to the Firing Department

Q: What effect does an increase in volume have on— a

What effect does an increase in volume have on— a. Unit fixed costs? b. Unit variable costs? c. Total fixed costs? d. Total variable costs?

Q: What is meant by an activity base when dealing with variable costs

What is meant by an activity base when dealing with variable costs? Give several examples of activity bases.

Q: Managers often assume a strictly linear relationship between cost and volume.

Managers often assume a strictly linear relationship between cost and volume. How can this practice be defended in light of the fact that many costs are curvilinear?

Q: John Olsen operates a stamping machine on the assembly line of Drake

John Olsen operates a stamping machine on the assembly line of Drake Manufacturing Company. Last week Mr. Olsen worked 45 hours. His basic wage rate is $14 per hour, with time and a half for overtime...

Q: Classify the following fixed costs as normally being either committed or discretionary

Classify the following fixed costs as normally being either committed or discretionary: a. Depreciation on buildings. b. Advertising. c. Research. d. Long-term equipment leases. e. Pension payments to...

Q: Does the concept of the relevant range apply to fixed costs?

Does the concept of the relevant range apply to fixed costs? Explain.

Q: What is the major disadvantage of the high-low method?

What is the major disadvantage of the high-low method?

Q: Give the general formula for a mixed cost. Which term represents

Give the general formula for a mixed cost. Which term represents the variable cost? The fixed cost?

Q: What is meant by the term least-squares regression?

What is meant by the term least-squares regression?

Q: What is the difference between ordinary least-squares regression analysis and

What is the difference between ordinary least-squares regression analysis and multiple regression analysis?

Q: What is the contribution margin?

What is the contribution margin?

Q: What is meant by the term operating leverage?

What is meant by the term operating leverage?

Q: What is meant by the term break-even point?

What is meant by the term break-even point?

Q: What is meant by the margin of safety?

What is meant by the margin of safety?

Q: A number of terms that relate to organizations, the work of

A number of terms that relate to organizations, the work of management, and the role of managerial accounting are listed below: Required: Choose the term or terms above that most appropriately comple...

Q: What is meant by the term sales mix? What assumption is

What is meant by the term sales mix? What assumption is usually made concerning sales mix in CVP analysis?

Q: Often the most direct route to a business decision is an incremental

Often the most direct route to a business decision is an incremental analysis. What is meant by an incremental analysis?

Q: In all respects, Company A and Company B are identical except

In all respects, Company A and Company B are identical except that Company A’s costs are mostly variable, whereas Company B’s costs are mostly fixed. When sales increase, which company will tend to re...

Q: Are selling and administrative expenses treated as product costs or as period

Are selling and administrative expenses treated as product costs or as period costs under variable costing?

Q: If the units produced and unit sales are equal, which method

If the units produced and unit sales are equal, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?

Q: If fixed manufacturing overhead costs are released from inventory under absorption costing

If fixed manufacturing overhead costs are released from inventory under absorption costing, what does this tell you about the level of production in relation to the level of sales?

Q: What types of costs should not be assigned to products in an

What types of costs should not be assigned to products in an activity-based costing system?

Q: Why are there two stages of allocation in activity-based costing

Why are there two stages of allocation in activity-based costing?

Q: What is a static planning budget?

What is a static planning budget?

Q: What is a flexible budget and how does it differ from a

What is a flexible budget and how does it differ from a static planning budget?

Q: What are the three major elements of product costs in a manufacturing

What are the three major elements of product costs in a manufacturing company?

Q: What are some of the possible reasons that actual results may differ

What are some of the possible reasons that actual results may differ from what had been budgeted at the beginning of a period?

Q: What is a quantity standard? What is a price standard?

What is a quantity standard? What is a price standard?

Q: Distinguish between ideal and practical standards.

Distinguish between ideal and practical standards.

Q: What is meant by the term management by exception?

What is meant by the term management by exception?

Q: Why are separate price and quantity variances computed?

Why are separate price and quantity variances computed?

Q: Who is generally responsible for the materials price variance? The materials

Who is generally responsible for the materials price variance? The materials quantity variance? The labor efficiency variance?

Q: If the materials price variance is favorable but the materials quantity variance

If the materials price variance is favorable but the materials quantity variance is unfavorable, what might this indicate?

Q: Should standards be used to identify who to blame for problems?

Should standards be used to identify who to blame for problems?

Q: What effect, if any, would you expect poor-quality

What effect, if any, would you expect poor-quality materials to have on direct labor variances?

Q: If a company has a manufacturing cycle efficiency (MCE) of

If a company has a manufacturing cycle efficiency (MCE) of less than 1, what does it mean? How would you interpret an MCE of 0.40?

Q: What are the four steps in the planning and control cycle?

What are the four steps in the planning and control cycle?

Q: Alyeska Services Company, a division of a major oil company,

Alyeska Services Company, a division of a major oil company, provides various services tothe operators of the North Slope oil field in Alaska. Data concerning the most recent year appearbelow: Sales ....

Q: What is meant by the term decentralization?

What is meant by the term decentralization?

Q: Distinguish between a cost center, a profit center, and an

Distinguish between a cost center, a profit center, and an investment center.

Q: What is a segment of an organization? Give several examples of

What is a segment of an organization? Give several examples of segments.

Q: What costs are assigned to a segment under the contribution approach?

What costs are assigned to a segment under the contribution approach?

Q: What is meant by the terms margin and turnover in ROI calculations

What is meant by the terms margin and turnover in ROI calculations?

Q: What is meant by residual income?

What is meant by residual income?

Q: Why do the measures used in a balanced scorecard differ from company

Why do the measures used in a balanced scorecard differ from company to company?

Q: What is a relevant cost?

What is a relevant cost?

Q: Are variable costs always relevant costs? Explain.

Are variable costs always relevant costs? Explain.

Q: Assume that a company has two processing departments—Mixing followed by

Assume that a company has two processing departments—Mixing followed by Firing. Explain what costs might be added to the Firing Department’s Work in Process account during a period.

Q: “Sunk costs are easy to spot—they’re simply the fixed

“Sunk costs are easy to spot—they’re simply the fixed costs associated with a decision.”Do you agree? Explain.

Q: All future costs are relevant in decision making. Do you agree

All future costs are relevant in decision making. Do you agree? Why?

Q: Prentice Company is considering dropping one of its product lines. What

Prentice Company is considering dropping one of its product lines. What costs of the productline would be relevant to this decision? Irrelevant?

Q: What is the danger in allocating common fixed costs among product lines

What is the danger in allocating common fixed costs among product lines or other segmentsof an organization?

Q: How will relating product contribution margins to the amount of the constrained

How will relating product contribution margins to the amount of the constrained resourcethey consume help a company maximize its profits?

Q: Define the following terms: joint products, joint costs, and

Define the following terms: joint products, joint costs, and split-off point.

Q: What guideline should be used in determining whether a joint product should

What guideline should be used in determining whether a joint product should be sold at the split-off point or processed further?

Q: What is the difference between capital budgeting screening decisions and capital budgeting

What is the difference between capital budgeting screening decisions and capital budgeting preference decisions?

Q: What is meant by the term time value of money?

What is meant by the term time value of money?

Q: What is meant by the term discounting?

What is meant by the term discounting?

Q: What is meant by the term equivalent units of production when the

What is meant by the term equivalent units of production when the weighted-average method is used?

Q: Why isn’t accounting net income used in the net present value and

Why isn’t accounting net income used in the net present value and internal rate of return methods of making capital budgeting decisions?

Q: Why are discounted cash flow methods of making capital budgeting decisions superior

Why are discounted cash flow methods of making capital budgeting decisions superior to other methods?

Q: What is net present value? Can it ever be negative?

What is net present value? Can it ever be negative? Explain.

Q: Identify two simplifying assumptions associated with discounted cash flow methods of making

Identify two simplifying assumptions associated with discounted cash flow methods of making capital budgeting decisions.

Q: If a company has to pay interest of 14% on long

If a company has to pay interest of 14% on long-term debt, then its cost of capital is 14%.Do you agree? Explain.

Q: What is meant by an investment project’s internal rate of return?

What is meant by an investment project’s internal rate of return? How is the internal rate of return computed?

Q: What is the purpose of a statement of cash flows?

What is the purpose of a statement of cash flows?

Q: What are cash equivalents, and why are they included with cash

What are cash equivalents, and why are they included with cash on a statement of cashflows?

Q: What are the three major sections on a statement of cash flows

What are the three major sections on a statement of cash flows, and what are the general rules that determine the transactions that should be included in each section?

Q: Why is interest paid on amounts borrowed from banks and other lenders

Why is interest paid on amounts borrowed from banks and other lenders considered to bean operating activity while the amounts borrowed are financing activities?

Q: Watkins Trophies, Inc., produces thousands of medallions made of bronze

Watkins Trophies, Inc., produces thousands of medallions made of bronze, silver, and gold. The medallions are identical except for the materials used in their manufacture. What costing system would yo...

Q: If an asset is sold at a gain, why is the

If an asset is sold at a gain, why is the gain deducted from net income when computing the net cash provided by operating activities under the indirect method?

Q: Why aren’t transactions involving accounts payable considered to be financing activities?

Why aren’t transactions involving accounts payable considered to be financing activities?

Q: Assume that a company repays a $300,000 loan from

Assume that a company repays a $300,000 loan from its bank and then later in the sameyear borrows $500,000. What amount(s) would appear on the statement of cash flows?

Q: How do the direct and the indirect methods differ in their approach

How do the direct and the indirect methods differ in their approach to computing the netcash provided by operating activities?

Q: If the Accounts Receivable balance increases during a period, how will

If the Accounts Receivable balance increases during a period, how will this increase be recognized using the indirect method of computing the net cash provided by operating activities?

Q: What is the difference between net cash provided by operating activities and

What is the difference between net cash provided by operating activities and free cashflow?

Q: Following are a number of cost terms introduced in the chapter:

Following are a number of cost terms introduced in the chapter: Required: Choose the term or terms above that most appropriately describe the cost identified in each of the following situations. A co...

Q: Describe the managerial accountant’s role in business planning, control, and

Describe the managerial accountant’s role in business planning, control, and decision making.

Q: Distinguish between managerial and financial accounting on a. Users and

Distinguish between managerial and financial accounting on a. Users and decision makers. b. Purpose of information. c. Flexibility of practice. d. Time dimension. e. Focus of information. f. Nature of...

Q: Hansel Corporation has requested bids from several architects to design its new

Hansel Corporation has requested bids from several architects to design its new corporate headquarters. Frey Architects is one of the firms bidding on the job. Frey estimates that the job will require...

Q: A recent balance sheet for Porsche AG shows beginning raw materials inventory

A recent balance sheet for Porsche AG shows beginning raw materials inventory of €83 million and ending raw materials inventory of €85 million. Assume the company purchased raw materials (on account)...

Q: Match the terms below with their definitions. 1. Cost

Match the terms below with their definitions. 1. Cost accounting system 2. Target cost 3. General accounting system 4. Job 5. Job order production 6. Job lot a. Production of products in response to c...

Q: The following information is from the materials requisitions and time tickets for

The following information is from the materials requisitions and time tickets for Job 9-1005 completed by Great Bay Boats. The requisitions are identified by code numbers starting with the letter Q an...

Q: The left column lists the titles of documents and accounts used in

The left column lists the titles of documents and accounts used in job order cost accounting. The right column presents short descriptions of the purposes of the documents. Match each document in the...

Q: In December 2012, Shire Computer’s management establishes the year 2013 predetermined

In December 2012, Shire Computer’s management establishes the year 2013 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes est...

Q: Lorenzo Company uses a job order cost accounting system that charges overhead

Lorenzo Company uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost. At year-end, the Goods in Process Inventory account shows the following. 1...

Q: Use information in Exercise 2-7 to prepare journal entries for

Use information in Exercise 2-7 to prepare journal entries for the following events for the month of May. 1. Raw materials purchases for cash. 2. Direct materials usage. 3. Indirect materials usage.

Q: Use information in Exercise 2-7 to prepare journal entries for

Use information in Exercise 2-7 to prepare journal entries for the following events for the month of May. 1. Factory payroll costs in cash. 2. Direct labor usage. 3. Indirect labor usage.

Q: Use information in Exercise 2-7 to prepare journal entries for

Use information in Exercise 2-7 to prepare journal entries for the following events for the month of May. 1. Factory overhead excluding indirect materials and indirect labor (record credit to Other Ac...

Q: Identify the usual changes that a company must make when it adopts

Identify the usual changes that a company must make when it adopts a customer orientation.

Q: Refer to information in Exercise 2-7. Prepare the journal

Refer to information in Exercise 2-7. Prepare the journal entry to allocate (close) overapplied orunderapplied overhead to Cost of Goods Sold.

Q: Record the journal entry to close over- or underapplied factory overhead

Record the journal entry to close over- or underapplied factory overhead to Cost of Goods Sold for each of the independent cases below.

Q: Determine which products are most likely to be manufactured as a job

Determine which products are most likely to be manufactured as a job and which as a job lot. 1. Hats imprinted with company logo. 2. Little League trophies. 3. A hand-crafted table. 4. A 90-foot mo...

Q: List the three types of costs that are typically recorded on a

List the three types of costs that are typically recorded on a job cost sheet. How can managers use job cost sheets?

Q: Clemens Cars’ job cost sheet for job A40 shows that the cost

Clemens Cars’ job cost sheet for job A40 shows that the cost to add security features to a car was $10,500. The car was delivered to the customer, who paid $14,900 in cash for the added features. What...

Q: During the current month, a company that uses a job order

During the current month, a company that uses a job order cost accounting system purchases $50,000 in raw materials for cash. It then uses $12,000 of raw materials indirectly as factory supplies and u...

Q: During the current month, a company that uses a job order

During the current month, a company that uses a job order cost accounting system incurred a monthly factory payroll of $180,000, paid in cash. Of this amount, $40,000 is classified as indirect labor a...

Q: During the current month, a company that uses a job order

During the current month, a company that uses a job order cost accounting system incurred a monthly factory payroll of $175,000, paid in cash. Of this amount, $44,000 is classified as indirect labor a...

Q: A company incurred the following manufacturing costs this period: direct labor

A company incurred the following manufacturing costs this period: direct labor, $468,000; direct materials, $354,000; and factory overhead, $117,000. Compute its overhead cost as a percent of (1) dire...

Q: A company’s Factory Overhead T-account shows total debts of $

A company’s Factory Overhead T-account shows total debts of $624,000 and total credits of $646,000 at the end of a period. Prepare the journal entry to close the balance in the Factory Overhead accoun...

Q: Explain how business activities and inventories for a manufacturing company, a

Explain how business activities and inventories for a manufacturing company, a merchandising company, and a service company differ.

Q: A company allocates overhead at a rate of 150% of direct

A company allocates overhead at a rate of 150% of direct labor cost. Actual overhead cost for the current period is $950,000, and direct labor cost is $600,000. Prepare the entry to close over- or und...

Q: At the beginning of a period a company predicts total direct materials

At the beginning of a period a company predicts total direct materials costs of $900,000 and total overhead costs of $1,170,000. If the company uses direct materials costs as its activity base to allo...

Q: An advertising agency is estimating costs for advertising a music festival.

An advertising agency is estimating costs for advertising a music festival. The job will require 200 direct labor hours at a cost of $50 per hour. Overhead costs are applied at a rate of $65 per direc...

Q: Refer to this chapter’s Global View. Porsche AG is the manufacturer

Refer to this chapter’s Global View. Porsche AG is the manufacturer of the Porsche automobile line. Does Porsche produce in jobs or in job lots? Explain.

Q: Distinguish between (a) factory overhead and (b) selling

Distinguish between (a) factory overhead and (b) selling and administrative overhead.

Q: How do an income statement and a balance sheet for a manufacturing

How do an income statement and a balance sheet for a manufacturing company and a merchandising company differ?

Q: Distinguish between direct material and indirect material.

Distinguish between direct material and indirect material.

Q: Why does a manufacturing company require three different inventory categories?

Why does a manufacturing company require three different inventory categories?

Q: Manufacturing activities of a company are described in the _______. This statement

Manufacturing activities of a company are described in the _______. This statement summarizes the types and amounts of costs incurred in its manufacturing _______.

Q: What are the three categories of manufacturing costs?

What are the three categories of manufacturing costs?

Q: List several examples of factory overhead.

List several examples of factory overhead.

Q: Both Polaris and Arctic Cat provide warranties on the products they sell

Both Polaris and Arctic Cat provide warranties on the products they sell. Accurate estimatesof these future warranty claims are important. Access the annual report or 10-K for both Polaris (from Appe...

Q: List the four components of a manufacturing statement and provide specific examples

List the four components of a manufacturing statement and provide specific examples of each for Polaris.

Q: Prepare a proper title for the annual “manufacturing statement” of

Prepare a proper title for the annual “manufacturing statement” of Arctic Cat. Does the date match the balance sheet or income statement? Why?

Q: Describe the relations among the income statement, the manufacturing statement,

Describe the relations among the income statement, the manufacturing statement, and a detailed listing of factory overhead costs.

Q: Define and describe two measures to assess raw materials inventory management.

Define and describe two measures to assess raw materials inventory management.

Q: Can management of a company such as Polaris use cycle time and

Can management of a company such as Polaris use cycle time and cycle efficiency as useful measures of performance? Explain.

Q: Access Dell’s annual report (10-K) for the fiscal

Access Dell’s annual report (10-K) for the fiscal year ended February 3, 2012, at the SEC’s EDGAR database (SEC.gov) or its Website (Dell.com). From its financial statement notes, identify the titles...

Q: What product cost is listed as both a prime cost and a

What product cost is listed as both a prime cost and a conversion cost?

Q: Should we evaluate a manager’s performance on the basis of controllable or

Should we evaluate a manager’s performance on the basis of controllable or noncontrollable costs? Why?

Q: Explain why knowledge of cost behavior is useful in product performance evaluation

Explain why knowledge of cost behavior is useful in product performance evaluation.

Q: Explain why product costs are capitalized but period costs are expensed in

Explain why product costs are capitalized but period costs are expensed in the current accounting period.

Q: Assume that you are the managerial accountant at Infostore, a manufacturer

Assume that you are the managerial accountant at Infostore, a manufacturer of hard drives,CDs, and DVDs. Its reporting year-end is December 31. The chief financial officer is concerned about having e...

Q: Why does managerial accounting often involve working with numerous predictions and estimates

Why does managerial accounting often involve working with numerous predictions and estimates?

Q: Besides inventories, what other assets often appear on manufacturers’ balance sheets

Besides inventories, what other assets often appear on manufacturers’ balance sheets but not on merchandisers’ balance sheets?

Q: In the following chart, compare financial accounting and managerial accounting by

In the following chart, compare financial accounting and managerial accounting by describing how each differs for the items listed. Be specific in your responses.

Q: Both managerial accounting and financial accounting provide useful information to decision makers

Both managerial accounting and financial accounting provide useful information to decision makers. Indicate in the following chart the most likely source of information for each business decision (a d...

Q: (1) Identify each of the five cost classifications discussed in

(1) Identify each of the five cost classifications discussed in the chapter. (2) List two purposes of identifying these separate cost classifications.

Q: Listed here are product costs for the production of soccer balls.

Listed here are product costs for the production of soccer balls. (1) Classify each cost (a) as either variable or fixed and (b) as either direct or indirect. (2) What pattern do you see regarding th...

Q: Georgia Pacific, a manufacturer, incurs the following costs.

Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a product or a period cost. If a product cost, identify it as direct materials, direct labor, or factory...

Q: Current assets for two different companies at calendar year-end 2013

Current assets for two different companies at calendar year-end 2013 are listed here. One is a manufacturer, Salomon Skis Mfg., and the other, Sun Fresh Foods, is a grocery distribution company. (1)...

Q: Using the following data, compute (1) the cost

Using the following data, compute (1) the cost of goods manufactured (2) the cost of goods sold for both Garcia Company and Culpepper Company

Q: Compute cost of goods sold for each of these two companies for

Compute cost of goods sold for each of these two companies for the year ended December 31, 2013.

Q: Distinguish between direct labor and indirect labor.

Distinguish between direct labor and indirect labor.

Q: The following chart shows how costs flow through a business as a

The following chart shows how costs flow through a business as a product is manufactured. Some boxes in the flowchart show cost amounts. Compute the cost amounts for the boxes that contain question ma...

Q: For each of the following accounts for a manufacturing company, place

For each of the following accounts for a manufacturing company, place a ✔ in the appropriate column indicating that it appears on the balance sheet, the income statement, the manufac...

Q: Given the following selected account balances of Shanta Company, prepare its

Given the following selected account balances of Shanta Company, prepare its manufacturing statement for the year ended on December 31, 2013. Include a listing of the individual overhead account balan...

Q: Use the information in Exercise 1-12 to prepare an income

Use the information in Exercise 1-12 to prepare an income statement for Shanta Company (a man ufacturer). Assume that its cost of goods manufactured is $534,390.

Q: Customer orientation means that a company’s managers and employees respond to customers’

Customer orientation means that a company’s managers and employees respond to customers’ changing wants and needs. A manufacturer of metal parts has created a customer satisfaction survey that it asks...

Q: Listed below are costs of providing an airline service. Classify each

Listed below are costs of providing an airline service. Classify each cost as (a) either variable or fixed and (b) as either direct or indirect. Consider the cost object to be a flight.

Q: Complete the following statements by filling in the blanks.1

Complete the following statements by filling in the blanks.1. _______ _______ usually covers a period of one year. 2. _______ is the process of monitoring planning decisions and evaluating an organiz...

Q: Following are three separate events affecting the managerial accounting systems for different

Following are three separate events affecting the managerial accounting systems for different companies. Match the management concept(s) that the company is likely to adopt for the event identified. T...

Q: This chapter explained the purpose of managerial accounting in the context of

This chapter explained the purpose of managerial accounting in the context of the current business environment. Review the automobile section of your local newspaper; the Sunday paper is often best. R...

Q: Refer to Decision Maker, Purchase Manager, in this chapter.

Refer to Decision Maker, Purchase Manager, in this chapter. Assume that you are the motorcycle manufacturer’s managerial accountant. The purchasing manager asks you about preparing an estimate of the...

Q: Managerial accounting professionals follow a code of ethics. As a member

Managerial accounting professionals follow a code of ethics. As a member of the Instituteof Management Accountants, the managerial accountant must comply with Standards of EthicalConduct. Required...

Q: Listed here are the total costs associated with the 2013 production of

Listed here are the total costs associated with the 2013 production of 1,000 drum sets manufactured by DrumBeat. The drum sets sell for $500 each. Required1. Classify each cost and its amount as (a)...

Q: Assume that you must make a presentation to the marketing staff explaining the

Assume that you must make a presentation to the marketing staff explaining the difference between product and period costs. Your supervisor tells you the marketing staff would also like clarification...

Q: Notaro’s Boot Company makes specialty boots for the rodeo circuit. On

Notaro’s Boot Company makes specialty boots for the rodeo circuit. On December 31, 2012, the company had (a) 300 pairs of boots in finished goods inventory and (b) 1,200 heels at a cost of $8 each in...

Q: Shown here are annual financial data at December 31, 2013,

Shown here are annual financial data at December 31, 2013, taken from two different companies. Required1. Compute the cost of goods sold section of the income statement at December 31, 2013, for each...

Q: The following calendar year-end information is taken from the December

The following calendar year-end information is taken from the December 31, 2013, adjusted trial balance and other records of DeLeon Company. Required1. Prepare the company’s 2013 m...

Q: Many fast-food restaurants compete on lean business concepts. Match

Many fast-food restaurants compete on lean business concepts. Match each of the following activities at a fast-food restaurant with the lean business concept it strives to achieve. Some activities mig...

Q: This chapter described the purpose of managerial accounting in the context of

This chapter described the purpose of managerial accounting in the context of the current business environment. Review the home electronics section of your local newspaper; the Sunday paper is often b...

Q: Refer to Decision Maker, Purchase Manager, in this chapter.

Refer to Decision Maker, Purchase Manager, in this chapter. Assume that you are the motorcycle manufacturer’s managerial accountant. The purchasing manager asks you about preparing an estimate of the...

Q: Listed here are the total costs associated with the 2013 production of

Listed here are the total costs associated with the 2013 production of 15,000 Blu-ray Discs (BDs) manufactured by Nextgen. The BDs sell for $18 each. Required1. Classify each cost and its amount as (...

Q: Assume that you must make a presentation to a client explaining the

Assume that you must make a presentation to a client explaining the difference between prime and conversion costs. The client makes and sells 200,000 cookies per week. The client tells you that her sa...

Q: The following calendar-year information is taken from the December 31

The following calendar-year information is taken from the December 31, 2013, adjusted trialbalance and other records of Dahlia Company. Required1. Each team member is to be responsible for computing...

Q: Sharp Edges makes specialty skates for the ice skating circuit. On

Sharp Edges makes specialty skates for the ice skating circuit. On December 31, 2012, the company had (a) 1,500 skates in finished goods inventory and (b) 2,500 blades at a cost of $20 each in raw mat...

Q: Shown here are annual financial data at December 31, 2013,

Shown here are annual financial data at December 31, 2013, taken from two different companies. Required1. Compute the cost of goods sold section of the income statement at December 31, 2013, for each...

Q: The following calendar year-end information is taken from the December

The following calendar year-end information is taken from the December 31, 2013, adjusted trial balance and other records of Elegant Furniture. Required1. Prepare the company’s 2013...

Q: Canon manufactures digital cameras and must compete on lean manufacturing concepts.

Canon manufactures digital cameras and must compete on lean manufacturing concepts. Match each of the following activities that it engages in with the lean manufacturing concept it strives to achieve....

Q: Prepare the 2013 manufacturing statement for Briton Company using the following information

Prepare the 2013 manufacturing statement for Briton Company using the following information. Direct materials . . . . . . . . . . . . . . . . . . . . . $190,500 Direct labor . . . . . . . . . . . . ....

Q: Refer to QS 1-12 and compute raw materials inventory turnover

Refer to QS 1-12 and compute raw materials inventory turnover and the number of days’ sales in raw materials inventory.

Q: Managerial accounting (choose one) 1. Is directed at

Managerial accounting (choose one) 1. Is directed at reporting aggregate data on the company as a whole. 2. Provides information that is widely available to all interested parties. 3. Must follow gene...

Q: Identify whether each description most likely applies to managerial or financial accounting

Identify whether each description most likely applies to managerial or financial accounting. 1. _______ Its primary users are company managers. 2. _______ Its information is often available only after...

Q: Which of these statements is true regarding product and period costs?

Which of these statements is true regarding product and period costs? 1. Factory maintenance is a product cost and sales commission is a period cost. 2. Sales commission is a product cost and deprecia...

Q: Which of these statements is true regarding fixed and variable costs?

Which of these statements is true regarding fixed and variable costs? 1. Fixed costs stay the same and variable costs increase in total as activity volume increases. 2. Both fixed and variable costs i...

Q: Alex Velez and Nikhil Arora of Back to the Roots must understand

Alex Velez and Nikhil Arora of Back to the Roots must understand manufacturing costs to effectively operate and succeed as a profitable and efficient business. Required1. What are the three main cat...

Q: Verdi Company produces sporting equipment, including leather footballs. Identify each

Verdi Company produces sporting equipment, including leather footballs. Identify each of the following costs as direct or indirect if the cost object is a football produced by Verdi. 1. Electricity us...

Q: Three inventory categories are reported on a manufacturing company’s balance sheet:

Three inventory categories are reported on a manufacturing company’s balance sheet: (a) raw materials, (b) goods in process, and (c) finished goods. Identify the usual order in which these inventory i...

Q: Compute cost of goods sold for year 2013 using the following information

Compute cost of goods sold for year 2013 using the following information. Finished goods inventory, Dec. 31, 2012 . . . . . . . . . . . . $345,000 Goods in process inventory, Dec. 31, 2012 . . . . . ....

Q: A company has year-end cost of goods manufactured of $

A company has year-end cost of goods manufactured of $4,000, beginning finished goods inventory of $500, and ending finished goods inventory of $750. Its cost of goods sold is1. $4,250 2. $4,000 3....

Q: Identify the usual sequence of manufacturing activities by filling in the blank

Identify the usual sequence of manufacturing activities by filling in the blank (1, 2 or 3) corres ponding to its order: _______ Production activities; _______ sales activities; _______ materials acti...

Q: Match each lean business concept with its best description by entering its

Match each lean business concept with its best description by entering its letter in the blank.1. _______ Just-in-time manufacturing 2. _______ Continuous improvements 3. _______ Customer orientatio...

Q: Nestlé reports beginning raw materials inventory of 3,243 and ending

Nestlé reports beginning raw materials inventory of 3,243 and ending raw materials inventory of 3,904 (both numbers in millions of Swiss francs). If Nestlé purchased 16,200 (in millions of Swiss franc...

Q: Adria Lopez, owner of Success Systems, decides to diversify her

Adria Lopez, owner of Success Systems, decides to diversify her business by also manufacturingcomputer workstation furniture. Required1. Classify the following manufacturing costs of Success Systems b...

Q: Prepare a manufacturing statement for Success Systems for the month ended January

Prepare a manufacturing statement for Success Systems for the month ended January 31, 2014. Assume the following manufacturing costs: Direct materials: $2,200 Factory overhead: $490 Direct labor: $900...

Q: Prepare the cost of goods sold section of a partial income statement

Prepare the cost of goods sold section of a partial income statement for Success Systems for the month ended January 31, 2014.

Q: Assume that we tour Polaris’ factory where it makes its products.

Assume that we tour Polaris’ factory where it makes its products. List three direct costs andthree indirect costs that we are likely to see.

Q: Why must a company estimate the amount of factory overhead assigned to

Why must a company estimate the amount of factory overhead assigned to individual jobs or job lots?

Q: What information is recorded on a job cost sheet? How do

What information is recorded on a job cost sheet? How do management and employees use job cost sheets?

Q: In a job order cost accounting system, what records serve as

In a job order cost accounting system, what records serve as a subsidiary ledger for Goods in Process Inventory? For Finished Goods Inventory?

Q: Polaris uses a “time ticket” for some employees. What

Polaris uses a “time ticket” for some employees. What is the difference between a clock card and a time ticket?

Q: Piaggio applies overhead to product costs. What account(s)

Piaggio applies overhead to product costs. What account(s) is (are) used to eliminate overapplied or underapplied overhead from the Factory Overhead account, assuming the amount is not material?

Q: Assume that Arctic Cat produces a batch of 1,000 snowmobile

Assume that Arctic Cat produces a batch of 1,000 snowmobile helmets. Does it account for this as 1,000 individual jobs or as a job lot? Explain (consider costs and benefits).

Q: Why must a company prepare a predetermined overhead rate when using job

Why must a company prepare a predetermined overhead rate when using job order cost accounting?

Q: Harley-Davidson manufactures 30 custom made, luxury-model motor

Harley-Davidson manufactures 30 custom made, luxury-model motor cycles. Does it account for these motorcycles as 30 individual jobs or as a job lot? Explain.

Q: Assume Sprint will install and service a server to link all of

Assume Sprint will install and service a server to link all of a customer’s employees’ smartphones to a centralized company server, for an upfront flat price. How can Sprint use a job order costing sy...

Q: The chapter used a percent of labor cost to assign factory overhead

The chapter used a percent of labor cost to assign factory overhead to jobs. Identify another factor (or base) a company might reasonably use to assign overhead costs.

Q: Access Piaggio’s Website (www.piaggiogroup.com) and select

Access Piaggio’s Website (www.piaggiogroup.com) and select “Governance” and then select“Company boards.” Read the section dealing with the role of its board of directors. Required 1. Identify the rol...

Q: What journal entry is recorded when a materials manager receives a materials

What journal entry is recorded when a materials manager receives a materials requisition and then issues materials (both direct and indirect) for use in the factory?

Q: How does the materials requisition help safeguard a company’s assets?

How does the materials requisition help safeguard a company’s assets?

Q: What events cause debits to be recorded in the Factory Overhead account

What events cause debits to be recorded in the Factory Overhead account? What events cause credits to be recorded in the Factory Overhead account?

Q: How would a hospital apply job order costing? Explain.

How would a hospital apply job order costing? Explain.

Q: As of the end of June, the job cost sheets at

As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costsaccumulated on three custom jobs. Job 102 was started in production in May and the following costs we...

Q: The following information is available for Lock-Safe Company, which

The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Compute the following amounts for the month...

Q: In December 2012, Infovision established its predetermined overhead rate for movies

In December 2012, Infovision established its predetermined overhead rate for movies produced during year 2013 by using the following cost predictions: overhead costs, $1,680,000, and direct labor cost...

Q: In December 2012, Cardozo Company established its predetermined overhead rate for

In December 2012, Cardozo Company established its predetermined overhead rate for jobs produced during year 2013 by using the following cost predictions: overhead costs, $750,000, and direct labor cos...

Q: Sunrise Company applies factory overhead based on direct labor costs. The

Sunrise Company applies factory overhead based on direct labor costs. The company incurred thefollowing costs during 2013: direct materials costs, $650,000; direct labor costs, $3,000,000; and factor...

Q: Deschamps Company’s ending Goods in Process Inventory account consists of 5,

Deschamps Company’s ending Goods in Process Inventory account consists of 5,000 units of partially completed product, and its Finished Goods Inventory account consists of 12,000 units of product. The...

Q: Adria Lopez expects sales of her line of computer workstation furniture to

Adria Lopez expects sales of her line of computer workstation furniture to equal 300 workstations (at a sales price of $3,000) for 2014. The workstations’ manufacturing costs include the following. D...

Q: KTM and Piaggio are competitors in the global marketplace. KTM’s and

KTM and Piaggio are competitors in the global marketplace. KTM’s and Piaggio’s financialstatements are in Appendix A. Required1. Determine the change in KTM’s and Piaggio’s inventories for the most...

Q: The following refers to units processed by an ice cream maker in

The following refers to units processed by an ice cream maker in July. Compute the total equivalent units of production with respect to labor for July using the weighted-average inventory method.

Q: The computer workstation furniture manufacturing that Adria Lopez started is progressing well

The computer workstation furniture manufacturing that Adria Lopez started is progressing well. At this point, Adria is using a job order costing system to account for the production costs of this prod...

Q: Visit the Websites and review the financial statements for KTM (KTM

Visit the Websites and review the financial statements for KTM (KTM.com) and Piaggio(piaggio.com). Each of these companies sells street vehicles like motorcycles or scooters in globalmarkets. Requi...

Q: Refer to financial statements of Polaris (Polaris.com) and

Refer to financial statements of Polaris (Polaris.com) and Arctic Cat (arcticcat.com) to answerthe following. Required1. Identify at least two activities at Polaris and at Arctic Cat that cause cos...

Q: Polaris and Arctic Cat are competitors in the sales of recreational and

Polaris and Arctic Cat are competitors in the sales of recreational and off-road vehicles. Compare these companies’ income statements and answer the following. Required1. Which company has a higher...

Q: In conducting interviews and observing factory operations to implement an activity-

In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that several activities are unnecessary or redundant. For example, warehouse pers...

Q: The chief executive officer (CEO) of your company recently returned

The chief executive officer (CEO) of your company recently returned from a luncheon meetingwhere activity-based costing was presented and discussed. Though her background is not in accounting, she ha...

Q: Accounting professionals that work for private companies often obtain the Certified Management

Accounting professionals that work for private companies often obtain the Certified ManagementAccountant (CMA) designation to indicate their proficiency in several business areas in addition to manag...

Q: New Belgium Brewing Company has expanded its product offerings to include many

New Belgium Brewing Company has expanded its product offerings to include many varietiesof specialty and seasonal brews. Kim Jordan, CEO of New Belgium Brewing Company, realizes that financial succes...

Q: Why are direct labor hours and machine hours commonly used as the

Why are direct labor hours and machine hours commonly used as the bases for overhead allocation?

Q: King Company produces variations of its product, a megatron, in

King Company produces variations of its product, a megatron, in response to custom orders from its customers. On June 1, the company had no inventories of goods in process or finished goods but held t...

Q: What are the advantages of using a single plantwide overhead rate?

What are the advantages of using a single plantwide overhead rate?

Q: Explain why a single plantwide overhead rate can distort the cost of

Explain why a single plantwide overhead rate can distort the cost of a particular product.

Q: In what way are departmental overhead rates similar to a single plantwide

In what way are departmental overhead rates similar to a single plantwide overhead rate? How are they different?

Q: What are the four activity levels associated with activity-based costing

What are the four activity levels associated with activity-based costing? Define each.

Q: KTM reports costs in financial statements. If plantwide overhead rates are

KTM reports costs in financial statements. If plantwide overhead rates are allowed for reportingcosts to external users, why might a company choose to use a more complicated and more expensive method...

Q: Blanchard Company management targets an annual after-tax income of $

Blanchard Company management targets an annual after-tax income of $810,000. The company is subject to a 20% income tax rate. Assume that fixed costs remain at $562,500. Compute the (1) unit sales to...

Q: Nombre Company management predicts $390,000 of variable costs,

Nombre Company management predicts $390,000 of variable costs, $430,000 of fixed costs, and a pretax income of $155,000 in the next period. Management also predicts that the contribution margin per un...

Q: Cooper Company expects to sell 200,000 units of its product

Cooper Company expects to sell 200,000 units of its product next year, which would generate total sales of $17 million. Management predicts that pretax net income for next year will be $1,250,000 and...

Q: Handy Home sells windows and doors in the ratio of 8:

Handy Home sells windows and doors in the ratio of 8:2 (windows: doors). The selling price of each window is $200 and of each door is $500. The variable cost of a window is $125 and of a door is $350....

Q: Refer to the information from Exercise 5-17. Use the

Refer to the information from Exercise 5-17. Use the information to determine the (1) weighted average contribution margin, (2) break-even point in units, and (3) number of units of each product that...

Q: R&R Tax Service offers tax and consulting services to individuals

R&R Tax Service offers tax and consulting services to individuals and small businesses. Data forfees and costs of three types of tax returns follow. R&R provides services in the ratio of 5:3:2...

Q: Refer to the information from Exercise 5-19. Use the

Refer to the information from Exercise 5-19. Use the information to determine the (1) weighted average contribution margin, (2) break-even point in units, and (3) number of units of each product that...

Q: Following are five graphs representing various cost behaviors. (1)

Following are five graphs representing various cost behaviors. (1) Identify whether the cost behavior in each graph is mixed, step-wise, fixed, variable, or curvilinear. (2) Identify the graph (by num...

Q: Manufacturers such as Polaris and Arctic Cat usually work to maintain a

Manufacturers such as Polaris and Arctic Cat usually work to maintain a high-quality and low-cost operation. One ratio routinely computed for this assessment is the cost of goods sold divided by total...

Q: The left column lists several cost classifications. The right column presents

The left column lists several cost classifications. The right column presents short definitions of those costs. In the blank space beside each of the numbers in the right column, write the letter of t...

Q: What is the first step in applying activity-based costing?

What is the first step in applying activity-based costing?

Q: Following are five series of costs A through E measured at various

Following are five series of costs A through E measured at various volume levels. Examine each series and identify which is fixed, variable, mixed, step-wise, or curvilinear.

Q: Bloom Company management predicts that it will incur fixed costs of $

Bloom Company management predicts that it will incur fixed costs of $160,000 and earn pretax income of $164,000 in the next period. Its expected contribution margin ratio is 25%. Use this information...

Q: Use the following information about sales and costs to prepare a scatter

Use the following information about sales and costs to prepare a scatter diagram. Draw a cost line that reflects the behavior displayed by this cost. Determine whether the cost is variable, step-wise,...

Q: Refer to the information from Exercise 5-7. Use spreadsheet

Refer to the information from Exercise 5-7. Use spreadsheet software to use ordinary least squares regression to estimate the cost equation, including fixed and variable cost amounts. Information fro...

Q: Refer to the information in Exercise 5-10. Prepare a

Refer to the information in Exercise 5-10. Prepare a CVP chart for the company. Information from 5-10: Blanchard Company manufactures a single product that sells for $180 per unit and whose total var...

Q: Blanchard Company’s sales manager (in Exercise 5-10) predicts

Blanchard Company’s sales manager (in Exercise 5-10) predicts that annual sales of the company’s product will soon reach 40,000 units and its price will increase to $200 per unit. According to the pro...

Q: A company reports the following information about its sales and its cost

A company reports the following information about its sales and its cost of sales. Each unit of its product sells for $500. Use these data to prepare a scatter diagram. Draw an estimated line of cost...

Q: Xcite Equipment Co. manufactures and markets a number of rope products

Xcite Equipment Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding that has not been as profitable as planned....

Q: Alden Co.’s monthly sales and cost data for its operating

Alden Co.’s monthly sales and cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs. Require...

Q: Many accounting and accounting-related professionals are skilled in financial analysis

Many accounting and accounting-related professionals are skilled in financial analysis, butmost are not skilled in manufacturing. This is especially the case for process manufacturing environments (f...

Q: What is an activity cost driver?

What is an activity cost driver?

Q: Astro Co. sold 20,000 units of its only product

Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2014’s activities,...

Q: Vanna Co. produces and sells two products, T and O

Vanna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company...

Q: This year Bertrand Company sold 40,000 units of its only

This year Bertrand Company sold 40,000 units of its only product for $25 per unit. Manufacturing and selling the product required $200,000 of fixed manufacturing costs and $325,000 of fixed selling an...

Q: Patriot Co. manufactures and sells three products: red, white

Patriot Co. manufactures and sells three products: red, white, and blue. Their unit sales prices are red, $20; white, $35; and blue, $65. The per unit variable costs to manufacture and sell these prod...

Q: The following costs result from the production and sale of 1,

The following costs result from the production and sale of 1,000 drum sets manufactured by TomThompson Company for the year ended December 31, 2013. The drum sets sell for $500 each. The company has...

Q: Hip-Hop Co. manufactures and markets several products. Management

Hip-Hop Co. manufactures and markets several products. Management is considering the future of one product, electronic keyboards that has not been as profitable as planned. Since this product is manuf...

Q: Kyo Co.’s monthly sales and costs data for its operating

Kyo Co.’s monthly sales and costs data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs. (Dollar am...

Q: Rivera Co. sold 20,000 units of its only product

Rivera Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2014’s activities...

Q: Mingei Co. produces and sells two products, BB and TT

Mingei Co. produces and sells two products, BB and TT. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the compa...

Q: This year Best Company earned a disappointing 5.6% after

This year Best Company earned a disappointing 5.6% after-tax return on sales (net income/sales) from marketing 100,000 units of its only product. The company buys its product in bulk and repackages it...

Q: Arctic Cat’s production requires activities. What are value-added activities

Arctic Cat’s production requires activities. What are value-added activities?

Q: You hire a new assistant production manager whose prior experience is with

You hire a new assistant production manager whose prior experience is with a company thatproduced goods to order. Your company engages in continuous production of homogeneous products that go through...

Q: Milano Co. manufactures and sells three products: product 1,

Milano Co. manufactures and sells three products: product 1, product 2, and product 3. Their unit sales prices are product 1, $40; product 2, $30; and product 3, $20. The per unit variable costs to ma...

Q: The following costs result from the production and sale of 12,

The following costs result from the production and sale of 12,000 CD sets manufactured by Gilmore Company for the year ended December 31, 2013. The CD sets sell for $18 each. The company has a 25% inc...

Q: US-Mobile Company manufactures and sells two products, conventional phones

US-Mobile Company manufactures and sells two products, conventional phones and smart phones, in the ratio of 5:3. Fixed costs are $105,000, and the contribution margin per composite unit is $125. What...

Q: A high proportion of Company A’s total costs are variable with respect

A high proportion of Company A’s total costs are variable with respect to units sold; a high proportion of Company B’s total costs are fixed with respect to units sold. Which company is likely to have...

Q: Listed here are four series of separate costs measured at various volume

Listed here are four series of separate costs measured at various volume levels. Examine each series and identify whether it is best described as a fixed, variable, step-wise, or curvilinear cost. (It...

Q: Determine whether each of the following is best described as a fixed

Determine whether each of the following is best described as a fixed, variable, or mixed cost with respect to product units. 1. Rubber used to manufacture athletic shoes. 2. Maintenance of factory mac...

Q: The following information is available for a company’s maintenance cost over the

The following information is available for a company’s maintenance cost over the last seven months. Using the high-low method, estimate both the fixed and variable components of its...

Q: This scatter diagram reflects past maintenance hours and their corresponding maintenance costs

This scatter diagram reflects past maintenance hours and their corresponding maintenance costs. 1. Draw an estimated line of cost behavior.2. Estimate the fixed and variable components of maintenanc...

Q: Compute and interpret the contribution margin ratio using the following data:

Compute and interpret the contribution margin ratio using the following data: sales, $5,000; total variable cost, $3,000.

Q: Surgery Center is an outpatient surgical clinic that was profitable for many

Surgery Center is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its reimbursements by as much as 40%. As a result, the clinic wants to better understand its co...

Q: SBD Phone Company sells its cordless phone for $90 per unit

SBD Phone Company sells its cordless phone for $90 per unit. Fixed costs total $162,000, and variable costs are $36 per unit. Determine the (1) contribution margin per unit and (2) break-even point in...

Q: Many companies acquire software to help them monitor and control their costs

Many companies acquire software to help them monitor and control their costs and as an aid totheir accounting systems. One company that supplies such software is proDacapo (prodacapo.com). There are...

Q: How will the break-even point in units change in response

How will the break-even point in units change in response to each of the following independent changes in selling price per unit, variable cost per unit, or total fixed costs? Use I for increase and D...

Q: Refer to QS 5-6. Determine the (1)

Refer to QS 5-6. Determine the (1) contribution margin ratio and (2) break-even point in dollars.

Q: Assume that SBD Phone Co. is subject to a 30%

Assume that SBD Phone Co. is subject to a 30% income tax rate. Compute the units of product that must be sold to earn after-tax income of $140,000. (Round to the nearest whole unit.)

Q: Which one of the following is an assumption that underlies cost-

Which one of the following is an assumption that underlies cost-volume-profit analysis? 1. The selling price per unit must change in proportion to the number of units sold. 2. All costs have approxima...

Q: Corme Company expects sales of $34 million (400,000

Corme Company expects sales of $34 million (400,000 units). The company’s total fixed costs are $17.5 million and its variable costs are $35 per unit. Prepare a CVP chart from this information.

Q: A recent income statement for Volkswagen reports the following (in €

A recent income statement for Volkswagen reports the following (in € millions). Assume 75 percent of the cost of sales and 75 percent of the selling and administrative costs are variable costs, and th...

Q: Success Systems sells upscale modular desk units and office chairs in the

Success Systems sells upscale modular desk units and office chairs in the ratio of 3:2 (deskunit:chair). The selling prices are $1,250 per desk unit and $500 per chair. The variable costs are $750 pe...

Q: Assume that KTM (KTM.com) is considering offering financing

Assume that KTM (KTM.com) is considering offering financing services for its dealers.However, instead of developing the division internally, KTM is considering buying a company that already offers su...

Q: Explain the two basic stages of cost flows for activity-based

Explain the two basic stages of cost flows for activity-based costing.

Q: Polaris offers its dealers financing plans while Arctic Cat currently relies on

Polaris offers its dealers financing plans while Arctic Cat currently relies on outside companies to provide its dealers’ financing. Assume Arctic Cat is considering starting its own finance unit top...

Q: FDP Company produces a variety of home security products. Gary Price

FDP Company produces a variety of home security products. Gary Price, the company’s president,is concerned with the fourth quarter market demand for the company’s products. Unless something is done i...

Q: The purpose of this team activity is to ensure that each team

The purpose of this team activity is to ensure that each team member understands processoperations and the related accounting entries. Find the activities and flows identified in Exhibit 3.4 with numb...

Q: Mertz Chemical has three divisions. Its consumer product division faces strong

Mertz Chemical has three divisions. Its consumer product division faces strong competitionfrom companies overseas. During its recent teleconference, Ryan Peterson, the consumer product division manag...

Q: This chapter discussed the variable costing method and how to use variable

This chapter discussed the variable costing method and how to use variable costing information to make various business decisions. We also can find several Websites on variable costing and itsbusines...

Q: This chapter identified many decision contexts in which variable costing information is

This chapter identified many decision contexts in which variable costing information is morerelevant than absorption costing. However, absorption costing is still used by many companies and remains t...

Q: Samanta Shoes, which was launched by entrepreneurs Samanta and Kelvin Joseph

Samanta Shoes, which was launched by entrepreneurs Samanta and Kelvin Joseph, produceshigh-quality shoes in unique styles and limited quantities. Selling prices for a pair of Samanta shoes can range...

Q: Visit a local hotel and observe its daily operating activities. The

Visit a local hotel and observe its daily operating activities. The costs associated with some ofits activities are variable while others are fixed with respect to occupancy levels. Required1. List...

Q: Polaris uses variable costing for several business decisions. How can variable

Polaris uses variable costing for several business decisions. How can variable costing income statements be converted to absorption costing?

Q: Hi-Test Company uses the weighted-average method of process

Hi-Test Company uses the weighted-average method of process costing to assign production costs to its products. Information for September follows. Assume that all materials are added at the beginning...

Q: Match each of the following items A through G with the best

Match each of the following items A through G with the best numbered description of its purpose. A. Factory Overhead account B. Process cost summary C. Equivalent units of production D. Goods in Pr...

Q: Prepare journal entries to record the following production activities. 1

Prepare journal entries to record the following production activities. 1. Purchased $80,000 of raw materials on credit. 2. Used $42,000 of direct materials in production. 3. Used $22,500 of indirect m...

Q: Prepare journal entries to record the following production activities. 1

Prepare journal entries to record the following production activities. 1. Incurred total labor cost of $95,000, which is paid in cash. 2. Used $75,000 of direct labor in production. 3. Used $20,000 of...

Q: Cardiff and Delp is an architectural firm that provides services for residential

Cardiff and Delp is an architectural firm that provides services for residential construction projects. The following data pertain to a recent reporting period. Required1. Using ABC, compute the fir...

Q: Refer to information in Exercise 3-3. Prepare journal entries

Refer to information in Exercise 3-3. Prepare journal entries to record the following productionactivities. 1. Paid overhead costs (other than indirect materials and indirect labor) of $38,750. 2. Ap...

Q: Prepare journal entries to record the following production activities. 1

Prepare journal entries to record the following production activities. 1. Transferred completed products with a cost of $135,600 to finished goods inventory. 2. Sold $315,000 of products on credit. Th...

Q: For each of the following products and services, indicate whether it

For each of the following products and services, indicate whether it is most likely produced in a process operation or in a job order operation. 1. Beach towels 2. Bolts and nuts 3. Lawn chairs 4....

Q: Label each item a through h below as a feature of either

Label each item a through h below as a feature of either a job order or process operation. a. Heterogeneous products and services b. Custom orders c. Low production volume d. Routine, repetitive pro...

Q: Sierra Company manufactures woven blankets and accounts for product costs using process

Sierra Company manufactures woven blankets and accounts for product costs using process costing. The following information is available regarding its May inventories. The following additional inform...

Q: Assume that Arctic Cat has received a special order from a retailer

Assume that Arctic Cat has received a special order from a retailer for 100 specially outfittedsnowmobiles. This is a one-time order, which will not require any additional capacity or fixed costs. Wh...

Q: Victory Company uses weighted-average process costing to account for its

Victory Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the proce...

Q: Consider the activities undertaken by a medical clinic in your area.

Consider the activities undertaken by a medical clinic in your area. Required 1. Do you consider a job order cost accounting system appropriate for the clinic? 2. Identify as many factors as possible...

Q: Elliott Company produces large quantities of a standardized product. The following

Elliott Company produces large quantities of a standardized product. The following information is available for its production activities for March. Additional information about units and costs of p...

Q: Fast Co. produces its product through a single processing department.

Fast Co. produces its product through a single processing department. Direct materials are added at the start of production, and direct labor and overhead are added evenly throughout the process. The...

Q: Tamar Co. manufactures a single product in one department. All

Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Direct labor and overhead are added evenly throughout the proce...

Q: Glassworks Inc. produces two types of glass shelving, rounded edge

Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data. Glassworksâ
...

Q: Refer to the data in Problem 3-5A. Assume that

Refer to the data in Problem 3-5A. Assume that Tamar uses the FIFO method to account for its process costing system. The following additional information is available: ● Beginning go...

Q: During May, the production department of a process manufacturing system completed

During May, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in proc...

Q: Refer to the information in Problem 3-2A and complete its

Refer to the information in Problem 3-2A and complete its parts (1) through (4) using the FIFO method of process costing. Round cost per equivalent unit calculations to two decimal places. Informatio...

Q: Dengo Co. manufactures a single product in one department. Direct

Dengo Co. manufactures a single product in one department. Direct labor and overhead are added evenly throughout the process, while direct materials are added at the beginning of the process. The comp...

Q: What costs are normally included as part of product costs under the

What costs are normally included as part of product costs under the method of variable costing?

Q: Dream Toys Company manufactures video game consoles and accounts for product costs

Dream Toys Company manufactures video game consoles and accounts for product costs using process costing. The following information is available regarding its June inventories. The following additio...

Q: Abraham Company uses process costing to account for its production costs.

Abraham Company uses process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. During Septem...

Q: Oslo Company produces large quantities of a standardized product. The following

Oslo Company produces large quantities of a standardized product. The following information is available for its production activities for May. Additional information about units and costs of produc...

Q: Refer to the chapter opener regarding David Schottenstein and his company,

Refer to the chapter opener regarding David Schottenstein and his company, Astor and Black.All successful businesses track their costs, and it is especially important for start-up businesses to monit...

Q: Braun Company produces its product through a single processing department. Direct

Braun Company produces its product through a single processing department. Direct materials are added at the beginning of the process. Direct labor and overhead are added to the product evenly through...

Q: Switch Co. manufactures a single product in one department. Direct

Switch Co. manufactures a single product in one department. Direct labor and overhead are added evenly throughout the process. Direct materials are added as needed. The company uses monthly reporting...

Q: 1. When using departmental overhead rates, which of the following

1. When using departmental overhead rates, which of the following cost objects is the first in the cost allocation process? a. Activities b. Units of product c. Product lines d. Departments 2. Which...

Q: Refer to the information in Problem 3-5B. Assume that

Refer to the information in Problem 3-5B. Assume that Switch uses the FIFO method to account for its process costing system. The following additional information is available. ● Begi...

Q: During May, the production department of a process manufacturing system completed

During May, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 62,500 were in proc...

Q: Refer to the information in Problem 3-2B and complete its

Refer to the information in Problem 3-2B and complete its parts (1) through (4) using the FIFO method of process costing. Round cost per equivalent unit calculations to two decimal places. Informatio...

Q: What costs are normally included as part of product costs under the

What costs are normally included as part of product costs under the method of absorption costing?

Q: Belda Co. manufactures a single product in one department. Direct

Belda Co. manufactures a single product in one department. Direct labor and overhead are added evenly throughout the process. Direct materials are added as needed. The company uses the FIFO method of...

Q: Blanche’s Boxes requisitioned $9,000 of indirect materials from its

Blanche’s Boxes requisitioned $9,000 of indirect materials from its raw materials and used $10,000 of indirect labor in its production of boxes. Also, it incurred $156,000 of other factory overhead co...

Q: Explain how a car maintenance and repair garage might use a hybrid

Explain how a car maintenance and repair garage might use a hybrid costing system.

Q: Refer to QS 3-6 and compute the total equivalent units

Refer to QS 3-6 and compute the total equivalent units of production with respect to labor for March using the FIFO inventory method. Information from QS 3-6: The following refers to units processed...

Q: Anheuser-Busch InBev is attempting to reduce its water usage.

Anheuser-Busch InBev is attempting to reduce its water usage. How could a company manager use a process cost summary to determine if the program to reduce water usage is successful?

Q: The computer workstation furniture manufacturing that Adria Lopez started in January is

The computer workstation furniture manufacturing that Adria Lopez started in January is progressing well. As of the end of June, Success Systems’ job cost sheets show the following t...

Q: Refer to QS 3-14 and compute the total equivalent units

Refer to QS 3-14 and compute the total equivalent units of production with respect to labor for July using the FIFO inventory method. Information from QS 3-14: The following refers to units processed...

Q: Why is overhead allocation under ABC usually more accurate than either the

Why is overhead allocation under ABC usually more accurate than either the plantwide overhead allocation method or the departmental overhead allocation method?

Q: For each of the following products and services, indicate whether it

For each of the following products and services, indicate whether it is most likely produced in a process operation or in a job order operation. 1. Tennis courts 2. Apple juice 3. Vanilla ice cream 4....

Q: Blanche’s Boxes makes cardboard shipping cartons in a single operation. This

Blanche’s Boxes makes cardboard shipping cartons in a single operation. This period, Blanche purchased $62,000 in raw materials. Its production department requisitioned $50,000 of those materials for...

Q: What conditions must exist to achieve accurate short-run pricing decisions

What conditions must exist to achieve accurate short-run pricing decisions using variable costing?

Q: Blanche’s Boxes incurred $135,000 in factory payroll costs,

Blanche’s Boxes incurred $135,000 in factory payroll costs, of which $125,000 was direct labor. Prepare journal entries to record its (1) total factory payroll incurred and (2) direct labor used in pr...

Q: Blanche’s Boxes completed 20,000 boxes costing $275,000

Blanche’s Boxes completed 20,000 boxes costing $275,000 and transferred them to finished goods. Prepare its journal entry to record the transfer of the boxes from production to finished goods inventor...

Q: The following refers to units processed in Sunfllower Printing’s binding department in

The following refers to units processed in Sunfllower Printing’s binding department in March. Compute the total equivalent units of production with respect to labor for March using t...

Q: The cost of beginning inventory plus the costs added during the period

The cost of beginning inventory plus the costs added during the period should equal the cost of units _____________________ plus the cost of _____________________.

Q: Put the four steps in accounting for production activities in the order

Put the four steps in accounting for production activities in the order in which they would occur.a. Determine physical flow of units b. Compute the cost per equivalent unit c. Compute equivalent uni...

Q: List the headings of the three major sections of a process cost

List the headings of the three major sections of a process cost summary.

Q: Label each statement below as either true (“T”) or false

Label each statement below as either true (“T”) or false (“F”). 1. The cost per equivalent unit is computed as the total costs of a process divided by the number of equivalent units passing through th...

Q: Textra Plastics produces parts for a variety of small machine manufacturers.

Textra Plastics produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and acti...

Q: Polaris must assign overhead costs to its products. Activity-based

Polaris must assign overhead costs to its products. Activity-based costing is generally considered more accurate than other methods of assigning overhead. If this is so, why do all manufacturing compa...

Q: Prescott Company’s predetermined overhead rate is 200% of direct labor.

Prescott Company’s predetermined overhead rate is 200% of direct labor. Information on the company’s production activities during September 2013 follows. a. Purchased raw materials on credit, $125,000...

Q: Smythe Crystal makes fine tableware in its Ireland factory. The following

Smythe Crystal makes fine tableware in its Ireland factory. The following data are taken from its production plans for the year. Direct labor costs . . . . . . . . . €5,870,000 Setup...

Q: Xylon Company manufactures custom-made furniture for its local market and

Xylon Company manufactures custom-made furniture for its local market and produces a line of home furnishings sold in retail stores across the country. The company uses traditional volume-based method...

Q: Craft Pro Machining produces machine tools for the construction industry. The

Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Additional information on the drivers for it...

Q: Bright Day Company produces two beverages, Hi-Voltage and EasySlim

Bright Day Company produces two beverages, Hi-Voltage and EasySlim. Data about these products follow. Additional data from its two production departments follow. Required1. Determine the cost of eac...

Q: Sara’s Salsa Company produces its condiments in two types: Extra Fine

Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in depart...

Q: The following data are for the two products produced by Tadros Company

The following data are for the two products produced by Tadros Company. The company’s direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Requir...

Q: Wade Company makes two distinct products with the following information available for

Wade Company makes two distinct products with the following information available for each. The company’s direct labor rate is $20 per direct labor hour (DLH). Additional informati...

Q: Midwest Paper produces cardboard boxes. The boxes require designing, cutting

Midwest Paper produces cardboard boxes. The boxes require designing, cutting, and printing. (The boxes are shipped flat and customers fold them as necessary.) Midwest has a reputation for providing hi...

Q: Ryan Foods produces gourmet gift baskets that it distributes online as well

Ryan Foods produces gourmet gift baskets that it distributes online as well as from its small retail store. The following details about overhead costs are taken from its records. Additional informat...

Q: Mathwerks produces two electronic, handheld educational games: Fun with Fractions

Mathwerks produces two electronic, handheld educational games: Fun with Fractions and Count Calculus. Data on these products follow. Additional data from its two production departments follow. Requ...

Q: Why are overhead costs allocated to products and not traced to products

Why are overhead costs allocated to products and not traced to products as direct materials and direct labor are?

Q: What are the major limitations of variable costing?

What are the major limitations of variable costing?

Q: Tent Pro produces two lines of tents sold to outdoor enthusiasts.

Tent Pro produces two lines of tents sold to outdoor enthusiasts. The tents are cut to specifications in department A. In department B the tents are sewn and folded. The activities, costs, and drivers...

Q: In December 2012, Pavelka Company’s manager estimated next year’s total direct

In December 2012, Pavelka Company’s manager estimated next year’s total direct labor cost assuming 50 persons working an average of 2,000 hours each at an average wage rate of $15 per hour. The manage...

Q: A company has two products: standard and deluxe. The company

A company has two products: standard and deluxe. The company expects to produce 36,375 standard units and 62,240 deluxe units. It uses activity-based costing and has prepared the following analysis sh...

Q: Xie Company identified the following activities, costs, and activity drivers

Xie Company identified the following activities, costs, and activity drivers. The company manufactures two types of go-karts: Deluxe and Basic. Production volume is 10,000 units of the Deluxe model an...

Q: Refer to the data in QS 4-7. Assume that

Refer to the data in QS 4-7. Assume that the following information is available for the company’s two products. RequiredAssign overhead costs to each product model using activity-b...

Q: The following is taken from Ronda Co.’s internal records of

The following is taken from Ronda Co.’s internal records of its factory with two operating departments. The cost driver for indirect labor and supplies is direct labor costs, and the...

Q: In the blank next to the following terms, place the letter

In the blank next to the following terms, place the letter A through D corresponding to the best description of that term. 1. Activity 2. Activity driver 3. Cost object 4. Cost pool A. Measurement ass...

Q: In the blank next to each of the following terms, place

In the blank next to each of the following terms, place the letter A through D that corresponds to the description of that term. Some letters are used more than once. 1. Activity-based costing 2. Plan...

Q: List the three main advantages of the plantwide and departmental overhead rate

List the three main advantages of the plantwide and departmental overhead rate methods.

Q: Identify each of the following activities as unit level (U),

Identify each of the following activities as unit level (U), batch level (B), product level (P), or facility level (F) to indicate the way each is incurred with respect to production. 1. Paying real e...

Q: Explain how contribution margin analysis is useful for managerial decisions and performance

Explain how contribution margin analysis is useful for managerial decisions and performance evaluations.

Q: What are three common methods of assigning overhead costs to a product

What are three common methods of assigning overhead costs to a product?

Q: Rafner Manufacturing identified the following data in its two production departments.

Rafner Manufacturing identified the following data in its two production departments. Required1. What is the company’s single plantwide overhead rate based on direct labor hours? 2...

Q: Empire Plaza Hotel is a luxury hotel with 400 rooms. Its

Empire Plaza Hotel is a luxury hotel with 400 rooms. Its regular room rate is $300 per night per room. The hotel’s cost is $165 per night per room and consists of the following. Variable direct labor...

Q: Refer to information in QS 6-6. Prepare an income

Refer to information in QS 6-6. Prepare an income statement under absorption costing. Information from 6-6: Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produc...

Q: When output volume increases, do fixed costs per unit increase,

When output volume increases, do fixed costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.

Q: How is cost-volume-profit analysis useful?

How is cost-volume-profit analysis useful?

Q: Define and explain the contribution margin ratio.

Define and explain the contribution margin ratio.

Q: Define and describe contribution margin per unit.

Define and describe contribution margin per unit.

Q: In performing CVP analysis for a manufacturing company, what simplifying assumption

In performing CVP analysis for a manufacturing company, what simplifying assumption is usually made about the volume of production and the volume of sales?

Q: In December 2012, Yerbury Company’s manager estimated next year’s total direct

In December 2012, Yerbury Company’s manager estimated next year’s total direct labor cost assuming 50 persons working an average of 2,000 hours each at an average wage rate of $25 per hour. The manage...

Q: Trio Company reports the following information for the current year, which

Trio Company reports the following information for the current year, which is its first year of operations. Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15 per unit Dir...

Q: List three methods to measure cost behavior.

List three methods to measure cost behavior.

Q: How is a scatter diagram used to identify and measure the behavior

How is a scatter diagram used to identify and measure the behavior of a company’s costs?

Q: In cost-volume-profit analysis, what is the estimated

In cost-volume-profit analysis, what is the estimated profit at the break-even point?

Q: Ramort Company reports the following cost data for its single product.

Ramort Company reports the following cost data for its single product. The company regularly sells 20,000 units of its product at a price of $60 per unit. If Ramort doubles its production to 40,000 un...

Q: Assume that a straight line on a CVP chart intersects the vertical

Assume that a straight line on a CVP chart intersects the vertical axis at the level of fixed costs and has a positive slope that rises with each additional unit of volume by the amount of the variabl...

Q: Why are multiple departmental overhead rates more accurate for product costing than

Why are multiple departmental overhead rates more accurate for product costing than a single plantwide overhead rate?

Q: KTM has both fixed and variable costs. Why are fixed costs

KTM has both fixed and variable costs. Why are fixed costs depicted as a horizontal line on a CVP chart?

Q: _______ of _______ reflects expected sales in excess of the level of

_______ of _______ reflects expected sales in excess of the level of break-even sales.

Q: Should Polaris use single product or multiproduct break-even analysis?

Should Polaris use single product or multiproduct break-even analysis? Explain.

Q: Company A is a manufacturer with current sales of $6,

Company A is a manufacturer with current sales of $6,000,000 and a 60% contribution margin. Its fixed costs equal $2,600,000. Company B is a consulting firm with current service revenues of $4,500,000...

Q: Felix & Co. reports the following information about its sales and

Felix & Co. reports the following information about its sales and cost of sales. Draw an estimated line of cost behavior using a scatter diagram, and compute fixed costs and variable costs per uni...

Q: Sims Company, a manufacturer of in-home decorative fountains,

Sims Company, a manufacturer of in-home decorative fountains, began operations on September 1 of the current year. Its cost and sales information for this year follows. Production costs Direct materi...

Q: A jeans maker is designing a new line of jeans called the

A jeans maker is designing a new line of jeans called the Slims. The jeans will sell for $205 per pair and cost $164 per pair in variable costs to make. (1) Compute the contribution margin per pair. (...

Q: Polaris’s financial statements and notes in Appendix A provide evidence of growth

Polaris’s financial statements and notes in Appendix A provide evidence of growth potentialin its sales. Required1. Identify at least two types of costs that will predictably increase as a percent...

Q: Refer to the information about Ramort Company in QS 6-8

Refer to the information about Ramort Company in QS 6-8. Would the answer to the question in QS 6-8 change if the company uses variable costing? Explain. Information from QS 6-8: Ramort Company repor...

Q: Sager Company manufactures variations of its product, a technopress, in

Sager Company manufactures variations of its product, a technopress, in response to custom orders from its customers. On May 1, the company had no inventories of goods in process or finished goods but...

Q: Blanchard Company manufactures a single product that sells for $180 per

Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company’s annual fixed costs are $562,500. (1) Use this information t...

Q: Refer to the information for D’Souza Company in QS 6-2

Refer to the information for D’Souza Company in QS 6-2. Compute the contribution margin.

Q: Ming Company had net income of $772,200 based on

Ming Company had net income of $772,200 based on variable costing. Beginning and ending inventories were 7,800 units and 5,200 units, respectively. Assume the fixed overhead per unit was $3.00 for bot...

Q: Cool Sky Company reports the following costing data on its product for

Cool Sky Company reports the following costing data on its product for its first year of operations. During this first year, the company produced 44,000 units and sold 36,000 units at a price of $140...

Q: Li Company produces a product that sells for $84 per unit

Li Company produces a product that sells for $84 per unit. A customer contacts Li and offers to purchase 2,000 units of its product at a price of $68 per unit. Variable production costs with this orde...

Q: When units produced exceed units sold for a reporting period, would

When units produced exceed units sold for a reporting period, would income under variable costing be greater than, equal to, or less than income under absorption costing? Explain.

Q: Jacquie Inc. reports the following annual cost data for its single

Jacquie Inc. reports the following annual cost data for its single product. Normal production and sales level . . . . . . . . . 60,000 units Sales price . . . . . . . . . . . . . . . . . . . . . . ....

Q: Tee-Pro has three types of costs: t-shirt

Tee-Pro has three types of costs: t-shirt cost, factory rent cost, and utilities cost. This company sells its shirts for $16.50 each. Management has prepared the following estimated cost information f...

Q: Swisher Company’s computer system generated the following trial balance on December 31

Swisher Company’s computer system generated the following trial balance on December 31, 2013. The company’s manager knows that the trial balance is wrong because it...

Q: Explain in simple terms the notion of equivalent units of production (

Explain in simple terms the notion of equivalent units of production (EUP). Why is it necessary to use EUP in process costing?

Q: Hayek Furnaces prepares the income statement under variable costing for its managerial

Hayek Furnaces prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first mont...

Q: Oak Mart, a producer of solid oak tables, reports the

Oak Mart, a producer of solid oak tables, reports the following data from its current year operations, which is its second year of business. Sales price per unit . . . . . . . . . . . . . . . . . . ....

Q: Way Cool produces two different models of air conditioners. The company

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in...

Q: MidCoast Airlines provides charter airplane services. In October this year,

MidCoast Airlines provides charter airplane services. In October this year, the company was operating at 60% of its capacity when it received a bid from the local community college. The college was or...

Q: Polarix is a retailer of ATVs (all-terrain vehicles)

Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell, on average, for $3,800. Variable sell...

Q: Rey Company’s single product sells at a price of $216 per

Rey Company’s single product sells at a price of $216 per unit. Cost data for its single product follows. Compute this company’s break-even volume in units. Direct materials . . . . . . . . . . . . ....

Q: Refer to Exercise 5-10. (1) Prepare a

Refer to Exercise 5-10. (1) Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and fixed costs at the break-even point. (2) If the company’s fixed cost...

Q: The following journal entries are recorded in Kiesha Co.’s process

The following journal entries are recorded in Kiesha Co.’s process cost accounting system. Kieshaproduces apparel and accessories. Overhead is applied to production based on direct l...

Q: What is a variable cost? Identify two variable costs.

What is a variable cost? Identify two variable costs.

Q: When output volume increases, do variable costs per unit increase,

When output volume increases, do variable costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.

Q: Tavella Co.’s August 31 inventory of raw materials is $

Tavella Co.’s August 31 inventory of raw materials is $150,000. Raw materials purchases in September are $400,000, and factory payroll cost in September is $232,000. Overhead costs i...

Q: During April, the production department of a process manufacturing system completed

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 60,000 were in pr...

Q: Piaggio, Polaris, and Arctic Cat are competitors in the global

Piaggio, Polaris, and Arctic Cat are competitors in the global marketplace. Selected data forPiaggio follow. Required1. Review the discussion of the importance of the cost of goods sold divided by t...

Q: The production department described in Exercise 3-8 had $850

The production department described in Exercise 3-8 had $850,000 of direct materials and $650,000 of direct labor cost charged to it during April. Also, its beginning inventory included $118,840 of di...

Q: Under absorption costing a company had the following per unit costs when

Under absorption costing a company had the following per unit costs when 10,000 units were produced. Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2 Direct material . . ....

Q: Assume that you are preparing for a second interview with a manufacturing

Assume that you are preparing for a second interview with a manufacturing company. The company is impressed with your credentials but has indicated that it has several qualified applicants. You antici...

Q: Vijay Company reports the following information regarding its production costs. Compute

Vijay Company reports the following information regarding its production costs. Compute its production cost per unit under absorption costing. Direct materials . . . . . . . . . . . . . . . . . . . $...

Q: Describe the usefulness of variable costing for controlling company costs.

Describe the usefulness of variable costing for controlling company costs.

Q: Mortech had net income of $250,000 based on variable

Mortech had net income of $250,000 based on variable costing. Beginning and ending inventories were 50,000 units and 48,000 units, respectively. Assume the fixed overhead per unit was $0.75 for both t...

Q: Blazer Chemical produces and sells an ice-melting granular used on

Blazer Chemical produces and sells an ice-melting granular used on roadways and sidewalks in winter. It annually produces and sells about 100 tons of its granular. In its nine-year history, the compan...

Q: Kenzi Kayaking, a manufacturer of kayaks, began operations this year

Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At the current year-end, the com...

Q: Refer to the information in Exercise 3-8 to compute the

Refer to the information in Exercise 3-8 to compute the number of equivalent units with respect to both materials used and labor used in the production department for April using the FIFO method. Info...

Q: Refer to the information in Exercise 3-9 and complete its

Refer to the information in Exercise 3-9 and complete its parts (1) and (2) using the FIFO method. (Round cost per equivalent unit to two decimal places.) Information from Exercise 3-9: The productio...

Q: Describe how use of absorption costing in determining income can lead to

Describe how use of absorption costing in determining income can lead to over-production and a buildup of inventory. Explain how variable costing can avoid this same problem.

Q: The production department in a process manufacturing system completed 80,000

The production department in a process manufacturing system completed 80,000 units of product and transferred them to finished goods during a recent period. Of these units, 24,000 were in process at t...

Q: Why is it possible for direct labor in process operations to include

Why is it possible for direct labor in process operations to include the labor of employees who do not work directly on products or services?

Q: Refer to the information in Exercise 3-12 and complete it

Refer to the information in Exercise 3-12 and complete it for each of the three separate assumptions using the FIFO method for process costing. Information from Exercise 3-12: The production departme...

Q: The following flowchart shows the August production activity of the Spalding Company

The following flowchart shows the August production activity of the Spalding Company. Use the amounts shown on the flowchart to compute the missing four numbers identified by blanks.

Q: Consider the following data for two products of Gitano Manufacturing.

Consider the following data for two products of Gitano Manufacturing. Required1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for...

Q: The following partially completed process cost summary describes the July production activities

The following partially completed process cost summary describes the July production activities of AshadCompany. Its production output is sent to its warehouse for shipping. All direct materials are a...

Q: Refer to the information in Exercise 3-15. Prepare a

Refer to the information in Exercise 3-15. Prepare a process cost summary using the FIFO method. (Round cost per equivalent unit calculations to two decimal places.) Information from Exercise 3-15: T...

Q: Many contractors work on custom jobs that require a job order costing

Many contractors work on custom jobs that require a job order costing system. RequiredAccess the Website AMSI.com and click on Construction Management Software, and then on star builder. Prepare a o...

Q: What are the two main inventory methods used in process costing?

What are the two main inventory methods used in process costing? What are the differences between these methods?

Q: Can services be delivered by means of process operations? Support your

Can services be delivered by means of process operations? Support your answer with an example.

Q: Refer to the information in QS 4-5. What are

Refer to the information in QS 4-5. What are the company’s departmental overhead rates if the assembly department assigns overhead based on direct labor hours and the finishing depar...

Q: Ciolino Co.’s March 31 inventory of raw materials is $

Ciolino Co.’s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in...

Q: Refer to the information in QS 4-7. Compute the

Refer to the information in QS 4-7. Compute the activity rate for each activity, assuming the company uses activity-based costing. Information from 4-7: Xie Company identified the following activitie...

Q: Manufacturers and merchandisers can apply just-in-time (JIT

Manufacturers and merchandisers can apply just-in-time (JIT) to their inventory management.Both Polaris and Arctic Cat want to know the impact of a JIT inventory system for their operating cash flows...

Q: 1. If management wants the most accurate product cost, which

1. If management wants the most accurate product cost, which of the following costing methods should be used? a. Volume-based costing using departmental overhead rates b. Volume-based costing using a...

Q: Aziz Company sells two types of products, Basic and Deluxe.

Aziz Company sells two types of products, Basic and Deluxe. The company provides technical support for users of its products, at an expected cost of $250,000 per year. The company expects to process 1...

Q: Refer to information about Azule Company in Problem 6-1B.

Refer to information about Azule Company in Problem 6-1B. In the company’s planning documents,Roberta Azule, the company president, reports that the company’s break-even volume in unit sales is 55,715...

Q: Explain why equivalent units of production for both direct labor and overhead

Explain why equivalent units of production for both direct labor and overhead can be the same as, and why they can be different from, equivalent units for direct materials.

Q: Identify the control document for materials flow when a materials requisition slip

Identify the control document for materials flow when a materials requisition slip is not used.

Q: A company uses activity-based costing to determine the costs of

A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and cost driver activity for each of the company’s three activity c...

Q: What is the main factor for a company in choosing between the

What is the main factor for a company in choosing between the job order costing and process costing accounting systems? Give two likely applications of each system.

Q: How can absorption costing lead to incorrect short-run pricing decisions

How can absorption costing lead to incorrect short-run pricing decisions?

Q: This chapter’s opener featured Neal Gottlieb and his company Three Twins Ice

This chapter’s opener featured Neal Gottlieb and his company Three Twins Ice Cream. Required 1. Neal recently built a large manufacturing facility. Explain how his company’s process cost summary repo...

Q: Piaggiois a manufacturer. “Activity-based costing is only useful

Piaggiois a manufacturer. “Activity-based costing is only useful for manufacturing companies.” Is this a true statement? Explain.

Q: A list of activities that generate quality costs is provided below.

A list of activities that generate quality costs is provided below. For each activity, indicate whether it relates to a prevention activity (P), appraisal activity (A), internal failure activity (I),...

Q: Toyota embraces lean techniques, including lean accounting. What are the

Toyota embraces lean techniques, including lean accounting. What are the two key components of lean accounting?

Q: KTM’s managers rely on reports of variable costs. How variable costing

KTM’s managers rely on reports of variable costs. How variable costing reports can prepared using the contribution margin format help managers in computing break-even volume in units?

Q: After reading an article about activity-based costing in a trade

After reading an article about activity-based costing in a trade journal for the furniture industry,Adria Lopez wondered if it was time to critically analyze overhead costs at Success Systems. In a re...

Q: Aces Inc., a manufacturer of tennis rackets, began operations this

Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. Each racket was sold at a price of $90. Fixed overhead costs are $78,000 and...

Q: Refer to the information in Exercise 4-9.

Refer to the information in Exercise 4-9. Information from Exercise 4-9: Textra Plastics produces parts for a variety of small machine manufacturers. Most products go through two operations, molding...

Q: The usefulness of a single plantwide overhead rate is based on two

The usefulness of a single plantwide overhead rate is based on two assumptions. What are those assumptions?

Q: Both Polaris and Arctic Cat sell motorized vehicles, and each of

Both Polaris and Arctic Cat sell motorized vehicles, and each of these companies has a different product mix. Required1. Assume the following data are available for both companies. Compute each compa...

Q: Laval produces lamps and home lighting fixtures. Its most popular product

Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped in the fabricating department and assembled in its a...

Q: Assume that a company produces a single product by processing it first

Assume that a company produces a single product by processing it first through a single production department. Directlabor costs flow through what accounts in this company’s process cost system?

Q: Labor costs of an auto repair mechanic are seldom based on actual

Labor costs of an auto repair mechanic are seldom based on actual hours worked. Instead, theamount paid a mechanic is based on an industry average of time estimated to complete a repair job. The repa...

Q: Diaz Company reports the following variable costing income statement for its single

Diaz Company reports the following variable costing income statement for its single product. Thiscompany’s sales totaled 50,000 units, but its production was 80,000 units. It had no...

Q: E’Lonte Company began operations this year. During this first year,

E’Lonte Company began operations this year. During this first year, the company produced 300,000 units and sold 250,000 units. Its income statement under absorption costing for its f...

Q: Following are activities in providing medical services at Healthsmart Clinic.

Following are activities in providing medical services at Healthsmart Clinic. A. Registering patients B. Cleaning beds C. Stocking examination rooms D. Washing linens E. Ordering medical equipment F....

Q: Is it possible to have under- or overapplied overhead costs in

Is it possible to have under- or overapplied overhead costs in a process cost accounting system? Explain.

Q: Multiproduct break-even analysis is often viewed differently when actually applied

Multiproduct break-even analysis is often viewed differently when actually applied in practice.You are to visit a local fast-food restaurant and count the number of items on the menu. To apply multip...

Q: Chem-Melt produces and sells an ice-melting granular used

Chem-Melt produces and sells an ice-melting granular used on roadways and sidewalks in winter. The company annually produces and sells about 300,000 lbs of its granular. In its ten-year history, the c...

Q: A recent annual report for McDonald’s reports the following operating income for

A recent annual report for McDonald’s reports the following operating income for its United States and APMEA (Asia-Pacific, Middle East, and Africa) geographic segments: Required1....

Q: Access and review Piaggio’s Website (www.piaggio.com)

Access and review Piaggio’s Website (www.piaggio.com) to answer the following questions. Required1. Do you believe that Piaggio’s managers use single product CVP analysis or multiproduct break-even...

Q: D’Souza Company sold 10,000 units of its product at a

D’Souza Company sold 10,000 units of its product at a price of $80 per unit. Total variable cost is $50 per unit, consisting of $40 in variable production cost and $10 in variable selling and administ...

Q: Polaris offers extended service contracts that provide repair and maintenance coverage over

Polaris offers extended service contracts that provide repair and maintenance coverage over its products. As you complete the following requirements, assume that the Polaris services department uses m...

Q: What is a cost object?

What is a cost object?

Q: Trez Company began operations this year. During this first year,

Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for its first year of operations foll...

Q: Piaggiois thinking of expanding sales of its most popular scooter model by

Piaggiois thinking of expanding sales of its most popular scooter model by 65%. Shouldwe expect its variable and fixed costs for this model to stay within the relevant range? Explain.

Q: Refer to the information in Exercise 4-6 to answer the

Refer to the information in Exercise 4-6 to answer the following requirements. Information from 4-6: Way Cool produces two different models of air conditioners. The company produces the mechanical sys...

Q: Refer to Vijay Company’s data in QS 6-4. Compute

Refer to Vijay Company’s data in QS 6-4. Compute its production cost per unit under variablecosting.

Q: How do step-wise costs and curvilinear costs differ?

How do step-wise costs and curvilinear costs differ?

Q: Grand Garden is a luxury hotel with 150 suites. Its regular

Grand Garden is a luxury hotel with 150 suites. Its regular suite rate is $250 per night per suite. The hotel’s cost per night is $140 per suite and consists of the following. Variable direct labor a...

Q: Explain a hybrid costing system. Identify a product or service operation

Explain a hybrid costing system. Identify a product or service operation that might well fit a hybridcosting system.

Q: Are there situations where Polariscan use process costing? Identify at least

Are there situations where Polariscan use process costing? Identify at least one and explain it.

Q: After all labor costs for a period are allocated, what balance

After all labor costs for a period are allocated, what balance should remain in the Factory Payroll account?

Q: Describe the contribution margin ratio in layperson’s terms.

Describe the contribution margin ratio in layperson’s terms.

Q: Describe how the following items are computed: a. Gross margin

Describe how the following items are computed: a. Gross margin, and b. Contribution margin

Q: What two arguments tend to justify classifying all costs as either fixed

What two arguments tend to justify classifying all costs as either fixed or variable even though individual costs might not behave exactly as classified?

Q: Widmer Watercraft’s predetermined overhead rate for year 2013 is 200% of

Widmer Watercraft’s predetermined overhead rate for year 2013 is 200% of direct labor. Information on the company’s production activities during May 2013 follows. a. Purchased raw materials on credit,...

Q: Access and review the entrepreneurial information at Business Owner’s Toolkit [Toolkit

Access and review the entrepreneurial information at Business Owner’s Toolkit [Toolkit.com].Access and review its New Business Cash Needs Checklist under the Start Up menu bar or similarworksheets re...

Q: Laffer Lumber produces bagged bark for use in landscaping. Production involves

Laffer Lumber produces bagged bark for use in landscaping. Production involves packaging bark chips in plastic bags in a bagging department. The following information describes production operations f...

Q: How does assuming that operating activity occurs within a relevant range affect

How does assuming that operating activity occurs within a relevant range affect cost-volume-profit analysis?

Q: Are the journal entries that match cost flows to product flows in

Are the journal entries that match cost flows to product flows in process costing primarily the same or much different than those in job order costing? Explain.

Q: Each of two similar companies has sales of $20,000

Each of two similar companies has sales of $20,000 and total costs of $15,000 for a month. Company A’s total costs include $10,000 of variable costs and $5,000 of fixed costs. IfCompany B’s total cos...

Q: An accounting professional requires at least two skill sets. The first

An accounting professional requires at least two skill sets. The first is to be technically competent. Knowing how to capture, manage, and report information is a necessary skill. Second, the ability...

Q: How can Piaggiouse variable costing to help better understand its operations and

How can Piaggiouse variable costing to help better understand its operations and to make better pricing decisions?

Q: In process costing, the process is analyzed first and then a

In process costing, the process is analyzed first and then a unit measure is computed in the formof equivalent units for direct materials, direct labor, overhead, and all three combined. The same anal...

Q: Arctic Cat produces snowmobiles with a multiple process production line. Identify

Arctic Cat produces snowmobiles with a multiple process production line. Identify and list some of its production processing steps and departments.

Q: Arctic Cat produces snowmobiles for sale. Identify some of the variable

Arctic Cat produces snowmobiles for sale. Identify some of the variable and fixed productcosts associated with that production. [Hint: Limit costs to product costs.]

Q: Companies such as Piaggio apply process operations. List the four steps

Companies such as Piaggio apply process operations. List the four steps in accounting for production activity in a reporting period (for process operations).

Q: Refer to the information in Exercise 4-6 to answer the

Refer to the information in Exercise 4-6 to answer the following requirements. Information from Exercise 4-6: Way Cool produces two different models of air conditioners. The company produces the mech...

Q: The focus in a job order costing system is the job or

The focus in a job order costing system is the job or batch. Identify the main focus in process costing.

Q: Assume a company sells a given product for $85 per unit

Assume a company sells a given product for $85 per unit. How many units must be sold to break even if variable selling costs are $27 per unit, variable production costs are $23 per unit, and total fix...

Q: Dowell Company produces a single product. Its income statement under absorption

Dowell Company produces a single product. Its income statement under absorption costing for its first two years of operation follow. Additional Information a. Sales and production data for these fir...

Q: ProChem manufactures aspirin in a process operation. Details on production activity

ProChem manufactures aspirin in a process operation. Details on production activity follow. Compute the department’s equivalent units of production with respect to direct materials under each of two s...

Q: Refer to the information in Exercise 3-20 and complete it

Refer to the information in Exercise 3-20 and complete it for each of the two separate assumptions using the FIFO method for process costing. Information from Exercise 3.20: ProChem manufactures aspi...

Q: Farina Bay’s computer system generated the following trial balance on December 31

Farina Bay’s computer system generated the following trial balance on December 31, 2013. The company’s manager knows something is wrong with the trial balance becau...

Q: A local movie theater owner explains to you that ticket sales on

A local movie theater owner explains to you that ticket sales on weekends and evenings arestrong, but attendance during the weekdays, Monday through Thursday, is poor. The owner proposes to offer a c...

Q: Refer to information about Dowell Company in Problem 6-1A.

Refer to information about Dowell Company in Problem 6-1A. In the company’s planning documents, Kyra Dowell, the company’s president, reports that the break-even volume (in units) for the company is 2...

Q: Companies such as KTM commonly prepare a process cost summary. What

Companies such as KTM commonly prepare a process cost summary. What purposes does a process cost summary serve?

Q: Leather Head Sports, launched by entrepreneur Paul Cunningham, produces balls

Leather Head Sports, launched by entrepreneur Paul Cunningham, produces balls for various sports. Selling prices typically range from $40 per ball to $295 per ball. Required1. Identify at least two...

Q: Azule Company produces a single product. Its income statement under absorption

Azule Company produces a single product. Its income statement under absorption costing for its first two years of operation follow. Additional Informationa. Sales and production data for these first...

Q: Several important assumptions underlie CVP analysis. Assumptions often help simplify and

Several important assumptions underlie CVP analysis. Assumptions often help simplify andfocus our analysis of sales and costs. A common application of CVP analysis is as a tool to forecast sales, cos...

Q: Major League Bat Company manufactures baseball bats. In addition to its

Major League Bat Company manufactures baseball bats. In addition to its goods in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as di...

Q: What two common benchmarks can be used to evaluate actual performance?

What two common benchmarks can be used to evaluate actual performance? Which of the two is generally more useful?

Q: Walker Company prepares monthly budgets. The current budget plans for a

Walker Company prepares monthly budgets. The current budget plans for a September ending inventory of 30,000 units. Company policy is to end each month with merchandise inventory equal to a specified...

Q: World Company expects to operate at 80% of its productive capacity

World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At this planned level, the company expects to use 25,000 standard hours of direct labor. Overhead is alloc...

Q: Refer to the information from Exercise 8-10. Compute the

Refer to the information from Exercise 8-10. Compute the (1) overhead volume variance and (2) overhead controllable variance. In Exercise 8-10 World Company expects to operate at 80% of its productiv...

Q: Comp Wiz sells computers. During May 2013, it sold 350

Comp Wiz sells computers. During May 2013, it sold 350 computers at a $1,200 average price each. The May 2013 fixed budget included sales of 365 computers at an average price of $1,100 each. (1) Compu...

Q: Match the terms labelled a through e with their correct definition labelled

Match the terms labelled a through e with their correct definition labelled 1 through 5. a. Standard cost card b. Management by exception c. Standard cost d. Ideal standard e. Practical standard 1. Qu...

Q: Resset Co. provides the following results of April’s operations: F

Resset Co. provides the following results of April’s operations: F indicates favorable and U indicates unfavorable. Applying the management by exception approach, which of the variances are of greates...

Q: Trico Company set the following standard unit costs for its single product

Trico Company set the following standard unit costs for its single product. Direct materials (30 Ibs. @ $4 per Ib.) . . . . . . . . . . . . . . . . . $120.00 Direct labor (5 hrs. @ $14 per hr.) . . ....

Q: Refer to information in Problem 8-1A. Required

Refer to information in Problem 8-1A. RequiredCompute these variances: (a) variable overhead spending and efficiency, (b) fixed overhead spending and volume, and (c) total overhead controllable.

Q: Phoenix Company’s 2013 master budget included the following fixed budget report.

Phoenix Company’s 2013 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. Required1. Classify all ite...

Q: Refer to the information in Problem 8-3A. Phoenix Company’s

Refer to the information in Problem 8-3A. Phoenix Company’s actual income statement for 2013 follows. Required1. Prepare a flexible budget performance report for 2013. Analysis Co...

Q: Antuan Company set the following standard costs for one unit of its

Antuan Company set the following standard costs for one unit of its product. Direct materials (6 Ibs. @ $5 per Ib.) . . . . . . . . . $ 30 Direct labor (2 hrs. @ $17 per hr.). . . . . . . . . . . . ....

Q: Use the following information to prepare the July cash budget for Acco

Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash disbursements for the month and the cash balance expected on July 31. a. Begin...

Q: Kegler Company has set the following standard costs per unit for the

Kegler Company has set the following standard costs per unit for the product it manufactures. Direct materials (15 Ibs. @ $4 per Ib.). . . . . . . . . . . $ 60.00 Direct labor (3 hrs. @ $15 per hr.)...

Q: Boss Company’s standard cost accounting system recorded this information from its December

Boss Company’s standard cost accounting system recorded this information from its Decemberoperations. Standard direct materials cost . . . . . . . . . . . . . . . . . . . . . . . $100,000 Direct mat...

Q: Kryll Company set the following standard unit costs for its single product

Kryll Company set the following standard unit costs for its single product. Direct materials (25 Ibs. @ $4 per Ib.) . . . . . . . . . . . . . . . . . . . $100.00 Direct labor (6 hrs. @ $8 per hr.) ....

Q: Refer to information in Problem 8-1B. In

Refer to information in Problem 8-1B. In Problem 8-1B Kryll Company set the following standard unit costs for its single product. Direct materials (25 Ibs. @ $4 per Ib.) . . . . . . . . . . . . . ....

Q: Tohono Company’s 2013 master budget included the following fixed budget report.

Tohono Company’s 2013 master budget included the following fixed budget report. It is based on an expected production and sales volume of 20,000 units. Required1. Classify all item...

Q: Refer to the information in Problem 8-3B. Tohono Company’s

Refer to the information in Problem 8-3B. Tohono Company’s actual income statement for 2013 follows. In Problem 8-3B Tohono Company’s 2013 master budget included...

Q: Suncoast Company set the following standard costs for one unit of its

Suncoast Company set the following standard costs for one unit of its product. Direct materials (4.5 lb. @ $6 per kg.) . . . . . . . . . . $27 Direct labor (1.5 hrs. @ $12 per hr.) . . . . . . . . ....

Q: Guadelupe Company has set the following standard costs per unit for the

Guadelupe Company has set the following standard costs per unit for the product it manufactures. Direct materials (10 lbs. @ $3.00 per lb.) . . . . . . . . . . . $30.00 Direct labor (4 hr. @ $6 per h...

Q: Kenya Company’s standard cost accounting system recorded this information from its June

Kenya Company’s standard cost accounting system recorded this information from its June operations. Standard direct materials cost . . . . . . . . . . . . . . . . . . . . . . . . $130,000 Direct mate...

Q: Beech Company sold 105,000 units of its product in May

Beech Company sold 105,000 units of its product in May. For the level of production achieved in May, the budgeted amounts were: sales, $1,300,000; variable costs, $750,000; and fixed costs, $300,000....

Q: Use the information in Exercise 7-3 and the following additional

Use the information in Exercise 7-3 and the following additional information to prepare a budgeted income statement for the month of July and a budgeted balance sheet for July 31. a. Cost of goods sol...

Q: BatCo makes metal baseball bats. Each bat requires 1 kg.

BatCo makes metal baseball bats. Each bat requires 1 kg. of aluminum at $18 per kg. and 0.25 direct labor hours at $20 per hour. Overhead is assigned at the rate of $40 per labor hour. What amounts wo...

Q: Refer to information in QS 8-2. Assume the actual

Refer to information in QS 8-2. Assume the actual cost to manufacture one metal bat was $40. Compute the cost variance and classify it as favorable or unfavorable. In QS 8-2 BatCo makes metal basebal...

Q: Juan Company’s output for the current period was assigned a $150

Juan Company’s output for the current period was assigned a $150,000 standard direct materials cost. The direct materials variances included a $12,000 favorable price variance and a $2,000 favorable q...

Q: Frontera Company’s output for the current period results in a $20

Frontera Company’s output for the current period results in a $20,000 unfavorable direct labor rate variance and a $10,000 unfavorable direct labor efficiency variance. Production for the current peri...

Q: Alvarez Company’s output for the current period yields a $20,

Alvarez Company’s output for the current period yields a $20,000 favorable overhead volume variance and a $60,400 unfavorable overhead controllable variance. Standard overhead charged to production fo...

Q: Refer to the information in QS 8-8. Alvarez records

Refer to the information in QS 8-8. Alvarez records standard costs in its accounts. Prepare the journal entry to charge overhead costs to the Goods in Process Inventory account and to record any varia...

Q: Mosaic Company applies overhead using machine hours and reports the following information

Mosaic Company applies overhead using machine hours and reports the following information. Compute the total variable overhead cost variance. Actual machine hours used . . . . . . . . . . . . . . . ....

Q: Farad, Inc. specializes in selling used SUVs. During the

Farad, Inc. specializes in selling used SUVs. During the first six months of 2013, the dealership sold 50 trucks at an average price of $9,000 each. The budget for the first six months of 2013 was to...

Q: Based on predicted production of 24,000 units, a company

Based on predicted production of 24,000 units, a company anticipates $300,000 of fixed costs and $246,000 of variable costs. If the company actually produces 20,000 units, what are the flexible budget...

Q: Refer to information in QS 8-14. Assume that actual

Refer to information in QS 8-14. Assume that actual sales are $480,000, actual variable costs for the year are $112,000, and actual fixed costs for the year are $145,000. Prepare a flexible budget per...

Q: Hardy Company’s cost of goods sold is consistently 60% of sales

Hardy Company’s cost of goods sold is consistently 60% of sales. The company plans to carry ending merchandise inventory for each month equal to 20% of the next month’s budgeted cost of good sold. All...

Q: Fogel Co. expects to produce 116,000 units for the

Fogel Co. expects to produce 116,000 units for the year. The company’s flexible budget for 116,000 units of production shows variable overhead costs of $162,400 and fixed overhead costs of $124,000. F...

Q: AirPro Corp. reports the following for November. Compute the controllable

AirPro Corp. reports the following for November. Compute the controllable overhead variance for November. Actual total factory overhead incurred . . . . . . . . . . . . . . . . . . . $28,175 Standard...

Q: Refer to information in QS 8-19. Compute the overhead

Refer to information in QS 8-19. Compute the overhead volume variance for November. In QS 8-19 AirPro Corp. reports the following for November. Compute the controllable overhead variance for November...

Q: In a recent year, BMWsold 216,944 of its 1

In a recent year, BMWsold 216,944 of its 1 Series cars. Assume the company expected to sell 225,944 of these cars during the year. Also assume the budgeted sales price for each car was $30,000, and th...

Q: The following information describes a company’s usage of direct labor in a

The following information describes a company’s usage of direct labor in a recent period. Compute the direct labor rate and efficiency variances for the period. Actual direct labor hours used . . . ....

Q: The following information describes a company’s usage of direct labor in a

The following information describes a company’s usage of direct labor in a recent period. Compute the direct labor rate and efficiency variances for the period. Actual direct labor hours used . . . ....

Q: Managers use management by exception for control purposes. (1)

Managers use management by exception for control purposes. (1) Describe the concept of management by exception. (2) Explain how standard costs help managers apply this concept to monitor and control c...

Q: For the current period, Kayenta Company’s manufacturing operations yield a $

For the current period, Kayenta Company’s manufacturing operations yield a $4,000 unfavorable price variance on its direct materials usage. The actual price per pound of material is $78; the standard...

Q: Refer to the information from QS 8-10. Compute the

Refer to the information from QS 8-10. Compute the variable overhead spending variance and the variable overhead efficiency variance. In QS 8-10 Mosaic Company applies overhead using machine hours an...

Q: Brodrick Company expects to produce 20,000 units for the year

Brodrick Company expects to produce 20,000 units for the year ending December 31. A flexible budget for 20,000 units of production reflects sales of $400,000; variable costs of $80,000; and fixed cost...

Q: Quick Dollar Company purchases all merchandise on credit. It recently budgeted

Quick Dollar Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances and merchandise inventory balances. Cash payments on accounts payable d...

Q: Tercer reports the following on one of its products. Compute the

Tercer reports the following on one of its products. Compute the direct materials price and quantity variances. Direct materials standard (4 lbs. @ $2/lb.) . . . . . . . . . $8 per finished unit Actu...

Q: Success Systems’ second quarter 2014 fixed budget performance report for its computer

Success Systems’ second quarter 2014 fixed budget performance report for its computer furnitureoperations follows. The $156,000 budgeted expenses include $108,000 in variable expense...

Q: Review Polaris’s income statement in Appendix A and identify its revenues for

Review Polaris’s income statement in Appendix A and identify its revenues for the years endedDecember 31, 2011, December 31, 2010, and December 31, 2009. For the year ended December...

Q: Polaris and Arctic Cat compete in several on-road and off

Polaris and Arctic Cat compete in several on-road and off-road motorized vehicle categories.Sales, income, and asset information is provided for each company below. Required1. Compute profit margin...

Q: Senior Security Co. offers a range of security services for senior

Senior Security Co. offers a range of security services for senior citizens. Each type of service is considered within a separate department. Mary Pincus, the overall manager, is compensated partly on...

Q: Improvement Station is a national home improvement chain with more than 100

Improvement Station is a national home improvement chain with more than 100 storesthroughout the country. The manager of each store receives a salary plus a bonus equal to a percent of the store’s ne...

Q: This chapter described and used spreadsheets to prepare various managerial reports (

This chapter described and used spreadsheets to prepare various managerial reports (see Exhibit 9-6). You can download from Websites various tutorials showing how spreadsheets are used in managerial a...

Q: Polaris, and Arctic Cat compete across the world in several markets

Polaris, and Arctic Cat compete across the world in several markets. Required1. Design a three-tier responsibility accounting organizational chart assuming that you have available internal informatio...

Q: Brian Linton’s company, United By Blue, sells jewelry and apparel

Brian Linton’s company, United By Blue, sells jewelry and apparel. His company’s plans call for continued expansion into other types of products. Required1. How can United By Blue use departmental i...

Q: Visit a local movie theater and check out both its concession area

Visit a local movie theater and check out both its concession area and its showing areas. Themanager of a theater must confront questions such as: ● How much return do we earn on concessions? ● What...

Q: Big Sound, a merchandising company specializing in home computer speakers,

Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 70% of sales. Its inventory policy calls for ending inventory in each month t...

Q: Selected product data from Piaggio (www.piaggio.com)

Selected product data from Piaggio (www.piaggio.com) follow. Required1. Compute the percentage growth in net sales for each product line from fiscal year 2010 to 2011. Round percents to one decimal....

Q: What is the difference between operating departments and service departments?

What is the difference between operating departments and service departments?

Q: Controllable and uncontrollable costs must be identified with a particular _____ and

Controllable and uncontrollable costs must be identified with a particular _____ and a definite _____ period.

Q: Why should managers be closely involved in preparingtheir responsibility accounting budgets?

Why should managers be closely involved in preparingtheir responsibility accounting budgets?

Q: What are two main goals in managerial accounting for reporting on and

What are two main goals in managerial accounting for reporting on and analyzing departments?

Q: Is it possible to evaluate a cost center’s profitability? Explain.

Is it possible to evaluate a cost center’s profitability? Explain.

Q: Piaggio has many departments. How is a department’s contribution to overhead

Piaggio has many departments. How is a department’s contribution to overhead measured?

Q: KTMaims to give its managers timely cost reports. In responsibility accounting

KTMaims to give its managers timely cost reports. In responsibility accounting, who receivestimely cost reports and specific cost information? Explain.

Q: Give two examples of products with joint costs.

Give two examples of products with joint costs.

Q: Polaris delivers its products to locations around the world. List three

Polaris delivers its products to locations around the world. List three controllable andthree uncontrollable costs for its delivery department.

Q: Electro Company manufactures an innovative automobile transmission for electric cars. Management

Electro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending inventory for the first quarter will be 75,000 units. The following unit sales of...

Q: Define and describe cycle time and identify the components of cycle time

Define and describe cycle time and identify the components of cycle time.

Q: Explain the difference between value-added time and nonvalue-added

Explain the difference between value-added time and nonvalue-added time.

Q: Can management of a company such as Arctic Catuse cycle time and

Can management of a company such as Arctic Catuse cycle time and cycle efficiency as useful measures of performance? Explain.

Q: Each retail store of Applehas several departments. Why is it useful

Each retail store of Applehas several departments. Why is it useful for its management to (a) collect accounting information about each department and (b) treat each department as a profit center?

Q: Define and describe cycle efficiency.

Define and describe cycle efficiency.

Q: What are controllable costs?

What are controllable costs?

Q: Maryanne Dinardo manages an auto dealership’s service department. The recent month’s

Maryanne Dinardo manages an auto dealership’s service department. The recent month’s income statement for his department follows. (1) Analyze the items on the inco...

Q: Windmire Company manufactures and sells to local wholesalers approximately 300,000

Windmire Company manufactures and sells to local wholesalers approximately 300,000 units per month at a sales price of $4 per unit. Monthly costs for the production and sale of this quantity follow....

Q: Mervin Company produces circuit boards that sell for $8 per unit

Mervin Company produces circuit boards that sell for $8 per unit. It currently has capacity to produce 600,000 circuit boards per year, but is selling 550,000 boards per year. Annual costs for the 550...

Q: Alto Company currently produces component TH1 for its sole product. The

Alto Company currently produces component TH1 for its sole product. The current cost per unit to manufacture its required 400,000 units of TH1 follows. Direct materials . . . . . . . . . . . $1.20 Di...

Q: Micron Manufacturing produces electronic equipment. This year, it produced 7

Micron Manufacturing produces electronic equipment. This year, it produced 7,500 oscilloscopes at a manufacturing cost of $300 each. These oscilloscopes were damaged in the warehouse during storage an...

Q: Sung Company is able to produce two products, R and T

Sung Company is able to produce two products, R and T, with the same machine in its factory. The following information is available. The company presently operates the machine for a single eight-hou...

Q: Near the end of 2013, the management of Dimsdale Sports Co

Near the end of 2013, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2013. To prepare a master budget for January, Fe...

Q: Esme Company’s management is trying to decide whether to eliminate Department Z

Esme Company’s management is trying to decide whether to eliminate Department Z, which has produced low profits or losses for several years. The company’s 2013 depa...

Q: Garcia Company has 10,000 units of its product that were

Garcia Company has 10,000 units of its product that were produced last year at a total cost of $150,000. The units were damaged in a rain storm because the warehouse where they were stored developed a...

Q: Label each of the following statements as either true (“T”)

Label each of the following statements as either true (“T”) or false (“F”). 1. Relevant costs are also known as unavoidable costs. 2. Incremental costs are also known as differential costs. 3. An out-...

Q: Radar Company sells bikes for $300 each. The company currently

Radar Company sells bikes for $300 each. The company currently sells 3,750 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $225 each to make; $150 in variable costs per b...

Q: Below are departmental income statements for a guitar manufacturer. The manufacturer

Below are departmental income statements for a guitar manufacturer. The manufacturer is considering dropping its electric guitar department since it has a net loss. The company classifies advertising,...

Q: A guitar manufacturer is considering eliminating its electric guitar division because its

A guitar manufacturer is considering eliminating its electric guitar division because its $76,000 expenses are higher than its $72,000 sales. The company reports the following expenses for this divisi...

Q: Rory Company has a machine with a book value of $75

Rory Company has a machine with a book value of $75,000 and a remaining five-year useful life. A new machine is available at a cost of $112,500, and Rory can also receive $60,000 for trading in its ol...

Q: Signal mistakenly produced 10,000 defective cell phones. The phones

Signal mistakenly produced 10,000 defective cell phones. The phones cost $60 each to produce. A salvage company will buy the defective phones as they are for $30 each. It would cost Signal $80 per pho...

Q: Helix Company has been approached by a new customer to provide 2

Helix Company has been approached by a new customer to provide 2,000 units of its regular product at a special price of $6 per unit. The regular selling price of the product is $8 per unit. Helix is o...

Q: Refer to the data in QS 10-1. Based on

Refer to the data in QS 10-1. Based on financial considerations alone, should Helix accept this order at the special price? Explain. In QS 10-1 Helix Company has been approached by a new customer to...

Q: Refer to QS 10-1 and QS 10-2.

Refer to QS 10-1 and QS 10-2. What nonfinancial factors should Helix consider before accepting this order? Explain. In QS 10-1 Helix Company has been approached by a new customer to provide 2,000 uni...

Q: Black Diamond Company produces snow skis. Each ski requires 2 pounds

Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company’s management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June 30...

Q: Kando Company incurs a $9 per unit cost for Product A

Kando Company incurs a $9 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase Produc...

Q: Excel Memory Company can sell all units of computer memory X and

Excel Memory Company can sell all units of computer memory X and Y that it can produce, but it has limited production capacity. It can produce two units of X per hour or three units of Y per hour, and...

Q: Holmes Company produces a product that can either be sold as is

Holmes Company produces a product that can either be sold as is or processed further. Holmes has already spent $50,000 to produce 1,250 units that can be sold now for $67,500 to another manufacturer....

Q: Marathon Running Shop has two service departments (advertising and administration)

Marathon Running Shop has two service departments (advertising and administration) and two operating departments (shoes and clothing). During 2013, the departments had the following direct expenses an...

Q: Adria Lopez has found that her line of computer desks and chairs

Adria Lopez has found that her line of computer desks and chairs has become very popular and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both it...

Q: Piaggio’s annual report includes information about its debt and interest rates.

Piaggio’s annual report includes information about its debt and interest rates. One statement inits annual report reveals that Piaggio recently issued 10-year bonds with a market return of about 6.5%...

Q: Assume that Arctic Cat invests $2.42 million in capital

Assume that Arctic Cat invests $2.42 million in capital expenditures, including $1.08 million related to manufacturing capacity. Assume that these projects have a seven-year life and that management r...

Q: A consultant commented that “too often the numbers look good but

A consultant commented that “too often the numbers look good but feel bad.” This commentoften stems from estimation error common to capital budgeting proposals that relate to future cash flows. Three...

Q: Payback period, accounting rate of return, net present value,

Payback period, accounting rate of return, net present value, and internal rate of return arecommon methods to evaluate capital investment opportunities. Assume that your manager asks you to identify...

Q: Capital budgeting is an important topic and there are Websites designed to

Capital budgeting is an important topic and there are Websites designed to helppeople understand the methods available. Access TeachMeFinance.com’s capital budgeting web page (teachm...

Q: Break into teams and identify four reasons that an international airline such

Break into teams and identify four reasons that an international airline such as Southwest orDelta would invest in a project when its direct analysis using both payback period and net present value i...

Q: The management of Zigby Manufacturing prepared the following estimated balance sheet for

The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2013: To prepare a master budget for April, May, and June of 2013, management gathers the followinginf...

Q: Read the chapter opener about Keith Mullin and his company, Gamer

Read the chapter opener about Keith Mullin and his company, Gamer Grub. Keith is considering building a new, larger warehousing center to make his business more efficient and reduce costs. He expects...

Q: Visit or call a local auto dealership and inquire about leasing a

Visit or call a local auto dealership and inquire about leasing a car. Ask about the down payment and the required monthly payments. You will likely find the salesperson does not discuss the cost to p...

Q: The following is a partially completed lower section of a departmental expense

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Cozy Bookstore. It reports the total amounts of direct and indirect expenses allocated to its...

Q: Capital budgeting decisions require careful analysis because they are generally the ________

Capital budgeting decisions require careful analysis because they are generally the ________ ________ and ________ decisions that management faces.

Q: What is capital budgeting?

What is capital budgeting?

Q: Identify four reasons that capital budgeting decisions by managers are risky.

Identify four reasons that capital budgeting decisions by managers are risky.

Q: Identify two disadvantages of using the payback period for comparing investments.

Identify two disadvantages of using the payback period for comparing investments.

Q: What is the average amount invested in a machine during its predicted

What is the average amount invested in a machine during its predicted five-year life if it costs $200,000 and has a $20,000 salvage value? Assume that net income is received evenly throughout each yea...

Q: Why should managers set the required rate of return higher than the

Why should managers set the required rate of return higher than the rate at which money can be borrowed when making a typical capital budgeting decision?

Q: The management of Arctic Catis planning to acquire new equipment to manufacture

The management of Arctic Catis planning to acquire new equipment to manufacture snowmobiles. What are some of the costs and benefits that would be included in Arctic Cat’s analysis?

Q: KTM is considering expanding a store. Identify three methods management can

KTM is considering expanding a store. Identify three methods management can use to evaluate whether to expand.

Q: H20 Sports Company is a merchandiser of three different products. The

H20 Sports Company is a merchandiser of three different products. The company’s March 31 inventories are water skis, 40,000 units; tow ropes, 90,000 units; and life jackets, 150,000...

Q: The management of Piaggio is planning to invest in a new companywide

The management of Piaggio is planning to invest in a new companywide computerized inventory tracking system. What makes this potential investment risky?

Q: Jessica Porter works in both the jewelry department and the hosiery department

Jessica Porter works in both the jewelry department and the hosiery department of a retail store. Porter assists customers in both departments and arranges and stocks merchandise in both departments....

Q: Why is an investment more attractive to management if it has a

Why is an investment more attractive to management if it has a shorter payback period?

Q: If the present value of the expected net cash flows from a

If the present value of the expected net cash flows from a machine, discounted at 10%, exceeds the amount to be invested, what can you say about the investment’s expected rate of return? What can you...

Q: Why is the present value of $100 that you expect to

Why is the present value of $100 that you expect to receive one year from today worth less than $100 received today? What is the present value of $100 that you expect to receive one year from today, d...

Q: Polaris managers must select depreciation methods. Why does the use of

Polaris managers must select depreciation methods. Why does the use of the accelerated depreciation method (instead of straight line) for income tax reporting increase an investment’s value?

Q: A machine costs $700,000 and is expected to yield

A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year.Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses st...

Q: After evaluating the risk of the investment described in Exercise 11-

After evaluating the risk of the investment described in Exercise 11-5, B2B Co. concludes that it must earn at least a 8% return on this investment. Compute the net present value of this investment. (...

Q: This chapter explained two methods to evaluate investments using recovery time,

This chapter explained two methods to evaluate investments using recovery time, the payback period and break-even time (BET). Refer to QS 11-8 and (1) compute the recovery time for both the payback p...

Q: Beyer Company is considering the purchase of an asset for $180

Beyer Company is considering the purchase of an asset for $180,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Compute the payback period...

Q: A machine can be purchased for $150,000 and used

A machine can be purchased for $150,000 and used for 5 years, yielding the following net incomes. In projecting net incomes, double-declining balance depreciation is applied, using a 5-year life and a...

Q: Identify three usual time horizons for short-term planning and budgets

Identify three usual time horizons for short-term planning and budgets.

Q: You must prepare a return on investment analysis for the regional manager

You must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which outlet of two alternatives to open. The first location (...

Q: During the last week of March, Sony Stereo’s owner approaches the

During the last week of March, Sony Stereo’s owner approaches the bank for a $80,000 loan to be made on April 1 and repaid on June 30 with annual interest of 12%, for an interest cos...

Q: Compute the payback period for each of these two separate investments (

Compute the payback period for each of these two separate investments (round the payback period to two decimals): a. A new operating system for an existing machine is expected to cost $520,000 and hav...

Q: B2B Co. is considering the purchase of equipment that would allow

B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $360,000 with a 6-year life and no salvage value. It w...

Q: Phoenix Company can invest in each of three cheese-making projects

Phoenix Company can invest in each of three cheese-making projects: C1, C2, and C3. Each project requires an initial investment of $228,000 and would yield the following annual cash flows. (1) Assum...

Q: Following is information on two alternative investments being considered by Jolee Company

Following is information on two alternative investments being considered by Jolee Company. The company requires a 10% return from its investments. For each alternative project compute the (a) net pr...

Q: Refer to the information in Exercise 11-8. Create an

Refer to the information in Exercise 11-8. Create an Excel spreadsheet to compute the internal rate of return for each of the projects. Round the percentage return to two decimals. In Exercise 11-8 F...

Q: Factor Company is planning to add a new product to its line

Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $480,000 cost with an expected four-year life and a $20,000 salvag...

Q: Most Company has an opportunity to invest in one of two new

Most Company has an opportunity to invest in one of two new projects. Project Y requires a $350,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $350,0...

Q: Manning Corporation is considering a new project requiring a $90,

Manning Corporation is considering a new project requiring a $90,000 investment in test equipment with no salvage value. The project would produce $66,000 of pretax income before depreciation at the e...

Q: Interstate Manufacturing is considering either replacing one of its old machines with

Interstate Manufacturing is considering either replacing one of its old machines with a new machine or having the old machine overhauled. Information about the two alternatives follows. Management req...

Q: Hector Company reports the following: / Payments

Hector Company reports the following: Payments for purchases are made in the month after purchase. Selling expenses are 10% of sales, administrative expenses are 8% of sales, and both are paid in th...

Q: Sentinel Company is considering an investment in technology to improve its operations

Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $250,000 and will yield the following expected cash flows. Manag...

Q: Connick Company sells its product for $22 per unit. Its

Connick Company sells its product for $22 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 40% of credit sales is collected in the month of the...

Q: Lenitnes Company is considering an investment in technology to improve its operations

Lenitnes Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $250,000 and will yield the following expected cash flows. Manag...

Q: Cortino Company is planning to add a new product to its line

Cortino Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $300,000 cost with an expected four-year life and a $20,000 salva...

Q: Aikman Company has an opportunity to invest in one of two projects

Aikman Company has an opportunity to invest in one of two projects. Project A requires a $240,000 investment for new machinery with a four-year life and no salvage value. Project B also requires a $24...

Q: Grossman Corporation is considering a new project requiring a $30,

Grossman Corporation is considering a new project requiring a $30,000 investment in an asset having no salvage value. The project would produce $12,000 of pretax income before depreciation at the end...

Q: Archer Foods has a freezer that is in need of repair and

Archer Foods has a freezer that is in need of repair and is considering whether to replace the old freezer with a new freezer or have the old freezer extensively repaired. Information about the two al...

Q: Aster Company is considering an investment in technology to improve its operations

Aster Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $800,000 and yield the following expected cash flows. Management re...

Q: Retsa Company is considering an investment in technology to improve its operations

Retsa Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $800,000 and will yield the following expected cash flows. Manageme...

Q: Freeman Brothers Co. is considering an investment that requires immediate payment

Freeman Brothers Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. What is the investment’s payback peri...

Q: Megamart, a retailer of consumer goods, provides the following information

Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). (1) Compute return on investment for each department. Usi...

Q: Peng Company is considering an investment expected to generate an average net

Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Comp...

Q: Yokam Company is considering two alternative projects. Project 1 requires an

Yokam Company is considering two alternative projects. Project 1 requires an initial investment of $400,000 and has a net present value of cash flows of $1,100,000. Project 2 requires an initial inves...

Q: Comp-Media buys its product for $60 and sells it

Comp-Media buys its product for $60 and sells it for $130 per unit. The sales staff receives a 10% commission on the sale of each unit. Its June income statement follows. COMP- MEDIA COMPANY Income S...

Q: A company is considering investing in a new machine that requires a

A company is considering investing in a new machine that requires a cash payment of $47,946 today. The machine will generate annual cash flows of $21,000 for the next three years. What is the internal...

Q: Tinto Company is planning to invest in a project at a cost

Tinto Company is planning to invest in a project at a cost of $135,000. This project has the following expected cash flows over its three-year life: Year 1, $45,000; Year 2, $52,000; and Year 3, $78,0...

Q: Siemens AG invests €80 million to build a manufacturing plant to

Siemens AG invests €80 million to build a manufacturing plant to build wind turbines. The company predicts net cash flows of €16 million per year for the next 8 years. Assume the company requires an 8...

Q: Heels, a shoe manufacturer, is evaluating the costs and benefits

Heels, a shoe manufacturer, is evaluating the costs and benefits of new equipment that would custom fit each pair of athletic shoes. The customer would have his or her foot scanned by digital computer...

Q: Park Company is considering two alternative investments. The payback period is

Park Company is considering two alternative investments. The payback period is 3.5 years for investment A and 4 years for investment B. (1) If management relies on the payback period, which investmen...

Q: If Quail Company invests $50,000 today, it can

If Quail Company invests $50,000 today, it can expect to receive $10,000 at the end of each year for the next seven years, plus an extra $6,000 at the end of the seventh year. What is the net present...

Q: Adria Lopez is considering the purchase of equipment for Success Systems that

Adria Lopez is considering the purchase of equipment for Success Systems that would allow thecompany to add a new product to its computer furniture line. The equipment is expected to cost $300,000 an...

Q: Refer to information in Exercise 9-8. Compute profit margin

Refer to information in Exercise 9-8. Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most ef...

Q: Financial statements often serve as a starting point in formulating budgets.

Financial statements often serve as a starting point in formulating budgets. Review Polaris’sfinancial statements to determine its cash paid for acquisitions of property and equipment in the current...

Q: One source of cash savings for a company is improved management of

One source of cash savings for a company is improved management of inventory. To illustrate, assume that Polaris and Arctic Catboth have $1,000,000 per month in sales of one model ofsnowmobiles in Ca...

Q: Both the budget process and budgets themselves can impact management actions,

Both the budget process and budgets themselves can impact management actions, both positively and negatively. For instance, a common practice among not-for-profit organizations and government agencies...

Q: Near the end of 2013, the management of Isle Corp.,

Near the end of 2013, the management of Isle Corp., a merchandising company, prepared the following estimated balance sheet for December 31, 2013. To prepare a master budget for January, February, a...

Q: The sales budget is usually the first and most crucial of the

The sales budget is usually the first and most crucial of the component budgets in a masterbudget because all other budgets usually rely on it for planning purposes. RequiredAssume that your compan...

Q: Access information on e-budgets through The Manage Mentor: http

Access information on e-budgets through The Manage Mentor: http://www.themanagementor.com/kuniverse/kmailers_universe/finance_kmailers/cfa/budgeting2.htmRead the information provided. Required1. Ass...

Q: Your team is to prepare a budget report outlining the costs of

Your team is to prepare a budget report outlining the costs of attending college (full- time) forthe next two semesters (30 hours) or three quarters (45 hours). This budget’s focus is solely on atten...

Q: Freshiisells fresh foods with a focus on healthy fare. Company founder

Freshiisells fresh foods with a focus on healthy fare. Company founder Matthew Corrin stresses the importance of planning and budgeting for business success. Required1. How can budgeting help Matthe...

Q: To help understand the factors impacting a sales budget, you are

To help understand the factors impacting a sales budget, you are to visit three businesses withthe same ownership or franchise membership. Record the selling prices of two identical products at each...

Q: Access KTM’s income statement (in Appendix A) for the business

Access KTM’s income statement (in Appendix A) for the business year 2011. Required1. Is KTM’s infrastructure and administration expense budget likely to be an important budget in its master budgetin...

Q: The Trailer department of Baxter Bicycles makes bike trailers that attach to

The Trailer department of Baxter Bicycles makes bike trailers that attach to bicycles and can carry children or cargo. The trailers have a retail price of $200 each. Each trailer incurs $80 of variabl...

Q: Piaggio prepares a cash budget. What is a cash budget?

Piaggio prepares a cash budget. What is a cash budget? Why must operating budgets and thecapital expenditures budget be prepared before the cash budget?

Q: KTM regularly uses budgets. What is the difference between a production

KTM regularly uses budgets. What is the difference between a production budget and a manufacturing budget?

Q: Would a manager of an Apple retail store participate more in budgeting

Would a manager of an Apple retail store participate more in budgeting than a manager at the corporate offices? Explain.

Q: Does the manager of a Arctic Cat distribution center participate in long

Does the manager of a Arctic Cat distribution center participate in long-term budgeting?Explain.

Q: NSA Company produces baseball bats. Each bat requires 3 pounds of

NSA Company produces baseball bats. Each bat requires 3 pounds of aluminum alloy. Management predicts that 8,000 bats and 15,000 pounds of aluminum alloy will be in inventory on March 31 of the curren...

Q: Assume that Polaris’s snowmobile division is charged with preparing a master budget

Assume that Polaris’s snowmobile division is charged with preparing a master budget. Identify the participants—for example, the sales manager for the sales budget—and describe the information each per...

Q: Castor, Inc. is preparing its master budget for the quarter

Castor, Inc. is preparing its master budget for the quarter ended June 30. Budgeted sales and cash payments for merchandise for the next three months follow: Sales are 50% cash and 50% on credit. Al...

Q: Kelsey is preparing its master budget for the quarter ended September 30

Kelsey is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for merchandise for the next three months follow: Sales are 20% cash and 80% on credit. All...

Q: The following information is available for Zetrov Company: a.

The following information is available for Zetrov Company: a. The cash budget for March shows an ending bank loan of $10,000 and an ending cash balance of $50,000. b. The sales budget for March indica...

Q: Fortune, Inc., is preparing its master budget for the first

Fortune, Inc., is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are forecasted at 45,000 for January, 55,000 for Fe...

Q: What is the difference between direct and indirect expenses?

What is the difference between direct and indirect expenses?

Q: Heart & Home Properties is developing a subdivision that includes 600 home

Heart & Home Properties is developing a subdivision that includes 600 home lots. The 450 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 15...

Q: The production budget for Manner Company shows units to be produced as

The production budget for Manner Company shows units to be produced as follows: July, 620; August, 680; September, 540. Each unit produced requires two hours of direct labor. The direct labor rate is...

Q: Hospitable Co. provides the following sales forecast for the next four

Hospitable Co. provides the following sales forecast for the next four months: The company wants to end each month with ending finished goods inventory equal to 25% of next month’s...

Q: Refer to the information in Exercise 7-20. In addition

Refer to the information in Exercise 7-20. In addition, assume each finished unit requires five pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30...

Q: Match the definitions 1 through 9 with the term or phrase a

Match the definitions 1 through 9 with the term or phrase a through i. A. Budget B. Merchandise purchases budget C. Cash budget D. Safety stock E. Budgeted income statement F. General and administrati...

Q: Participatory budgeting can sometimes lead to negative consequences. Identify three potential

Participatory budgeting can sometimes lead to negative consequences. Identify three potential negative outcomes that can arise from participatory budgeting.

Q: The management of Nabar Manufacturing prepared the following estimated balance sheet for

The management of Nabar Manufacturing prepared the following estimated balance sheet for June, 2013: To prepare a master budget for July, August, and September of 2013, management gathers the follow...

Q: Render Co. CPA is preparing activity-based budgets for 2013

Render Co. CPA is preparing activity-based budgets for 2013. The partners expect the firm to generate billable hours for the year as follows: Data entry . . . . . . . . . 2,200 hours Auditing . . . ....

Q: Rida, Inc., a manufacturer in a seasonal industry, is

Rida, Inc., a manufacturer in a seasonal industry, is preparing its direct materials budget for the second quarter. It forecasts sales of 225,000 units in the second quarter and 262,500 units in the t...

Q: Refer to Exercise 7-25. For the second quarter,

Refer to Exercise 7-25. For the second quarter, prepare (1) a direct labor budget and (2) a factory overhead budget. In Exercise 7-25 Rida, Inc., a manufacturer in a seasonal industry, is preparing i...

Q: Rad Co. provides the following sales forecast and production budget for

Rad Co. provides the following sales forecast and production budget for the next four months: The company plans for finished goods inventory of 120 units at the end of June. In addition, each finish...

Q: Pirate Seafood Company purchases lobsters and processes them into tails and flakes

Pirate Seafood Company purchases lobsters and processes them into tails and flakes. It sells the lobster tails for $21 per pound and the flakes for $14 per pound. On average, 100 pounds of lobster are...

Q: Refer to Exercise 7-27. For April, May,

Refer to Exercise 7-27. For April, May, and June, prepare (1) a direct labor budget and (2) a factory overhead budget. In Exercise 7-27 Rad Co. provides the following sales forecast and production bu...

Q: Identify at least three roles that budgeting plays in helping managers control

Identify at least three roles that budgeting plays in helping managers control and monitor a business.

Q: Which one of the following sets of items are all necessary components

Which one of the following sets of items are all necessary components of the master budget? 1. Operating budgets, historical income statement, and budgeted balance sheet. 2. Prior sales reports, capit...

Q: The motivation of employees is one goal of budgeting. Identify three

The motivation of employees is one goal of budgeting. Identify three guidelines that organizations should follow if budgeting is to serve effectively as a source of motivation for employees.

Q: Montel Company’s July sales budget calls for sales of $600,

Montel Company’s July sales budget calls for sales of $600,000. The store expects to begin July with $50,000 of inventory and to end the month with $40,000 of inventory. Gross margin is typically 40%...

Q: Lighthouse Company anticipates total sales for June and July of $420

Lighthouse Company anticipates total sales for June and July of $420,000 and $398,000, respectively. Cash sales are normally 60% of total sales. Of the credit sales, 20% are collected in the same mont...

Q: Why should each department participate in preparing its own budget?

Why should each department participate in preparing its own budget?

Q: Use the following information to prepare a cash budget for the month

Use the following information to prepare a cash budget for the month ended on March 31 for Gado Merchandising Company. The budget should show expected cash receipts and cash disbursements for the mont...

Q: Forrest Company manufactures watches and has a JIT policy that ending inventory

Forrest Company manufactures watches and has a JIT policy that ending inventory must equal 10% of the next month’s sales. It estimates that October’s actual ending inventory will consist of 40,000 wat...

Q: Refer to information from QS 7-8. Forrest Company assigns

Refer to information from QS 7-8. Forrest Company assigns variable overhead at the rate of $1.50 per unit of production. Fixed overhead equals $4,600,000 per month. Prepare a factory overhead budget f...

Q: Oakwood Company produces maple bookcases to customer order. It received an

Oakwood Company produces maple bookcases to customer order. It received an order from a customer to produce 5,000 bookcases. The following information is available for the production of the bookcases....

Q: Grace sells miniature digital cameras for $250 each. 1,

Grace sells miniature digital cameras for $250 each. 1,000 units were sold in May, and it forecasts 4% growth in unit sales each month. Determine (a) the number of camera sales and (b) the dollar amou...

Q: Refer to information from QS 7-10. Grace pays a

Refer to information from QS 7-10. Grace pays a sales manager a monthly salary of $6,000 and a commission of 8% of camera sales (in dollars). Prepare a selling expense budget for the month of June. I...

Q: Following are selected accounts for a company. For each account,

Following are selected accounts for a company. For each account, indicate whether it will appear on a budgeted income statement (BIS) or a budgeted balance sheet (BBS). If an item will not appear on e...

Q: The Candle Shoppe reports the following sales forecast: August, $

The Candle Shoppe reports the following sales forecast: August, $150,000; September, $170,000. Cash sales are normally 40% of total sales and all credit sales are expected to be collected in the month...

Q: Wells Company reports the following sales forecast: September, $55

Wells Company reports the following sales forecast: September, $55,000; October, $66,000; and November, $80,000. All sales are on account. Collections of credit sales are received as follows: 20% in t...

Q: Gordands purchased $600,000 of merchandise in August and expects

Gordands purchased $600,000 of merchandise in August and expects to purchase $720,000 in September. Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following mon...

Q: Raider-X Company forecasts sales of 18,000 units for

Raider-X Company forecasts sales of 18,000 units for April. Beginning inventory is 3,000 units. The desired ending inventory is 30% higher than the beginning inventory. How many units should Raider-X...

Q: How does budgeting help management coordinate and plan business activities?

How does budgeting help management coordinate and plan business activities?

Q: Tora Co. plans to produce 1,020 units in July

Tora Co. plans to produce 1,020 units in July. Each unit requires two hours of direct labor. The direct labor rate is $20 per hour. Prepare a direct labor budget for July.

Q: Scora, Inc., is preparing its master budget for the quarter

Scora, Inc., is preparing its master budget for the quarter ending March 31. It sells a single product for $50 per unit. Budgeted sales for the next four months follow. Prepare a sales budget for the...

Q: National Bank has several departments that occupy both floors of a two

National Bank has several departments that occupy both floors of a two-story building. The depart mental accounting system has a single account, Building Occupancy Cost, in its ledger. The types and a...

Q: Refer to information in QS 7-23. In addition,

Refer to information in QS 7-23. In addition, sales commissions are 10% of sales and the company pays a sales manager a salary of $6,000 per month. Sales commissions and salaries are paid in the month...

Q: Royal Phillips Electronics of the Netherlands reports sales of €25,

Royal Phillips Electronics of the Netherlands reports sales of €25,400 million for a recent year. Assume that the company expects sales growth of 3 percent for the next year. Also assume that selling...

Q: Messers Company is preparing a cash budget for February. The company

Messers Company is preparing a cash budget for February. The company has $20,000 cash at the beginning of February and anticipates $75,000 in cash receipts and $100,250 in cash disbursements during Fe...

Q: Good management includes good budgeting. (1) Explain why

Good management includes good budgeting. (1) Explain why the bottom-up approach to budgeting is considered a more successful management technique than a top-down approach. (2) Provide an example of...

Q: Activity-based budgeting is a budget system based on expected activities

Activity-based budgeting is a budget system based on expected activities. (1) Describe activity-based budgeting, and explain its preparation of budgets. (2) How does activity-based budgeting differ...

Q: Refer to information from QS 7-10. Assume 60%

Refer to information from QS 7-10. Assume 60% of Grace’s sales are for cash. The remaining 40% are credit sales; these customers pay in the month following the sale. Compute the budgeted cash receipts...

Q: Meyer Co. forecasts merchandise purchases of $15,800 in

Meyer Co. forecasts merchandise purchases of $15,800 in January, $18,600 in February, and $20,200 in March; 40% of purchases are paid in the month of purchase and 60% are paid in the following month....

Q: Lexi Company forecasts unit sales of 1,040,000 in

Lexi Company forecasts unit sales of 1,040,000 in April, 1,220,000 in May, 980,000 in June, and 1,020,000 in July. Beginning inventory on April 1 is 280,000 units, and the company wants to have 30% of...

Q: Why is the sales budget so important to the budgeting process?

Why is the sales budget so important to the budgeting process?

Q: Champ, Inc. predicts the following sales in units for the

Champ, Inc. predicts the following sales in units for the coming three months: Each month’s ending inventory of finished units should be 60% of the next month’s s...

Q: Williams Company began operations in January 2013 with two operating (selling

Williams Company began operations in January 2013 with two operating (selling) departments and one service (office) department. Its departmental income statements follow. Williams plans to open a th...

Q: Zortek Corp. budgets production of 400 units in January and 200

Zortek Corp. budgets production of 400 units in January and 200 units in February. Each finished unit requires five pounds of raw material Z, which costs $2 per pound. Each month’s ending inventory of...

Q: Refer to information in QS 7-23. In addition,

Refer to information in QS 7-23. In addition, sales are 40% cash and 60% on credit. All credit sales are collected in the month following the sale. The January 1 balance in accounts receivable is $15,...

Q: Adria Lopez expects second quarter 2014 sales of her new line of

Adria Lopez expects second quarter 2014 sales of her new line of computer furniture to be thesame as the first quarter’s sales (reported below) without any changes in strategy. Month...

Q: Many service industries link labor rate and time (quantity) standards

Many service industries link labor rate and time (quantity) standards with their processes. Oneexample is the standard time to board an aircraft. The reason time plays such an important role in the s...

Q: Access the annual report of Piaggio (at www.piaggio.

Access the annual report of Piaggio (at www.piaggio.com) for the year ended December 31,2011. The usefulness of its budgets, variances, and related analyses depends on the accuracy of management’s es...

Q: Analysis of flexible budgets and standard costs emphasizes the importance of a

Analysis of flexible budgets and standard costs emphasizes the importance of a similar unit ofmeasure for meaningful comparisons and evaluations. When Polariscompiles its financial reports in complia...

Q: The usefulness of budgets, variances, and related analyses often depends

The usefulness of budgets, variances, and related analyses often depends on the accuracy ofmanagement’s estimates of future sales activity. Required1. Identify and record the prior three years’ sal...

Q: Setting materials, labor, and overhead standards is challenging. If

Setting materials, labor, and overhead standards is challenging. If standards are set too low,companies might purchase inferior products and employees might not work to their full potential. If stand...

Q: The reason we use the words favorable and unfavorable when evaluating variances

The reason we use the words favorable and unfavorable when evaluating variances is madeclear when we look at the closing of accounts. To see this, consider that (1) all variance accounts are closed a...

Q: Kayak Co. budgeted the following cash receipts (excluding cash receipts

Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash disbursements (excluding cash disbursements for loan and interest payments) for the first three mo...

Q: Billie Whitehorse, the plant manager of Travel Free’s Indiana plant,

Billie Whitehorse, the plant manager of Travel Free’s Indiana plant, is responsible for all of that plant’s costs other than her own salary. The plant has two opera...

Q: Access iSixSigma’s Website (iSixSigma.com) to search for and

Access iSixSigma’s Website (iSixSigma.com) to search for and read information about benchmarking to complete the following requirements. (Hint: Look in the “dictionary” link.) Required1. Write a one...

Q: Folsom Custom Skis, as discussed in the chapter opener, uses

Folsom Custom Skis, as discussed in the chapter opener, uses a costing system with standardcosts for direct materials, direct labor, and overhead costs. Two comments frequently are mentioned in relat...

Q: Training employees to use standard amounts of materials in production is common

Training employees to use standard amounts of materials in production is common. Typicallylarge companies invest in this training but small organizations do not. One can observe these different pract...

Q: What limits the usefulness to managers of fixed budget performance reports?

What limits the usefulness to managers of fixed budget performance reports?

Q: Identify the main purpose of a flexible budget for managers.

Identify the main purpose of a flexible budget for managers.

Q: What type of analysis does a flexible budget performance report help management

What type of analysis does a flexible budget performance report help management perform?

Q: In what sense can a variable cost be considered constant?

In what sense can a variable cost be considered constant?

Q: What is the purpose of using standard costs?

What is the purpose of using standard costs?

Q: In general, variance analysis is said to provide information about _________

In general, variance analysis is said to provide information about _________ and _________ variances.

Q: Is it possible for a retail store such asApple to use variances

Is it possible for a retail store such asApple to use variances in analyzing its operating performance? Explain.

Q: Georgia Orchards produced a good crop of peaches this year. After

Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company believes it should have given its No. 3 peaches to charity and saved its efforts...

Q: Budgeting promotes good decision making by requiring managers to conduct ______ and

Budgeting promotes good decision making by requiring managers to conduct ______ and by focusing their attention on the ______.

Q: Assume that Piaggio is budgeted to operate at 80% of capacity

Assume that Piaggio is budgeted to operate at 80% of capacity but actually operates at 75% of capacity. What effect will the 5% deviation have on its controllable variance? Its volume variance?

Q: Prepare a flexible budget performance report title (in proper form)

Prepare a flexible budget performance report title (in proper form) for Spalding Company for the calendar year 2013. Why is a proper title important for this or any report?

Q: What department is usually responsible for a direct labor rate variance?

What department is usually responsible for a direct labor rate variance? What department is usually responsible for a direct labor efficiency variance? Explain.

Q: What is a price variance? What is a quantity variance?

What is a price variance? What is a quantity variance?

Q: KTM monitors its fixed overhead. In an analysis of fixed overhead

KTM monitors its fixed overhead. In an analysis of fixed overhead cost variances, what is the volume variance?

Q: What is the predetermined standard overhead rate? How is it computed

What is the predetermined standard overhead rate? How is it computed?

Q: Polaris monitors its overhead. In an analysis of overhead cost variances

Polaris monitors its overhead. In an analysis of overhead cost variances, what is the controllable variance and what causes it?

Q: What are the relations among standard costs, flexible budgets, variance

What are the relations among standard costs, flexible budgets, variance analysis, and management by exception?

Q: How can the manager of snowmobile sales at Arctic Cat use flexible

How can the manager of snowmobile sales at Arctic Cat use flexible budgets to enhance performance?

Q: Jasper Company has sales on account and sales for cash. Specifically

Jasper Company has sales on account and sales for cash. Specifically, 70% of its sales are on account and 30% are for cash. Credit sales are collected in full in the month following the sale. The comp...

Q: Presented below are terms preceded by letters a through j and a

Presented below are terms preceded by letters a through j and a list of definitions 1 through 10. Enter the letter of the term with the definition, using the space preceding the definition. a. Fixed b...

Q: Refer to information from Exercise 7-8. Each transmission requires

Refer to information from Exercise 7-8. Each transmission requires 4 direct labor hours, at a cost of $12 per hour. Prepare a direct labor budget for the second quarter. In Exercise 7-8 Electro Compa...

Q: The following information describes production activities of Mercer Manufacturing for the year

The following information describes production activities of Mercer Manufacturing for the year: Actual raw materials used . . . . . . . . . 16,000 lbs. at $4.05 per lb. Actual factory payroll . . . ....

Q: JPAK Company manufactures and sells mountain bikes. It normally operates eight

JPAK Company manufactures and sells mountain bikes. It normally operates eight hours a day, five days a week. Using this information, classify each of the following costs as fixed or variable. If addi...

Q: Tempo Company’s fixed budget for the first quarter of calendar year 2013

Tempo Company’s fixed budget for the first quarter of calendar year 2013 reveals the following. Prepare flexible budgets following the format of Exhibit 8.3 that show variable costs...

Q: Solitaire Company’s fixed budget performance report for June follows. The $

Solitaire Company’s fixed budget performance report for June follows. The $315,000 budgeted expenses include $294,000 variable expenses and $21,000 fixed expenses. Actual expenses in...

Q: Bay City Company’s fixed budget performance report for July follows. The

Bay City Company’s fixed budget performance report for July follows. The $647,500 budgeted expenses include $487,500 variable expenses and $160,000 fixed expenses. Actual expenses in...

Q: After evaluating Null Company’s manufacturing process, management decides to establish standards

After evaluating Null Company’s manufacturing process, management decides to establish standards of 3 hours of direct labor per unit of product and $15 per hour for the labor rate. During October, the...

Q: Sedona Company set the following standard costs for one unit of its

Sedona Company set the following standard costs for one unit of its product for 2013. Direct material (20 Ibs. @ $2.50 per Ib.) . . . . . . . . . . . . . . . . . . $ 50.00 Direct labor (10 hrs. @ $8....

Q: Refer to the information from Exercise 8-6. Compute and

Refer to the information from Exercise 8-6. Compute and interpret the following. 1. Variable overhead spending and efficiency variances. 2. Fixed overhead spending and volume variances. 3. Controllabl...

Q: Oakwood Company produces maple bookcases to customer order. It received an

Oakwood Company produces maple bookcases to customer order. It received an order from a customer to produce 5,000 bookcases. The following information is available for the production of the bookcases....

Q: Hart Company made 3,000 bookshelves using 22,000 board

Hart Company made 3,000 bookshelves using 22,000 board feet of wood costing $266,200. The company’s direct materials standards for one bookshelf are 8 board feet of wood at $12 per board foot. (1) Com...

Q: Refer to Exercise 8-8. Hart Company records standard costs

Refer to Exercise 8-8. Hart Company records standard costs in its accounts and its material variances in separate accounts when it assigns materials costs to the Goods in Process Inventory account. (1...

Q: Why are many companies divided into departments?

Why are many companies divided into departments?

Q: National Bank has several departments that occupy both floors of a two

National Bank has several departments that occupy both floors of a two-story building. The depart mental accounting system has a single account, Building Occupancy Cost, in its ledger. The types and a...

Q: Suggest a reasonable basis for allocating each of the following indirect expenses

Suggest a reasonable basis for allocating each of the following indirect expenses to departments: (a) salary of a supervisor who manages several departments, (b) rent, (c) heat, (d) electricity for li...

Q: Williams Company began operations in January 2013 with two operating (selling

Williams Company began operations in January 2013 with two operating (selling) departments and one service (office) department. Its departmental income statements follow. Williams plans to open a th...

Q: Billie Whitehorse, the plant manager of Travel Free’s Indiana plant,

Billie Whitehorse, the plant manager of Travel Free’s Indiana plant, is responsible for all of that plant’s costs other than her own salary. The plant has two opera...

Q: Georgia Orchards produced a good crop of peaches this year. After

Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company believes it should have given its No. 3 peaches to charity and saved its efforts...

Q: Best Ink produces ink-jet printers for personal computers. It

Best Ink produces ink-jet printers for personal computers. It received an order for 500 printers from a customer. The following information is available for this order. Process time . . . . . . . . ....

Q: Harmon’s has several departments that occupy all floors of a two-

Harmon’s has several departments that occupy all floors of a two-story building that includes a basement floor. Harmon rented this building under a long-term lease negotiated when rental rates were lo...

Q: Bonanza Entertainment began operations in January 2013 with two operating (selling

Bonanza Entertainment began operations in January 2013 with two operating (selling) departments and one service (office) department. Its departmental income statements follow. The company plans to o...

Q: Britney Brown, the plant manager of LMN Co.’s Chicago

Britney Brown, the plant manager of LMN Co.’s Chicago plant, is responsible for all of that plant’s costs other than her own salary. The plant has two operating dep...

Q: Rita and Rick Redding own and operate a tomato grove. After

Rita and Rick Redding own and operate a tomato grove. After preparing the following income statement, Rita believes they should have offered the No. 3 tomatoes to the public for free and saved themsel...

Q: What is the benefit of continuous budgeting?

What is the benefit of continuous budgeting?

Q: Karim Corp. requires a minimum $8,000 cash balance

Karim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at...

Q: What is a transfer price? Under what conditions is a marketbased

What is a transfer price? Under what conditions is a marketbased transfer price most likely to be used?

Q: In each blank next to the following terms, place the identifying

In each blank next to the following terms, place the identifying letter of its best description. 1. Cost center 2. Investment center 3. Departmental accounting system 4. Operating department 5. Profit...

Q: In each blank next to the following terms, place the identifying

In each blank next to the following terms, place the identifying letter of its best description. 1. Indirect expenses 2. Controllable costs 3. Direct expenses 4. Uncontrollable costs A. Costs not wi...

Q: Refer to information in QS 9-5. Assume a target

Refer to information in QS 9-5. Assume a target income of 12% of average invested assets. Compute residual income for each division. In QS 9-5

Q: A company’s shipping division (an investment center) has sales of

A company’s shipping division (an investment center) has sales of $2,420,000, net income of $516,000, and average invested assets of $2,250,000. Compute the division’s profit margin and investment tur...

Q: Classify each of the performance measures below into the most likely balanced

Classify each of the performance measures below into the most likely balanced scorecard perspective it relates to. Label your answers using C (customer), P (internal process), I (innovation and growth...

Q: Walt Disney reports the following information for its two Parks and Resorts

Walt Disney reports the following information for its two Parks and Resorts divisions. Assume Walt Disney uses a balanced scorecard and sets a target of 90% occupancy in its resorts. Using Exhibit 9...

Q: A company purchases a 10,020 square foot commercial building for

A company purchases a 10,020 square foot commercial building for $325,000 and spends an additional $50,000 to divide the space into two separate rental units and prepare it for rent. Unit A, which has...

Q: For a recent year L’Orealreported operating profit of €3,385

For a recent year L’Orealreported operating profit of €3,385 (in millions) for its Cosmetics division. Total assets were €12,888 at the beginning of the year and €13,099 (in millions) at the end of th...

Q: Compute and interpret (a) manufacturing cycle time and (b

Compute and interpret (a) manufacturing cycle time and (b) manufacturing cycle efficiency using the following information from a manufacturing company. Process time . . . . . . . . . . . 15 minutes I...

Q: Car Mart pays $130,000 rent each year for its

Car Mart pays $130,000 rent each year for its two-story building. The space in this building is occupied by five departments as specified here. Paint department . . . . . . . . . . . . . . . 1,440 sq...

Q: Refer to information from Exercise 7-8. Each transmission requires

Refer to information from Exercise 7-8. Each transmission requires 0.80 pounds of a key raw material. Electro Company aims to end each quarter with an ending inventory of direct materials equal to 50%...

Q: Foyert Corp. requires a minimum $30,000 cash balance

Foyert Corp. requires a minimum $30,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans a...

Q: For each of the following types of indirect expenses and service department

For each of the following types of indirect expenses and service department expenses, identify oneallocation basis that could be used to distribute it to the departments indicated. 1. Computer servic...

Q: Use the information in the following table to compute each department’s contribution

Use the information in the following table to compute each department’s contribution to overhead (both in dollars and as a percent). Which department contributes the largest dollar a...

Q: Compute return on assets for each of the divisions below (each

Compute return on assets for each of the divisions below (each is an investment center). Comment on the relative performance of each investment center.

Q: Fill in the blanks in the schedule below for two separate investment

Fill in the blanks in the schedule below for two separate investment centers A and B. Round answers to the nearest whole percent.

Q: The Windshield division of Fast Car Co. makes windshields for use

The Windshield division of Fast Car Co. makes windshields for use in Fast Car’s Assembly division. The Windshield division incurs variable costs of $200 per windshield and has capacity to make 500,000...

Q: Refer to information in QS 9-11. If the Windshield

Refer to information in QS 9-11. If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between the Windshield and Assembly divis...

Q: Adria Lopez’s two departments, computer consulting services and computer workstation furniture

Adria Lopez’s two departments, computer consulting services and computer workstation furniture manufacturing, have each been profitable. Adria has heard of the balanced scorecard and wants you to prov...

Q: Revenues for three of Polaris’s four segments for the year ending December

Revenues for three of Polaris’s four segments for the year ending December 31, 2011 are reported below. Assume that Polaris reports operating expenses for each of its segments for th...

Q: Access KTM’s 2011 annual report dated December 31, 2011, from

Access KTM’s 2011 annual report dated December 31, 2011, from its Website www.KTM.com.Identify and read the section in the Group Status Report—2011, section 12, regarding Sustainability. RequiredKT...

Q: What is a joint cost? How are joint costs usually allocated

What is a joint cost? How are joint costs usually allocated among the products produced from them?

Q: Polaris and Arctic Cat sell several different products; most are profitable

Polaris and Arctic Cat sell several different products; most are profitable but some are not.Teams of employees in each company make advertising, investment, and product mix decisions. A certain port...

Q: Keggler’s Supply is a merchandiser of three different products. The company’s

Keggler’s Supply is a merchandiser of three different products. The company’s February 28 inventories are footwear, 20,000 units; sports equipment, 80,000 units; an...

Q: Bert Asiago, a salesperson for Convertco, received an order from

Bert Asiago, a salesperson for Convertco, received an order from a potential new customer for50,000 units of Convertco’s single product at a price $25 below its regular selling price of $65. Asiago k...

Q: Assume that you work for Greeble’s Department Store, and your manager

Assume that you work for Greeble’s Department Store, and your manager requests that yououtline the pros and cons of discontinuing its hardware department. That department appears to be generating los...

Q: Many companies must determine whether to internally produce their component parts or

Many companies must determine whether to internally produce their component parts or to outsource them. Further, some companies now outsource key components or business processes to international prov...

Q: Break into teams and identify costs that an airline such as Delta

Break into teams and identify costs that an airline such as Delta Airlineswould incur on aflight from Green Bay to Minneapolis. (1) Identify the individual costs as variable or fixed. (2) Assume tha...

Q: Charlie Fyffe of Charlie’s Browniesmakes brownies and other sweets. Charlie must

Charlie Fyffe of Charlie’s Browniesmakes brownies and other sweets. Charlie must decideon the best sales mix for his products. Assume that his company has a capacity of 400 hours of...

Q: Restaurants are often adding and removing menu items. Visit a restaurant

Restaurants are often adding and removing menu items. Visit a restaurant and identify anew food item. Make a list of costs that the restaurant must consider when deciding whether to add that new item...

Q: Identify the five steps involved in the managerial decisionmaking process.

Identify the five steps involved in the managerial decisionmaking process.

Q: Is nonfinancial information ever useful in managerial decision making?

Is nonfinancial information ever useful in managerial decision making?

Q: USA Airlines uses the following performance measures. Classify each of the

USA Airlines uses the following performance measures. Classify each of the performance measures below into the most likely balanced scorecard perspective it relates to. Label your answers using C (cus...

Q: What is a relevant cost? Identify the two types of relevant

What is a relevant cost? Identify the two types of relevant costs.

Q: Why are sunk costs irrelevant in deciding whether to sell a product

Why are sunk costs irrelevant in deciding whether to sell a product in its present condition or to make it into a new product through additional processing?

Q: During the last week of August, Oneida Company’s owner approaches the

During the last week of August, Oneida Company’s owner approaches the bank for a $100,000 loan to be made on September 2 and repaid on November 30 with annual interest of 12%, for an...

Q: Arctic Cat has many types of costs. What is an out

Arctic Cat has many types of costs. What is an out-of-pocket cost? What is an opportunity cost?Are opportunity costs recorded in the accounting records?

Q: Piaggio must confront sunk costs. Why are sunk costs irrelevant in

Piaggio must confront sunk costs. Why are sunk costs irrelevant in deciding whetherto sell a product in its present condition or to make it into a new product through additional processing?

Q: Assume that Polarismanufactures and sells 60,000 units of a product

Assume that Polarismanufactures and sells 60,000 units of a product at $11,000 per unit indomestic markets. It costs $6,000 per unit to manufacture ($4,000 variable cost per unit, $2,000 fixed cost p...

Q: Identify some qualitative factors that should be considered when making managerial decisions

Identify some qualitative factors that should be considered when making managerial decisions.

Q: Identify the incremental costs incurred by Applefor shipping one additional iPod from

Identify the incremental costs incurred by Applefor shipping one additional iPod from a warehouse to a retail store along with the store’s normal order of 75 iPods.

Q: KTM is considering eliminating one of its stores in a large U

KTM is considering eliminating one of its stores in a large U.S. city. What are some factors that it should consider in making this decision?

Q: Fill in each of the blanks below with the correct term.

Fill in each of the blanks below with the correct term. 1. A arises from a past decision and cannot be avoided or changed; it is irrelevant to future decisions. 2.refer to the incremental revenue gene...

Q: L’Orealreports the following for a recent year for the major divisions in

L’Orealreports the following for a recent year for the major divisions in its Cosmetics branch. 1. Compute profit margin for each division. State your answers as percents, rounded...

Q: Childress Company produces three products, K1, S5, and G9

Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 4 pounds of the material, S5 uses 3 pounds of the material, and G9 uses 6 pounds...

Q: Xinhong Company is considering replacing one of its manufacturing machines. The

Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $45,000 and a remaining useful life of 5 years, at which time its salvage value will be zero...

Q: A company must decide between scrapping or reworking units that do not

A company must decide between scrapping or reworking units that do not pass inspection. The company has 22,000 defective units that cost $6 per unit to manufacture. The units can be sold as is for $2....

Q: Aztec Company sells its product for $180 per unit. Its

Aztec Company sells its product for $180 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 20% of credit sales is collected in the month of the s...

Q: Farrow Co. expects to sell 150,000 units of its

Farrow Co. expects to sell 150,000 units of its product in the next period with the following results. Sales (150,000 units) . . . . . . . . . . . . . . $2,250,000 Costs and expenses Direct materials...

Q: Goshford Company produces a single product and has capacity to produce 100

Goshford Company produces a single product and has capacity to produce 100,000 units per month. Costs to produce its current sales of 80,000 units follow. The regular selling price of the product is $...

Q: Gilberto Company currently manufactures one of its crucial parts at a cost

Gilberto Company currently manufactures one of its crucial parts at a cost of $4.45 per unit. This cost is based on a normal production rate of 65,000 units per year. Variable costs are $1.95 per unit...

Q: Gelb Company currently manufactures 40,000 units of a key component

Gelb Company currently manufactures 40,000 units of a key component for its manufacturing process at a cost of $4.45 per unit. Variable costs are $1.95 per unit, fixed costs related to making this com...

Q: Cobe Company has already manufactured 28,000 units of Product A

Cobe Company has already manufactured 28,000 units of Product A at a cost of $28 per unit. The 28,000 units can be sold at this stage for $700,000. Alternatively, the units can be further processed at...

Q: Varto Company has 7,000 units of its sole product in

Varto Company has 7,000 units of its sole product in inventory that it produced last year at a cost of $22 each. This year’s model is superior to last year’s and the 7,000 units cannot be sold at last...

Q: WohChe Co. has four departments: materials, personnel, manufacturing

WohChe Co. has four departments: materials, personnel, manufacturing, and packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expe...

Q: Suresh Co. expects its five departments to yield the following income

Suresh Co. expects its five departments to yield the following income for next year. Recompute and prepare the departmental income statements (including a combined total column) for the company unde...

Q: Marinette Company makes several products, including canoes. The company has

Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is...

Q: Colt Company owns a machine that can produce two specialized products.

Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is five units per hour. The machine’s...

Q: Jones Products manufactures and sells to wholesalers approximately 400,000 packages

Jones Products manufactures and sells to wholesalers approximately 400,000 packages per year of underwater markers at $6 per package. Annual costs for the production and sale of this quantity are show...

Q: Merline, a one-product mail-order firm, buys

Merline, a one-product mail-order firm, buys its product for $75 per unit and sells it for $150 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statem...

Q: Calla Company produces skateboards that sell for $50 per unit.

Calla Company produces skateboards that sell for $50 per unit. The company currently has the capacity to produce 90,000 skateboards per year, but is selling 80,000 skateboards per year. Annual costs f...

Q: Haver Company currently produces component RX5 for its sole product. The

Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 50,000 units of RX5 follows. Direct materials . . . . . . . . . . . $ 5.00 D...

Q: Harold Manufacturing produces denim clothing. This year, it produced 5

Harold Manufacturing produces denim clothing. This year, it produced 5,000 denim jackets at a manufacturing cost of $45 each. These jackets were damaged in the warehouse during storage. Management inv...

Q: Edgerron Company is able to produce two products, G and B

Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. The company presently operates the machine for a single eight...

Q: Elegant Decor Company’s management is trying to decide whether to eliminate Department

Elegant Decor Company’s management is trying to decide whether to eliminate Department 200, which has produced losses or low profits for several years. The company’...

Q: Refer to Polaris’s financial statements in Appendix A to answer the following

Refer to Polaris’s financial statements in Appendix A to answer the following. 1. Is Polaris’s statement of cash flows prepared under the direct method or the indirect method? How do you know? 2. For...

Q: Key comparative information for Piaggio (www.piaggio.com),

Key comparative information for Piaggio (www.piaggio.com), which manufactures two-,three- and four-wheel vehicles, and is Europe’s leading manufacturer of motorcycles and scooters, f...

Q: Refer to Arctic Cat’s financial statements in Appendix A to compute its

Refer to Arctic Cat’s financial statements in Appendix A to compute its equity ratio as of March 31, 2011, and March 31, 2010.

Q: Refer to Piaggio’s financial statements in Appendix A. Compute its debt

Refer to Piaggio’s financial statements in Appendix A. Compute its debt ratio as of December 31, 2011, and December 31, 2010.

Q: Use KTM’s financial statements in Appendix A to compute its return on

Use KTM’s financial statements in Appendix A to compute its return on total assets for fiscal yearended December 31, 2011.

Q: Nintendo Company, Ltd., reports the following financial information as of

Nintendo Company, Ltd., reports the following financial information as of, or for the year ended, March 31, 2011. Nintendo reports its financial statements in both Japanese yen and U.S. dollars as sho...

Q: Compute trend percents for the following accounts, using 2011 as the

Compute trend percents for the following accounts, using 2011 as the base year (round the percents to whole numbers). State whether the situation as revealed by the trends appears to be favorable or u...

Q: Common-size and trend percents for Rustynail Company’s sales, cost

Common-size and trend percents for Rustynail Company’s sales, cost of goods sold, and expenses follow. Determine whether net income increased, decreased, or remained unchanged in thi...

Q: Express the following comparative income statements in common-size percents and

Express the following comparative income statements in common-size percents and assess whether or not this company’s situation has improved in the most recent year (round the percent...

Q: Roak Company and Clay Company are similar firms that operate in the

Roak Company and Clay Company are similar firms that operate in the same industry. Clay began operations in 2013 and Roak in 2010. In 2015, both companies pay 7% interest on their debt to creditors. T...

Q: Simon Company’s year-end balance sheets follow. Express the balance

Simon Company’s year-end balance sheets follow. Express the balance sheets in common-size percents. Round amounts to the nearest one-tenth of a percent. Analyze and comment on the re...

Q: Refer to Simon Company’s balance sheets in Exercise 13-7.

Refer to Simon Company’s balance sheets in Exercise 13-7. Analyze its year-end short-term liquidity position at the end of 2014, 2013, and 2012 by computing (1) the current ratio an...

Q: Is depreciation a source of cash flow?

Is depreciation a source of cash flow?

Q: Refer to the Simon Company information in Exercise 13-7.

Refer to the Simon Company information in Exercise 13-7. The company’s income statements for the years ended December 31, 2014 and 2013, follow. Assume that all sales are on credit a...

Q: Refer to the Simon Company information in Exercises 13-7 and

Refer to the Simon Company information in Exercises 13-7 and 13-9. Compare the company’s long-term risk and capital structure positions at the end of 2014 and 2013 by computing these...

Q: Refer to Simon Company’s financial information in Exercises 13-7 and

Refer to Simon Company’s financial information in Exercises 13-7 and 13-9. Evaluate the company’s efficiency and profitability by computing the following for 2014 a...

Q: Refer to Simon Company’s financial information in Exercises 13-7 and

Refer to Simon Company’s financial information in Exercises 13-7 and 13-9. Additional information about the company follows. To help evaluate the company’s profitab...

Q: In 2013, Randa Merchandising, Inc., sold its interest in

In 2013, Randa Merchandising, Inc., sold its interest in a chain of wholesale outlets, taking the company completely out of the wholesaling business. The company still operates its retail outlets. A l...

Q: Use the financial data for Randa Merchandising, Inc., in Exercise

Use the financial data for Randa Merchandising, Inc., in Exercise 13-13 to prepare its income statement for calendar year 2013. (Ignore the earnings per share section.) Exercise 13-13:

Q: Match the ratio to the building block of financial statement analysis to

Match the ratio to the building block of financial statement analysis to which it best relates. A. Liquidity and efficiency B. Solvency C. Profitability D. Market prospects 1. Equity...

Q: 1. Which two ratios are key components in measuring a company’s

1. Which two ratios are key components in measuring a company’s operating efficiency? Which ratio summarizes these two components? 2. What measure reflects the difference between current assets and cu...

Q: Selected comparative financial statements of Korbin Company follow. /

Selected comparative financial statements of Korbin Company follow. Required1. Compute each year’s current ratio. (Round ratio amounts to one decimal.) 2. Express the income state...

Q: Selected comparative financial statements of Haroun Company follow. /

Selected comparative financial statements of Haroun Company follow. Required1. Compute trend percents for all components of both statements using 2008 as the base year. (Round percents to one decim...

Q: Refer to Polaris’s statement of cash flows in Appendix A.

Refer to Polaris’s statement of cash flows in Appendix A. (a) Which method is used to compute its net cash provided by operating activities? (b) Its balance sheet shows an increase in accounts (trad...

Q: Plum Corporation began the month of May with $700,000

Plum Corporation began the month of May with $700,000 of current assets, a current ratio of 2.50:1, and an acid-test ratio of 1.10:1. During the month, it completed the following transactions (the com...

Q: Selected year-end financial statements of Cabot Corporation follow. (

Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $48,900; total assets, $189,400; com...

Q: Summary information from the financial statements of two companies competing in the

Summary information from the financial statements of two companies competing in the same industry follows. Required1. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) ac...

Q: Selected account balances from the adjusted trial balance for Olinda Corporation as

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar yearend December 31, 2013, follow. RequiredAnswer each of the following questions by providing sup...

Q: Selected comparative financial statement information of Bluegrass Corporation follows.

Selected comparative financial statement information of Bluegrass Corporation follows. Required1. Compute each year’s current ratio. (Round ratio amounts to one decimal.) 2. Expre...

Q: Selected comparative financial statements of Tripoly Company follow. /

Selected comparative financial statements of Tripoly Company follow. Required1. Compute trend percents for all components of both statements using 2008 as the base year. (Round percents to one deci...

Q: Koto Corporation began the month of June with $300,000

Koto Corporation began the month of June with $300,000 of current assets, a current ratio of 2.5:1, and an acid-test ratio of 1.4:1. During the month, it completed the following transactions (the comp...

Q: Selected year-end financial statements of Overton Corporation follow. (

Selected year-end financial statements of Overton Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $17,400; total assets, $94,900; co...

Q: Summary information from the financial statements of two companies competing in the

Summary information from the financial statements of two companies competing in the same industry follows. Required1. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) ac...

Q: Selected account balances from the adjusted trial balance for Harbor Corp.

Selected account balances from the adjusted trial balance for Harbor Corp. as of its calendar year-end December 31, 2013, follow. RequiredAnswer each of the following questions by providing supporti...

Q: Refer to Arctic Cat’s statement of cash flows in Appendix A.

Refer to Arctic Cat’s statement of cash flows in Appendix A. What are its cash flowsfrom financing activities for the year ended March 31, 2011? List the items and amounts.

Q: Answer each of the following related to international accounting and analysis.

Answer each of the following related to international accounting and analysis. a. Identify a limitation to using ratio analysis when examining companies reporting under different accounting systems su...

Q: What are four possible standards of comparison used to analyze financial statement

What are four possible standards of comparison used to analyze financial statement ratios? Which of these is generally considered to be the most useful? Which one is least likely to provide a good bas...

Q: For each ratio listed, identify whether the change in ratio value

For each ratio listed, identify whether the change in ratio value from 2012 to 2013 is usually regarded as favorable or unfavorable.

Q: The following information is available for Morgan Company and Parker Company,

The following information is available for Morgan Company and Parker Company, similar firms operating in the same industry. Write a half-page report comparing Morgan and Parker using the available inf...

Q: Which of the following items (a) through (i)

Which of the following items (a) through (i) are part of financial reporting but are not included as part of general-purpose financial statements? (a) balance sheet, (b) financial statement notes, (...

Q: Use the following information for Tide Corporation to determine the 2012 and

Use the following information for Tide Corporation to determine the 2012 and 2013 trend percents for net sales using 2012 as the base year.

Q: Refer to the information in QS 13-2. Use that

Refer to the information in QS 13-2. Use that information for Tide Corporation to determine the 2012 and 2013 common-size percents for cost of goods sold using net sales as the base. In QS 13-2

Q: Compute the annual dollar changes and percent changes for each of the

Compute the annual dollar changes and percent changes for each of the following accounts.

Q: A review of the notes payable files discovers that three years ago

A review of the notes payable files discovers that three years ago the company reported the entire amount of a payment (principal and interest) on an installment note payable as interest expense. This...

Q: Use the following selected data from Success Systems’ income statement for the

Use the following selected data from Success Systems’ income statement for the three monthsended March 31, 2014, and from its March 31, 2014, balance sheet to complete the requirements below: compute...

Q: What is the reporting purpose of the statement of cash flows?

What is the reporting purpose of the statement of cash flows? Identify at least two questions that this statement can answer.

Q: Refer to Piaggio’s statement of cash flows in Appendix A. What

Refer to Piaggio’s statement of cash flows in Appendix A. What investing activities resultin cash outflows for the year ended December 31, 2011? List items and amounts.

Q: What are some investing activities reported on the statement of cash flows

What are some investing activities reported on the statement of cash flows?

Q: What are some financing activities reported on the statement of cash flows

What are some financing activities reported on the statement of cash flows?

Q: When a statement of cash flows is prepared using the direct method

When a statement of cash flows is prepared using the direct method, what are some of the operating cash flows?

Q: Assume that a company purchases land for $1,000,

Assume that a company purchases land for $1,000,000, paying $400,000 cash and borrowing the remainder with a long-term note payable. How should this transaction be reported on a statement of cash flow...

Q: Key figures for Polaris and Arctic Cat follow. /

Key figures for Polaris and Arctic Cat follow. Required1. Compute the recent two years’ cash flow on total assets ratios for Polaris and Arctic Cat. 2. What does the cash flow on t...

Q: If a company reports positive net income for the year, can

If a company reports positive net income for the year, can it also show a net cash outflow from operating activities? Explain.

Q: Describe the direct method of reporting cash flows from operating activities.

Describe the direct method of reporting cash flows from operating activities.

Q: Describe the indirect method of reporting cash flows from operating activities.

Describe the indirect method of reporting cash flows from operating activities.

Q: Where on the statement of cash flows is the payment of cash

Where on the statement of cash flows is the payment of cash dividends reported?

Q: On June 3, a company borrows $200,000 cash

On June 3, a company borrows $200,000 cash by giving its bank a 90-day, interest-bearing note. On the statement of cash flows, where should this be reported?

Q: Refer to KTM’s 2011 statement of cash flows in Appendix A.

Refer to KTM’s 2011 statement of cash flows in Appendix A. List its cash flows from operatingactivities, investing activities, and financing activities.

Q: Peugeot S.A. reports the following financial information for the

Peugeot S.A. reports the following financial information for the year ended December 31, 2011 (euros in millions). Prepare its statement of cash flows under the indirect method.

Q: The following transactions and events occurred during the year. Assuming that

The following transactions and events occurred during the year. Assuming that this company uses the indirect method to report cash provided by operating activities, indicate where each item would appe...

Q: The following transactions and events occurred during the year. Assuming that

The following transactions and events occurred during the year. Assuming that this company uses the direct method to report cash provided by operating activities, indicate where each item would appear...

Q: Fitzpatrick Company’s calendar-year 2013 income statement shows the following:

Fitzpatrick Company’s calendar-year 2013 income statement shows the following: Net Income, $374,000; Depreciation Expense, $44,000; Amortization Expense, $7,200; Gain on Sale of Plant Assets, $6,000....

Q: Katie Murphy is preparing for a meeting with her banker. Her

Katie Murphy is preparing for a meeting with her banker. Her business is finishing its fourthyear of operations. In the first year, it had negative cash flows from operations. In the second and third...

Q: Salud Company reports net income of $400,000 for the

Salud Company reports net income of $400,000 for the year ended December 31, 2013. It also reports $80,000 depreciation expense and a $20,000 gain on the sale of machinery. Its comparative balance she...

Q: For each of the following three separate cases, use the information

For each of the following three separate cases, use the information provided about the calendar-year 2014 operations of Sahim Company to compute the required cash flow information. Case X: Compute cas...

Q: Information: The following income statement and information about changes in noncash

Information: The following income statement and information about changes in noncash current assets and current liabilities are reported. Changes in current asset and current liability accounts for...

Q: Refer to the information about Sonad Company in Exercise 12-6

Refer to the information about Sonad Company in Exercise 12-6. Use the direct method to prepare only the cash provided or used by operating activities section of the statement of cash flows for this c...

Q: Use the following information to determine this company’s cash flows from investing

Use the following information to determine this company’s cash flows from investing activities. a. Equipment with a book value of $65,300 and an original cost of $133,000 was sold at a loss of $14,000...

Q: Refer to the information reported about Forten Company in Problem 12-

Refer to the information reported about Forten Company in Problem 12-1A. RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report its operating activities us...

Q: Refer to the information in Problem 12-7B.

Refer to the information in Problem 12-7B. RequiredPrepare the cash flows from operating activities section only of the company’s 2013 statement of cash flows using the direct metho...

Q: Team members are to coordinate and independently answer one question within each

Team members are to coordinate and independently answer one question within each of thefollowing three sections. Team members should then report to the team and confirm or correct teammates’ answers....

Q: Refer to Forten Company’s financial statements and related information in Problem 12

Refer to Forten Company’s financial statements and related information in Problem 12-1A. RequiredPrepare a complete statement of cash flows; report its operating activities according...

Q: Answer each of the following related to international accounting standards.

Answer each of the following related to international accounting standards. 1. Which method, indirect or direct, is acceptable for reporting operating cash flows under IFRS?2. For each of the followin...

Q: The statement of cash flows is one of the four primary financial

The statement of cash flows is one of the four primary financial statements. 1. Describe the content and layout of a statement of cash flows, including its three sections. 2. List at least three trans...

Q: Complete the following spreadsheet in preparation of the statement of cash flows

Complete the following spreadsheet in preparation of the statement of cash flows. (The statement of cash flows is not required.) Prepare the spreadsheet as in Exhibit 12A.1; report operating activitie...

Q: The following selected information is from Ellerby Company’s comparative balance sheets.

The following selected information is from Ellerby Company’s comparative balance sheets. The income statement reports depreciation expense for the year of $18,000. Also, furniture...

Q: The following selected information is from the Princeton Company’s comparative balance sheets

The following selected information is from the Princeton Company’s comparative balance sheets. The company’s net income for the year ended December 31, 2013, was...

Q: Use the following balance sheets and income statement to answer QS 12

Use the following balance sheets and income statement to answer QS 12-6 through QS 12-11. RequiredUse the indirect method to prepare the cash provided or used from operating activities section only...

Q: Refer to the data in QS 12-6. Furniture costing

Refer to the data in QS 12-6. Furniture costing $55,000 is sold at its book value in 2013. Acquisitions of furniture total $45,000 cash, on which no depreciation is necessary because it is acquired at...

Q: Gazelle Corporation, a merchandiser, recently completed its calendar-year

Gazelle Corporation, a merchandiser, recently completed its calendar-year 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts...

Q: Refer to the data in QS 12-6. 1

Refer to the data in QS 12-6. 1. Assume that all common stock is issued for cash. What amount of cash dividends is paid during 2013?2. Assume that no additional notes payable are issued in 2013. What...

Q: Refer to the data in QS 12-6. 1

Refer to the data in QS 12-6. 1. How much cash is paid to acquire merchandise inventory during year 2013? 2. How much cash is paid for operating expenses during year 2013? In QS 12-6

Q: Refer to the data in QS 12-6. Use the

Refer to the data in QS 12-6. Use the direct method to prepare the cash provided or used from operating activities section only of the statement of cash flows for this company. In QS 12-6

Q: Golden Corp., a merchandiser, recently completed its 2013 operations.

Golden Corp., a merchandiser, recently completed its 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3)...

Q: Financial data from three competitors in the same industry follow.

Financial data from three competitors in the same industry follow. 1. Which of the three competitors is in the strongest position as shown by its statement of cash flows?2. Analyze and compare the str...

Q: Review the chapter’s opener involving TOMSand its young entrepreneurial owner, Blake

Review the chapter’s opener involving TOMSand its young entrepreneurial owner, Blake Mycoskie. Required1. In a business such as TOMS, monitoring cash flow is always a priority. Even though TOMS now...

Q: When a spreadsheet for a statement of cash flows is prepared,

When a spreadsheet for a statement of cash flows is prepared, all changes in noncash balance sheet accounts are fully explained on the spreadsheet. Explain how these noncash balance sheet accounts are...

Q: Use the following information about the cash flows of Ferron Company to

Use the following information about the cash flows of Ferron Company to prepare a complete statement of cash flows (direct method) for the year ended December 31, 2013. Use a note disclosure for any n...

Q: For each of the following separate cases, compute cash flows from

For each of the following separate cases, compute cash flows from operations. The list includes all balance sheet accounts related to operating activities.

Q: Use the following financial statements and additional information to (1

Use the following financial statements and additional information to (1) prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method, and (2) analyze and briefl...

Q: Arundel Company disclosed the following information for its recent calendar year.

Arundel Company disclosed the following information for its recent calendar year. Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000 Expenses Salaries expense . . . . . . . . ....

Q: Classify the following cash flows as operating, investing, or financing

Classify the following cash flows as operating, investing, or financing activities. 1. Sold long-term investments for cash. 2. Received cash payments from customers. 3. Paid cash for wages and salar...

Q: Use the following information to determine this company’s cash flows from operating

Use the following information to determine this company’s cash flows from operating activities using the indirect method.

Q: Refer to the data in QS 12-6. 1

Refer to the data in QS 12-6. 1. How much cash is received from sales to customers for year 2013? 2. What is the net increase or decrease in cash for year 2013? In QS 12-6

Q: Compute cash flows from investing activities using the following company information.

Compute cash flows from investing activities using the following company information. Sale of short-term investments . . . . . . . . . . $ 6,000 Cash collections from customers . . . . . . . . . 16,0...

Q: Refer to the information reported about Golden Corporation in Problem 12-

Refer to the information reported about Golden Corporation in Problem 12-4A. RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report operating activities un...

Q: Compute cash flows from financing activities using the following company information.

Compute cash flows from financing activities using the following company information. Additional short-term borrowings . . . . . . . . . . $20,000 Purchase of short-term investments . . . . . . . . 5...

Q: Adria Lopez, owner of Success Systems, decides to prepare a

Adria Lopez, owner of Success Systems, decides to prepare a statement of cash flows for herbusiness. (Although the serial problem allowed for various ownership changes in earlier chapters, we will pre...

Q: KTM (www.KTM.com), which is a leading

KTM (www.KTM.com), which is a leading manufacturer of offroad and street motorcycles,along with Polaris and Arctic Cat, are competitors in the global marketplace. Key figures for KTMfollow (in Euro...

Q: Jenna and Matt Wilder are completing their second year operating Mountain High

Jenna and Matt Wilder are completing their second year operating Mountain High, a downhillski area and resort. Mountain High reports a net loss of $(10,000) for its second year, which includes an $85...

Q: Your friend, Diana Wood, recently completed the second year of

Your friend, Diana Wood, recently completed the second year of her business and just received annual financial statements from her accountant. Wood finds the income statement and balancesheet informa...

Q: Refer to the information reported about Gazelle Corporation in Problem 12-

Refer to the information reported about Gazelle Corporation in Problem 12-1B. RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report its operating activiti...

Q: Key figures for Polaris and Arctic Cat follow. /

Key figures for Polaris and Arctic Cat follow. Required1. Compute common-size percents for each of the companies using the data provided. (Round percents to one decimal.) 2. Which company retains a...

Q: As Beacon Company controller, you are responsible for informing the board

As Beacon Company controller, you are responsible for informing the board of directorsabout its financial activities. At the board meeting, you present the following information. After the meeting,...

Q: Access the February 17, 2012, filing of the December 31

Access the February 17, 2012, filing of the December 31, 2011, 10-K report of The HersheyCompany (ticker HSY) at www.sec.gov and complete the following requirements. RequiredCompute or identify the...

Q: A team approach to learning financial statement analysis is often useful.

A team approach to learning financial statement analysis is often useful. Required1. Each team should write a description of horizontal and vertical analysis that all team members agree with and und...

Q: Assume that David and Tom Gardner of The Motley Fool (Fool

Assume that David and Tom Gardner of The Motley Fool (Fool.com) have impressed yousince you first heard of their rather improbable rise to prominence in financial circles. You learn of a staff opening...

Q: Refer to Golden Corporation’s financial statements and related information in Problem 12

Refer to Golden Corporation’s financial statements and related information in Problem 12-4A. RequiredPrepare a complete statement of cash flows; report its cash flows from operating...

Q: You are to devise an investment strategy to enable you to accumulate

You are to devise an investment strategy to enable you to accumulate $1,000,000 by age 65.Start by making some assumptions about your salary. Next compute the percent of your salary that you will be...

Q: Why would a company’s return on total assets be different from its

Why would a company’s return on total assets be different from its return on common stockholders’ equity?

Q: What is the difference between comparative financial statements and common-size

What is the difference between comparative financial statements and common-size comparative statements?

Q: Why is a company’s capital structure, as measured by debt and

Why is a company’s capital structure, as measured by debt and equity ratios, important to financial statement analysts?

Q: Refer to Gazelle Corporation’s financial statements and related information in Problem 12

Refer to Gazelle Corporation’s financial statements and related information in Problem 12-1B. RequiredPrepare a complete statement of cash flows; report its operating activities acco...

Q: How does inventory turnover provide information about a company’s short-term

How does inventory turnover provide information about a company’s short-term liquidity?

Q: The following summarized Cash T-account reflects the total debits and

The following summarized Cash T-account reflects the total debits and total credits to the Cash account of Thomas Corporation for calendar year 2013. (1) Use this information to prepare a complete sta...

Q: Visit The Motley Fool’s Website (Fool.com). Enter the

Visit The Motley Fool’s Website (Fool.com). Enter the Fool’s School (at Fool.com/School).Identify and select the link How to Value Stocks. (Please note the site may ask you to register with your emai...

Q: What ratios would you compute to evaluate management performance?

What ratios would you compute to evaluate management performance?

Q: Explain the difference between financial reporting and financial statements.

Explain the difference between financial reporting and financial statements.

Q: Which items are usually assigned a 100% value on (a

Which items are usually assigned a 100% value on (a) a common-size balance sheet and (b) a common-size income statement?

Q: Lansing Company’s 2013 income statement and selected balance sheet data at December

Lansing Company’s 2013 income statement and selected balance sheet data at December 31, 2012 and 2013, follow. RequiredPrepare the cash flows from operating activities section only...

Q: What three factors would influence your evaluation as to whether a company’s

What three factors would influence your evaluation as to whether a company’s current ratio is good or bad?

Q: Suggest several reasons why a 2:1 current ratio might not

Suggest several reasons why a 2:1 current ratio might not be adequate for a particular company.

Q: Why is working capital given special attention in the process of analyzing

Why is working capital given special attention in the process of analyzing balance sheets?

Q: Satu Company, a merchandiser, recently completed its 2013 operations.

Satu Company, a merchandiser, recently completed its 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3)...

Q: What does the number of days’ sales uncollected indicate?

What does the number of days’ sales uncollected indicate?

Q: What does a relatively high accounts receivable turnover indicate about a company’s

What does a relatively high accounts receivable turnover indicate about a company’s short-term liquidity?

Q: Where on the income statement does a company report an unusual gain

Where on the income statement does a company report an unusual gain not expected to occur more often than once every two years or so?

Q: A company reported average total assets of $1,240,

A company reported average total assets of $1,240,000 in 2012 and $1,510,000 in 2013. Its net operating cash flow in 2012 was $102,920 and $138,920 in 2013. Calculate its cash flow on total assets rat...

Q: Refer to Polaris’s financial statements in Appendix A. Compute its profit

Refer to Polaris’s financial statements in Appendix A. Compute its profit margin for the years ended December 31, 2011, and December 31, 2010.

Q: Use the following information to determine this company’s cash flows from financing

Use the following information to determine this company’s cash flows from financing activities. a. Net income was $35,000. b. Issued common stock for $64,000 cash. c. Paid cash dividend of $14,600. d....

Q: Hampton Company reports the following information for its recent calendar year.

Hampton Company reports the following information for its recent calendar year. Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160,000 Expenses Cost of goods sold . . . . . . . . . ....

Q: Access the March 30, 2012, filing of the 10-

Access the March 30, 2012, filing of the 10-K report (for year ending December 31, 2011) ofMendocino Brewing Company, Inc., at www .sec.gov. Required1. Does Mendocino Brewing use the direct or indi...

Q: Refer to the information in Problem 12-7A.

Refer to the information in Problem 12-7A. RequiredPrepare the cash flows from operating activities section only of the company’s 2013 statement of cash flows using the direct metho...

Q: Forten Company, a merchandiser, recently completed its calendar-year

Forten Company, a merchandiser, recently completed its calendar-year 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from...

Q: Refer to the information reported aboutSatu Company in Problem 12-4B

Refer to the information reported aboutSatu Company in Problem 12-4B. RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report operating activities under the...

Q: Refer to the information in Exercise 12-10. Using the

Refer to the information in Exercise 12-10. Using the direct method, prepare the statement of cash flows for the year ended June 30, 2013. In Exercise 12-10 The following financial statements and add...

Q: Refer to Satu Company’s financial statements and related information in Problem 12

Refer to Satu Company’s financial statements and related information in Problem 12-4B. RequiredPrepare a complete statement of cash flows; report its cash flows from operating activ...

Q: Salt Lake Company’s 2013 income statement and selected balance sheet data at

Salt Lake Company’s 2013 income statement and selected balance sheet data at December 31, 2012 and 2013, follow. RequiredPrepare the cash flows from operating activities section on...

Q: ‘‘They don’t just sell coffee; they sell the Starbucks

‘‘They don’t just sell coffee; they sell the Starbucks Experience,’’ remarked Deb Mills while sitting down to...

Q: The financial statements of Nike, Inc., reveal the information regarding

The financial statements of Nike, Inc., reveal the information regarding income taxes shown in Exhibit 2.17. REQUIRED a. Assuming that Nike had no significant permanent differences between book incom...

Q: Disclosures related to income taxes for The Coca-Cola Company (

Disclosures related to income taxes for The Coca-Cola Company (Coca-Cola) for 2006–2008 appear in Exhibit 9.13. REQUIRED a. Why are Coca-Cola’s average tax rates...

Q: What are the three main areas of management’s responsibility? How are

What are the three main areas of management’s responsibility? How are these three areas interrelated? How does managerial accounting support each of the responsibility areas of managers?

Q: What business trends are influencing managerial accounting today? How do these

What business trends are influencing managerial accounting today? How do these trends impact management accountants’ roles in the organization?

Q: Make a list of all of the equipment you will need to

Make a list of all of the equipment you will need to make your product. Estimate the cost of each piece of equipment that you will need.

Q: Now classify all of the expenses you have listed as being either

Now classify all of the expenses you have listed as being either fixed or variable. For mixed expenses, separate the expense into the fixed component and the variable component.

Q: Calculate how many units of your product you will need to sell

Calculate how many units of your product you will need to sell to break even in each of the five years you have projected.

Q: Calculate the margin of safety in units for each of the five

Calculate the margin of safety in units for each of the five years in your projection.

Q: Now decide how much you would like to make in before-

Now decide how much you would like to make in before-tax operating income (target profit) in each of the upcoming five years. Calculate how many units you would need to sell in each of the upcoming ye...

Q: Alston Jewelry had sales revenues last year of $2.4

Alston Jewelry had sales revenues last year of $2.4 million, while its breakeven point (in dollars) was $2.2 million. What was Alston Jewelry’s margin of safety in dollars? What does the term margin o...

Q: Describe four different ways cost-volume-profit analysis could be

Describe four different ways cost-volume-profit analysis could be useful to management.

Q: Describe three ways that cost-volume-profit concepts could be

Describe three ways that cost-volume-profit concepts could be used by a service organization.

Q: Define breakeven point. Why is the breakeven point important to managers

Define breakeven point. Why is the breakeven point important to managers?

Q: The purchasing manager for Rockwell Hall Bags has been able to purchase

The purchasing manager for Rockwell Hall Bags has been able to purchase the material for its signature handbags for $9 less per bag than in the prior year. Keeping everything else the same, what effec...

Q: Why is managerial accounting more suitable for internal reporting than for financial

Why is managerial accounting more suitable for internal reporting than for financial accounting?

Q: “Breakeven analysis isn’t very useful to a company because companies need

“Breakeven analysis isn’t very useful to a company because companies need to do more than break even to survive in the long run.” Explain why you agree or disagree with this statement.

Q: What conditions must be met for cost-volume-profit analysis

What conditions must be met for cost-volume-profit analysis to be accurate?

Q: Why is it necessary to calculate a weighted-average contribution margin

Why is it necessary to calculate a weighted-average contribution margin ratio for a multi- product company when calculating the breakeven point for that company? Why can’t all of the products’ contrib...

Q: Is the contribution margin ratio of a grocery store likely to be

Is the contribution margin ratio of a grocery store likely to be higher or lower than that of a plastics manufacturer? Explain the difference in cost structure between a grocery store and a plastics m...

Q: Rondell Pharmacy is considering switching to the use of robots to fill

Rondell Pharmacy is considering switching to the use of robots to fill prescriptions that consist of oral solids or medications in pill form. The robots will assist the human pharma- cists and will re...

Q: How can CVP techniques be used in supporting a company’s sustainability efforts

How can CVP techniques be used in supporting a company’s sustainability efforts? Conversely, how might CVP be a barrier to sustainability efforts?

Q: Describe the company that is making the decision to outsource. What

Describe the company that is making the decision to outsource. What area of the business is the company looking to outsource, or did it already outsource?

Q: Why did the company decide to outsource (or is considering outsourcing

Why did the company decide to outsource (or is considering outsourcing)?

Q: List the revenues and costs that might be impacted by this outsourcing

List the revenues and costs that might be impacted by this outsourcing decision. The article will not list many, if any, of these revenues and costs; you should make reasonable guesses about what reve...

Q: List the qualitative factors that could influence the company’s decision of whether

List the qualitative factors that could influence the company’s decision of whether or not to outsource this business operation. Again, you need to make reasonable guesses about the qualitative factor...

Q: How can what is taught in managerial accounting help you in other

How can what is taught in managerial accounting help you in other careers other than accounting?

Q: A computer manufacturer is considering outsourcing its technical support call center to

A computer manufacturer is considering outsourcing its technical support call center to India. Its current technical support call center is located in Dellroy, Ohio. The current call center is one of...

Q: A beverage company is considering whether to discontinue its line of grape

A beverage company is considering whether to discontinue its line of grape soda. What factors will affect the company’s decision? What is a qualitative factor? Which of the factors you listed are qual...

Q: What is an opportunity cost? List possible opportunity costs associated with

What is an opportunity cost? List possible opportunity costs associated with a make-or-buy decision.

Q: What undesirable result can arise from allocating common fixed costs to product

What undesirable result can arise from allocating common fixed costs to product lines?

Q: Why could a manager be justified in ignoring fixed costs when making

Why could a manager be justified in ignoring fixed costs when making a decision about a special order? When would fixed costs be relevant when making a decision about a special order?

Q: What is the difference between segment margin and contribution margin? When

What is the difference between segment margin and contribution margin? When would each be used?

Q: How can “make-or-buy” concepts be applied

How can “make-or-buy” concepts be applied to decisions at a service organization? What types of make-or-buy decisions might a service organization face?

Q: Do an Internet search on the terms carbon offset and carbon footprint

Do an Internet search on the terms carbon offset and carbon footprint. What is a carbon footprint? What is a carbon offset? Why would carbon offsets be of interest to a company? What are some companie...

Q: Estimate how many hours you will spend in each of the upcoming

Estimate how many hours you will spend in each of the upcoming three months doing the purchasing, repackaging, and selling. Select a reasonable wage rate for yourself. What will your total labor costs...

Q: Prepare a sales budget for each of the upcoming three months.

Prepare a sales budget for each of the upcoming three months.

Q: List a direct cost and an indirect cost for each of the

List a direct cost and an indirect cost for each of the three different cost objects in question 5. • Advertising • Internal control • Environmental sustainability

Q: Prepare the direct material budgets for the upcoming three months, assuming

Prepare the direct material budgets for the upcoming three months, assuming that you need to keep 10% of the direct materials needed for next month’s sales on hand at the end of each month (this requi...

Q: Prepare a direct labor budget (for your labor) for each

Prepare a direct labor budget (for your labor) for each of the upcoming three months.

Q: Think about any other expenses you are likely to have (i

Think about any other expenses you are likely to have (i.e., booth rental at a flea market or a vendor license). Prepare the operating expenses budget for each of the upcoming three months.

Q: Prepare a budgeted income statement that reflects the budgets you prepared,

Prepare a budgeted income statement that reflects the budgets you prepared, including the sales budget, direct materials budget, direct labor budget, and the operating expenses budget. This budgeted i...

Q: Describe your product. What is your cost of this product?

Describe your product. What is your cost of this product? What size (quantity) will you purchase? At what price will you sell your repackaged product? Make projections of your sales in units in each o...

Q: Compare and contrast “participative budgeting” with “top-down

Compare and contrast “participative budgeting” with “top-down” budgeting.

Q: Give an example of a sustainable practice that would affect a company’s

Give an example of a sustainable practice that would affect a company’s budget. How might this sustainable practice, if adopted, impact the company’s budget in both the short-term and in the long-term...

Q: How does the master budget for a service company differ from a

How does the master budget for a service company differ from a master budget for a manufacturing company? Which (if any) operating budgets differ and how, specifically, do they differ? Which (if any)...

Q: Why might a company want to state environmental goals for increased sustainability

Why might a company want to state environmental goals for increased sustainability in its budgets? Explain.

Q: “The sales budget is the most important budget.” Do you

“The sales budget is the most important budget.” Do you agree or disagree? Explain your answer.

Q: Describe the product that is being produced and the company that produces

Describe the product that is being produced and the company that produces it.

Q: List at least four reasons why a company would use budgeting.

List at least four reasons why a company would use budgeting.

Q: Describe the difference between an operating budget and a capital expenditures budget

Describe the difference between an operating budget and a capital expenditures budget.

Q: Describe the process for developing a budget.

Describe the process for developing a budget.

Q: What is a budget committee? What is the budget committee’s role

What is a budget committee? What is the budget committee’s role in the budgeting process?

Q: What are operating budgets? List at least four operating budgets.

What are operating budgets? List at least four operating budgets.

Q: What are financial budgets? List at least three financial budgets

What are financial budgets? List at least three financial budgets

Q: The rules for how segments should be presented in the annual report

The rules for how segments should be presented in the annual report are governed by external financial accounting rules. The information you gathered for the previous requirements would be used by inv...

Q: Use the data you collected in Requirement 2 to calculate each segment’s

Use the data you collected in Requirement 2 to calculate each segment’s capital turnover. Interpret your results.

Q: List the segments as reported in the annual report. Make a

List the segments as reported in the annual report. Make a table listing each operating segment, its revenues, income, and assets.

Q: List and describe the four perspectives found on a balanced scorecard.

List and describe the four perspectives found on a balanced scorecard. For each perspective, list at least two examples of KPIs that might be used to measure performance on that perspective.

Q: Summarize the production process that is used in making this product.

Summarize the production process that is used in making this product.

Q: What skills do employers value highly? What does that tell you

What skills do employers value highly? What does that tell you about “what accountants do” at their companies?

Q: Define manufacturing overhead. In addition to the indirect materials and

Define manufacturing overhead. In addition to the indirect materials and indirect labor previously described, what other manufacturing overhead costs would be incurred in this production process? Be...

Q: Describe the product that is being produced and the company that makes

Describe the product that is being produced and the company that makes it

Q: What raw materials are used to make this product?

What raw materials are used to make this product?

Q: What indirect materials are used to make this product?

What indirect materials are used to make this product?

Q: Describe the jobs of the workers who would be considered “

Describe the jobs of the workers who would be considered “direct labor” in the making of this product

Q: Describe the jobs of the workers who would be considered “

Describe the jobs of the workers who would be considered “indirect labor” in the making of this product.

Q: Would a job-order costing system or a process costing system

Would a job-order costing system or a process costing system be used for this production process? Give specific reasons for your choice of which costing system would be most appropriate for this manuf...

Q: Why should companies estimate the environmental costs of a given job?

Why should companies estimate the environmental costs of a given job? Why have EPR (extended producer responsibility) laws come into existence?

Q: Describe at least four advantages of decentralization. Also describe at least

Describe at least four advantages of decentralization. Also describe at least two disadvantages of decentralization.

Q: For what types of products is job costing appropriate? Why?

For what types of products is job costing appropriate? Why? For what types of products is process costing appropriate? Why?

Q: When the predetermined manufacturing overhead rate is calculated, why are estimated

When the predetermined manufacturing overhead rate is calculated, why are estimated costs and cost driver levels used instead of actual dollars and amounts?

Q: Make a list of all other expenses that would be needed to

Make a list of all other expenses that would be needed to create your product. Examples of other expenses would be rent, utilities, and insurance. Estimate the cost of each of these expenses per year....

Q: Why should manufacturing overhead be allocated to a job even though the

Why should manufacturing overhead be allocated to a job even though the costs cannot be directly traced to a job? Give at least two reasons.

Q: Why does management need to know the cost of a job?

Why does management need to know the cost of a job? Discuss at least five reasons.

Q: Why is it acceptable to close overallocated or underallocated manufacturing overhead to

Why is it acceptable to close overallocated or underallocated manufacturing overhead to Cost of Goods Sold rather than allocating it proportionately to Work in Process Inventory, Finished Goods Invent...

Q: Describe a situation that may cause manufacturing overhead to be overallocated in

Describe a situation that may cause manufacturing overhead to be overallocated in a given year. Also, describe a situation that may cause manufacturing overhead to be un- derallocated in a given year....

Q: Explain why the cost of goods sold should be lower if manufacturing

Explain why the cost of goods sold should be lower if manufacturing overhead is over- allocated. Should operating income be higher or lower if manufacturing overhead is over - allocated? Why?

Q: What account is credited when manufacturing overhead is allocated to jobs during

What account is credited when manufacturing overhead is allocated to jobs during the period? What account is debited when manufacturing overhead costs are incurred during the period? Would you expect...

Q: How can job cost records help to promote sustainability efforts within a

How can job cost records help to promote sustainability efforts within a company?

Q: Compare and contrast a cost center, a revenue center, a

Compare and contrast a cost center, a revenue center, a profit center, and an investment center. List a specific example of each type of responsibility center. How is the performance of managers eva...

Q: What product costs must be allocated to jobs? Why must these

What product costs must be allocated to jobs? Why must these costs be allocated rather than assigned?

Q: Why would it be inappropriate for a custom-home builder to

Why would it be inappropriate for a custom-home builder to use process costing?

Q: Describe the company selected, including its products or services

Describe the company selected, including its products or services

Q: A company currently has all of its managerial accountants reporting to the

A company currently has all of its managerial accountants reporting to the controller. What might be inefficient about this organizational structure? How might the company restructure? What benefits...

Q: List eight key activities performed at this company. Choose at least

List eight key activities performed at this company. Choose at least one activity in the areas of production, sales, human resources, and accounting.

Q: For each of the key activities, list a potential cost driver

For each of the key activities, list a potential cost driver for that activity and describe why this cost driver would be appropriate for the associated activity.

Q: Why might a company want to take lean thinking a step further

Why might a company want to take lean thinking a step further by including operations and methods associated with sustainability?

Q: Explain why departmental overhead rates might be used instead of a single

Explain why departmental overhead rates might be used instead of a single plantwide overhead rate.

Q: How can using a single predetermined manufacturing overhead rate based on a

How can using a single predetermined manufacturing overhead rate based on a unit-level cost driver cause a high-volume product to be overcosted?

Q: Assume a company uses a plantwide predetermined manufacturing overhead rate that is

Assume a company uses a plantwide predetermined manufacturing overhead rate that is calculated using direct labor hours as the cost driver. The use of this plantwide predetermined manufacturing overhe...

Q: Explain the potential problem that could arise from using ROI as the

Explain the potential problem that could arise from using ROI as the incentive measure for managers. What are some specific actions a company might take to resolve this potential problem?

Q: A company makes shatterproof, waterproof cases for the S-series

A company makes shatterproof, waterproof cases for the S-series of Samsung smart- phones. The company makes only one model and has been very successful in marketing its cases; no other company in the...

Q: Compare a traditional production system with a lean production system. Discuss

Compare a traditional production system with a lean production system. Discuss the similarities and the differences.

Q: It has been said that external failure costs can be catastrophic and

It has been said that external failure costs can be catastrophic and much higher than the other categories. What are some examples of external failure costs? Why is it often difficult to arrive at the...

Q: What are the similarities between sustainability and lean thinking? What are

What are the similarities between sustainability and lean thinking? What are the differences between sustainability and lean thinking?

Q: What skills are required of a management accountant? In what college

What skills are required of a management accountant? In what college courses are these skills taught or developed? What skills would be further developed in the workplace?

Q: What are the four categories of quality-related costs? Name

What are the four categories of quality-related costs? Name a cost in each of the four cat- egories for each of the following types of organizations: a. Restaurant b. Hospital c. Law firm d. Bank...

Q: Using activity-based costing, why are indirect costs allocated while

Using activity-based costing, why are indirect costs allocated while direct costs are not allocated?

Q: A hospital can use activity-based costing (ABC) for

A hospital can use activity-based costing (ABC) for costing its services. In a hospital, what activities might be considered to be value-added activities? What activities at that hospital might be con...

Q: Summarize the production process.

Summarize the production process.

Q: List at least two separate processes that are performed in creating this

List at least two separate processes that are performed in creating this product. What departments would house these processes?

Q: List at least three costs that would be incurred in each of

List at least three costs that would be incurred in each of the six business activities in the value chain.

Q: Justify why you think this production process would dictate the use of

Justify why you think this production process would dictate the use of a process costing system.

Q: Describe at least one department that would have ending work in

Describe at least one department that would have ending work in process. What do the units look like as they are “in process”?

Q: Describe the product selected.

Describe the product selected.

Q: Provide an example of how a company may change its processes to

Provide an example of how a company may change its processes to make its manufacturing more efficient or environmentally sustainable. How will the company benefit?

Q: What characteristics of the product or manufacturing process would lead a company

What characteristics of the product or manufacturing process would lead a company to use a process costing system? Give two examples of companies that are likely to be using process costing. What char...

Q: What is the Institute of Management Accountants (IMA)? What is

What is the Institute of Management Accountants (IMA)? What is the American Institute of Certified Public Accountants? How could being a member of a professional organization help a person’s career?...

Q: How are process costing and job costing similar? How are they

How are process costing and job costing similar? How are they different?

Q: Why not assign all costs of production during a period to only

Why not assign all costs of production during a period to only the completed units? What happens if a company does this? Why are the costs of production in any period allocated between completed uni...

Q: Describe the flow of costs in a process costing system. List

Describe the flow of costs in a process costing system. List each type of journal entry that would be made and describe the purpose of that journal entry.

Q: If a company has very little or no inventory, what effect

If a company has very little or no inventory, what effect does that lack of inventory have on its process costing system? What other benefits result from having very little to no inventory?

Q: Describe at least two specific actions that a company could take to

Describe at least two specific actions that a company could take to improve its ROI.

Q: Think of a business or an organization that would use process costing

Think of a business or an organization that would use process costing. What types of Waste are likely to be generated during the manufacturing process? Are there ways to avoid this waste or minimize i...

Q: What are conversion costs? In a job costing system, at

What are conversion costs? In a job costing system, at least some conversion costs are as- signed directly to products. Why do all conversion costs need to be assigned to process- ing departments in a...

Q: What information generated by a process costing system can be used

What information generated by a process costing system can be used by management? How can management use this process costing information?

Q: Why are the equivalent units for direct materials often different from the

Why are the equivalent units for direct materials often different from the equivalent units for conversion costs in the same period?

Q: How does process costing differ between a first processing department and a

How does process costing differ between a first processing department and a second or later processing department?

Q: “Process costing is easier to use than job costing.” Do

“Process costing is easier to use than job costing.” Do you agree or disagree with this statement? Explain your reasoning.

Q: How might a Certified Management Accountant (CMA) certification benefit a

How might a Certified Management Accountant (CMA) certification benefit a person in his or her career? What skills are assessed on the CMA exam?

Q: Discuss how easy or difficult it was for you to decide whether

Discuss how easy or difficult it was for you to decide whether each cost was fixed, variable, or mixed. Describe techniques a company could use to determine whether a cost is fixed, variable, or mixed...

Q: Classify each of the costs you listed as either fixed, variable

Classify each of the costs you listed as either fixed, variable, or mixed. Justify why you classified each cost as you did.

Q: Describe a potential cost driver for each of the variable and mixed

Describe a potential cost driver for each of the variable and mixed costs you listed. Explain why each cost driver would be appropriate for its associated cost.

Q: Suppose a company that makes and sells spaghetti sauce in plastic jars

Suppose a company that makes and sells spaghetti sauce in plastic jars makes a change to its bottle that allows it to use significantly less plastic in each bottle. Describe at least four ways this ch...

Q: Describe the company you selected and the products or services it provides

Describe the company you selected and the products or services it provides.

Q: List ten costs that this company would incur. Include costs from

List ten costs that this company would incur. Include costs from a variety of departments within the company, including human resources, sales, accounting, production (if a manufacturer), service (if...

Q: What costs might a business incur by not adopting paperless services?

What costs might a business incur by not adopting paperless services? Is paperless only profitable to large businesses or is it applicable to small businesses? Explain what factors might be involved i...

Q: How might the principles of sustainability (such as increased efficiency)

How might the principles of sustainability (such as increased efficiency) affect cost behavior overall? Think of an example of a sustainable change in process or material that could impact the cost eq...

Q: Briefly describe an organization with which you are familiar. Describe a

Briefly describe an organization with which you are familiar. Describe a situation when a manager in that organization could use cost behavior information and how the manager could use the information...

Q: How are fixed costs similar to step fixed costs? How are

How are fixed costs similar to step fixed costs? How are fixed costs different from step fixed costs? Give an example of a step fixed cost and describe why that cost is not considered to be a fixed co...

Q: Describe a specific situation when a scatter plot could be useful to

Describe a specific situation when a scatter plot could be useful to a manager.

Q: What are the four ethical standards in the Institute of Management Accountants’

What are the four ethical standards in the Institute of Management Accountants’ Statement of Ethical Professional Practice? Describe the meaning of each of the four standards. How does each of these s...

Q: Compare discretionary fixed costs to committed fixed costs. Think of an

Compare discretionary fixed costs to committed fixed costs. Think of an organization with which you are familiar. Give two examples of discretionary fixed costs and two examples of committed fixed cos...

Q: Define the terms “independent variable” and “dependent variable,”

Define the terms “independent variable” and “dependent variable,” as used in regression analysis. Illustrate the concepts of independent variables and dependent variables by selecting a cost a company...

Q: Suppose a company is implementing lean accounting throughout the organization. Why

Suppose a company is implementing lean accounting throughout the organization. Why might standard costing not be beneficial for that company?

Q: Describe the term “R-square.” If a regression analysis

Describe the term “R-square.” If a regression analysis for predicting manufacturing over - head using direct labor hours as the dependent variable has an R-square of 0.40, why might this be a problem?...

Q: Over the past year, a company’s inventory has increased significantly.

Over the past year, a company’s inventory has increased significantly. The company uses absorption costing for financial statements, but internally, the company uses variable costing for financial sta...

Q: A company has adopted a lean production philosophy and, as a

A company has adopted a lean production philosophy and, as a result, has cut its inventory levels significantly. Describe the impact on the company’s external financial statements as a result of this...

Q: What is a mixed cost? Give an example of a mixed

What is a mixed cost? Give an example of a mixed cost. Sketch a graph of this example.

Q: Define the term “relevant range.” Why is it important to

Define the term “relevant range.” Why is it important to managers?

Q: How realistic is your potential venture? Do you think you would

How realistic is your potential venture? Do you think you would be able to break even in each of the projected five years? How risky is your venture (use the margin of safety to help answer this quest...

Q: Describe your product. What market are you targeting this product for

Describe your product. What market are you targeting this product for? What price will you sell your product for? Make projections of your sales in units over each of the upcoming five years

Q: Make a detailed list of all the materials needed to make your

Make a detailed list of all the materials needed to make your product. Include quantities needed of each material. Also include the cost of the material on a per-unit basis

Q: What advantages might a company experience if it adopts ideal standards for

What advantages might a company experience if it adopts ideal standards for its direct material standards and direct labor standards? What advantages are there to using practical standards? As an empl...

Q: What does the direct materials price variance measure? Who is generally

What does the direct materials price variance measure? Who is generally responsible for the direct materials price variance? Describe two situations that could result in a favorable materials price va...

Q: Use the data you collected in Requirement 2 to calculate each segment’s

Use the data you collected in Requirement 2 to calculate each segment’s sales margin. Interpret your results.

Q: What does the direct materials quantity variance measure? Who is generally

What does the direct materials quantity variance measure? Who is generally responsible for the direct materials quantity variance? Describe two situations that could result in a favorable direct mater...

Q: What does the direct labor rate variance measure? Who is generally

What does the direct labor rate variance measure? Who is generally responsible for the direct labor rate variance? Describe two situations that could result in a favorable labor rate variance. Describ...

Q: What does the direct labor efficiency variance measure? Who is generally

What does the direct labor efficiency variance measure? Who is generally responsible for the direct labor efficiency variance? Describe two situations that could result in a favor-able direct labor ef...

Q: What are the two variable manufacturing overhead variances? What does each

What are the two variable manufacturing overhead variances? What does each measure? Who within the organization would be responsible for each of these variances?

Q: Describe at least four ways a company could use standard costing and

Describe at least four ways a company could use standard costing and variance analysis.

Q: Classify each cost you identified in the value chain as being either

Classify each cost you identified in the value chain as being either a product cost or a period cost. Explain your justification.

Q: Calculate the NPV of the hybrid model, using the annual fuel

Calculate the NPV of the hybrid model, using the annual fuel savings as the annual cash inflow for the 10 years you would own the car. Assume a required rate of return of 10%.

Q: Estimate the number of miles you drive each year. Also estimate

Estimate the number of miles you drive each year. Also estimate the cost of a gallon of fuel.

Q: Given your previous estimates from 1 and 2, estimate the total

Given your previous estimates from 1 and 2, estimate the total fuel cost of driving the hybrid model for one year. Also estimate the total fuel cost of driving the nonhybrid model for one year. Calcul...

Q: Compare the NPV of the hybrid model with the cost of the

Compare the NPV of the hybrid model with the cost of the gasoline-engine model. Which model has the lowest cost (the lowest NPV)? From a purely financial standpoint, does the hybrid model make sense?...

Q: Describe the six value chain business activities that this product would pass

Describe the six value chain business activities that this product would pass through from its inception to its ultimate delivery to the customer.

Q: Now look at the payback period of the hybrid model. Use

Now look at the payback period of the hybrid model. Use the difference between the cost of the hybrid model and the gasoline-engine model as the investment. Use the annual fuel savings as the expected...

Q: What qualitative factors might affect your decision about which model to purchase

What qualitative factors might affect your decision about which model to purchase?

Q: Research the cost of each model (include taxes and title costs

Research the cost of each model (include taxes and title costs). Also, obtain an estimate of the miles-per-gallon fuel efficiency of each model.

Q: Describe the capital budgeting process in your own words.

Describe the capital budgeting process in your own words.

Q: Define capital investment. List at least three examples of capital investments

Define capital investment. List at least three examples of capital investments other than the examples provided in the chapter.

Q: Net cash inflows and net cash outflows are used in the net

Net cash inflows and net cash outflows are used in the net present value method and in the internal rate of return method. Explain why accounting net income is not used instead of cash flows.

Q: A cost object can be anything for which managers want a separate

A cost object can be anything for which managers want a separate measurement of cost. List three different potential cost objects other than the product itself for the company you have selected.

Q: The decision rule for NPV analysis states that the project with the

The decision rule for NPV analysis states that the project with the highest NPV should be selected. Describe at least two situations when the project with the highest NPV may not necessarily be the be...

Q: List and describe the advantages and disadvantages of the payback method.

List and describe the advantages and disadvantages of the payback method.

Q: List and describe the advantages and disadvantages of the internal rate of

List and describe the advantages and disadvantages of the internal rate of return method.

Q: Use the data you collected in Requirement 2 to calculate each segment’s

Use the data you collected in Requirement 2 to calculate each segment’s ROI. Interpret your results.

Q: “As the required rate of return increases, the net present

“As the required rate of return increases, the net present value of a project also increases.” Explain why you agree or disagree with this statement.

Q: Summarize the net present value method for evaluating a capital investment opportunity

Summarize the net present value method for evaluating a capital investment opportunity. Describe the circumstances that create a positive net present value. Describe the circum-stances that may cause...

Q: Suppose you are a manager and you have three potential capital investment projects

Suppose you are a manager and you have three potential capital investment projects from which to choose. Funds are limited, so you can only choose one of the three projects. Describe at least three me...

Q: The net present value method assumes that future cash inflows are immediately

The net present value method assumes that future cash inflows are immediately rein-vested at the required rate of return, while the internal rate of return method assumes that future cash inflows are...

Q: What items (if any) are disclosed as significant noncash financing

What items (if any) are disclosed as significant noncash financing or investing activities? Now that you have looked at each company’s cash flow statements individually, compare the two companies. Wha...

Q: Which method is used to calculate the cash provided or used by

Which method is used to calculate the cash provided or used by operations?

Q: What items increased cash provided by operations?

What items increased cash provided by operations?

Q: Briefly describe a service company, a merchandising company, and a

Briefly describe a service company, a merchandising company, and a manufacturing company. Give an example of each type of company, but do not use the same examples as given in the chapter.

Q: What items decreased cash provided by operations?

What items decreased cash provided by operations?

Q: Overall, was cash increased or decreased by operating activities?

Overall, was cash increased or decreased by operating activities?

Q: Can you calculate RI using the data presented? Why or why

Can you calculate RI using the data presented? Why or why not?

Q: Did investing activities in total increase cash or decrease cash during the

Did investing activities in total increase cash or decrease cash during the year? What were the major uses or sources of cash related to investing?

Q: Did financing activities in total increase cash or decrease cash during the

Did financing activities in total increase cash or decrease cash during the year? What were the major uses or sources of cash related to financing?

Q: How do managers use the statement of cash flows?

How do managers use the statement of cash flows?

Q: Describe at least four needs for cash within a business.

Describe at least four needs for cash within a business.

Q: When preparing a statement of cash flows using the indirect method,

When preparing a statement of cash flows using the indirect method, what information is needed? What documents or statements would be used?

Q: Think of a company with which you are familiar. Describe an

Think of a company with which you are familiar. Describe an investing activity related to a company’s sustainability efforts that would be classified as a use of cash on a company’s statement of cash...

Q: Define an “operating activity.” List two examples of an operating

Define an “operating activity.” List two examples of an operating activity on the statement of cash flows that would increase cash. List two examples of an operating activity that would decrease cash....

Q: Define an “investing activity.” List two examples of an investing

Define an “investing activity.” List two examples of an investing activity on the statement of cash flows that would increase cash. List two examples of an investing activity that would decrease cash....

Q: What is the Sarbanes-Oxley Act of 2002 (SOX)?

What is the Sarbanes-Oxley Act of 2002 (SOX)? How does SOX affect financial accounting? How does SOX impact managerial accounting? Is there any overlap between financial and managerial accounting in...

Q: What is the value chain? What are the six types of

What is the value chain? What are the six types of business activities found in the value chain? Which type(s) of business activities in the value chain generate costs that go directly to the income s...

Q: Locate the company’s annual report as outlined previously. Find the company’s

Locate the company’s annual report as outlined previously. Find the company’s segment information; it should be in the “Notes to Consolidated Financial Statements” or another, similarly named section....

Q: Define a “financing activity.” List two examples of a financing

Define a “financing activity.” List two examples of a financing activity on the statement of cash flows that would increase cash. List two examples of a financing activity that would decrease cash.

Q: Define a “noncash investing or financing” activity. Describe an

Define a “noncash investing or financing” activity. Describe an activity that would need to be disclosed as a noncash investing or financing activity.

Q: Describe the difference between the direct and the indirect methods of preparing

Describe the difference between the direct and the indirect methods of preparing the operating section of the statement of cash flows.

Q: Describe the process for reconciling net income to the cash basis.

Describe the process for reconciling net income to the cash basis. What items are added to net income? What items are subtracted from net income?

Q: Summarize the process for preparing the operating section of the statement of

Summarize the process for preparing the operating section of the statement of cash flows when using the direct method.

Q: Provide an example of an operating cash inflow that could result from

Provide an example of an operating cash inflow that could result from sustainability activities. Also provide an example of an operating cash outflow that would support sustainability.

Q: Now that you have crunched the numbers, interpret the ratios.

Now that you have crunched the numbers, interpret the ratios. What can you tell about each company and its financial position? Is one company clearly better than the others in terms of its financial p...

Q: Calculate two ratios that measure the ability to pay current liabilities.

Calculate two ratios that measure the ability to pay current liabilities.

Q: Calculate at least two ratios that measure the ability to sell inventory

Calculate at least two ratios that measure the ability to sell inventory and collect receivables.

Q: Calculate at least two ratios that measure the ability to pay long

Calculate at least two ratios that measure the ability to pay long-term debt.

Q: Contrast lag indicators with lead indicators. Provide an example of each

Contrast lag indicators with lead indicators. Provide an example of each type of indicator.

Q: Compare direct costs to indirect costs. Give an example of a

Compare direct costs to indirect costs. Give an example of a cost at a company that could be a direct cost at one level of the organization but would be considered an indirect cost at a different lev...

Q: Calculate at least two ratios that measure profitability.

Calculate at least two ratios that measure profitability.

Q: Calculate at least two ratios that help to analyze the stock as

Calculate at least two ratios that help to analyze the stock as an investment.

Q: Describe why book value per share of common stock may not be

Describe why book value per share of common stock may not be useful for investment analysis.

Q: How is the current ratio calculated? What is it used to

How is the current ratio calculated? What is it used to measure? How is it interpreted?

Q: Assume a company has a current ratio of 2.0.

Assume a company has a current ratio of 2.0. List two examples of transactions that could cause the current ratio to increase. Also list two examples of transactions that could cause the current ratio...

Q: Describe the set of circumstances that could result in net income increasing

Describe the set of circumstances that could result in net income increasing while return on investment (ROI) decreases.

Q: Describe at least two reasons that a company’s ratios might not be

Describe at least two reasons that a company’s ratios might not be comparable over time.

Q: Compare and contrast the current ratio and the quick ratio.

Compare and contrast the current ratio and the quick ratio.

Q: Describe at least four financial conditions that may signal financial trouble.

Describe at least four financial conditions that may signal financial trouble.

Q: Define residual income. How is it calculated? Describe the major

Define residual income. How is it calculated? Describe the major weakness of residual income.

Q: Describe horizontal analysis. Describe vertical analysis. What is each technique

Describe horizontal analysis. Describe vertical analysis. What is each technique used for? How are the two methods similar? How are they different?

Q: What is meant by the term product costs? What is meant

What is meant by the term product costs? What is meant by the term period costs? Why does it matter whether a cost is a product cost or a period cost?

Q: What does the accounts receivable turnover measure? What does a relatively

What does the accounts receivable turnover measure? What does a relatively high ac-counts receivable turnover indicate about a company?

Q: Suppose a company has a relatively high inventory turnover. What does

Suppose a company has a relatively high inventory turnover. What does the high inventory turnover indicate about the company’s short-term liquidity?

Q: Judging from the information in the report(s) from the

Judging from the information in the report(s) from the company, does the company appear to emphasize profits, environment, or society? Or does the company appear to give equal emphasis to each compone...

Q: Perform an online search for sustainability issues in the industry in which

Perform an online search for sustainability issues in the industry in which this organization operates. Does the company appear to be addressing the sustainability issues of the industry?

Q: What environmental accounting information does this company report?

What environmental accounting information does this company report?

Q: What environmental goals does this company have for the upcoming five to

What environmental goals does this company have for the upcoming five to ten years?

Q: What types of EMA information might be reported internally by this company

What types of EMA information might be reported internally by this company? Make reasonable “guesses”; the annual report will not give this information directly. Use your imagination.

Q: Perform an online search on the terms “carbon offset” and

Perform an online search on the terms “carbon offset” and “carbon footprint.” What is a carbon footprint? What is a carbon offset? Why would carbon offsets be of interest to a company? What are some c...

Q: Compare and contrast a master budget and a flexible budget.

Compare and contrast a master budget and a flexible budget.