New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
managerial accounting
Accounting Principles 11th Edition Jerry Weygandt, Paul Kimmel, Donald Kieso - Solutions
When setting a transfer price, what objective(s) should the company have in mind?
What are the three approaches for determining transfer prices?
Describe the cost-based approach to transfer pricing. What is the strength of this approach? What are the weaknesses of this approach?
What is the general formula for determining the minimum transfer price that the selling division should be willing to accept?
When determining the minimum transfer price, what is meant by the “opportunity cost”?
In what circumstances will a negotiated transfer price be used instead of a market-based price?
Explain how companies use transfer pricing between divisions located in different countries to reduce tax payments, and discuss the propriety of this approach.
What costs are excluded from the cost base when absorption-cost pricing is used to determine the markup percentage?
Marie Corporation manufactures a fiber optic connector. The variable cost per unit is $16. The fixed cost per unit is $9. The company’s desired ROI per unit is $3. Compute the markup percentage using variable cost pricing.
Voorhees Company manufactures computer hard drives. The market for hard drives is very competitive. The current market price for a computer hard drive is $45. Voorhees would like a profit of $15 per drive. How can Voorhees Company accomplish this objective?
Mussatto Corporation produces snowboards. The following per unit cost information is available: direct materials $12; direct labor $8; variable manufacturing overhead $6; fixed manufacturing overhead $14; variable selling and administrative expenses $4; and fixed selling and administrative expenses
Hannon Corporation produces high-performance rotors. It expects to produce 50,000 rotors in the coming year. It has invested $10,000,000 to produce rotors. The company has a required return on investment of 16%. What is its ROI per unit?
Morales Corporation produces microwave units. The following per unit cost information is available: direct materials $36; direct labor $24; variable manufacturing overhead $18; fixed manufacturing overhead $40; variable selling and administrative expenses $14; and fixed selling and administrative
During the current year, Mast Corporation expects to produce 10,000 units and has budgeted the following: net income $300,000; variable costs $1,100,000; and fixed costs $100,000. It has invested assets of $1,500,000. The company’s budgeted ROI was 24%. What was its budgeted markup percentage
Rooney Small Engine Repair charges $42 per hour of labor. It has a material loading percentage of 40%. On a recent job replacing the engine of a riding lawnmower, Rooney worked 10.5 hours and used parts with a cost of $700. Calculate Rooney’s total bill.
The Heating Division of KLM International produces a heating element that it sells to its customers for $45 per unit. Its variable cost per unit is $20, and its fixed cost per unit is $10. Top management of KLM International would like the Heating Division to transfer 15,000 heating units to
Use the data from BE8-7, but assume that the Heating Division has sufficient excess capacity to provide the 15,000 heating units to the other division. What is the minimum transfer price that the Heating Division should accept?
Use the data from BE8-7, but assume that the units being requested are special high-performance units and that the division’s variable cost would be $24 per unit (rather than $20). What is the minimum transfer price that the Heating Division should accept?Data From BE8-7The Heating Division of
Using the data in BE8-4, Compute the markup percentage using absorption-cost pricing.Data From BE8-4 Morales Corporation produces microwave units. The following per unit cost information is available: direct materials $36; direct labor $24; variable manufacturing overhead $18; fixed
Using the data in BE8-4, Compute the markup percentage using variable-cost pricing.Data From BE8-4 Morales Corporation produces microwave units. The following per unit cost information is available: direct materials $36; direct labor $24; variable manufacturing overhead $18; fixed
Krystal Water is considering introducing a water filtration device for its 20-ounce water bottles. Market research indicates that 1,000,000 units can be sold if the price is no more than $3. If Krystal Water decides to produce the filters, it will need to invest $2,000,000 in new production
Gundy Corporation produces area rugs. The following per unit cost information is available: direct materials $18, direct labor $9, variable manufacturing overhead $5, fixed manufacturing overhead $6, variable selling and administrative expenses $3, and fixed selling and administrative expenses
Presented below are data for Kwik Appliance Repair Shop.Repair-technicians’ wages ....... $120,000Fringe benefits ............. 40,000Overhead ............... 50,000The desired profit margin per hour is $20. The material loading charge is 60% of invoice cost. Kwik estimates that 5,000 labor hours
The fastener division of Southern Fasteners manufactures zippers and then sells them to customers for $8 per unit. Its variable cost is $3 per unit, and its fixed cost per unit is $1.50. Management would like the fastener division to transfer 12,000 of these zippers to another division within the
Jarlsberg Cheese Company has developed a new cheese slicer called Slim Slicer. The company plans to sell this slicer through its catalog, which it issues monthly. Given market research, Jarlsberg believes that it can charge $20 for the Slim Slicer. Prototypes of the Slim Slicer, however, are
Eckert Company is involved in producing and selling high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure yardages on the golf course. One small laser gun, called LittleLaser, appears to have a very large potential market. Because of
Hannon Company makes swimsuits and sells these suits directly to retailers. Although Hannon has a variety of suits, it does not make the All-Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates
Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation€™s anticipated annual volume of 30,000 units.The company uses a 40% markup percentage on total cost.Instructions(a) Compute the total cost per unit.(b) Compute the
Paige Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is available for Paige Corporation€™s anticipated annual volume of 500,000 units.The company has a desired ROI of 25%. It has invested assets of
Alma€™s Recording Studio rents studio time to musicians in 2-hour blocks. Each session includes the use of the studio facilities, a digital recording of the performance, and a professional music producer/mixer. Anticipated annual volume is 1,000 sessions. The company has invested
Pargo Corporation produces industrial robots for high-precision manufacturing. The following information is given for Pargo Corporation.The company has a desired ROI of 20%. It has invested assets of $51,000,000. It anticipates production of 3,000 units per year.Instructions(a) Compute the cost per
Second Chance Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2014 is available for Second Chance.The company desires a $30 profit margin per hour of labor and a 20% profit margin on parts. It has budgeted for 7,600 hours of repair time in the coming year, and
Ignatenko's Custom Electronics (ICE) sells and installs complete security, computer, audio, and video systems for homes. On newly constructed homes it provides bids using time-and-material pricing. The following budgeted cost data are available.The company has budgeted for 6,250 hours of technician
Wasson€™s Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are:The company anticipated that the restorers would work a total of 12,000 hours this year. Expected parts and materials were $1,260,000.In late January, the company experienced a
Wellstone Company’s Small Motor Division manufactures a number of small motors used in household and office appliances. The Household Division of Wellstone then assembles and packages such items as blenders and juicers. Both divisions are free to buy and sell any of their components internally or
The Cycle Division of Ayala Company has the following per unit data related to its most recent cycle called Roadbuster.Presently, the Cycle Division buys its body frames from an outside supplier. However Ayala has another division, FrameBody, that makes body frames for other cycle companies. The
Venetian Corporation manufactures car stereos. It is a division of Berna Motors, which manufactures vehicles. Venetian sells car stereos to Berna, as well as to other vehicle manufacturers and retail stores. The following information is available for Venetian’s standard unit: variable cost per
The Bathtub Division of Kirk Plumbing Corporation has recently approached the Faucet Division with a proposal. The Bathtub Division would like to make a special “ivory” tub with gold-plated fixtures for the company’s 50-year anniversary. It would make only 5,000 of these units. It would like
The Appraisal Department of Bonita Bank performs appraisals of business properties for loans being considered by the bank and appraisals for home buyers that are financing their purchase through some other financial institution. The department charges $162 per home appraisal, and its variable costs
Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps.Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10 from an outside vendor. Division A needs 10,000 lamps for the coming
The Pacific Company is a multidivisional company. Its managers have full responsibility for profits and complete autonomy to accept or reject transfers from other divisions. Division A produces a subassembly part for which there is a competitive market. Division B currently uses this subassembly
Information for Paige Corporation is given in E8-5.InstructionsUsing the information given in E8-5, answer the following.(a) Compute the total cost per unit.(b) Compute the desired ROI per unit.(c) Using absorption-cost pricing, compute the markup percentage.(d) Using variable-cost pricing, compute
Rensing Corporation produces outdoor portable fireplace units. The following per unit cost information is available: direct materials $20; direct labor $25; variable manufacturing overhead $14; fixed manufacturing overhead $21; variable selling and administrative expenses $9; and fixed selling and
Information for Pargo Corporation is given in E8-7.InstructionsUsing the information given in E8-7, answer the following.(a) Compute the cost per unit of the fixed manufacturing overhead and the fixed selling and administrative expenses.(b) Compute the desired ROI per unit.(c) Compute the markup
Dewitt Corporation needs to set a target price for its newly designed product M14€“M16. The following data relate to this new product.These costs are based on a budgeted volume of 80,000 units produced and sold each year. Dewitt uses cost-plus pricing methods to set its target selling
Lovell Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 50,000 units.Lovell Computer Parts management
Jose€™s Electronic Repair Shop has budgeted the following time and material for 2014.Jose€™s budgets 5,000 hours of repair time in 2014 and will bill a profit of $5 per labor hour along with a 30% profit markup on the invoice cost of parts. The estimated invoice cost for parts
Georgia Gould Bikes Inc. is in the process of setting a target price on its newly designed mountain bike. Cost data relating to the bike at a budgeted volume of 20,000 units are as follows.Georgia Gould Bikes uses cost-plus pricing methods that are designed to provide the company with a 25% ROI on
As a service to its customers, Current Designs repairs damaged kayaks. This is especially valuable to customers that have made a significant investment in the composite kayaks. To price the repair jobs, Current Designs uses time-and-material pricing with a desired profit margin of $20 per labor
Lanier Manufacturing has multiple divisions that make a wide variety of products. Recently, the Bearing Division and the Wheel Division got into an argument over a transfer price. The Wheel Division needed bearings for garden tractor wheels. It normally buys its bearings from an outside supplier
Construction on the Bonita Full-Service Car Wash is nearing completion. The owner is Dave Kear, a retired accounting professor. The car wash is strategically located on a busy street that separates an affluent suburban community from a middle-class community. It has two state-of-the-art stalls.
Merck & Co., Inc. is a global, research-driven pharmaceutical company that discovers, develops, manufactures, and markets a broad range of human and animal health products. The following are excerpts from the financial review section of the company’s annual report.Merck & Co., Inc.Financial
Shopping “robots” have become very popular on the Web. These are sites that will find the price of a specified product that is listed by retailers on the Web (“e-tailers”). This allows the customer to search for the lowest possible price.Address: www.dealtime.com or go to
Jane Fleming recently graduated from college with a degree in landscape architecture. Her father runs a tree, shrub, and perennial-flower nursery, and her brother has a business delivering topsoil, mulch, and compost. Jane has decided that she would like to start a landscape business. She believes
Jumbo Airlines operates out of three main “hub” airports in the United States. Recently, Econo Airlines began operating a flight from Reno, Nevada, into Jumbo’s Metropolis hub for $190. Jumbo Airlines offers a price of $425 for the same route. The management of Jumbo is not happy about Econo
The January 2011 issue of Strategic Finance includes an article by J. Lockhart, A. Taylor, K. Thomas, B. Levetsovitis, and J. Wise entitled “When a Higher Price Pays Off.”InstructionsRead the article and answer the following questions.(a) Explain what is meant by a “low-cost” supplier
Word Wizard is a publishing company with a number of different book lines. Each line has contracts with a number of different authors. The company also owns a printing operation called Quick Press. The book lines and the printing operation each operate as a separate profit center. The printing
Watts Company makes various electronic products. The company is divided into a number of autonomous divisions that can either sell to internal units or sell externally. All divisions are located in buildings on the same piece of property. The Board Division has offered the Chip Division $20 per
Comm Devices (CD) is a division of Worldwide Communications, Inc. CD produces pagers and other personal communication devices. These devices are sold to other Worldwide divisions, as well as to other communication companies. CD was recently approached by the manager of the Personal Communications
Gonzalez Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product.The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Gonzalez uses cost-plus pricing methods to set its target
Anderson Windows Inc. is in the process of setting a target price on its newly designed tinted window. Cost data relating to the window at a budgeted volume of 4,000 units are as follows.Anderson Windows uses cost-plus pricing methods that are designed to provide the company with a 25% ROI on its
Harrington Corporation needs to set a target price for its newly designed product R2€“D2. The following data relate to this new product.These costs are based on a budgeted volume of 100,000 units produced and sold each year. Harrington uses cost-plus pricing methods to set its target
Robo Parts Inc. is in the process of setting a selling price on a new robotics component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 100,000 units.Robo€™s management
Armstrong Bike Repair Shop has budgeted the following time and material for 2014.Armstrong budgets 2,500 hours of repair time in 2014 and will bill a profit of $5 per labor hour along with a 15% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is
Deitz is a publishing company with a number of different magazines and other publications. The company also owns a printing operation called Saira Press. The publications and the printing operation each operate as a separate profit center. The printing operation earns revenue by printing magazines
Dolby Ukes makes various types of ukeleles. The company is divided into a number of autonomous divisions that can either sell to internal units or sell externally. All divisions are located in buildings on the same piece of property. The Alto Division has offered the Peg Division $0.26 per peg to
Innovative Systems (IS) is a division of Global Electronics, Inc. IS produces videogame systems. These systems are sold to retailers. IS recently approached the manager of the Laptop Computer Division regarding a request to buy a special circuit board for a new advanced video game system. IS has
Zelmer Corporation needs to set a target price for its newly designed product QB-14. The following data relate to this new product.The costs above are based on a budgeted volume of 250,000 units produced and sold each year. Zelmer uses cost-plus pricing methods to set its target selling price.
What is participative budgeting? What are its potential benefits? What are its potential disadvantages?
Alou Company has 20,000 beginning finished goods units. Budgeted sales units are 160,000. If management desires 15,000 ending finished goods units, what are the required units of production?
In preparing the direct materials budget for Quan Company, management concludes that required purchases are 64,000 units. If 52,000 direct materials units are required in production and there are 9,000 units of beginning direct materials, what is the desired unit of ending direct materials?
Ortiz Company’s manufacturing overhead budget shows total variable costs of $198,000 and total fixed costs of $162,000. Total production in units is expected to be 150,000. It takes 20 minutes to make one unit, and the direct labor rate is $15 per hour. Express the manufacturing overhead rate
Everly Company’s variable selling and administrative expenses are 12% of net sales. Fixed expenses are $50,000 per quarter. The sales budget shows expected sales of $200,000 and $240,000 in the first and second quarters, respectively. What are the total budgeted selling and administrative
For Goody Company, the budgeted cost for one unit of product is direct materials $10, direct labor $20, and manufacturing overhead 80% of direct labor cost. If 25,000 units are expected to be sold at $65 each, what is the budgeted gross profit?
Noterman Company has credit sales of $600,000 in January. Past experience suggests that 40% is collected in the month of sale, 50% in the month following the sale, and 10% in the second month following the sale. Compute the cash collections from January sales in January, February, and March.
Palermo Company estimates that unit sales will be 10,000 in quarter 1; 12,000 in quarter 2; 15,000 in quarter 3; and 18,000 in quarter 4. Using a sales price of $70 per unit, prepare the sales budget by quarters for the year ending December 31, 2014.
Sales budget data for Palermo Company are given in BE9-2. Management desires to have an ending finished goods inventory equal to 25% of the next quarter’s expected unit sales. Prepare a production budget by quarters for the first 6 months of 2014.
Perine Company has 2,000 pounds of raw materials in its December 31, 2013, ending inventory. Required production for January and February of 2014 are 4,000 and 5,000 units, respectively. Two pounds of raw materials are needed for each unit, and the estimated cost per pound is $6. Management desires
For Mize Company, units to be produced are 5,000 in quarter 1 and 6,000 in quarter 2. It takes 1.6 hours to make a finished unit, and the expected hourly wage rate is $15 per hour. Prepare a direct labor budget by quarters for the 6 months ending June 30, 2014.
For Roche Inc., variable manufacturing overhead costs are expected to be $20,000 in the first quarter of 2014, with $5,000 increments in each of the remaining three quarters. Fixed overhead costs are estimated to be $40,000 in each quarter. Prepare the manufacturing overhead budget by quarters and
Noble Company classifies its selling and administrative expense budget into variable and fixed components. Variable expenses are expected to be $22,000 in the first quarter, and $4,000 increments are expected in the remaining quarters of 2014. Fixed expenses are expected to be $40,000 in each
North Company has completed all of its operating budgets. The sales budget for the year shows 50,000 units and total sales of $2,250,000. The total unit cost of making one unit of sales is $25. Selling and administrative expenses are expected to be $300,000. Income taxes are estimated to be
Bruno Industries expects credit sales for January, February, and March to be $200,000, $260,000, and $300,000, respectively. It is expected that 75% of the sales will be collected in the month of sale, and 25% will be collected in the following month. Compute cash collections from customers for
Moore Wholesalers is preparing its merchandise purchases budget. Budgeted sales are $400,000 for April and $480,000 for May. Cost of goods sold is expected to be 65% of sales. The company’s desired ending inventory is 20% of the following month’s cost of goods sold. Compute the required
Use this list of terms to complete the sentences that follow.Long-range plans Participative budgetingSales forecast Operating budgetsMaster budget Financial budgets1. _____________ establish goals for the company’s sales and production personnel.2. The _____________ is a set of interrelated
Zeller Company estimates that 2014 unit sales will be 20,000 in quarter 1, 24,000 in quarter 2, and 29,000 in quarter 3, at a unit selling price of $20. Management desires to have ending finished goods inventory equal to 10% of the next quarter’s expected unit sales. Prepare a production budget
Ash Creek Company is preparing its master budget for 2014. Relevant data pertaining to its sales, production, and direct materials budgets are as follows.Sales. Sales for the year are expected to total 1,000,000 units. Quarterly sales are 20%, 20%, 30%, and 30%, respectively. The sales price is
Ash Creek Company is preparing its budgeted income statement for 2014. Relevant data pertaining to its sales, production, and direct materials budgets can be found in DO-IT 9-3.In addition, Ash Creek budgets 0.3 hours of direct labor per unit, labor costs at $15 per hour, and manufacturing overhead
Batista Company management wants to maintain a minimum monthly cash balance of $20,000. At the beginning of April, the cash balance is $25,000, expected cash receipts for April are $245,000, and cash disbursements are expected to be $255,000. How much cash, if any, must be borrowed to maintain the
Adler Company has always done some planning for the future, but the company has never prepared a formal budget. Now that the company is growing larger, it is considering preparing a budget.InstructionsWrite a memo to Jim Dixon, the president of Adler Company, in which you define budgeting, identify
Edington Electronics Inc. produces and sells two models of pocket calculators, XQ-103 and XQ-104. The calculators sell for $15 and $25, respectively. Because of the intense competition Edington faces, management budgets sales semiannually. Its projections for the first 2 quarters of 2014 are as
Garza and Neely, CPAs, are preparing their service revenue (sales) budget for the coming year (2014). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.Average hourly billing rates are auditing $80, tax
Turney Company produces and sells automobile batteries, the heavy-duty HD-240.The 2014 sales forecast is as follows.Quarter HD-2401 ......... 5,0002 ......... 7,0003 ......... 8,0004 .......... 10,000The January 1, 2014, inventory of HD-240 is 2,000 units. Management desires
Dallas Industries has adopted the following production budget for the first 4 months of 2014.Each unit requires 2 pounds of raw materials costing $2 per pound. On December 31, 2013, the ending raw materials inventory was 4,000 pounds. Management wants to have a raw materials inventory at the end of
On January 1, 2014, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2014.Sales units: First quarter 5,000; second quarter 6,000; third quarter 7,000.Ending raw materials inventory: 40% of the next quarter’s production
Chandler Ltd. estimates sales for the second quarter of 2014 will be as follows.Month UnitsApril ...... 2,550May ....... 2,475June ....... 2,390The target ending inventory of finished products is as follows.March 31 2,000April 30 2,230May 31 2,200June 30 2,310Two units of material are
Rodriguez, Inc., is preparing its direct labor budget for 2014 from the following production budget based on a calendar year.Quarter Units1 ..... 20,0002 ..... 25,0003 ..... 35,0004 ..... 30,000Each unit requires 1.5 hours of direct labor.InstructionsPrepare a direct labor budget for 2014. Wage
Donnegal Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2014.Donnegal has a labor contract that calls for a wage increase to $9.00 per hour on April 1.New labor-saving machinery
Atlanta Company is preparing its manufacturing overhead budget for 2014. Relevant data consist of the following.Units to be produced (by quarters): 10,000, 12,000, 14,000, 16,000.Direct labor: time is 1.5 hours per unit.Variable overhead costs per direct labor hour: indirect materials $0.80;
Duncan Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2014, the following data are available.1. Sales: 20,000 units quarter 1; 22,000 units quarter 2.2. Variable costs per dollar of sales: sales commissions 5%,
Showing 9100 - 9200
of 58739
First
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
Last
Step by Step Answers
Get 50% OFF
Claim Now
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
