Questions and Answers of Cost Management 5th

Privacy Window and Wall Treatments Company provides draperies, shades, and various window treatments. Privacy works with the customer to design the appropriate window treatment, places the order, and
Renlund Company is transitioning to a lean manufacturing system and has just finalized two order fulfillment value streams. One of the value streams has two products, and the other has four products.
Richins Company is considering the acquisition of a computerized manufacturing system. The new system has a built-in quality function that increases the control over product specifications. An alarm
Nealon Company runs a driving range and golf shop. The budgeted income statement for the coming year is as follows.Required:1. What is Nealon’s variable cost ratio? Its contribution margin ratio?2.
Petoskey Electronics Company manufactures specialized products for boats and recreational vehicles using its newly introduced patented engine analytics device. The first-year revenues and costs for
Whang Construction Company is a general contractor that specializes in custom residential housing. Each job requires a bid that includes Whang’s direct costs and subcontractor costs as well as an
Holland Company is a garden products wholesale firm. In December, Holland Company expects to sell 84,000 bags of vegetable fertilizer at an average price of $8.75 per bag. Actual results are 85,000
Ioannis Inc., produces and sells two types of countertop ovens—the toaster oven and the convection oven. Budgeted and actual data for the two models are shown below.Budgeted Amounts:Actual
Mayfair Electric Utility has excess electrical generating capacity. In order to utilize its excess capacity, Mayfair entered into a five-year contract with the U.S. government to sell Mayfair’s
Aranda Company is an import-export company that relocated earlier this year in a foreign trade zone (FTZ) in a southwestern city. The company imports $760,000 of fabric from overseas for resale to
Chinook, Inc., purchases components from a Japanese company that requires payment in yen (¥); it sells finished product to a German company that pays in euros. On June 1, Chinook ordered components
Aubrey Company produces a single product. Last year’s income statement is as follows:Required:1. Compute the break-even point in units and sales revenue. (Round break-even units to the nearest unit
Each year, Giada Company produces 25,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $4.00. The unit cost is:Required:1. What are the
Redwood Elegance Company, manufactures wooden coffee tables for sale to specialty furniture stores. Currently, the company is operating at 85 percent of capacity. A chain of furniture outlet stores
Goler Company, based in Illinois, sells its product at home and abroad. On March 1, Bondi Company, an Australian company, orders $30,000 worth of product to be delivered immediately and to be paid in
On June 1, Marano, Inc., sold product for $50,000 to be delivered immediately to a Japanese customer and to be paid in yen on August 1. Marano is worried that the exchange rate of dollars for yen
Lanman, Inc., estimates its hidden external failure costs using the Taguchi loss function. Lanman produces plastic sheets that vary in thickness and grade. For one of its large-volume products, it
Shultz Company had the following environmental activities and product information:1. Environmental activity costs2. Driver data3. Other production dataRequired:1. Calculate the activity rates that
Ming Company reported the following sales and quality costs for the past four years. Assume that all quality costs are variable and that all changes in the quality cost ratios are due to a quality
Whitaker Company produces two models of blenders for restaurants: the “Super Model” (priced at $1,600) and the “Special Model” (priced at $800). Recently, Whitaker has been losing market
Tulsa Company is a car brake repair and replacement company operating in the after-sales market. Tulsa’s purchasing manager uses two suppliers (Stridulo and Fallimento) for the source of its
Alejandro’s Moab Grill features authentic Mexican dishes delivered in a relaxing Western motif. Given the short summer tourist season, Alejandro (the owner) decided to identify his top risk.
Allard, Inc., presented two years of data for its Frozen Foods Division and its Canned Foods Division.Required:1. Compute the ROI and the margin and turnover ratios for each year for the Frozen Foods
Arbus Company provided the following information:Required:1. What is ROI?2. What is margin? Turnover Operating assets Operating income 1.4 $120,000 6,720
Imprimo, Inc., produces two types of ink-jet printers: business and home. Imprimo uses a plantwide rate based on direct labor hours to assign its overhead costs. The company has the following
For each of the following scenarios, determine whether the specified variable would increase, decrease, or remain the same. Explain your choice.1. If sales and average operating assets for Kayman
Wade Paving Company has a sealcoating activity and wants to develop a flexible budget formula for the activity. The following resources are used by the activity:• Five truck-mounted sealing units,
Bemidii Company has the following data for one of its production departments:Theoretical velocity: 400 units per hourProductive minutes available per year: 5,000,000Annual conversion costs:
Fontane, Inc., has provided the following information for one of its products for each hour of production:Actual velocity: 400 units (per hour)Move time: 25 minutesInspection time: 5 minutesRework
Vasani House Company produces numerous fabrics for use in automobile, airplane, and boat seats. For last year, Vasani House reported the following:Last year, Vasani House produced 6,800 units and
Dulce Company produces 70 percent dark chocolate truffles. Conversion costs are added uniformly. For the first week in March, EWIP is 80 percent complete with respect to conversion costs. Materials
Picante, Inc., provided the following information for the last calendar year:During the year, direct materials purchases amounted to $184,800, direct labor cost was $149,100, and overhead cost was
J. Q. Higgins, owner of Robin’s Nest, wants to determine the cost behavior of labor and overhead. Higgins pays his workers a salary; during busy times, everyone works to get the orders out. Temps
Noel’s Mobile Pet Services Company has a grooming department staffed by 10 professional pet groomers. Each groomer is paid $75,000 per year and is able to process 5,000 grooming orders. Last year,
Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is
A consulting firm has recently installed a TDABC system for the Shawnee University Library. The consulting firm identified four major processes or departments for the library: Acquisition,
Perrin Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $242,000, and budgeted direct labor hours were 20,000. The average wage rate for direct labor is
Limpiar Company produces a liquid household cleaning product. The Mixing Department, the first process department, mixes the ingredients required for the cleaning product. The following data are for