Questions and Answers of Horngrens Accounting managerial

Suppose White Valley is deciding whether to purchase new accounting software. The payback for the $26,565 software package is five years, and the software’s expected life is eight years. White
Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose):1. $8,550 per year at the end of each of the
Refer to the Stenback Valley Snow Park Lodge expansion project in Short Exercise S26-4. What is the project’s NPV (round to nearest dollar)? Is the investment attractive? Why or why not?Data From
Refer to Short Exercise S26-4. Assume the expansion has no residual value. What is the project’s NPV (round to nearest dollar)? Is the investment attractive? Why or why not?Data From Short Exercise
Refer to Short Exercise S26-4. Continue to assume that the expansion has no residual value. What is the project’s IRR? Is the investment attractive? Why or why not?Data From Short Exercise
Nancy Company is considering buying a machine for $90,000 with an estimated life of ten years and no salvage value. The straight-line method of depreciation will be used. The machine is expected to
Dabbaneh Corporation is considering the purchase of a piece of equipment that costs $20,000. Managers estimate that this equipment will have a 4-year life and generate net cash inflows of $3,000 the
Refer to the information about Dabaneh Corporation in Exercise E26-19. Assume the project has no residual value. Compute the ARR for the equipment.Data From Exercise E26-19:Dabbaneh Corporation is
A real estate investment has the following expected cash flows:The discount rate is 8%. What is the investment’s present value? Year 1 2 WN 3 4 Cash Flows $ 10,000 25,000 50,000 35,000
Kamal Corporation is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn’t equipped to do.
Use the NPV method to determine whether Farran Company should invest in the following projects:• Project A: Costs $250,000 and offers six annual net cash inflows of $75,000. Farran Company requires
Refer to the data regarding Farran Company in Exercise E26-24. Compute the IRR of each project, and use this information to identify the better investment.Data From Exercise E26-24:Use the NPV method
Back Manufacturing is considering three capital investment proposals. At this time, Back only has funds available to pursue one of the three investments.Which investment should Back pursue at this
You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to withdraw $215,000 per year for the next 30 years (based on family history,
You are planning for an early retirement. You would like to retire at age 40 and have enough money saved to be able to withdraw $230,000 per year for the next 40 years (based on family history, you
GDM Equipment, Inc. reported the following data for 2016:Compute GDM’s net cash provided by operating activities—indirect method. Income Statement: Net Income Depreciation Expense Balance Sheet:
Horizontal analysis of Liberty’s balance sheet for 2017 would reporta. Cash as 9.50% of total assets.b. a 17% increase in Cash and Cash Equivalents.c. a current ratio of 1.01.d. inventory turnover
Vertical analysis of Liberty’s balance sheet for 2017 would reporta. Cash as 9.50% of total assets.b. inventory turnover of 6 times.c. a current ratio of 1.01.d. a 17% increase in Cash.
Which statement best describes Liberty’s acid-test ratio for 2017?a. Greater than 1b. Equal to 1c. Less than 1d. None of the above
Liberty’s inventory turnover during 2017 was (amounts rounded)a. 6 times.b. 7 times.c. 8 times.d. not determinable from the data given.
Assume all sales are on credit. During 2017, Liberty’s days’ sales in receivables ratio was (amounts rounded)a. 34 days.b. 30 days.c. 32 days.d. 28 days.
Which measure expresses Liberty’s times-interest-earned ratio? (amounts rounded)a. 54.7%b. 19 timesc. 34.5%d. 32 times
In order for an item to be reported in the extraordinary items section of the income statement, it must bea. unusual.b. infrequent.c. unusual or infrequent.d. unusual and infrequent.
What is the purpose of a cost accounting system?
What are the two main types of traditional cost accounting systems?
Briefly explain the job order costing system.
Briefly explain the process costing system.
Define materials requisition.
What are the two factors on which predetermined overhead allocation rate is based?
Explain allocation base. How does it function as a cost driver?
How do overhead costs flow through the job order costing before the period?
How do overhead costs flow through the job order costing during the period?
List the four steps for tracking product costs.
How do service companies use a job order costing system? List two ways they do this.
What happens to the debit and credit column when the cost of completed jobs is transferred from the work-in-process inventory to the finished goods inventory?
What happens to the debit and credit column when the costs of sold jobs are transferred from finished goods inventory to cost of goods sold?
Mountain Packs manufactures backpacks. Its plant records include the following materials-related data:Journalize the entries to record the transactions, post to the Raw Materials Inventory account,
Gray’s Accounting pays Rita Flores $ 51,000 per year. Flores works 1,000 hours per year.Requirements 1. What is the hourly cost to Gray Accounting of employing Flores? Assume a 25-hour week and a
Gray’s Accounting pays Rita Flores $ 95,400 per year. Assume that Gray’s accountants are expected to work a total of 8,000 direct labor hours in 2016. Gray’s estimated total indirect costs are
Norhan Company begins the month of June with $17,000 of work-in-process costs from Job 24. Information from job cost sheets shows the following additional costs assigned during June, July, and August
Bizri Corporation had the following transactions during its first month of operations:Requirement Journalize the above transactions for Bizri Corporation. Purchases of raw materials on account
Nagham Manufacturing is a small manufacturer that uses machine hours as its activity base for assigning overhead costs to jobs. The company estimated the following amounts for 2013 for the company
Jamal Company began operations on July 1, 2013. Information from job cost sheets shows the following:Job 102 was completed in July. Job 100 was completed in August, and Jobs 101 and 103 were
The following information is available for Sophie Company at December 31, 2013:1.2. Debit postings to Work-in-Process Inventory during the year were:3. Sales totaled $315,000 for the
Farid Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June. June
Analyze the following T-accounts and describe each lettered transaction. (f) Raw Materials Inventory 40,000 25,000 Finished Goods Inventory 140,000 120,000 Factory Labor 110,000 (c) (d) (c) (d) (e)
Manufacturing cost data for Patchi Company, which uses a job order cost system, are presented below:Requirement Indicate the missing amount for each letter. Assume that overhead is applied on the
Martin Realtors, a real estate consulting firm, specializes in advising companies on potential new plant sites. The company uses a job order costing system with a predetermined overhead allocation
Hummingbird Design, Inc. is a Web site design and consulting firm. The firm uses a job order costing system in which each client is a different job. Hummingbird Design assigns direct labor, licensing
Which of the following is the term for one of a series of steps in manufacturing production?a. Flowb. Processc. Seriesd. Diagrams
Which of the following is not true for a process costing system?a. Cost accumulation is by job.b. The cost transfer is at the end of the accounting period.c. It is used by those manufacturing
The cost to convert raw materials into finished goods is calleda. direct costs.b. production costs.c. conversion costs.d. replication costs.
How many units were completed and transferred out?a. 150 unitsb. 1,500 unitsc. 1,350 unitsd. 1,550 units Burton Company uses the weighted-average method in its process costing system.The Packaging
For conversion costs, the equivalent units of production area. 1,700 units.b. 1,580 units.c. 1,500 units.d. 1,550 units.Burton Company uses the weighted-average method in its process costing
The cost per equivalent unit for direct materials isa. $2.00.b. $4.00.c. $8.00.d. $14.00.Burton Company uses the weighted-average method in its process costing system.The Packaging Department started
Of the $3,400 total costs for direct materials, what amount will be transferred out?a. $3,400b. $300c. $1,200d. $3,100 Burton Company uses the weighted-average method in its process costing
The Mixing Department incurred the following costs during the month:What is the journal entry to record the costs incurred during the month? Beginning WIP Added this month Total Transferred In $ 250
Department 1 completed work on 500 units and transferred them to Department 2.The cost of the units was $750. What is the journal entry to record the transfer? Date Accounts and Explanation a.
Which of the following is not one of the uses of production costs report?a. Controlling costsb. Evaluating performancec. Pricing productsd. Applying for a loan
The assumption that the first units started in the production process are the first units completed and sold is calleda. stock card report.b. first-in first-out method.c. last-in first-out method.d.
What does the term process mean?
How does a job order costing system differ from a process costing system in terms of timing of cost transfer?
What are the two unique terms used on a production cost report?
Briefly describe the weighted average method.
How is the cost per equivalent unit of production for direct materials calculated?
How is the cost equivalent unit of production for conversion costs calculated?
Define the first-in, first-out method?
Define equivalent unit of production
What are the journal entries required when goods are sold?
Explain how the production cost report can help managers make decisions regarding controlling costs.
How does a job order costing system differ from a process costing system in terms of record keeping?
How is the accounted for section in the production cost report calculated?
Sanskrit Orange manufactures orange juice. Last month’s total manufacturing costs for the Hardee operation included:What was the conversion cost for Sanskrit Orange’s Hardee operation last month?
The Finishing Department of Bailey and Watson, Inc., the last department in the manufacturing process, incurred production costs of $180,000 during the month of June. If the June 1 balance in
Refer to Short Exercises S20-8 and S20-9. Use Fresh Foods’s costs per equivalent unit of production for direct materials and conversion costs that you calculated in Short Exercise S20-9.Calculate
Refer to Short Exercise S20-10. Prepare the journal entry to record the transfer of costs from the Mixing Department to the Packaging Department.Data From Short Exercise S20-10:Refer to Short
Refer to Short Exercise S20A-13. At Spring Rain, water is added at the beginning of the filtration process. Conversion costs are added evenly throughout the process.Now assume that in February,
For each of the following products or services, indicate if the cost would most likely be determined using a job order costing system or a process costing system.a. Business consultingb. Chemicalsc.
Match the following terms to their definitions. 1. Direct labor and manufacturing overhead 2. Direct labor and direct materials 3. Equivalents units 4. Process costing 5. Job costing 6.
At Cremino Company, materials are entered at the beginning of each process. Workin-Process inventories, with the percentage of work done on conversion, and production data for its Painting Department
Power Clean Chemicals refines a variety of chemicals for cleaning products and uses process costing. The following data are from the company’s Extracting Department:Compute the equivalent units for
The Pasta Factory manufactures spaghetti sauce through two production departments:Cooking and Packaging. For the month of February, the Work-in-Process accounts show the following debits:Requirements
Winer House manufactures a fine wine in two departments, Fermenting and Bottling.In the Fermenting Department, grapes are aged in casks for a period of 30 days. In the Bottling Department, the wine
Amal Manufacturing Corporation had the following transactions in January• Purchased raw materials for $50,000 on account.Prepare the journal entries for Amal Manufacturing Company. Raw materials
Rayan Manufacturing Company produces a product in two departments: (1) Mixing and (2) Finishing. The company had the following transactions in March:• Manufacturing overhead is applied to the
Work Problem P20-32A using the FIFO method. The Dyeing Department beginning work in process of 55 units is 40% complete as to conversion costs. Round equivalent unit of production costs to four
Work Problem P20-39B using the FIFO method. The Dyeing Department beginning work in process of 75 units is 80% complete as to conversion costs. Round equivalent unit costs to four decimal places.Data
Which of the following is a cost that increases or decreases in total in direct proportion to increases or decreases in the volume of activity?a. Fixed costsb. Variable costsc. Mixed costsd. Overhead
The range of volume where total fixed costs and variable cost per unit remain constant is calleda. relevant range.b. fixed range.c. adjustment range.d. flat range.
If Intervale Railway’s fixed costs total $90,000 per month, the variable cost per passenger is $45, and tickets sell for $75, what is the contribution margin per unit and contribution margin
If Intervale Railway’s fixed costs total $90,000 per month, the variable cost per passenger is $45, and tickets sell for $75, how much revenue must the Railway generate to earn $120,000 in
If Intervale Railway’s fixed costs total $90,000 per month, the variable cost per passenger is $45, and tickets sell for $75, what is the breakeven point in units?a. 1,200 passengersb. 2,000
The sales level at which operating income is zero is calleda. cut-off point.b. break-up point.c. breakeven point.d. equilibrium point.
Which of the following is a technique that estimates profit or loss results if selling price, costs, volume, or underlying assumptions change?a. Breakeven analysisb. Marginal analysisc. Ratio
If the selling price per unit increases, the contribution margin per unit willa. decrease.b. remain the same.c. be unknown.d. increase.
The Best Appliances had the following revenue over the past five years:To predict revenues for 2016, The Best Appliances uses the average for the past five years. The company’s breakeven revenue is
What is the unit product cost using variable costing?a. $50 per unitb. $55 per unitc. $70 per unitd. $90 per unit Donovan Company incurred the following costs while producing 500 units: direct
What is the operating income using variable costing if 450 units are sold for $100 each?a. $2,750b. $5,000c. $500d. $2,500Donovan Company incurred the following costs while producing 500 units:
How is total fixed cost calculated?
How is variable cost per unit calculated?

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