Questions and Answers of Horngrens Cost Accounting A Managerial Emphasis

The Ukraine power plant that services all manufacturing departments of CC Engineering has a budget for the coming year. This budget has been expressedin the following monthly terms:The expected
Distinguish between the stand-alone and the incremental revenue-allocation methods.
E-books, an online book retailer, has two operating departments— corporate sales and consumer sales—and two support departments human resources and information systems.Each sales department
Hall Auto Sales uses all types of media to advertise its products (television, radio, newspaper, and so on). At the end of 2019, the company president, Tina Hall, decided that all advertising costs
Ema Inc. and Gold Inc. are two small clothing companies that are considering leasing a dyeing machine together. The companies estimated that in order to meet production, Ema needs the machine for 600
What is a joint cost? What is a separable cost?
Yang Inc. produces and sells DVDs to businesspeople and students who are planning extended stays in China. It has been very successful with two DVDs: Beginning Mandarin and Conversational Mandarin.
Baker University completed construction of its newest administrative building at the end of 2019. The University’s first employees moved into the building on January 1, 2020. The building consists
The Central Valley Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows:Management has decided that the most appropriate inventory costs are
Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2020 follows:Joint cost of production in July 2020 was
Distinguish between a joint product and a byproduct.
Why does the sales value at splitoff method use the sales value of the total production in the accounting period and not just the revenues from the products sold?
Quality Chicken is computing the ending inventory values for its July 31, 2020, balance sheet. Ending inventory amounts on July 31 are 15 pounds of breasts, 4 pounds of wings, 6 pounds of thighs, 5
Stenback Company is one of the world’s leading corn refiners. It produces two joint products—corn syrup and corn starch—using a common production process. In July 2020, Stenback reported the
The KZee Company operates a simple chemical process to convert a single material into three separate items, referred to here as A, B, and C. All three end products are separated simultaneously at a
Sinclair Oil & Gas, a large energy conglomerate, jointly processes purchased hydrocarbons to generate three nonsalable intermediate products: ICR8, ING4, and XGE3. These intermediate products are
Tasty, Inc., is a producer of potato chips. A single production process at Tasty, Inc., yields potato chips as the main product and a byproduct that can also be sold as a snack. Both products are
Carl Jason is a prospector in the Texas Panhandle. He has also been running a side business for the past couple of years. Based on the popularity of shows such as “Rattlesnake Nation,” there has
Clover Dairy Products Corp. buys one input of full-cream milk, and refines it in a churning process. From each gallon of milk Clover produces three cups of butter and nine cups of buttermilk. During
Clover has decided that buttermilk may sell better if it was marketed for baking and sold in pints. This would involve additional packaging at an incremental cost of $0.70 per pint. Each pint could
Cloths of Heaven’s accountant needs to record the information about the joint and byproducts in the general journal but is not sure what the entries should be. The company has hired you as a
The Palm Company produces two products—coconut and coconut water—by a joint process. Joint costs amount to $14,000 per batch of output. Each batch totals 4,000 pounds of coconut and 6,000 pounds
Give three examples of industries that use process-costing systems.
What problems might arise in estimating the degree of completion of semiconductor chips in a semiconductor plant?
“The standard-costing method is particularly applicable to process-costing situations.” Do you agree? Why?
Why should the accountant distinguish between transferred-in costs and additional direct materials costs for each subsequent department in a process-costing system?
“Transferred-in costs are those costs incurred in the preceding accounting period.” Do you agree? Explain.
Panagra, Inc. manufactures digital cameras. It has two departments: assembly and testing. In January 2020, the company incurred $775,000 on direct materials and $816,000 on conversion costs, for a
Pilar Chemicals has a mixing department and a refining department. Its process-costing system in the mixing department has two direct materials cost categories (chemical P and chemical Q) and one
The assembly division of Fenton Watches, Inc., uses the weighted-average method of process costing. Consider the following data for the month of May 2020:RequiredCompute equivalent units for direct
Whole Goodness Bakery needs to determine the cost of two work orders for the month of June. Work order 215 is for 2,400 packages of dinner rolls, and work order 216 is for 2,800 loaves of multigrain
Third Wave Bakery supplies cupcakes to a national grocery chain for their private label. The cupcakes must meet specific requirements of the grocery chain. Third Wave uses a specific process to
The Tiffenex Company manufactures reproductions of expensive earrings. Tiffenex uses the standard-costing method of process costing to account for production of earrings. All materials are added at
Brown Industries operates several laminate flooring plants. Given the competitive pricing for flooring, Brown’s managers pay close attention to costs. Each plant uses a processcosting system, and
“Normal spoilage is planned spoilage.” Discuss.
“Units of abnormal spoilage are inferred rather than identified.” Explain.
“The inspection point is key to the allocation of spoilage costs.” Do you agree? Explain.
“Normal spoilage rate is computed by dividing the units of normal spoilage by total actual units started in production.” Do you agree? Explain.
All of the following are accurate regarding the treatment of normal or abnormal spoilage by a firm with the exception ofa. Abnormal spoilage is excluded in the standard cost of a manufactured
Which of the following is a TRUE statement regarding the treatment of scrap by a firm?a. Scrap is always allocated to a specific job.b. Scrap is separated between normal and abnormal scrap.c. When
Mason produces small machined parts. Mason uses a job-costing system. The nature of its process is such that management expects normal spoilage at a rate of 2% of good parts. Data for last quarter
Satiated Ninja produces a variety of items in accordance with special job orders from hospitals, plant cafeterias, and university dormitories. An order for 2,100 to-go boxes of uramaki costs €9 per
Rufenstein War Systems Pvt. Ltd. has an extensive job-costing facility that uses a variety of metals. Consider each requirement independently.Required1. Job 372 uses a particular metal alloy that is
The Seafood Company is a food-processing firm based in Oslo. It operates under the weighted-average method of process costing and has two departments: cleaning and packaging. For the cleaning
In the Seafood Company’s packaging department, conversion costs are added evenly during the process, and direct materials are added at the end of the process. Spoiled units are detected upon
Refer to the information in Problem 19-37 except that the transferred-in costs of beginning work in process on May 1 are $33,090 (instead of $33,698). Transferred-in costs for May equal the total
Jiminy Jacks produces jacks that are used in many types of automobiles. In the assembly department, materials are added at the beginning of the process and conversion costs are added evenly during
Textual Brilliance is a manufacturer of writing products for aspiring indie authors.Winston Smith, the plant manager of Textual Brilliance, obtains the following information for Job #10 in August
Assume that the 6 spoiled units of Textual Brilliance’s Job #10 can be reworked for a total cost of $1,800. A total cost of $6,600 associated with these units has already been assigned to Job #10
Flextron Company is a contract manufacturer for a variety of pharmaceutical and over-the-counter products. Lynn Sanger, one of Flextron’s quality control managers, obtains the following information
Assume the same information for Turcotte as in Problem 11-36. Working brake pads yield a profit of $25. If defective brake pads are identified before they are shipped, they can be fixed and sold as
Describe four purposes of cost allocation.
What is a target cost per unit?
Give two examples of a value-added cost and two examples of a non-value-added cost.
What is life-cycle budgeting?
Define price discrimination and give an example.
Describe peak-load pricing and give an example.
The Magill Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2020 is as follows:Required1. Classify each cost as value-added, non-value-added, or in the gray
Which of the following statements regarding price elasticity is incorrect?a. A product with a perfectly inelastic demand would have the same demand even as prices change.b. A product with a perfectly
Europa Associates prepares architectural drawings to conform to local structural-safety codes. Its income statement for 2020 is as follows:The percentage of time spent by professional staff on
Snappy Tiles is a small distributor of marble tiles. Snappy identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details
Neuro Instruments uses a manufacturing costing system with one direct-cost category (direct materials) and three indirect-cost categories:a. Setup, production-order, and materials-handling costs that
Sun Systems provides energy audits in residential areas of southern Ohio. The energy audits provide information to homeowners on the benefits of solar energy. A consultant from Sun Systems educates
TinRoof, Inc., manufactures and sells a do-it-yourself storage shed kit. In 2019, it reported the following:Required1. What was TinRoof’s operating income in 2019? What was the full cost per unit?
Jurgensen Manufacturing, Inc., plans to develop a new industrial- powered vacuum sweeper for household use that runs exclusively on rechargeable batteries. The product will take 6 months to design
Fun Stay Express operates a 100-room hotel near a busy amusement park. During June, a 30-day month, Fun Stay Express experienced a 65% occupancy rate from Monday evening through Thursday evening
The new chief executive officer (CEO) of Richard Manufacturing has asked for a variety of information about the operations of the firm from last year. The CEO is given the following information, but
Europa Airways is about to introduce a daily round-trip flight from Madrid, Spain, to Cairo, Egypt, and is determining how to price its round-trip tickets.The market research group at Europa Airways
ProDry is entering the professional hair dryer market. Research shows that their customers wish to pay $310 or less for each dryer. Cost accountants at the manufacturer have collected the following
Gammaro Company uses standard costing. Tim St. Germaine, the new president of Gammaro Company, is presented with the following data for 2020:Required1. At what percentage of denominator level was the
How does the treatment of fixed production overhead differ under variable costing and absorption costing?
Abeka Bakery Company had opening inventory of 14,800 units and closing inventory of 17,500 units.Profits based on marginal costing were £315,250 while overhead absorption rate was £5.20 unit. What
The selling price of Jay hair treatment lotion is £18 per unit, the variable manufacturing cost is £4.50 per unit, and sales commission is £2.50. The fixed manufacturing costs have been calculated
Yokojo Ltd specializes in the servicing of Japanese vehicles. The following is Yokojo’s budget for 2020:Fixed manufacturing
Budgeted production for the month was 5,000 units although the company managed to produce 5,800 units, selling 5,200 of them and incurring fixed overhead costs of £27,400 while selling price £75.
Gorimapa Manufacturing Company produces desktop calendars. The following are the budgeted data for 3,000 units of Joystick produced in September 2020:RequiredDuring the period 2,800 were produced and
The Zeta Company manufactures trendy, good-looking, moderately priced umbrellas. As Zeta’s senior financial analyst, you are asked to recommend a method of inventory costing. The CFO will use your
PAMO Medicals Ltd. makes face masks for the prevention of high contagious virus. For December 2020, PAMO Medicals incurred the following production costs:Required1. Compute PAMO Medicals’ profit
Regina Company manufacturers a professional-grade vacuum cleaner and began operations in 2020. For 2020, Regina budgeted to produce and sell 20,000 units. The company had no price, spending, or
Artesa, a leading firm in the semiconductor industry, produces digital integrated circuits (ICs) for the communications and defense markets. For the year ended December 31, 2020, Artesa sold 242,400
The Stenback Company uses an absorption-costing system based on standard costs. Variable manufacturing cost consists of direct material cost of $4 per unit and other variable manufacturing costs of
Johnson Stores produce and sell face powder called the ‘Success’ in cases. Each case is sold for £80. The following information relates to the product in the autumn and summer of 2020:Other
Horizon Press produces textbooks for college courses. The company recently hired a new editor, Billie White, to handle production and sales of books for an introduction to accounting course.
Zing Lager has just purchased the Chicago Brewery. The brewery is 2 years old and uses absorption costing. It will “sell” its product to Zing Lager at $44 per barrel. Peter Bryant, Zing Lager’s
Donaldson Corporation is a manufacturer of computer accessories. It uses absorption costing based on standard costs and reports the following data for 2020:There are no price, spending, or efficiency
Whistler, Inc., manufactures a specialized snowboard made for the advanced snowboarder. Whistler began 2020 with an inventory of 240 snowboards. During the year, it produced 900 boards and sold 995
Gostkowski Company is about to enter the highly competitive personal electronics market with a new optical reader. In anticipation of future growth, the company has leased a large manufacturing
Kappa Electricals, a producer of energy-efficient compact fluorescent lamps (CFLs), expects that demand will increase markedly over the next decade. Due to the high fixed costs involved in the
The Beta Company started business on January 1, 2020. Beta manufactures a specialty honey soda, which it sells directly to state-owned distributors in Abu Dhabi. Honey soda is produced and sold in
The Rolling Boulders Corporation operates car rental agencies at more than 20 airports. Customers can choose from one of three contracts for car rentals of one day or less:■ Contract 1: £50 for
The Blue Seas Company, which is under contract to the Navy, assembles troop deployment boats. As part of its research program, it completes the assembly of the first of a new model (PT109) of
An ROC curve plots the false positive rate (x-axis) against the true positive rate (y-axis) for different model thresholds. The graph below shows three different ROC curves labeled 1, 2, and
Graham Douglas is a guard dog training business based in Coventry, the United Kingdom. The business trains and sells different breeds of guard dogs. The dogs are usually purchased from local dog
Refer to Exercise 13-21.Data From Exercise 13-21Dominic & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers.
Top Catering operates a chain of 10 hospitals in the Los Angeles area. Its central food-catering facility, TopStuff, prepares and delivers meals to the hospitals. It has the capacity to deliver up to
JetStar produces jet bridges for many domestic and international airports. Cost information for JetStar’s jet bridges is as follows:Additional information for the first three quarters of 2020 for
Rollalong Inc. produces wheelchairs that are sold primarily to hospitals. Rollalong’s three plant managers’ bonuses are based on operating income that is produced using absorption costing. The
Explain linear cost function and give an example.
Why is a linear cost function useful?
What criteria are used by managers in the classification of costs into variable and fixed components?

Showing 300 - 400 of 799