Questions and Answers of Horngrens Cost Accounting

As the new controller, reply to the following comment made by your plant manager: “When I employ a proper accounting software, which can process all my daily accounting records and provide me with
Key success factors. Dalworth Construction Company provides construction services for major projects. Managers at the company believe that construction is a people-management business, and they list
Hannah Gilpin is the controller of Blakemore Auto Glass, a division of Eastern Glass and Window. Her division has been under pressure to improve its divisional operating income. Currently, divisions
How is financial accounting different from management accounting?
How do management accountants support strategic decisions?
How do companies add value, and what are the dimensions of performance that customers are expecting of companies?
How do managers make decisions to implement strategy?
What guidelines do management accountants use?
What are the ethical responsibilities of management accountants?
Campbell Soup Company incurs the following costs:a. Purchase of tomatoes by a canning plant for Campbell’s tomato soup productsb. Materials purchased for redesigning Pepperidge Farm biscuit
Foxwood Company is a metal- and woodcutting manufacturer, selling products to the home construction market. Consider the following data for 2017:Required 1. Prepare an income statement with a
How do managers decide whether a cost is a direct or an indirect cost?
How do managers decide whether a cost is a variable or a fixed cost?
How should managers estimate and interpret cost information?
What are the differences in the accounting for inventoriable versus period costs?
What is the flow of inventoriable and period costs in manufacturing and merchandising settings?
Why do managers assign different costs to the same cost objects?
What are the three key features of cost accounting and cost management?
Finding unknown amounts. An auditor for the Internal Revenue Service is trying to reconstruct some partially destroyed records of two taxpayers. For each case in the accompanying list, find the
How can CVP analysis help managers?
How can managers determine the breakeven point or the output needed to achieve a target operating income?
How can managers incorporate income taxes into CVP analysis?
How do managers use CVP analysis to make decisions?
What can managers do to cope with uncertainty or changes in underlying assumptions?
How should managers choose among different variable-cost/fixed-cost structures?
How can managers apply CVP analysis to a company producing multiple products?
How do managers apply CVP analysis in service and not-for-profit organizations?
What is the difference between contribution margin and gross margin?
Wembley Travel Agency specializes in flights between Los Angeles and London. It books passengers on United Airlines at $$900$ per round-trip ticket. Until last month, United paid Wembley a
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Use (a) the equation method and (b) the contribution method to calculate operating income if Bernard
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Calculate (a) the breakeven point in units and revenues and (b) the number of windows Bernard Windows must
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Calculate the number of windows Bernard Windows must install and the revenues needed to earn a target net
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Calculate the margin of safety in units and dollars and the margin of safety percentage if Bernard Windows
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Bernard is considering changing its sales compensation for next year. Bernard would pay salespeople a 5%
Bernard Windows plans to sell two different brands of windows—Chad and Musk—and budgets the following:Calculate the breakeven point for Bernard Windows in terms of (a) the number of units sold
Consider the following data for November 2018 from Grey Manufacturing Company, which makes silk pennants and uses a processcosting system. All direct materials are added at the beginning of the
The following data refer to the successful Munger division of Buffett, Inc. Munger makes and sells high-end cordless drills. The drills sell for $80 each, and Munger expects sales 01300,000 units in
Corners Ltd. owns and manages three convenience stores. The following information has been collected for the year 2018:Required1. Compute the ROI for each store, where investment is measured at (a)
Mineral Waters Ltd. operates three divisions that process and bottle sparkling mineral water. The historical-cost accounting system reports the following data for 2018:Mineral Waters estimates the
Nature's Juice Corporation operates three divisions that process and bottle natural fruit juices. The historical-cost accounting system reports the following information for 2019:Nature's Juice
News Report Group has two major divisions: Print and Internet. Summary financial data (in millions) for 2018 and 2019 are as follows:The two division managers' annual bonuses are based on division
Green News Group has two major divisions: Print and Internet. Summary fina ncial data (in millions) for 2017 and 2018 are as follows:The two division managers' annual bonuses are based on division
Spooked is a Halloween decorations manufacturer planning to purchase a new packing machine for $120,000 with a useful life of 15 years and a terminal value of $10,000. Savings due to the machine are
Funky Beats manufactures high-quality headphones for music lovers of all styles. The company requires a payback period of less than five years for any capital budgeting decisions.1. Does the
Chicks with Kicks has requested another report in addition to the NPV report you completed in Exercise 20-32. Details about the machine investment are as follows:Cost of new machine
Chicks with Kicks is a boxing club for women. The club manufactures all of its own punching bags out of high-quality leather and sand from Los Roques, one of Venezuela's most beautiful beaches. The
Candid Candles manufactures scented candles. There most popular scents are lemon biscotti and ra spberry whipped cream. The company is looking into purchasing an automated wick cutter to bolster
Crazy Mama has just heard about payback period and IRR. Assume the CCA rate is 20%, and refer to the following information to answer the questions below.1. Calculate the payback period.2. Compare
A&A Inc. is a manufacturer of digital cameras. It has two departments: assembly and testing. In January 201 8, the company incurred $900,000 on direct materials and $957,600 on conversion costs,
Your Market {YM} runs two convenience stores, one in Vancouver and one in Surrey. Operating income for each store in 2018 follows:The equipment has a remaining useful life of one year and zero
Generic Inc. is a distributor of pharmaceutical products. Its ABC system has five activities:Activity AreaCost Driver Rate in 20181. Order processingS40 per order2. Line-item ordering3 per line
The PopStop manufactures and sells three soft drinks: Kola, Lima, and Oranga. Budgeted and actual results for 2018 are as follows:Required1. Compute the total sales-volume variance, the total
Are for-profit businesses the only users of revenue allocation? Explain.
The Klein Company operates a simple chemical process to convert a single material into three separate items, referred to here as X, Y, and Z. All three end products are separated simultaneously at a
Sinclair Oil & Gas, a large energy conglomerate, jointly processes purchased hydrocarbons to generate three nonsaleable intermediate products: ICR8, ING4, and XGE3. These intermediate
Quality Chicken is computing the ending inventory values for its July 31, 2018, statement of financial position. ending inventory amounts on July 31 are 15 kilograms of breasts, 4 kilograms of wings,
Chocolat Inc. decides to examine the effect of using the dual-rate method for allocating truck costs to each round trip. At the start of 2018, the budgeted costs wereVariable cost per round trip
Halsey Company sells women's clothing. Halsey's strategy is to offer a wide selection of clothes and excellent customer service and to charge a premium price. Halsey presents the following data
Refer to the data for Exercise 13-37.Assume the fabric costs S4 per metre in 2019 and $4.10 per metre in 2018.Required1. Compute Guble Company's total factor productivity (TFP) for 2019.2. Compare
Guble Company manufactures wallets from fabric. In 2018, Guble made 2,500,000 wallets using 1,875,000 metres of fabric. In 2019, Guble plans to make 2,650,000 wallets and wants to make fabric use
All increases in market share (that is, sales increases greater than 8%) are the result of Oransfield's strategic actions.RequiredCalculate how much of the change in operating income from 2018 to
Dransfield Company manufactures an electronic component, ZP98. This component is significantly less expensive than similar products sold by Dransfield's competitors. Order-processing time is very
1. Calculate lakeside's operating income in both 2018 and 2019.2. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2018 to 2019.3.
lakeside T-Shirt Company sells a variety of T-shirts. lakeside presents the following data for its first two years of operations, 2018 and 2019. For simplicity, assume that all purchasing and selling
Suppose that during 2019 the market for implementing sales management software increased by 5%, and that Haller experiences a 1 % decline in prices. Assume that any further decreases in selling
Refer to the Grey Corporation information in Exercise 13· 18.Required1. Where possible, calculate the amount and cost of unused capacity for (a) manufacturing, (b) selling and customer service, and
Suppose that between 2018 and 2019 the market for Grey's special-purpose machines grew at 3%. All increases in market share (that is, sales increases greater than 3%) are the result of Grey's
Refer to the information in Exercise 13· 18.Required1. Calculate the change in operating income of Grey Corporation in 2018 and 2019.2. Calculate the growth, price-recovery, and productivity
Grey Corporation makes a special-purpose 04H machine used in the textile industry. Grey has designed the 04H machine for 2018 to be distinct from its competitors. It has been generally regarded as a
What is re engineering?
Define strategy.
Time Temps, a large Jabour contractor, supplies contract labour to building-construction companies. For 2018, Time Temps has budgeted to supply 80,000 hours of contract labour. Its variable costs are
What is life-cycle budgeting?
Ace Cleaning Service is considering expanding into one or more new market areas. Which costs are relevant to Ace's decision on whether to expand?
lees Corp. is deciding whether to keep or drop a small segment of its business. Key information regarding the segment includes:Contribution margin: 35,000Avoidable fixed costs: 30,000Unavoidable
What is the goal of an ordinary least squares (OLS) linear regression?
In 2019, only 806,840 Deliman meals were produced and sold to the retirement homes. Smith suspects that retirement home controllers had systematically inflated their 2019 meal estimates.Required1.
Shasta Hill s, a winery in British Columbia, manufactures a premium white cabernet and sells primarily to distributors. Wine is sold in cases of one dozen bottles. In the year ended December 31,
Yates Corporation is a manufacturer of computer accessories. It uses absorption costing based on standard costs and reports the following data for 2018:There are no rate or efficiency variances.
The Zwatch Company manufactures trendy, high-quality moderately priced watches. As Zwatch's senior financial analyst, you are asked to recommend a method of inventory costing. The CFO will use your
Electron Inc. is a semiconductor company based in Winnipeg. In 2018, it produced a new router system for its corporate clients. The average wholesale selling price of the system is $1,200 each. For
Inc. manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March of 2018 areRequired1. Present statements of comprehensive income
Motors assembles and sells motor vehicles, and uses standard costing. Actual data relating to April and May 2018 are The selling price per vehicle is $26,000. The budgeted level of production
Magic Dice manufactures premium food processors. The following is some manufacturing overhead data for Magic Dice for the year ended December 31, 2018.Budgeted number of output units: 888Planned
How do standard and actual costing differ?
On May 1, 2018, Terra Company began the manufacture of a new internet paging device known as Flare. The company installed a standard costing system to account for manufacturing costs. The standard
Grant Electric Inc. manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labour:Direct materials: 10 kg at $4.50/kg
Stevie McQueen has run Lightning Car Detailing for the past 10 years. His static -budget and actual results for June 2018 are provided below. Stevie has one employee who has been with him for all 10
Keats Inc. is a priva te ly held furniture manufacturer. For August 2018, the company had the following standards for one of its products, a wicker chair:The following data were compiled regarding
Sunshine Foods manufactures pumpkin scones. For January 2017, it budgeted to purchase and use 14,750 kilograms of pumpkin at $0.92 a kilogram. Actual purchases and usage for January 2017 were 16,000
Doux Dulce manufactures ka le salads. For January 2018, it budgeted to purchase and use 16,000 kilograms of kale at $1.11 per kilogram; budgeted output was 60,000 salads. Actual purchases and use for
Brabham Enterprises manufactures tires for the Formula I motor racing circuit. For August 2018, it budgeted to manufacture and sell 3,000 tires at a variable cost of $74 per tire and total fixed
Keating & Partners is a law firm specializing in labour relations and employee-related work. It employs 25 professionals (5 partners and 20 managers) who work directly with its clients. The
Two products are manufactured by the Fraser Corporation: Widgets and Thingamajigs. In July 2018, the controller of Fraser, upon instructions from senior management, had the budgeting department
Your Mart (YM) has a Kaizen (continuous improvement) approach to budgeting activity area costs for each month of 201 9. Each successive month, the budgeted cost driver rate decreases by 0.2% relative
The Parksville location of Your Mart (YM}, a chain of small neighbourhood grocery stores, is preparing its activity-based budget for January 2019. YM has three product categories: soft drinks, fresh
TabComp Inc. is a retail distributor for MZB-33 computer hardware and related software and support services. TabComp prepares annual sales forecasts of which the first six months for 2019 are
The Suzuki Company in Japan has a division that manufactures two-wheel motorcycles. Its budgeted sales for Model G in 2019 are 985,000 units. Suzuki's target ending inventory is 115,000 units, and
The wine-producing company Lebeau Vineyard expects to produce 2.1 million 3-litre bottles of Chablis in 2019. Lebeau purchases empty glass bottles from a reliable supplier. The target ending
The Russell Company expects 2019 sales of 135,000 units of serving trays. Russell's beginning inventory for 2019 is 9,700 trays; target ending inventory: 16,300 trays.RequiredCompute the number of

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