Introduction To AccountingAn Integrated Approach 8th Edition Penne Ainsworth, Dan Deines - Solutions

What type of company would use an EOQ system?
Ebzery Company plans to pay its managers a bonus to encourage performance. The bonus rate is 15 percent and the bonus base is net income after bonus but before taxes. Ebzery’s expected income before bonus or taxes is $400,000. Its tax rate is 30 percent. Determine the amount of the expected bonus.
What type of company would use a JIT system?
Refer to E5.16. What is the expected cash outflow for bonus and taxes if the bonus and the taxes are paid in the budgeting period? What is the expected net income?Data from E5.16Ebzery Company plans to pay its managers a bonus to encourage performance. The bonus rate is 15 percent and the bonus
When the EOQ formula is solved, what does the result indicate?
How do you determine the reorder point in an EOQ system?
Refer to E5.18. What is the expected cash outflow for bonus and taxes if the bonus and the taxes are paid in the budgeting period? What is the expected net income?Data from E5.18Downs, Inc., plans to pay its managers a bonus to encourage performance. The bonus rate is 10 percent and the bonus base
What are the goals of a JIT system?
How does the adoption of a JIT system impact the company/supplier relationship?
Murphy Enterprises has set its selling price at $400. At this price, its selling margin is $300. What is Murphy’s cost per unit? What is its selling margin percentage?
How does the adoption of a JIT system impact the company/employee relationship?
Roester, Inc., set its selling price at $120. Its markup percentage is 60 percent. What is Roester’s cost per unit? What is its selling margin? What is its selling margin percentage?
How does the adoption of a JIT system impact the company/customer relationship?
How does a kanban system work?
What is the difference between voluntary and involuntary withholdings?
Why do companies provide health and life insurance for employees?
Define the following terms:(a) Bonus,(b) Bonus rate,(c) Bonus base.
What is the purpose of budgeting?
You have recently been hired by a large firm and after a major promotion have just completed your first sales budget by yourself. You and your best friend set a date to go out and celebrate on Friday. The following conversation takes place: Friend: You look a little down. I thought this was
Describe the benefits of budgeting.
Many of the issues involved in budgetary slack, and so on, are caused because performance is measured against the budget. Given what you have learned about the balanced scorecard, discuss the appropriateness and suggest other means of measuring performance of middle and upper managers.
Describe the costs of budgeting.
Refer to E6.2. Assume that each unit of Dynamo costs O’Connell $4 while each unit of Craylon cost $2. Further assume that O’Connell wants and ending inventory equal to 5 percent of next month’s expected sales. Prepare the purchases budget for the first quarter.Data from E6.2O’Connell sells
Describe budgetary slack.
Refer to E6.10. Prepare a marketing and distribution budget by month for the quarter for McKown.Data from E6.10McKown plans to sell 5,000 units of Herbal Wash in the first month, 4,500 units in the second month, and 5,500 units in the third month, at $2 each. Commissions are 2 percent of sales and
What is the relationship between the accounts receivable schedule and the sales budget?
Refer to PepsiCo, Inc. (www.pepsico.com). Based on your knowledge of this company, answer the following.A. What budgeting strategy do you think it uses?B. What budgeting approach do you think it uses?C. How do you think its sales budget is organized (i.e., by product, by region)?D. What do you
What is the relationship between the cash receipts schedule and the accounts receivable schedule?
Refer to E6.8. Prepare an accounts receivable schedule for January through March.Data from E6.8Amadio, Inc., has a beginning accounts receivable balance of $20,000. It expects the following sales for the first quarter:January ................ $140,000.February ................
What is the relationship between the sales budget and the cash receipts schedule?
Appendix Shumway Enterprises has the following production planned for the first six months of next year:January ................... 50,000.February ................ 45,000.March ..................... 55,000.April .......................
Refer to E6.6. What is the expected ending balance of accounts receivable?Data from E6.6Soderlund Company has a balance in its accounts receivable of $35,000 at the beginning of the year. Credit sales for the year are expected to be $675,000. It is estimated that Soderlund will collect the entire
What is the difference between an ideal and a normal standard?
Craven Company plans to sell 20,000; 22,000; 30,000; and 34,000, respectively, units per month for the next four months. The desired ending finished goods inventory is 5 percent of the expected sales in the next month. Beginning inventory is 2,000 units. Each unit can be purchased for $3.Required:
To aid in preparing its budget for March 2018, Gotfredson Company has provided the following information: Amount owed by customers, March 1, 2018 $ 400,000 Estimated sales for March 2018 1,400,000 Estimated amount owed by customers, March 31, 2018 525,000What are the estimated cash receipts for
Refer to Walt Disney Company (www.disney.com). Based on your knowledge of this company, answer the following:A. What budgeting strategy do you think it uses?B. What budgeting approach do you think it uses?C. How do you think its sales budget is organized (i.e., by product, by region)?D. What do you
What is the relationship between the marketing and distribution budget and the sales budget?
Refer to E6.10 and E6.11. Assume that all costs are paid in the month incurred. Prepare the cash disbursements schedule by month for the quarter for McKown.Data from E6.10McKown plans to sell 5,000 units of Herbal Wash in the first month, 4,500 units in the second month, and 5,500 units in the
How can balanced scorecard measures be used for revenue process planning?
Develop a set of nonfinancial balanced scorecard measures for the revenue process.
Refer to E6.13. Assume Barcenilla sells its product for $100 each. Prepare a sales budget, by month, for next quarter.Data from E6.13Barcenilla has a beginning accounts receivable balance of $140,000. Barcenilla expects sales to be $460,000; $500,000; and $520,000, respectively, for each month in
Refer to E6.13 and E6.14. Assume each unit will cost $20 and Barcenilla desires an ending inventory equal to 10 percent of next month’s anticipated sales. Prepare the purchases budget for the first two months.Data from E6.13Barcenilla has a beginning accounts receivable balance of $140,000.
What information is needed to prepare a cash disbursements schedule and where is this information found?
How is the accounts payable schedule related to the cash disbursements schedule?
How can balanced scorecard measures be used for expenditure process planning?
Refer to E6.17. If Kallsen gives customers that pay within the month of sale a 2 percent discount, does this change your answer? Why?Data from E6.17Kallsen Enterprises, in its first year of operations, has provided the following estimated sales information:Month 1 ........................
Develop a set of nonfinancial balanced scorecard measures for the expenditure process.
Refer to P6.8. Each unit requires three hours of direct labor time at $12 per hour. Unit-related overhead is $10 per machine hour and each unit requires one-half machine hour. Batch- related overhead is $3,000 per batch with a batch-size of 1,000 units. Facility overhead, including depreciation of
What is the difference between a quantity discount and a purchase discount?
Schuh, Inc., plans to produce 6,000 units in Month 1 and 7,000 units in Month 2. Each unit requires 3 pounds of direct materials that can be purchased for $2 per pound. At the beginning of Month 1 there are 2,000 pounds of direct materials on hand. Schuh desires an ending inventory of direct
Frausto, Inc., plans to produce 22,000; 24,000; 26,000; 28,000; 30,000; and 32,000 units for the first six months, respectively, of the coming year. Each unit requires 2 liters of direct materials that cost $3 per liter. Frausto indicates that the beginning inventory of direct materials is 5,000
What is the purpose of the direct materials budget.
What is the purpose of the direct labor and manufacturing overhead budget?
Refer to E6.20. What is the expected ending balance of accounts payable?Data from E6.20Mathison Enterprises has a balance in accounts payable of $34,500 at the beginning of the budgeting period. Mathison expects purchases of $890,000 during the period and intends to pay its suppliers for amounts
How is the production budget related to the sales budget?
Refer to E6.17. Assume that Kallsen pays its sales personnel a commission of 4 percent of sales and that other marketing costs are estimated at $20,000 per month. What is the expected marketing cost each month?Data from E6.17Kallsen Enterprises, in its first year of operations, has provided the
Refer to Dell Computer (www.dell.com). Based on your knowledge of this company, answer the following:A. What budgeting strategy do you think it uses?B. What budgeting approach do you think it uses?C. How do you think its sales budget is organized (i.e., by product, by region)?D. What do you think
Refer to E3.13. These data were entered into a regression program, resulting in the following output. Determine the cost equation and evaluate its strength.Data from E3.13The engineering costs and the number of machine setups for each month during the first half of the year at Decklever Company
Refer to E3.11. These data were entered into a regression program, resulting in the following output. Use this output to determine the expected cost if 12,000 miles are logged in one month.Data from in E3.11Mitchem Fleet, Inc., has incurred the following maintenance costs on its fleet of taxicabs
What is an activity driver?
Explain the importance of the relevant range concept.
Refer to P3.9. The following linear regression results were obtained using these data:Required:A. Determine the revenue formula using the linear regression output.B. What is the estimated revenue if 600 patient days are used?C. What is the estimated revenue if 700 patient days are used?D. Evaluate
Refer to the information in P3.4. The following regression results were obtained using these data:Required:A. What is the estimated amount of overhead if 2,200 direct labor hours are worked next month?B. What is the estimated amount of overhead if 4,200 machine hours are worked next month?C. Which
Leasure Locks is a hair styling salon. The following is a list of costs connected with the salon. Identify each of the costs as variable, fixed, or mixed. Assume that activity is measured as the number of customers. Use V for variable, F for fixed, and M for mixed._______ A. Hair products sold to
Refer to P3.7. The following linear regression results were obtained using these data:Required:A. Determine the revenue formula using the linear regression output.B. What is the estimated revenue if 5,600 tax schedules are prepared in one period?C. What is the estimated revenue if 2,200 tax
Target accepts Visa, MasterCard, Discover, and American Express as well as its own Target charge cards. Assume that Visa and MasterCard charge a 1.8 percent processing fee while Discover and American Express charge a 3.5 percent processing fee. During the period, the following charge card sales
Refer to P3.2. The following is the output of a regression analysis applied to these data.Required:A. What is the dependent variable in the regression application?B. What is the independent variable in the regression application?C. Using the results, determine the cost equation.D. Estimate the
Give an example of a cost that might vary with each of the following cost drivers:(a) Number of orders placed,(b) Number of units produced,(c) Number of tests performed,(d) Number of square feet.
Examine each of the graphs below and determine whether the revenue is fixed, mixed, or variable. KEK
Why is activity analysis important?
How has automation affected the conversion process?
Refer to E3.3. What is the available sales/purchase discount? When is it available?Data from E3.3On December 30, 2019, Parker Company ships $250,000 of merchandise by common carrier to Jackson, Inc. The terms of the sale are 2/10, n/60, FOB shipping point. It takes four days for the merchandise to
On December 30, 2019, Parker Company ships $250,000 of merchandise by common carrier to Jackson, Inc. The terms of the sale are 2/10, n/60, FOB shipping point. It takes four days for the merchandise to arrive at Jackson, Inc. Both Parker and Jackson have December 31 year-ends. Can Parker report a
Many companies have moved operations overseas in an attempt to reduce costs. For example, order fulfillment and customer service call centers are often located in nondomestic locations. Discuss this issue from three points of view—customers, employees, and shareholders.
Refer to E3.1. What is the available sales/purchase discount? When is it available?Data from in E3.1On December 29, 2019, Wolfe Company ships $100,000 of merchandise by common carrier to the Audio Midwest Company. The terms of the sale are 2/15, n/30, FOB destination. It takes five days for the
On December 29, 2019, Wolfe Company ships $100,000 of merchandise by common carrier to the Audio Midwest Company. The terms of the sale are 2/15, n/30, FOB destination. It takes five days for the merchandise to arrive at Audio Midwest. Wolfe and Audio Midwest have December 31 yearends. Which
Hongmei Company has planned for annual cost of goods sold of $1,500,000 with an average inventory balance of $80,000. Assuming Hongmei meets its goals, calculate its inventory turnover and days in its selling cycle.
Katelyn Company has planned for annual sales of $1,800,000 with an average accounts receivable balance of $120,000. Assuming Katelyn meets its goals, calculate its accounts receivable turnover and days in its collection cycle.
What is an NSF check? Why do banks typically charge fees for NSF checks?
Wallace Company experienced the following operating times during the last month: Order response time 0.8 day Storing time 3.5 days Shipping time 2.0 days Processing time 6.8 days Queue time 4.5 days What is the customer response time for Wallace Company? What is the value-added time for Wallace
Explain the importance of internal controls.
These are the condensed financial statements of Pedersen Company for 2019 and 2018.Required:Calculate the appropriate ratios for the financial and internal perspectives of the balanced scorecard. PEDERSEN COMPANY Income Statement For the Years Ended December 31, 2019, and
What is a bank reconciliation?
Describe some measurements used in the learning and growth perspective.
The financial statements for Faulkender Company are as follows:Required:Calculate the appropriate ratios for the financial and internal perspectives of the balanced scorecard. FAULKENDER COMPANY Comparative Balance Sheet December 31, 2019, and 2018 Cash Accounts receivable Inventory Plant and
Describe some measurements used in the internal perspective.
Describe the internal control lapse in the following situation. An office manager, who is authorized to sign checks in the absence of the owner, has been stealing money from the company.
Loveland Company had the following bank reconciliation at March 31, 2019.Information found on the bank statement on April 30, 2019:All reconciliation items at March 31, 2019, cleared through the bank in April. Outstanding checks at April 30, 2019, totaled $7,500. What is the amount of cash
Describe the internal control issue in the following situation. All employees share a cash register and no passwords are required.
Describe the internal control issue in the following situation. A company allows a cashier to make small payments for various miscellaneous items with cash from the cash register. The cashier is required to make a note of the amount and the reasons for the payments.
Describe the internal control issue in the following situation. The mail clerk opens the mail, records the receipts, and turns this record and the receipts over to the bookkeeper, who deposits the receipts in the bank. The bookkeeper then records the receipts in the customer accounts.
Describe the balanced scorecard approach.
The following information was obtained from the books of Burghduff Products for the month of March:1. The reconciliation on February 28 included the following two items: Outstanding check number 412 $358 Deposit in transit $2652. The service charge includes a $40 fee for the nonsufficient funds
Discuss the pros and cons associated with companies being required to disclose balanced scorecard data in their annual reports.
Develop balanced scorecard measures for the customer, internal process, learning and growth, and financial perspective and show how they are linked. That is, discuss how an improvement in one could lead to an improvement in another, which could lead to an improvement in another, etc.
You are currently the only bookkeeper at a small business. You are going on vacation, so the company will hire a temporary person to replace you while you are away. Unfortunately, you are leaving today and the new person cannot start work until tomorrow. Prepare an instruction sheet that explains
What is the distinction between strategic and operating planning?
Since many companies profess that “employees are our most valuable asset,” some people feel that employees should be given information contained within the balanced scorecard so that the employees might make better decisions. Discuss this idea from the point of view of both the employees and
Information related to the cash account of Stubbs Limited for July follows:A. The balance per books is $12,732.36.B. The bank statement balance on July 31 is $11,920.91.C. The following checks are outstanding on July 31: check number 758 for $316.34, 762 for $89.36, and 765 for $461.30.D. A memo
Explain the purpose of the FASB concepts statements.

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Introduction To AccountingAn Integrated Approach 8th Edition Penne Ainsworth, Dan Deines - Solutions

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