Questions and Answers of Management And Cost Accounting 11th

Refer to the information in Exercise 6-46 for Harmon Recycling Services (HRS). The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product
Westover Travel offers travel packages using both air and ocean travel. Westover offers two packages, Tourist and Premier, that differ in the accommodations, class of travel, and so on. Westover has
Larned Recreational builds two models of dune buggies: Sport and Custom. Both models require the same assembly and finishing process and are assembled in the same factory. They differ in the quality
Piper Recreational Vehicles (PRV) modifies vans into recreational vehicles. PRV offers two models, the XC-2 and XC-6, which differ in the quality of the basic van and the workmanship and machining
Elmira Tool and Die makes machine tools to order. The following transactions occurred in October: 1. Issued $2,800 of supplies from the materials inventory.2. Purchased $42,000 of materials.3.
Selected information from the Iowa Instruments accounting records for April follows: Additional information for April follows:∙ The labor wage rate was $30 per hour.∙ During the month,
Barker Products is a job shop. The following events occurred in September: 1. Purchased $13,000 of materials.2. Issued $14,500 in direct materials to the production department.3. Purchased
What are two different ways of treating the difference between applied overhead and actual overhead at the end of the accounting period?
Refer to the information in Exercise 7-34. The amount of overhead applied in each of the inventory accounts at the end of Year 1 is as follows. RequiredPrepare an entry to allocate the over- or
In computing the predetermined overhead rate, the cost accountant must determine the period over which to estimate the overhead and the allocation base (direct labor-hours, for example). Why are
Consider the Business Application “Fraudulent Reporting of Project Completion to Improve Financial Performance.” Would a solution to the problem of misreporting in the case of projects be solved
Jason’s Custom Tooling (JCT) uses a job order cost system and applies overhead using a predetermined overhead rate based on direct labor costs. The following debits (credits) appeared in
Sturgis Manufacturing produces one model of precision tool and accounts for costs using a job cost system. Information from the most recent fiscal year indicates the following. ∙ Total
Wanda Instrumentation produces navigational equipment for ships, aircraft (both staffed and drones), and land vehicles. The parts are produced to specification by their customers. Depending on the
Antoine Machining estimated its manufacturing overhead to be $279,000 and its direct materials costs to be $450,000 in Year 1. Three of the jobs that Antoine Machining worked on in Year 1 had actual
Linzee Liners estimates that its manufacturing overhead will be $1,725,000 in Year 1. It further estimates that direct labor costs will amount to $750,000. During March, Linzee worked on four jobs
Fulton Construction is a general contractor for large construction projects. The budget costs and the time to reach a particular percentage of completion (in months) follow. Also shown are the actual
Refer to the information in Exercise 7-36.Data in Exercise 7-36. Marian Manufacturing (2M) applies manufacturing overhead to jobs based on direct labor costs. For Year 2, 2M estimates its
Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machine-hours is used to apply overhead to individual jobs. An estimate of
Louisiana Metals uses a job costing system. The company applies manufacturing overhead using a predetermined rate based on direct labor cost. The following debits (credits) appeared in the
In October, Temptations Event Planners (TEP) planned events for two clients. TEP worked 140 hours for Ward Corporation and 240 hours for Girardin Industries. TEP bills clients at the rate of $350 per
Farnsworth Executive Coaching (FEC) offers services to firms in advising executives on improving productivity and leadership. For August, FEC worked 660 hours for Grace Corporation and 390 hours for
Queenston Professional Support (QPS) provides professional services (IT, payroll and billing, and so on) to firms requiring temporary help in those areas. QPS bills clients for its various services
Jerome Shipyards does work for both the U.S. Navy and private shipping companies. Jerome’s major business is renovating ships, which it does at one of two company dry docks referred to by the names
Highway 1 Manufacturing (H1M) produces several, related products in multiple factories. At one facility, which produces only a single product, managers are debating whether to use a predetermined
Edwin Parts, a job shop, recorded the following transactions in May:1. Purchased $87,200 in materials on account.2. Issued $3,650 in supplies from the materials inventory to the production
Kenmore Fabrication estimated that direct labor cost for the year would be $640,000. The company also estimated that fixed overhead would be $480,000 and variable overhead would be 35 percent of
Kingsley Products estimated that direct labor for the year would be 64,000 hours. The company also estimated that the fixed overhead cost for the year would be $160,000. They further estimated the
Rutland Business Services (RBS) provides miscellaneous consulting and services to local businesses. In August, RBS worked for three clients. It worked 270 hours for Selden Contracting, 170 hours for
Shirley Processing, Inc. (SPI) makes adhesive tape and uses a FIFO process costing system. The following information shows the physical flow of units and costs for the month of March:Requireda.
Buelow, LLP, is a consulting firm that helps organizations become more efficient. A supervisor on two consulting jobs discusses an issue that arose recently. One of the consulting jobs is for a large
Radford Products adds materials at the beginning of the process in Department A. The following information on physical units for Department A for the month of January is available.Requireda. Compute
Spokane, Inc. is a manufacturing company that produces parts both for inventory and to custom specifications. Parts produced for inventory are sold at prices determined in the market. Custom parts
Hoyt, Inc. has a process costing system at its Forest Street Plant. All materials are introduced when conversion costs reach 40 percent. The following information is available for physical units
In what way are job costing, process costing, and operations costing similar? In what way do they differ?
A firm produces a product by sending it through three production departments (A, B, and C). A uses job costing, B uses operations costing, and C uses process costing. Is this possible? Why? Is this
The following cost information is available for July for the Crest Plant at Calvert Company: Materials are added at the beginning of the process. The following quantities have been recorded:∙
Patton Dyes manufactures colorings, primarily for textiles. Information on the work in process follows:∙ Beginning inventory, 115,000 partially complete liters.∙ Ending inventory, 85,000 liters;
Annin Laboratories uses the weighted-average method to account for its work-in-process inventories. The accounting records show the following information for February: Quantity information is
Kronk, Inc. provides the following information concerning the work in process at its plant:∙ Beginning inventory was partially complete (materials are 100 percent complete; conversion costs are 10
Boulder Toys manufactures powered, ride-on tractors and other equipment for children. There are three models, increasing in features and detail: XL, XLS, and XLT. All three models start in the
Terminal Industries (TI) produces a product using three departments: Mixing, Processing, and Filtering. New material is added only in the Mixing Department. The following information is given for the
Refer to the information in Exercise 8-49. Data in Exercise 8-49. Terminal Industries (TI) produces a product using three departments: Mixing, Processing, and Filtering. New material is
Beverly Plastics produces a part used in precision machining. The part is produced in two departments: Mixing and Refining. The raw material is introduced into the process in the Mixing Department.
Ambassador Lubricants (AL) produces various oil and synthetic-based products. One of the products is produced at the company’s Bridge Plant in a single department. Two materials are used in the
Bellevue Chemicals had beginning work-in-process inventory of $239,910 on March 1. Of this amount, $101,280 was the cost of direct materials and $138,630 was the cost of conversion. The 24,000 units
Wakefield Instruments manufactures three digital piano models, which differ only in the components included: Solo, Recital, and Concert. Production takes place in two departments, Assembly and
Refer to the data in Exercise 8-45. Data in Exercise 8-45.Bellevue Chemicals had beginning work-in-process inventory of $239,910 on March 1. Of this amount, $101,280 was the cost of direct
Howell Food Products (HFP) produces the most popular of its canned soup varieties at the Stadium Plant. The Stadium Plant has two departments: Mixing and Canning. Raw materials are added at two
Hedwig Optical makes three models of binoculars: Travel, Sport, and Pro. The models differ by the size of the casing and the quality of the optics. The binoculars are produced in two departments. The
Drew Implements makes four models of utility and light construction tractors. The model names are DI-1400, DI-3800, DI-5000, and DI-8000. Drew manufactures the tractors in two
McClellan Recreation manufactures and sells two models of paddle boards: Starter and Pro. The Starter model is a basic board used for instruction and purchased by novices. The Pro model is made with
Regular Company produces audio equipment, specifically headphones and speakers. A new CEO has just been hired and announces a new policy that if a product cannot earn a markup of at least 25 percent,
The Erskine Inc. Metals Division manufactures an industrial compound used in metal working at the division’s only plant. The production process uses two materials. The first is a lubricant produced
Edlie Accessories (EA) makes travel bags, both for sale under their own label (“Branded”) and for other resellers to put their label on the bags (“Private-Label”). The bags sold through the
West State Furniture (WSF) manufactures desks and desk chairs using two departments within a single facility. The West Department produces the desks, and the State Department produces the chairs. WSF
What is the cost hierarchy?
Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant. The different backpack models are identified by the primary material
Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Manufacturing overhead in the
Heidelberg Fabrication manufactures two products, G-09 and G-35:Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant
The Philip County Historical Society (PCHS) collects and displays historical artifacts from the local area. One of its services is dedicated tours. PCHS offers dedicated tours to two groups: the
Richard’s Events provides catering services, among other services. The company has adopted activity-based costing (ABC) for the catering services. The ABC system classifies activities into two
Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders.
Shady Fabrication Group (SFG) manufactures components for manufacturing equipment at several facilities. The company produces two, related, parts at its Park River Plant, the models SF-08 and SF-48.
Heidt Cleaning Services (HCS) is a local custodial service company serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business
Spencer’s Sports manufactures outdoor equipment at three regional plants. The Freeway Plant produces two models of fishing reels, the Stream and the Surf. The Surf model is heavier and more
Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost drivers and rates.Direct materials costs were $480,000 and direct labor
LaFontaine Accessories makes a variety of computer bags, carrier bags, and so on. LaFontaine uses activity-based costing for its products. The production manager has identified the following cost
Normandy Office Products (NOP) makes two types of office desks, Manager and Executive. The Executive model is adjustable using electric motors and is made with upgraded materials. The manufacturing
Thatcher Supply manufactures and sells two types of pet doors—Standard and Hi-Tech. The Standard model is a basic opening installed in a door. The Hi-Tech model is automated and includes several
Delaware Electronics makes three models of a controller for measurement and testing equipment: Models X-100, X-200, and X-500. The three models differ in their capabilities and also in the materials
Lincolnshire Lumber sells boards for many uses including wood floors. For floors, the boards are sold to local installers or do-it-yourself homeowners. The boards go through up to four processes,
Burgess Business School has two degree programs, BBA and MBA. The school uses an ABC system to cost the three support services it provides to students from both programs: Career Center, Events, and
Commonwealth Devices makes three wearable fitness devices at its Lake Plant: CFit-1, CFit-2, and CFit-Xtra. The company has for many years allocated overhead to products using machine-hours. Last
Chadwick Industries has several manufacturing facilities that make a wide variety of industrial and consumer products. Two of the plants, River North and River South, make components for road
How are activity-based costing and activity-based management similar? How do they differ?
Consider the Business Application feature “Technology, Data Analysis, Customer Profitability, and Cost of Quality.” Do you think it is easier to estimate the cost savings from adapting a lean
“Customers don’t cost money; they bring in revenue.” Do you agree? Why?
Consider the Business Application “Managing Excess Capacity Resources—The Case of Employees.” In a related article, the authors write that manufacturers would “probably not try to pass them
Brentwood Disaster Relief (BDR) is a local not-for-profit organization working to help victims of disasters.RequiredThe following are various resources and activities of the organization. Indicate
The following are various activities for Humphrey Insurance Agency.RequiredSuggest a feasible cost driver base for each of the following, and explain why each selected cost driver base is feasible.a.
Alter’s Home Center (AHC) sells renovation and remodeling products to both contractors and individual home owners. One of the services AHC offers is delivery of the purchased products to the
Rupert’s Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The delivery fee is meant
Northwestern Bank (NB) offers only checking accounts. Customers can write checks and use a network of automated teller machines. NB earns revenue by investing the money deposited; currently, it
Ellery Products manufactures various components for the fashion industry. Ellery buys fabric from two vendors: Ewers Textiles and Bramford Materials. Ellery chooses the vendor based on price. Once
Boston Home Center (BHC) offers customers the use of a truck at $40 per trip to take purchased merchandise home. BHC reports the following information about the trucks it has for customer
The Shipping Department at Nashville Fabricators reports the following information about resources: RequiredCompute the cost of unused resource capacity in the Shipping Department at Nashville
Cass Company has recorded the following information for the last six months of operations from its cost of quality system:Requireda. Classify these items into prevention (P), appraisal (A), internal
One of Camely Chemicals’ facilities manufactures a hazardous chemical. The following represents the financial information from the plant for the most recent two years:Requireda. Classify these
Fraser Plastics produces plastic parts for use in various products. The following represents accounts in its cost of quality system. RequiredClassify each as prevention (P), appraisal (A),
Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of 75,000 units. The variable cost of the sensor is $185.00 per unit,
Located in a small town in upstate New York, Terry’s Bakery operates a facility that makes pies for retail sale. The facility has the capacity to make 36,000 pies annually. The plant has only two
What are the three methods of allocating service department costs?
Refer to the data in Exercise 11-39. Suppose that Sanford Agricultural Chemicals uses the physical quantities method to allocate joint costs and the revenues from by-products are credited to joint
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs
Monroe Materials processes a purchased material, PM-20, and produces three outputs, Alpha, Beta, and Gamma. In February, the costs to process PM-20 are $524,000 for materials and $196,000 for
Barrett Chemicals manufactures four chemicals, Chem-1, Chem-2, Chem-3, and Chem-4, from a joint process. The total joint costs in May were $564,000. Additional information
Denver Fabricators manufactures products DF1 and DF2 from a joint process, which also yields a by-product, BP. The company accounts for the revenues from its by-product sales as other income.
St. John Mining operates several facilities. At one, a typical batch of an ore, Pryex, run through the processing plant yields three products: PX-10, PX-20, and PX-30. At the split-off point, the
Milo Manufacturing produces products Kappa and Lambda from a joint process. Total joint costs are $150,000. The sales value at split-off was $162,000 for 1,200 units of Kappa and $63,000 for 1,800

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