Questions and Answers of Managerial Accounting

Q: Describe three key components of a strategic analysis of operating income.
Q: Define strategy.
Q: Baker Inc. is preparing to submit a bid for a ball-bearings order. Greg Lazarus, controller of the Bearings Division of Baker, has asked Maria
Q: Digital Arts Inc. manufactures game systems. Digital Arts has decided to create and market a new system with wireless controls and excellent video
Q: What is life-cycle budgeting?
Q: Hernandez Corporation is bidding on a new construction contract, here called Contract No. 1. If the bid is accepted, work will begin in a few days,
Q: Lynn Hardt, a management accountant with the Paibec Corporation, is evaluating whether a component, MTR-2000, should continue to be manufactured by
Q: Larry Miller, the general manager of Basil Software, scheduled a meeting on June 2, 2016, with Nicole Nguyen, sales manager, Andy Ayim, accountant,
Q: The Beach Comber is a take-out food store at a popular beach resort. Susan Sexton, owner of the Beach Comber, is deciding how much refrigerator space
Q: The Svenson Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular
Q: “All future costs are relevant.” Do you agree? Explain briefly.
Q: Define opportunity cost.
Q: Evaluating multiple regression models, not-for-profit.InstructionsForm groups of two or more students to complete the following
Q: Two graduates of the university run M&S Java, and they have just opened their take-out coffee and snack bar on the university campus. At the end
Q: Below are the input and results of an OLS linear regression. The president of a specialty fruit juice company believed that for every single degree
Q: Ken Howard, financial analyst at JVR Corporation, a manufacturer of precision parts, is examining the behaviour of quarterly maintenance costs for
Q: “All independent variables in a cost function estimated with regression analysis are cost drivers.” Do you agree?
Q: Discuss the conference method for estimating a cost function. What are advantages of this method?
Q: What is a linear cost function? Describe three alternative linear cost functions.
Q: “Differences in operating income between variable and absorption costing are due solely to accounting for fixed costs.” Do you agree? Explain.
Q: Why is the term direct costing a misnomer for variable costing?
Q: The following information for 2015 is for Morgan Corporation, which uses standard costing:Required1. Calculate variable overhead rate variance and
Q: 1. Prepare appropriate journal entries for variable and fixed manufacturing overhead (you will need to calculate the different variances to
Q: The Singapore division of a Canadian telecommunications company uses a standard cost system for its machine-based production of telephone equipment.
Q: French Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labour-hours. For 2015,
Q: Provide one caution that will affect whether a production-volume variance is a good measure of the economic cost of unused capacity.
Q: Explain how the analysis of fixed overhead costs differs for (a) planning and control on the one hand and (b) inventory costing for financial
Q: Assume variable manufacturing overhead is allocated using machine-hours. Give three possible reasons for a $30,000 favourable variable overhead
Q: Prepare journal entries and post them to T-accounts for all transactions in Exercise 7-25, including requirement 2. Summarize how these journal
Q: Consider the following data collected for Blakes Construction Trailers:RequiredCompute the rate, efficiency, and flexible-budget variances for direct
Q: Connor Company’s budgeted prices for direct materials, direct manufacturing labour, and direct marketing (distribution) labour per attaché case
Q: A number of terms are listed below:RequiredSelect the terms from the above list to complete the following sentences.The question is whether or not
Q: Describe three reasons for an unfavourable direct manufacturing labour efficiency variance.
Q: Describe why direct materials rate variance and direct materials efficiency variance may be computed with reference to different points in time.
Q: List three causes of a favourable materials rate variance.
Q: The Suzuki Company in Japan has a division that manufactures two-wheel motorcycles. Its budgeted sales for Model G in 2016 are 985,000 units.
Q: Consider each of the following independent situations:1. A very successful salesperson at Amcorp Computers regularly ignores the published sales
Q: “The revenue budget is the cornerstone for budgeting.” Why?
Q: Activity-based costing (ABC) systems are useful in helping companies make better decisions about pricing, product mix, and cost management related to
Q: Terminology.RequiredSelect the terms from the above list to complete the following sentences.One common ____________ to a traditional or ____________
Q: “ABC systems apply only to manufacturing companies.” Do you agree? Explain.
Q: Describe four ways that help indicate when ABC systems are likely to provide the most benefits.
Q: Jack Halpern is the owner and CEO of Aerospace Comfort, a firm specializing in the manufacture of seats for air transport. He has just received a
Q: In each of the following situations, determine whether job costing or process costing would be more appropriate.a. A public acccounting firmb. An oil
Q: Describe three alternative ways to dispose of underallocated or overallocated indirect costs.
Q: Describe three different debit entries in the Work-in-Process Control general ledger T-account.
Q: How does actual costing differ from normal costing?
Q: What are the two major types of organizational elements that managers focus on in companies using job costing?
Q: Why might an advertising agency use job costing for an advertising campaign by Pepsi, whereas a bank might use process costing to determine the cost
Q: The Rapid Meal has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $450,000 per year. Service varies
Q: Patel Manufacturing sold 200,000 units of its product for $30 per unit. Variable cost per unit is $25 and total fixed costs are $800,000.Required1.
Q: Name three factors that affect the classification of a cost as direct or indirect.
Q: As a new controller, reply to this comment by a plant manager: “As I see it, our accountants may be needed to keep records for shareholders and the
Q: “Knowledge of technical issues such as computer technology is necessary but not sufficient to becoming a successful accountant.” Do you agree?
Q: Use the Hamilton’s Data Set to compute these profitability measures for 2020:Data use in Hamilton’s Data Seta. Rate of return on net
Q: Skyline Music is considering investing $600,000 in private lesson studios that will have no residual value. The studios are expected to result in
Q: Estimate the number of kilometres you drive each year. Also estimate the cost of a litre of fuel.
Q: Describe the product being produced (and the company that makes it).
Q: Dodds Aquatics manufactures swimming pool equipment. The company estimates total manufacturing costs next year to be $2,400,000. Dodds also estimates
Q: Hi-Tek is a small software firm that builds and installs custom business applications for clients and uses a job order costing system. The costs for
Q: Ockham Kitchens produces granite countertops in two sequential production departments: Forming and Polishing. The Polishing Department calculated the
Q: Warm Hearth Bakery mass-produces bread using three sequential processing departments: Mixing, Baking, and Packaging. The following transactions
Q: Blackfish and Corr (B&C) is a small accounting firm that offers services to businesses in the area. The services include Assurance Services,
Q: Cortana Products manufactures its products in two separate departments: Machining and Assembly. Total manufacturing overhead costs for the year are
Q: Harding College Bookstore, a campus bookstore, shows the following sales projections in units by quarter for the upcoming year:The average price of
Q: The Harris Company is in the process of preparing its manufacturing overhead budget for the upcoming year. Sales are projected to be 40,000 units.
Q: Horns and More, Ltd., a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $890,000 in October, $950,000 in November,
Q: BiGGym produces two types of exercise treadmills: Regular and Deluxe. The exercise craze is such that BiGGym could use all of its available machine
Q: Fibre Systems manufactures an optical switch that it uses in its final product. Fibre Systems incurred the following manufacturing costs when it
Q: Bennett Builders builds townhomes in a new subdivision just outside of Calgary. Land and labour are cheap, and competition among developers is
Q: Suppose the Hockey Hall of Fame in Toronto has approached Sports-Cardz with a special order. The Hall of Fame wants to purchase 60,000 hockey card
Q: Do sunk costs affect a sell or process-further decision? Why or why not?
Q: Evans Inc. manufactures only two products, Medium (42-inch) and Large (63-inch) plasma screen TVs. To generate adequate profit and cover its expenses
Q: Victor’s Sporting Goods is a retailer of sporting equipment. Last year, Victor’s Sporting Goods’ sales revenues totalled $8,000,000. Total
Q: Refer to Asokan’s Golden Brown Pancake Restaurant in E3- 33A.Data in E3- 33A.Asokan’s Golden Brown Pancake Restaurant features sourdough pancakes
Q: Refer to Cliff’s Fresh Stacks Pancake Restaurant in E3-57B. Data in E3-57B.Cliff’s Fresh Stacks Pancake Restaurant features sourdough
Q: Use the information from the Royal Hellenic Cruiseline data set. If Royal Hellenic Cruiseline sells 10,000 dinner cruises, compute the margin of
Q: Use the information from the Royal Hellenic Cruiseline data set.a. Compute the operating leverage factor when Royal Hellenic Cruiseline sells 12,000
Q: Suppose Kay sells 1,000 posters. Use the data from S4-13 to compute her operating leverage factor. If sales volume increases 10%, by what percentage
Q: Little Piggie produces sports socks. The company has fixed expenses of $80,000 and variable expenses of $1.20 per package. Each package sells for
Q: Vair’s Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $500,000 and a contribution margin of 80%
Q: Pistone Industries is planning to purchase a new piece of equipment that will increase the quality of its production. It hopes the increased quality
Q: Kick-A’s Sporting Goods is a retailer of sporting equipment. Last year, Kick-A’s sales revenues totalled $5,000,000. Total expenses were
Q: Mathieu Manufacturing had a 1.2 operating leverage factor when sales were $50,000. Mathieu Manufacturing’s contribution margin ratio was 20%. What
Q: Antigonish Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $620,000 and a contribution margin of
Q: Nate’s Repair Shop has a monthly target operating income of $13,500. Variable expenses are 80% of sales, and monthly fixed expenses are
Q: Hillsboro Recycling recycles newsprint, cardboard, and so on into recycled packaging materials. For the coming year, Hillsboro Recycling estimates
Q: Refer to the data in Exercise 5-26A . Freeman’s accountant found an error in the expense records from the year reported. Depreciation on
Q: Jackson Company, which uses the high-low method to analyze cost behaviour, has determined that machine hours best predict the company’s total
Q: Refer to the Sportade example in Appendix 3A and the data and your answer to S3-16. Data in S3-16.Consider the Sportade example in Appendix 3A .
Q: Categorize each of the following characteristics as being more representative of either traditional manufacturing or lean production.1. Quality tends
Q: How did employees of Enron (and employees of the utilities company in Oregon) end up losing billions in retirement funds?
Q: Wharfedale manufactures high-quality audio speakers. Suppose Wharfedale is considering spending the following amounts on a new quality
Q: In light of the “mark-to-market” accounting that enabled Enron to basically record any profit it wished, can you understand why some of the
Q: The reporter from Fortune magazine asked, “How does Enron make its money?” Why should every employee and manager (at every company) know the
Q: You are a business student who will someday work for a company or own a business. How will watching this movie affect the way you intend to conduct
Q: Do you think people weigh the potential costs of acting unethically with the potential benefits?
Q: What was your reaction to the psychology experiment shown in the movie? Studies have shown that, unlike the traders at Enron (who received large
Q: In general, do you think people stop to think about how their actions will affect other people (for example, the elderly in California who suffered
Q: Why do you think some people can so easily justify (at least to themselves) their unethical behaviour?

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