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managerial accounting 12th

Managerial Accounting The Cornerstone Of Business Decision Making 9th Edition Maryanne Mowen, Don Hansen, Dan Heitger - Solutions

Raising cash by issuing a long-term bond is an example of(a) a financing activity.(b) an investing activity.(c) an operating activity.(d) All of these.
During the last 2 years of operation, Wiggum Company engaged in the following activities:1. issuing long-term debt 2. paying cash dividends 3. reporting unprofitable operations 4. issuing capital stock 5. reducing long-term debt 6. retiring capital stock 7. selling long-term assets (e.g., plant,
Paterson Company,* a U.S.-based company, manufactures and sells electronic components worldwide. Virtually all its manufacturing takes place in the United States. The company has marketing divisions throughout Europe, including France. Debbie Kishimoto, manager of this division, was hired from a
Lindell Manufacturing embarked on an ambitious quality program that is centered on continual improvement. This improvement is operationalized by declining quality costs from year to year. Lindell rewards plant managers, production supervisors, and workers with bonuses ranging from $1,000 to $10,000
Luna Company is a printing company and a subsidiary of a large publishing company. Luna is in its fourth year of a 5-year, quality improvement program. The program began in 20X1 as a result of a report by a consulting firm that revealed that quality costs were about 20% of sales. Concerned about
Problem 13-47 Forensic Accounting and Business Valuation You have just opened your own printing business. A large sports franchise is beginning an important advertising campaign in order to attract more fans to the sport. The purchasing officer of the company calls and asks you to make a bid on
Custom Shutters, Inc., manufactures plantation shutters according to customer order. The company has a reputation for producing excellent quality shutters that fit virtually any size or shape of window. Sales are made in all 50 states. On July 1, Custom Shutters received orders from contractors in
Paladin Company manufactures plain paper fax machines in a small factory in Minnesota.Sales have increased by 50% in each of the past 3 years, as Paladin has expanded its market from the United States to Canada and Mexico. As a result, the Minnesota factory is at capacity.Beryl Adams, president of
Problem 13-44 Trend Analysis, Quality Costs In 20X1, Don Blackburn, president of Price Electronics, received a report indicating that quality costs were 31% of sales. Faced with increasing pressures from imported goods, Don resolved to take measures to improve the overall quality of the company’s
In 20X2, Clarkson, Inc., initiated a full-scale, quality improvement program. At the end of the year, Clarkson’s top management noted with some satisfaction that the defects per unit of product had dropped significantly compared to the prior year. They were also pleased that relationships with
Problem 13-42 Quality Cost Summary Danna Wise, president of Tidwell Company, recently returned from a conference on quality and productivity. At the conference, she was told that many American firms have quality costs totaling 20% to 30% of sales. The quality experts at the conference convinced her
Rocket Motors manufactures sterndrive engines for pleasure craft boats. Rocket’s management is concerned about increasing competition in its industry, resulting from a very large international boat motor manufacturer that appears to be seriously considering entering the same customer market
Exercise 13-40 Estimating Damages in a Forensic Accounting Dispute A medical supply company, MedAid, signed a three-year contract with Wildwood Hospital to supply the Hospital with a medical product called Endsleen. The contract stated that MedAid would supply Endsleen to the Hospital at a price of
Exercise 13-39 Fraud Concepts Consider each of the following situations. Is there a potential problem? Which part of the fraud triangle is involved, if any?A. Susan is an accounts payable clerk. She sets up creditors in a financial database and pays invoices as they come in. Last year, she won
Exercise 13-38 Payment of Duty and Duty-Related Carrying Cost Refer to Exercise 13-49. Suppose that Liston is considering building a new plant inside a foreign trade zone to replace its chemical manufacturing plant.Required:1. How much duty will be paid per year by the factory located inside the
Exercise 13-37 Payment of Duty and Duty-Related Carrying Cost Liston, Inc., owns a factory located close to, but not inside, a foreign trade zone. The plant imports volatile chemicals that are used in the manufacture of chemical reagents for laboratories.Each year, Liston imports about $16,400,000
Exercise 13-36 Foreign Currency Exchange Consider the following terms: spot rate, currency appreciation, currency depreciation, translation risk, transaction risk, transnational risk, exchange rate, hedging, trading. For each of the following definitions, fill in the blank with the best-fitting
Exercise 13-35 Types of Involvement in International Trade Consider the following terms: maquiladora, import, joint venture, import, tariff, outsourcing, export, and MNC. Match the term with the appropriate description.1. A company that does business in more than one country in such volume that its
13-34 Information Security Matching.Match each term in column A with its definition in column B.Column A Column B Cybersecurity a type of software designed to gain unauthorized access or to cause damage to a computer.Malware the practice of sending fraudulent emails that look very similar to those
Exercise 13-33 Multiple-Year Trend Reports The controller of Ephraim, Inc., has computed quality costs as a percentage of sales for the past 5 years (20X1 was the first year the company implemented a quality improvement program).This information is as follows:Required:1. Prepare a trend graph for
Exercise 13-32 Quality Cost Report Castledale Company reported sales of $7,000,000 in 20X1. At the end of the fiscal year(September 30, 20X1), the following quality costs were reported:Vendor certification $ 60,900 Warranty 140,000 Rework 175,000 Continuing supplier verification 75,600 Quality
Classify the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs:1. Scrap (created by defective units)2. Certifying a vendor to ensure that quality parts are provided 3. Stopping work to control process malfunction 4. Replacing a defective
Crazy Fan Guard Company provides security services to popular live sporting event venues.Crazy Fan management has identified one of its top risks as the possibility that restrictions on premium close seating options will severely decrease its sales revenue by lessening the demand for its security
Exercise 13-29 Estimating Net Benefit for Risk Response Alternatives Brauhaus Mining Company hired the Grundlsee Risk Consulting company to help respond to its top risk. After conducting a formal risk analysis, Grundlsee provided the following three risk response alternatives to Brauhaus’ top
Brunello Winery produces expensive wines. Brunello’s enterprise risk management team has chosen its particular risk response to each of its top five inherent risks. The risk graph below identifies Brunello’s risks after all of the team’s risk responses have been enacted.Required:Refer to
Barolo Company manufactures laptop stickers for Italian sports teams. Barolo’s risk management team has identified the company’s top five inherent risks and plans to manage them using a typical ERM portfolio perspective (i.e., align the portfolio of residual risks with the company’s risk
On March 1, Tres Hermanos Import-Export Company sells merchandise costing 95,000 Mexican pesos. Payment will be made in pesos, on June 1. The exchange rates of pesos for $1 were as follows:March 1 $1 = 19.8 pesos June 1 $1 = 19.6 pesos Round all answers to the nearest dollar.Required:1. What is the
Pintura Company implemented a quality improvement program and tracked the following for the 5 years:Required:1. Prepare a bar graph that reveals the trend in quality cost as a percentage of sales (time on the horizontal axis and percentages on the vertical). Comment on the message of the graph.2.
Matrimon, Inc., had the following quality costs for the years ended December 31, 20X1 and 20X2:At the end of 20X1, management decided to increase its investment in control costs by 40% for each category’s items, with the expectation that failure costs would decrease by 25% for each item of the
Cruz Company had total sales of $3,600,000 for fiscal 20X1. The costs of quality-related activities are given below.Discounts due to defects $150,000 Reinspection 45,000 Prototype inspection 21,000 Rework 180,000 Marketing research 9,000 Process acceptance 21,000 Packaging inspection 24,000 Product
Kalani’s Fish Taco Hut is a small start-up restaurant in Hanalei. Kalani recently completed an online risk management course and has identified food safety as his restaurant’s top risk. Specifically, he is concerned that the potential of spoiled food resulting from inadequate refrigeration and
On March 1, Tres Hermanos Import-Export Company purchased merchandise costing 80,000 Mexican pesos. Payment was due, in pesos, on June 1. The exchange rates of pesos for $1 were as follows:March 1 $1 = 19.8 pesos June 1 $1 = 19.6 pesos Round all answers to the nearest dollar.Required:1. What is the
Norris Company implemented a quality improvement program and tracked the following for the 5 years:Required:1. Prepare a bar graph that reveals the trend in quality cost as a percentage of sales (time on the horizontal axis and percentages on the vertical). Comment on the message of the graph.2.
Andresen Company had the following quality costs for the years ended June 30, 20X1 and 20X2:At the end of 20X1, management decided to increase its investment in control costs by 50% for each category’s items, with the expectation that failure costs would decrease by 20% for each item of the
Whitley Company had total sales of $1,000,000 for the year ending 20X1. The costs of quality are given below.Returns/allowances $50,000 Design changes 60,000 Prototype inspection 13,000 Downtime 40,000 Quality circles 2,000 Packaging inspection 14,000 Field testing 6,000 Complaint adjustment 65,000
Cooper Movie Studio Corp. makes movies and is interested in lowering its operating costs for the following year, while maintaining the high quality and appeal of its movies. Cooper’s management is concerned about the additional costs the company would have to incur if new industry regulation is
13-15 The premier credential for the forensic accountant is thea. CPA.b. CFE.c. CMA.d. CIA.e. None of these.
Which agency within the Federal government funded a task force to develop the Model Forensic Accounting Curriculum within universities to help launch the area of Forensic Accounting?a. Securities and Exchange Commissionb. Department of Justicec. Federal Bureau of Investigationsd. Internal Revenue
13-16 Which of the following is not true of forensic accounting?a. Many cases are adversarial in nature.b. Excellent written and oral communications skills are required.c. The forensic accountant must be able to explain basic accounting concepts to nonaccountants.d. The forensic accountant is
The following spot rates for $1 in terms of yen and pounds were in effect for June 1 and November 1. Japanese yen British pound June 1 November 1 115.0 118.0 0.699 0.650 Did the U.S. dollar appreciate or depreciate against these currencies between June 1 and November 1? Japanese Yen British Pound
13-12 A manufacturing plant located in Mexico that processes imported materials and reexports them to the United States is called a(n)a. maquiladora.b. foreign trade zone.c. joint venture.d. exchange venture.e. foreign transaction.
13-11 Which of the following is true regarding foreign trade zones?a. They are pieces of land physically located in foreign countries that are subject to the laws of the United States.b. They must be located near seaports.c. Goods that enter a foreign trade zone are not subject to tariff until they
13-10 General Data Protection Regulations (GDPR) protect consumers’ privacy in which geographic area?a. Californiab. Illinoisc. the United Statesd. the European Unione. the Republic of South Africa
13-9 Internal failure costs are incurreda. to prevent poor quality in the products or services being produced.b. because products or services do not conform to requirements after being delivered to the customer.c. to determine whether products and services are conforming to their requirements.d.
13-8 Which of the following is an external failure cost?a. Design reviewsb. Warrantiesc. Field testingd. Vendor certification
13-7 Which of the following is a prevention cost?a. Inspection of materialsb. Continuing supplier verificationc. Prototype inspectiond. Recalls
Which of the following business sustainability risks led to the grounding of Boeing’s MAX aircraft series?a. Environmental (e.g., greenhouse gas emissions)b. Social (e.g., safety)c. Political (e.g., lobbying)d. None of the abovee. All of the above
13-5 Bronco Company’s management accounting team uses the results from particular data analytics to select its optimal risk response to key risks. What analytic type does this behavior represent? [Refer to Exhibit 2.2 on p. 38.]a. Diagnosticb. Prescriptivec. Predictived. Descriptive
13-4 Which of the following risk response items would not be affected by an increase in the cost of managing a strategic alliance partnership that was formed to reduce a top organizational risk?a. Risk response net benefitb. Risk response costc. Risk response benefitd. All of thesee. None of these
13-3 A common way to assess the likelihood of an inherent risk is to measure itsa. incremental cost.b. probability.c. lost revenues.d. company reputation.
13-2 An organization’s overall desired level of risk taking is referred to as itsa. riskiness.b. inherent risk.c. monitoring ability.d. risk appetite.
A fire insurance policy on a manufacturing plant is an example of a risk reduction alternative that would reduce which component of the inherent risk of a plant fire?a. Likelihood onlyb. Impact onlyc. Both likelihood and impactd. Neither likelihood nor impact
Golo, Inc., has two manufacturing plants, one in Singapore and the other in San Antonio. The San Antonio plant is located in a foreign trade zone. On March 1, Golo received a large order from a Japanese customer. The order is for 10,000,000 yen to be paid on receipt of the goods, scheduled for June
At the beginning of 20X2, Landing Company initiated a quality improvement program.Because of the quality improvement efforts, the number of defective units decreased compared to the previous year. By the end of 20X2, scrap and rework had both decreased. The president of the company was pleased to
How to calculate the value of an exchange in another currency?
How to prepare multiple-period quality trend reports?
How to prepare an interim quality performance report?
How to prepare a quality cost report?
How to use net benefit to evaluate risk response alternatives?
What are the three legs of the fraud triangle?
Jim Alberts is majoring in accounting at the local college. Jim is highly intelligent and very knowledgeable about all areas of accounting. He would like to go into forensic accounting. Jim is not a skilled writer or speaker, but he feels that is no problem, since most accountants work in solitude
Casey Company purchases pottery from Mexico for resale in its southwestern gift shops. Purchases must be made in pesos. On May 1, Casey purchased goods costing 50,000 pesos and agreed to pay, in pesos, on June 1. The spot rates of dollars for pesos are as follows:May 1 $1 = 18.25 June 1 $1 = 18.84
A company builds a manufacturing plant in a foreign trade zone. Materials costing $1 million each month are imported. The duty is 8%. About 10% of the materials are defective and disposed of as waste. What is the savings to the company of locating inside a foreign trade zone?
SuperTubs, Inc., based in Oklahoma, sells its line of whirlpool tubs at home and to foreign distributors. On January 15, Bonbain, a French distributor of luxury plumbing fixtures, orders 100 tubs at a price of $1,000 per tub, to be delivered immediately, and to be paid in euros on March 15. On
The head of a medium-size financial services company does not see the need for a dedicated team of information security professionals. He believes their IT person can handle it. Do you agree? Disagree?
The CEO of Consumer Products, Inc., sees no reason to hire a specialist in privacy law. He argues that their information security team can easily handle any privacy threats. How would you respond to him?
Which of the following is an internal failure cost?a Training production workers in new quality procedures b Sampling a batch of goods to determine whether the batch has an acceptable defect rate c Processing and responding to customer complaints d Retesting a reworked product
What purposes are served by preparing a quality cost report?
Assume that Auger Company has experienced the following:Required:1. Prepare a bar graph that visualizes the trend in quality cost as a percentage of sales (time on the horizontal axis and percentages on the vertical axis). Comment on the message of the graph.2. Prepare a bar graph for each cost
The actual quality costs of Auger Company, for the years ended December 31, 20X1 and 20X2, are provided below.At the end of 20X1, management decided to increase its investment in control costs by 20%for each category’s items, with the expectation that failure costs would decrease by 20% for each
Auger Company had total sales of $10,000,000 for the fiscal year ending on December 31, 20X1. Auger’s costs of quality are as follows:Recalls $500,000 Scrap 350,000 Quality engineering 90,0000 Reinspection 250,000 Quality training 10,000 Product acceptance 120,000 Materials inspection 80,000
Which step within the ERM process should occur immediately after risk assessment?
The decision to form a strategic alliance with a new business partner to respond to the risk of low product quality represents an example of which risk response alternative?a. Acceptb. Avoidc. Reduced. None of these.
Swift Ascent Backpacking Company provides various outdoor adventure services to climbers visiting Mount Rainer National Park. One of its most popular services is a guided 12-mile hike from Paradise Lodge to the main Base Camp, where climbers can make their final ascent to the summit of the
Shaftel Ready Mix is a processor and supplier of concrete, aggregate, and rock products. The company operates in the intermountain western United States. Currently, Shaftel has 14 cement-processing plants and a labor force of more than 375 employees. With the exception of cement powder, all
Manny Carson, certified management accountant and controller of Wakeman Enterprises, has been given permission to acquire a new computer and software for the company’s accounting system. The capital investment analysis showed an NPV of $100,000. However, the initial estimates of acquisition and
Fabre Company, Patterson Company’s competitor, is considering the same investments as Patterson.Refer to the data in Problem 12-52 above. Assume that Fabre’s cost of capital is 14%.Required:1. Calculate the NPV of each alternative by using the 14% rate.2. Conceptual Connection Now assume that
Problem 12-53 Discount Rates, Automated Manufacturing, Competing Investments Patterson Company is considering two competing investments. The first is for a standard piece of production equipment. The second is for computer-aided manufacturing (CAM) equipment.The investment and after-tax operating
Problem 12-52 Postaudit, Sensitivity Analysis Newmarge Products Inc. is evaluating a new design for one of its manufacturing processes. The new design will eliminate the production of a toxic solid residue. The initial cost of the system is estimated at $860,000 and includes computerized equipment,
Problem 12-51 Capital Investment, Advanced Manufacturing Environment“I know that it’s the thing to do,” insisted Pamela Kincaid, vice president of finance for Colgate Manufacturing. “If we are going to be competitive, we need to build this completely automated plant.”“I’m not so
Problem 12-50 Cost of Capital, Net Present Value Leakam Company’s product engineering department has developed a new product that has a 3-year life cycle. Production of the product requires development of a new process that requires a current $100,000 capital outlay. The $100,000 will be raised
Foster Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines (to replace an existing manual system). The outlay required is $3,500,000. The NC equipment will last 5 years with no expected salvage value.
Kildare Medical Center, a for-profit hospital, has three investment opportunities: (1) adding a wing for in-patient treatment of substance abuse, (2) adding a pathology laboratory, and(3) expanding the outpatient surgery wing. The initial investments and the net present value for the three
Stillwater Designs has been rebuilding Model 100, Model 120, and Model 150 Kicker subwoofers that were returned for warranty action. Customers returning the subwoofers receive a new replacement. The warranty returns are then rebuilt and resold (as seconds). Tent sales are often used to sell the
Dr. Claudia Gomez, a plastic surgeon, had just returned from a conference in which she learned of a new surgical procedure for removing wrinkles around eyes, reducing the time to perform the normal procedure by 50%. Given her patient-load pressures, Dr. Gomez is excited to try out the new
Ondi Airlines is interested in acquiring a new aircraft to service a new route. The route will be from Tulsa to Denver. The aircraft will fly one round-trip daily except for scheduled maintenance days. There are 15 maintenance days scheduled each year. The seating capacity of the aircraft is 150.
Bella Cardenas, owner of Golding Company, was approached by a local dealer of airconditioning units. The dealer proposed replacing Golding’s old cooling system with a modern, more efficient system. The cost of the new system was quoted at $508,500, but it would save$90,000 per year in energy
Emery Communications Company is considering the production and marketing of a communications system that will increase the efficiency of messaging for small businesses or branch offices of large companies. Each unit hooked into the system is assigned a mailbox number, which can be matched to a
Round all present value calculations to the nearest dollar and payback periods to two decimal places.Problem 12-42 Basic Net Present Value Analysis Jonathan Butler, process engineer, knows that the acceptance of a new process design will depend on its economic feasibility. The new process is
Skiba Company is thinking about two different modifications to its current manufacturing process. The after-tax cash flows associated with the two investments follow:Year Project I Project II 0 $(100,000) $(100,000)1 — 63,857 2 134,560 63,857 Skiba’s cost of capital is 10%.Required:1. Compute
Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows.a. Thomas Company is investing $120,000 in a project that will yield a uniform series of cash inflows over the next 4 years.b. Video Repair has decided to invest in some new electronic equipment. The
Wise Company is considering an investment that requires an outlay of $600,000 and promises an after-tax cash inflow of $693,000 one year from now. The company’s cost of capital is 10%.Required:1. Break the $693,000 future cash inflow into three components: (a) the return of the original
All scenarios are independent of all other scenarios. Assume that all cash flows are after-tax cash flows.a. Kambry Day is considering investing in one of the following two projects. Either project will require an investment of $20,000. The expected cash flows for the two projects follow.Assume
Woodard Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of tractors. The outlay required is $460,800.The NC equipment will last 5 years with no expected salvage value. The expected after-tax cash flows associated with the
Muskogee Hospital is investigating the possibility of investing in new dialysis equipment. Two local manufacturers of this equipment are being considered as sources of the equipment. Aftertax cash inflows for the two competing projects are as follows:Both projects require an initial investment of
Exercise 12-35 Internal Rate of Return Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows.a. Cuenca Company is considering the purchase of new equipment that will speed up the process for producing flash drives. The equipment will cost $7,200,000 and
Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows.a. Campbell Manufacturing is considering the purchase of a new welding system. The cash benefits will be $480,000 per year. The system costs $2,700,000 and will last 10 years.b. Evee Cardenas is
Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows.a. Cobre Company is considering the purchase of new equipment that will speed up the process for extracting copper. The equipment will cost $3,600,000 and have a life of 5 years with no expected
Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows.a. Colby Hepworth has just invested $400,000 in a book and video store. She expects to receive a cash income of $120,000 per year from the investment.b. Carsen Nabors invested in a project that has a
Brief Exercise 12-31 NPV and IRR, Mutually Exclusive Projects Techno Inc. intends to invest in one of two competing types of flexible manufacturing systems:FLEX-1K and FLEX-2Z. Both systems have a project life of 10 years. The purchase price of the FLEX-1K system is $9,600,000, and it has a net

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