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managerial accounting 12th

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

9-11 A company plans to sell 220 units. The selling price per unit is $24. There are 50 units in beginning inventory, and the company would like to have 20 units in ending inventory. How many units should be produced for the coming period?a. 250b. 200c. 230d. 220e. None of these
9-10 A company requires 100 pounds of plastic to meet the production needs of a small toy.It currently has 10 pounds of plastic inventory. The desired ending inventory of plastic is 30 pounds. How many pounds of plastic should be budgeted for purchasing during the coming period?a. 80 poundsb. 110
9-9 Which of the following is needed to prepare the production budget?a. Direct materials needed for productionb. Direct labor needed for productionc. Expected unit salesd. Units of materials in ending inventorye. None of these
9-8 The first step in preparing the sales budget is toa. prepare a sales forecast.b. review the production budget carefully.c. assess the desired ending inventory of finished goods.d. talk with past customers.e. increase sales beyond the forecast level.
9-7 Before a direct materials purchases budget can be prepared, you should firsta. prepare a sales budget.b. prepare a production budget.c. decide on the desired ending inventory of materials.d. obtain the expected price of each type of material.e. All of these.
9-6 Which of the following is not part of the operating budget?a. The direct labor budgetb. The cost of goods sold budgetc. The production budgetd. The capital budgete. The selling and administrative expenses budget
9-5 A moving, 12-month budget that is updated monthly isa. not used by manufacturing firms.b. a waste of time and effort.c. a master budget.d. a continuous budget.e. always used by firms that prepare a master budget.
9-4 The budget committeea. reviews the budget.b. resolves differences that arise as the budget is prepared.c. approves the final budget.d. is directed (typically) by the controller.e. All of these.
9-3 Which of the following is not an advantage of budgeting?a. It forces managers to plan.b. It provides information for decision-making.c. It guarantees an improvement in organizational efficiency.d. It provides a standard for performance evaluation.e. It improves communication and coordination.
9-2 Which of the following is part of the control process?a. Monitoring of actual activityb. Comparison of actual with planned activityc. Investigatingd. Taking corrective actione. All of these
9-1 A budgeta. is a long-term plan.b. covers at least 2 years.c. is only a control tool.d. is a short-term financial plan.e. is necessary only for large firms.
Trina Hoyt, controller of Ferrel Company, wants to prepare a quarterly budget for three different levels of output (measured in units): 2,000, 2,500, and 3,000.The product uses the following inputs:Materials:3 pounds of plastic @ $6.00 4 ounces of metal @ $2.00 Labor:0.5 hr. @ $10.00
Kylles Inc. expects to receive cash from sales of $45,000 in March. In addition, Kylles expects to sell property worth $3,500. Payments for materials and supplies are expected to total $10,000, direct labor payroll will be $12,500, and other expenditures are budgeted at $14,900. On March 1, the
Joven Products produces coat racks. The projected sales for the first quarter of the coming year and the beginning and ending inventory data are as follows:Unit sales 100,000 Unit price $15 Units in beginning inventory 8,000 Units in targeted ending inventory 12,000 The coat racks are molded and
How to prepare a performance report using a flexible budget?
How to prepare a before-the-fact flexible budget?
How to prepare a cash budget?
How to determine cash payments on accounts payable?
How to prepare a schedule for cash collections on accounts receivable?
How to prepare a budgeted income statement?
How to prepare a selling and administrative expenses budget?
How to prepare a cost of goods sold budget?
How to prepare an ending finished goods inventory budget?
How to prepare an overhead budget?
How to prepare a direct labor budge?
How to prepare a direct materials purchases budget?
How to prepare a production budget?
How to prepare a sales budget?
Assume that a company evaluates and rewards its managers based on their ability to achieve budgeted goals. Why would the same company ask its managers to participate in setting their budgeted standards?
In the last quarter of the fiscal year, a divisional manager chose to delay budgeted preventive maintenance expenditures so that the budgeted income goals could be achieved. Is this an example of goal congruent behavior or dysfunctional behavior?
The flexible budget for 2,000 units shows a unit cost of $4.60. The unit cost for 3,000 units is $4.20. Why is the unit cost less for more units?
Why are static budgets usually not a good choice for benchmarks in preparing a performance report?
From Example 9.13 and the actual costs for 1,200 units shown in Exhibit 9.5, the actual and budgeted costs for the actual level of activity are as follows:Required:Prepare a performance report using budgeted costs for the actual level of activity. Units produced Direct materials cost Direct labor
Levels of output: 1,000, 1,200, and 1,400.Materials:1 plain T-shirt @ $3.00 5 ounces of ink @ $0.20 per oz.Labor:0.12 hr. @ $10.00 Variable overhead (VOH):Maintenance: 0.12 hr. @ $3.75 Power: 0.12 hr. @ $1.25 Fixed overhead (FOH):Grounds keeping: $1,200 per quarter Depreciation: $600 per quarter
Why would a company want a minimum cash balance? Suppose that the minimum cash balance is $1,000 and that the projected cash surplus is $500.What would a company have to do to achieve the desired minimum?
Sales for a month totaled $10,000. Cash receipts for the same month were$15,000. How is it possible for cash receipts to be more than sales?
Texas Rex purchases all raw materials on account. Eighty percent of purchases are paid for in Ex amp l e 9 . 1 1 the quarter of purchase; the remaining 20% are paid for in the following quarter. The purchases for the fourth quarter of the prior year were $5,000. Recall from Example 9.3 (p. 515)that
From past experience, Texas Rex expects that, on average, 25% of total sales are cash and 75%of total sales are on credit. Of the credit sales, Texas Rex expects that 90% will be paid in cash during the quarter of sale, and the remaining 10% will be paid in the following quarter. Recall from
What operating budgets are needed to calculate a budgeted unit cost?
Why is it not possible to prepare a budgeted income statement by using only operating budgets?
Loring Company expects to produce 1,000 units of product next month, based on an ending inventory policy of 20% of the following month’s sales. Now suppose that Loring adjusts the ending inventory policy to 10% of sales. What is the impact of budgeted units produced?
Why is the sales budget not necessarily the same as the sales forecast?
Budgeted units to be produced for each quarter: 1,060, 1,260, 1,600, and 1,800. Plain T-shirts cost $8 each, and ink (for the screen printing) costs $0.70 per ounce. On a per-unit basis, the factory needs one plain T-shirt and five ounces of ink for each logoed T-shirt that it produces.Texas
Budgeted units to be sold for each quarter: 1,000, 1,200, 1,500, and 2,000. Assume that company policy requires 20% of the next quarter’s sales in ending inventory and that beginning inventory of T-shirts for the first quarter of the year was 180. Assume also that sales for the first quarter of
Budgeted units to be sold for each quarter of the coming year: 1,000, 1,200, 1,500, and 2,000.Selling price is $25 per T-shirt.Required:Prepare a sales budget for each quarter and for the year.
What is the main objective of continuous budgeting?
How can a budget help in planning and control?
Case 8-74 Internet Research, Group Case Often, websites for major airlines contain news of current special fares and flights. A decision to run a brief “fare special” is an example of a tactical decision. Form a group with one to three other students. Have each member of the group choose one or
Jan Shumard, president and general manager of Danbury Company, was concerned about the future of one of the company’s largest divisions. The division’s most recent quarterly income statement follows:Sales $3,751,500 Less: Cost of goods sold 2,722,400 Gross profit $1,029,100 Less: Selling and
Case 8-72 Make or Buy: Ethical Considerations Pamela McDonald, chief management accountant and controller for Murray Manufacturing, Inc., was having lunch with Roger Branch, manager of the company’s power department. Over the past 6 months, Pamela and Roger had developed a romantic relationship
Problem 8-71 Differential Costing As pointed out earlier in “Here’s the Real Kicker,” Kicker changed banks a couple of years ago because the loan officer at its bank moved out of state. Kicker saw that as an opportunity to take bids for its banking business and to fine-tune the banking
Problem 8-70 Sell at Split-Off or Process Further Eunice Company produces two products from a joint process. Joint costs are $70,000 for one batch, which yields 1,000 liters of germain and 4,000 liters of hastain. Germain can be sold at the split-off point for $24 or be processed further, into
Problem 8-69 Product Mix Decision, Single Constraint Norton Company produces two products ( Juno and Hera) that use the same material input.Juno uses two pounds of the material for every unit produced, and Hera uses five pounds.Currently, Norton has 16,000 pounds of the material in inventory. All
Problem 8-68 Sell or Process Further, Basic Analysis Shenista, Inc., produces four products (Alpha, Beta, Gamma, and Delta) from a common input.The joint costs for a typical quarter follow:Direct materials $95,000 Direct labor 43,000 Overhead 85,000 The quarterly revenues from each product are as
Problem 8-67 Special-Order Decision, Qualitative Aspects Flip Dover manager of Specialty Paper Products Company, was agonizing over an offer for an order requesting 5,000 boxes of disposable drinking cups Specialty Paper Products was operating at 70% of its capacity and could use the extra
Problem 8-66 Product Mix Decision, Single Constraint Emily’s Salon offers three types of haircuts. Each haircut type requires the use of a specially trained stylist. Emily’s has a hairstylist total operating capacity of 15,000 hours per year.Information on the three types of haircuts is as
Problem 8-65 Cost-Based Pricing Decision Jeremy Costa, owner of Costa Cabinets, Inc., is preparing a bid on a job that requires $1,800 of direct materials, $1,600 of direct labor, and $800 of overhead. Jeremy normally applies a standard markup based on cost of goods sold to arrive at an initial bid
Steve Murningham, manager of an electronics division, was considering an offer by Pat Sellers, manager of a sister division. Pat’s division was operating below capacity and had just been given an opportunity to produce 8,000 units of one of its products for a customer in a market not normally
AudioMart is a retailer of vintage vinyl records and equipment. The store carries two popular sound systems—system A and system B. System A, of slightly higher quality than System B, costs $20 more. With rare exceptions, the store also sells a specialized headset when a system is sold. The
Zanda Drug Corporation buys three chemicals that are processed to produce two types of analgesics used as ingredients for popular over-the-counter drugs. The purchased chemicals are blended for 2 to 3 hours and then heated for 15 minutes. The results of the process are two separate analgesics,
Hetrick Dentistry Services operates in a large metropolitan area. Currently, Hetrick has its own dental laboratory to produce porcelain and gold crowns. The unit costs to produce the crowns are as follows:Overhead is applied on the basis of direct labor hours. These rates were computed by using
FunTime Company produces three lines of greeting cards: scented, musical, and regular.Segmented income statements for the past year are as follows:Kathy Bunker, president of FunTime, is concerned about the financial performance of her firm and is seriously considering dropping both the scented and
Alard Company produces blenders and coffee makers. During the past year, the company produced and sold 65,000 blenders and 75,000 coffee makers. Fixed costs for Alard totaled$340,000, of which $184,000 can be avoided if the blenders are not produced and $142,500 can be avoided if the coffee makers
Ophir Company produces a light fixture with the following unit cost:Direct materials $2 Direct labor 1 Variable overhead 3 Fixed overhead 0.75 Unit cost $6.75 The production capacity is 300,000 units per year. Because of a depressed housing market, the company expects to produce only 180,000
Exercise 8-57 Make or Buy Refer to the information for Blasingham Company above. All of the fixed overhead is common fixed overhead. An outside supplier has offered to sell the part to Blasingham for $11. There is no alternative use for the facilities currently used to produce the part.Blasingham
Exercise 8-56 Make or Buy Refer to the information for Blasingham Company. Of the total fixed overhead assigned to Q108, $77,000 is direct fixed overhead (the lease of production machinery and salary of a production line supervisor—neither of which will be needed if the line is dropped). The
Exercise 8-55 Keep or Buy, Sunk Costs Heather Alburty purchased a previously owned Jeep Grand Cherokee for $8,900. Since purchasing the car, she has spent the following amounts on parts and labor:New stereo system $1,200 Trick paint 400 New wide racing tires 800 Total $2,400 Unfortunately, the new
Exercise 8-54 Target Costing H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market. The toaster will have four slots that adjust in thickness to accommodate both slim slices of bread and oversized bagels. The target price is $60. Banks requires that
Exercise 8-53 Calculating Price Using a Markup Percentage of Cost Lake McDonald Gift Shop sells two games (the National Parks Memory Game and the Guess This Animal Track Game). It has decided to price each game at cost plus 65%.The National Parks Memory Card Game costs $20 each and the Guess This
Exercise 8-51 Choosing the Optimal Product Mix with One Constrained Resource Refer to the information for Billings Company.Billings Company produces two products, Product Reno and Product Tahoe. Each product goes through its own assembly and finishing departments. However, both of them must go
Exercise 8-50 Sell at Split-Off or Process Further Bozo, Inc., manufactures two products from a joint production process. The joint process costs$110,000 and yields 6,000 pounds of LTE compound and 14,000 pounds of HS compound.LTE can be sold at split-off for $55 per pound. HS can be sold at
Exercise 8-49 Keep-or-Drop Decision Refer to the information for Charlevoix Company from Exercise 8-48. Assume that 30% of the Torch customers choose to buy from Charlevoix because it offers a full range of products, including Walloon. If Walloon were no longer available from Charlevoix, these
Refer to the information for Charlevoix Company. Assume that each of the three products has a different marketing campaign whose advertising would be eliminated if the associated product were dropped.Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement
Exercise 8-47 Keep-or-Drop Decision Refer to the information for Charlevoix Company. Assume that each of the three products has a different marketing campaign whose advertising would remain if the associated product were dropped.Charlevoix Company produces three products: Torch, Elk, and Walloon. A
Chiltina, Inc., produces two types of fleeces—full-zip and half-zip—in a single factory. The following information was provided for the coming year:Full-Zip Half-Zip Sales $410,000 $1,400,000 Variable cost of goods sold 210,000 544,500 Direct fixed overhead 70,000 220,000 A sales commission of
Exercise 8-45 Special-Order Decision Refer to the information for Cool Can Company provided in the set up box and in Exercise 8-44.However, assume that Cool Can plans to produce and sell 70,000 units in the coming year(rather than the originally anticipated 65,000 units).1. Using Excel (or some
Exercise 8-44 Special-Order Decision Refer to the information for the Cool Can Company above. In addition, assume that the new customer also wants to have its company logo affixed to each koozie using a label. Cool Can would have to purchase a special logo labeling machine that will cost $12,000.
Exercise 8-43 Special-Order Decision Refer to the information for Cool Can Company above. If Cool Can accepts the order, no fixed manufacturing activities will be affected because there is sufficient excess capacity.Required:1. What are the alternatives for Cool Can?2. Conceptual Connection Should
Exercise 8-42 Make-or-Buy Decision Refer to the information for Arches Manufacturing. Assume that 80% of Arches Manufacturing’s fixed overhead for component DA would be eliminated if that component were no longer produced.Arches Manufacturing had always made its components in-house. However,
Exercise 8-41 Make-or-Buy Decision Refer to the information for Arches Manufacturing. The fixed overhead is an allocated expense; none of it would be eliminated if production of component DA stopped.Arches Manufacturing had always made its components in-house. However, Canyonlands Component Works
Exercise 8.40 Matching Tactical Decision-Making Definitions and Terms Consider the following list of tactical decision-making definitions (A–N).Definitionsa. Fixed expenses that are jointly caused by two or more segments.b. The point of separation in a joint product setting.c. The profit
Exercise 8-39 Model for Making Tactical Decisions Austin Porter is a sophomore at a small Midwestern university (SMWU). He is considering whether to continue at this university or to transfer to one with a nationally recognized engineering program. Austin’s decision-making process included the
Exercise 8-38 Model for Making Tactical Decisions The model for making tactical decisions described in the text has six steps. These steps are listed, out of order, below.Required:Put the steps in the correct order, starting with the step that should be taken first.1. Select the alternative with
Brief Exercise 8-37 Calculating a Target Cost Agostinho, Inc., produces industry-level 3D printers for use in additive manufacturing applications, including tooling aids, functional prototypes, and end-use parts. The new 3D printer model has a target price of $50,000. Management requires a 25%
Brief Exercise 8-36 Calculating Price by Applying a Markup Percentage to Cost Mateo Consulting Firm provides various environmental consulting services to organizations.Mateo has decided to price its jobs at the total direct variable costs of the job plus 20%. The job for a new client included the
Brief Exercise 8-35 Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint Refer to the information for Midlife Orthopedics, Inc.,. Assume that a maximum of 16,000 therapy sessions of each type can be sold.Midlife Orthopedics, Inc., provides two types of physical
Brief Exercise 8-34 Determining the Optimal Product Mix with One Constrained Resource Refer to the information for Midlife Orthopedics, Inc.,. Assume that there are no other constraints.Midlife Orthopedics, Inc., provides two types of physical therapy service sessions, Injury Rehabilitation and
Britney’s Butters receives 2,000,000 containers of raw milk each period that it subsequently processes into consumable milk by adjusting the fat content, adding vitamins, and destroying any potentially harmful bacteria. For Britney’s, one container equals one gallon of consumable milk.
Brief Exercise 8-32 Structuring a Keep-or-Drop Product-Line Problem with Complementary Effects Refer to the information for Mullett Marina. Relevant fixed costs associated with this line include 70% of Boat Maintenance’s garage/warehouse rent and 40% of Boat Maintenance’s supervision salaries.
Brief Exercise 8-31 Structuring a Keep-or-Drop Product-Line Problem Refer to the information for Mullett Marina. Mullett’s management is deciding whether to keep or drop the Boat Maintenance service line. Mullett’s Boat Maintenance service line has a contribution margin of $400,000 (sales of
Kraft Bowlen owns two sports franchises—the Bladers (a hockey team) and the Ballers(a basketball team). The following information was provided for the coming year:A sales commission of 5% of sales revenue is paid for each of the two sports franchises.Direct fixed selling and administrative
Rabbit Foot Motors has been approached by a new customer with an offer to purchase 5,000 units of its hands-free, Wi-Fi-enabled automotive model—the SMAK—at a price of $18,000 per automobile. Rabbit Foot’s other sales would not be affected by this new customer offer.Rabbit Foot normally
Coed Scents, a national producer of young adult perfumes and colognes, needs to determine if it would be cheaper to produce 100,000 bottles of its most popular perfume, Two AM, for sale in its college town shops or to purchase them from an outside supplier for $25 each. Cost information on internal
Brief Exercise 8-27 Calculating a Target Cost Yuhu manufactures cell phones and is developing a new model with a feature (aptly named Don’t Drink and Dial) that prevents the phone from dialing an owner-defined list of phone numbers between the hours of midnight and 6:00 a.m. The new phone model
Brief Exercise 8-26 Calculating Price by Applying a Markup Percentage to Cost Integrity Accounting Firm provides various financial services to organizations. Integrity has decided to price its jobs at the total variable costs of the job plus 15%. The job for a medium-sized dance club client
Brief Exercise 8-25 Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint Refer to the information for Comfy Fit Company. Assume that a maximum of 40,000 units of each sweatshirt can be sold.Comfy Fit Company manufactures two types of university sweatshirts, the
Brief Exercise 8-24 Determining the Optimal Product Mix with One Constrained Resource Refer to the information for Comfy Fit Company. Assume that there are no other constraints.Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution
Jack’s Lumber Yard receives 8,000 large trees each period that it subsequently processes into rough logs by stripping off the tree bark and leaves (i.e., one tree equals one log). Jack’s then must decide whether to sell its rough logs (for use in log cabin construction) at split-off or to
Brief Exercise 8-22 Structuring a Keep-or-Drop Product-Line Problem with Complementary Effects Refer to the information for Hickory Company. Relevant fixed costs associated with this line include 80% of parquet’s machine rent and all of parquet’s supervision salaries. In addition, assume that
Brief Exercise 8-21 Structuring a Keep-or-Drop Product-Line Problem Refer to the information for Hickory Company. Hickory’s management is deciding whether to keep or drop the parquet product line. Hickory’s parquet flooring product line has a contribution margin of $50,000 (sales of $300,000

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