Questions and Answers of Managerial Accounting 4th Edition

Sury Company reported the following physical unit information for the month of April:Work in Process
In February, Parsons, Inc. completed 15,000 units; 3,000 units still in process were 55% complete with respect to materials and conversion. Required a. How many equivalent units
The following information is taken from the accounting records of four different companies. Provide the missing amounts. Assume there are no indirect materials used in the company’s
Brinker International, Inc. is the parent company that owns casual dining chains Chili’s Grill and Bar and Maggiano’s Little Italy. You can learn more about the company at
Fiendish Friends makes Halloween costumes. The company incurred the following total costs to produce 28,000 costumes.Direct materials . . . . . . . $280,000Direct labor
The following information relates to the operations of Favre Company:Finished Goods Inventory, beginning . . . . . . . . . . . . . $ 29,000Finished Goods Inventory, ending
Rocket Company produces small gasoline-powered engines for model airplanes. Mr. Clemens, Rocket’s CFO, has presented you with the following cost information:Direct Materials Inventory,
Refer to Exhibit 4.10. Is $602 the actual cost of Job 6052?Exhibit 4.10 C&c Sports Job Cost Sheet Job Number 6052 Date Started 06/5/2020 Date Completed 06/16/2020 Item Description batch of 35 gray
How do you determine the cost to assign to the ending Work in Process Inventory? To the units that are transferred out of the department?
How would an attorney use job order costing?
Why are some raw materials costs and some labor costs treated as manufacturing overhead? What are those components of manufacturing overhead called?
What formula can be used to calculate the difference between income under variable costing and income under absorption costing?
How do you determine the total cost that must be assigned both to the units transferred out of the department and to the units remaining in ending Work in Process Inventory?
How are job cost sheets used to determine the Work in Process account balance at any particular time?
Describe the three major categories of product costs.
When is income under variable costing higher than income under absorption costing?
Why do the equivalent units calculated for materials sometimes differ from the equivalent units calculated for conversion?
Why do some companies prefer to use predetermined overhead rates instead of waiting for the actual rates? Give three reasons.
What is a period cost? Give three specific examples (not categories) that are not mentioned in the chapter.
What income statement format is appropriate for variable costing?
What are equivalent units? Why is it necessary to calculate equivalent units?
What two methods can companies use to dispose of under- and overapplied overhead?
How is the predetermined overhead rate calculated? When is the predetermined overhead rate calculated?
What is the cost of goods manufactured? How does it differ from total manufacturing cost?
What is a product cost? Give three specific examples (not categories) that are not mentioned in the chapter.
Explain how the high-low method is used to separate a mixed cost into its fixed and variable components for cost estimation.
Managers of Tom Brown Distributors are evaluating the compensation system for the company’s sales personnel. Currently, the two salespeople have a combined salary of $50,000 per year and earn
How can managers use CVP analysis to support their decision making?
How do you calculate the sales required to break even or achieve a target operating income in a multiproduct setting?
Explain cost-plus pricing. What are some flaws of cost-plus pricing?
Scott Confectionery sells its Stack-o-Choc candy bar for $0.80. The variable cost per unit for the candy bar is $0.45; total fixed costs are $175,000.Requireda. What is the contribution margin per
How do you calculate the breakeven point in units? In dollars?
What assumption is required in multiproduct CVP analysis but is not necessary in single-product CVP analysis?
What assumptions are made in CVP analysis? Do those assumptions invalidate the predictions managers make using CVP analysis?
Explain the concept of operating leverage.
Explain target costing. What alternatives does a company have if it cannot make a product at the target cost?
Delectable Dish Printery publishes the best-selling Captain Cajun Cookbook that sells for $15. The company incurs variable costs of $9 per cookbook and total fixed costs are $480,000.RequiredIf
What is the margin of safety? How is it calculated?
Refer to Exercise 3.3.Data from Exercise 3.3Julianna Abdallah owns and operates FirstCakes, a bakery that creates personalized birthday cakes for a child’s first birthday. The cakes, which sell for
Reid Recreation Products sells the Amazing Foam Frisbee for $8. The variable cost per unit is $3; fixed costs are $28,000 per month.Requireda. What is the monthly breakeven point in units? In
Multiple-choice questions covering various topics; consider each scenario independentlya. James Shaw owns several shaved ice stands that operate in the summer along the Outer Banks of
Matoaka Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $50 throughout the country to loyal alumni of over 1,000
Wimpee’s Hamburger Stand sells the Super Tuesday Burger for $4.00. The variable cost per hamburger is $2.25; total fixed cost per month is $38,500.Requireda. How many hamburgers must
Hogue Sports Hut provides individual instruction and coaching to children participating in the city’s baseball, softball, basketball, and soccer youth leagues. Last year’s results were as
The President is Missing, a best-selling novel by Bill Clinton and James Patterson, was published on June 4, 2018. Amazon.com sells the book in hardcover at $16.99 and as an ebook at
Kitchenware, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $10 and are sold for $20. Glass pitchers cost $24 and are sold for $45. All other
On September 21, 2018, Apple released its iPhone XS at a retail price of $1,099. An October 13, 2018, article published in The Wall Street Journal estimated that the cost of materials
The following is Talley Company’s income statement for the past year.Sales revenue . . . . . . . . . . . . . . . . . . . . . . . $300,000Cost of goods sold . . . . . . . . . . . . . . . . . .
Justin Allen, a product engineer for L’Oso Gaming, is designing a new electronic game. Market research indicates that gamers will pay $27 for the game.Requireda. If L’Oso desires a 140%
Pet Designs makes various accessories for pets. Their trademark product, PetBed, is perceived to be high quality but not extravagant, and is sold in a variety of pet stores. Wanda Foster,
CB Markets imports and sells small bear-shaped piñatas. Last year’s income statement is as follows:In planning for the coming year, the company’s owner is evaluating several scenarios. For
JenSteel, Inc., had the following results for last year:Prepare a new income statement for each of the following scenarios. Assume each scenario is applied independently to the original
W Promotions sells T-shirts imprinted with high school names and logos. Last year the shirts sold for $20 each, and variable costs were $8.50 per shirt. At this cost structure, the breakeven
Delphi Company has developed a new product that will be marketed for the first time next year. The product will have variable costs of $22 per unit. Although the marketing department estimates
Kipmar Company produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning purposes.Sales price
Picasso’s Pantry is a chain of arts and crafts stores. Results for the most recent year are as follows:Requireda. What is Picasso’s Pantry’s degree of operating leverage?b. If sales increase by
Under Armour, a company that wants to “empower athletes everywhere,” started out to produce a superior T-shirt that would help regulate an athlete’s body temperature during
Return to Problem 3.35. Kipmar Company’s managers are considering expanding the product line by introducing a leather briefcase. The new briefcase is expected to sell for $125; variable costs
Herzog Industries sells two electrical components with the following characteristics. Fixed costs for the company are $200,000 per year.Requireda. How many units of each product must
Gail Sawyer has just started a new catering business in Dallas, Texas. Instead of establishing a fixed menu, she has decided to make whatever the customer wants until she knows how well
Universal Sports Exchange has just received notice from C&C Sports that the price of a baseball jersey will be increasing to $22.50 next year. In response to this increase, Universal is
In 1999, Blue Nile, Inc. began selling diamonds and other fine jewelry over the Internet. Using an online retailing model, Blue Nile prices its diamonds at an average of 35% less than traditional
“I’ll never understand this accounting stuff,” Blake Dunn yelled, waving the income statement he had just received from his accountant in the morning mail. “Last month, we sold 2,000
Carol Mauldin, owner of Mauldin Mercantile Exchange, is considering changing to a sales commission pay scale for her employees. Currently, her 20 salespeople are each paid a flat salary
What are the similarities between job order and process costing? What are the differences?
Under absorption costing, which costs are considered product costs? Which costs are considered period costs?
Why do managers need to understand product and period costs?
Refer to the T-accounts in Exhibit 4.18. Answer the following questions in words, not numbers.a. What increases Raw Materials Inventory? What decreases Raw Materials Inventory?b. What increases
Why must overhead be applied instead of traced to specific jobs?
Why do companies that use job order costing have under- and overapplied overhead?
Under variable costing, which costs are considered product costs? Which costs are considered period costs?
Define managerial accounting in your own words.
How does information assist in achieving corporate strategy?
Why is it important for an organization to have a code of conduct?
How does corporate strategy influence the selection of information used in decision-making activities?
How can an employee’s unethical behavior affect an organization?
In each of the following situations, identify whether the setting is primarily financial accounting or managerial accounting.a. Build-A-Bear Workshop reported it would experience a $3.9 million
Compare and contrast managerial and financial accounting information.
What are the four functions of management? How does management carry out each function?
Applying the IMA’s Statement of Ethical Professional Practice (Adapted from M. Elizabeth Haywood and Donald E. Wygal, “Corporate Greed vs. IMA’s Ethics Code,” Strategic Finance,
Corporate codes of conduct Use the Internet to find a corporate code of conduct. Compare the code you find to the list of typical components of a code of conduct in Exhibit 1.7. Does the code
Charlie Anderson recently began a new job as the office manager for a prominent medical clinic. He has just received a bill from Med-Count, one of the labs that performs tests for the
Why is it important for managers to understand cost behavior patterns?
Express the relationship between total cost (TC), variable cost per unit (VC), volume (x), and fixed cost (FC) in equation form.
Parker Beverages sells a variety of protein shakes and fruit juices to small health food stores. Parker purchases the shakes and juices from leading manufacturers. Identify each of the
What is a variable cost? If the activity level increases, what happens to the total cost incurred? Give three examples of a variable cost.
Explain how a scattergraph is used to separate a mixed cost into its fixed and variable components.
What is the contribution margin ratio? How is it related to the variable cost ratio?
What is a fixed cost? If the activity level increases, what happens to the total cost incurred? Give three examples of a fixed cost.
If a product’s variable cost per unit increases while the selling price and fixed cost decrease, what will happen to the contribution margin per unit?
Will Jones, LLP is a small CPA firm that focuses primarily on preparing tax returns for small businesses. The company pays a $650 annual fee plus $12 per tax return for a license to use
Given a choice between the high-low method, a scattergraph, or regression analysis, which method would you prefer for separating a mixed cost into its fixed and variable components? Why?
How can a company increase a product’s contribution margin?
Identify each of the following costs, incurred monthly by Furman Flower Cart, as fixed, variable, or mixed. Explain your reasoning. Bouquets Sold 2,000 4,000 6,000 $ 5,000 $ 6,000 $12,000 $15,000 $
What is a mixed cost? If the activity level increases, what happens to the total cost incurred? Give three examples of a mixed cost.
Explain the concept of the relevant range. How does a company’s relevant range differ from the steps found in a step cost?
Marla Mason owns and operates a home health care agency. She reported the following cost information for the first four months in 2019. Identify each of the following costs as fixed, variable,
What is a step cost? If the activity level increases, what happens to the total cost incurred? Give three examples of a step cost.
To calculate the unit cost of the video games that he sells at his mall kiosk, Joel Lawson added up all his costs and divided by the number of units he sold during the year. He then used
Refer to the data in Exercise 2-8.Data From Exercises 2-8:Stratton, Inc., has collected the following information on its cost of electricity:Requireda. Using the high-low method, compute the variable

Showing 400 - 500 of 519