Questions and Answers of Managerial Accounting Creating

Refer to the data given in Exercise 18-20. Breakfasttime Cereal Company has an opportunity to process its Crummies further into a mulch for ornamental shrubs. The additional processing operation
Glass Creations Company is developing departmental overhead rates based on direct-labor hours for its two production departments. Etching and Finishing. The Etching Department employs 20 people and
Allegheny River Sawmill manufactures two lumber products from a joint milling process. The two products developed are mine support braces (MSB) and unseasoned commercial building lumber (CBL). A
Chemco. Inc. manufactures two products out of a joint process: Compod and Ultrasene. The joint costs incurred are $750,000 for a standard production run that generates 120,000 gallons of Compod and
Refer to the data given in Problem 18-24 for Glass Creations Company.Required:1. Calculate the overhead rates per direct-labor hour for the Etching Department and the Finishing Department. Use the
Edmonton Chemical Company manufactures two industrial chemical products in a joint process. In May, 10,000 gallons of input costing $180,000 were processed at a cost of $450,000 . The joint process
Refer to the answers given for the preceding exercise.Required:1. Refer to requirement (1) of the preceding exercise. Prepare a display similar to Exhibit 1-1 to show how your accumulation grows each
For what purpose should the managerial accountant be careful not to use joint cost allocations?
Aurora National Bank has two service departments, the Personnel Department and the Computing Department. The bank has two other departments that directly service customers, the Deposit Department and
Refer to the data given in the preceding exercise.Required: Use the step-down method to allocate the budgeted costs of the Personnel and Computing departments to the Deposit and Loan departments.
Visit the website of one of the following organizations, or a different organization of your choosing.Required: Read about the organization's activities and operations. Then list three activities
Bay State Community College enrolls students in two departments, Liberal Arts and Sciences. The college also has two service departments, the Library and the Computing Services Department. The usage
Refer to the data given in the preceding exercise.Required: Use the step-down method to allocate Bay State Community College's service department costs to the Liberal Arts and Sciences
Refer to the data given in the preceding exercise.Required: Use the relative-sales-value method to allocate Breakfast time Cereal Company's joint production cost between Yummies and Crummies.Data
Refer to the data given in Exercise 18-15 for Aurora National Bank.Required: Use the reciprocal-services method to allocate the budgeted costs of the Personnel and Computing departments to the
Jacksonville Instrument Company manufactures gauges for construction machinery. The company has two production departments: Machining and Finishing. There are three service departments: Human
Refer to the data given in the preceding problem. When Jacksonville Instrument Company established its service departments, the following long-run needs were anticipated.Required: Use the dual
Travelcraft, Inc. manufactures a complete line of fiberglass suitcases and attache cases. The firm has three manufacturing departments: Molding, Component, and Assembly. There are also two service
Le Monde Company is a manufacturer of chemicals for various purposes. One of the processes used by Le Monde produces HTP-3, a chemical used in hot tubs and swimming pools: PST^l. a chemical used in
Gleed Company manufactures products Alpha, Beta, and Gamma from a joint process. Production, sales, and cost data for July follow.Required:1. Assuming that joint costs are allocated using the
Wyalusing Chemicals uses a joint process to produce MJ-4, a chemical used in the manufacture of paints and varnishes; HD-10, a chemical used in household cleaning products; and FT-5, a by-product
Refer to the data for Riverside Clinic given in Exhibits 18-2 and 18-5.Required: Use the reciprocal-services method in combination with the dual-allocation approach to allocate Riverside's service
Finally, add the variable costs and fixed costs allocated to each direct-patient-care department.
Tropics Fruit Company, based on Oahu, grows, processes, cans, and sells three main pineapple products:sliced, crushed, and juice. The outside skin is cut off in the Cutting Department and processed
Explain in words the following future-value formula: F = P(1+r)".
Define the term present value.
Comment on the interplay of market forces and cost issues in price setting at America Online. "America Online Faces New Threat from Cut-Rate Internet Services," The Wall Street Journal, February 3,
Comment on the interplay of market forces and cost issues in setting prices in the airline industry. "Airlines' Move to Raise Fares Falls Apart as Northwest Balks," The Wall Street Journal, February
Can the retailers pass these increased shipping costs on to their customers or will they have to absorb the costs while keeping prices the same? Discuss this issue in terms of cost-based versus
How are the U.S. automakers changing their pricing policies as a result of the surge in online auto trading? "Car Makers May Try to Alter Pricing Practices," The Wall Street Journal, January 24,
What issues are involved for these automakers in deciding whether to pass on higher fuel costs to consumers in the form of higher destination charges or to simply absorb these costs? Discuss this
What are the trade-offs companies face in making major outsourcing decisions?. "Is Your Job Next?" and "A World of Outsourcing," Business Week, February 3, 2003, pp. 50-60, Pete Engardio, Aaron
What implications does this seemingly innocuous question have for tariffs and cost management at Toy Biz, Inc.? "Is Wolverine Human? A Judge Answers No; Fans Howl in Protest," The Wall Street
Referring to the chapter's discussion of how to increase ROI, how will 7-Eleven's investment likely impact the company's ROI? "7-Eleven, Amid Pressures, Makes Big Bets," The Wall Street Journal,
Discuss as a group. According to the article, these "plans add to company liabilities, but are poorly disclosed."Are these types of executive compensation effective in getting the best performance
Why would capital investment on research and development activities tend to provide a lower return on investment than would other activities? "What's a New Economy without Research?" Fortune, May 15,
What categories of environmental costs would these automakers incur in making the switch to fuel-cell or diesel-fuel cars? Are these costs likely to be visible or hidden environmental costs? "Honda
As a group, discuss the following questions and present your conclusions to the class. What steps should Firestone and Ford have taken to remedy this problem before it became such a public relations
As a group, discuss the phenomenon described in the article. Why does it occur? What can be done to mitigate against this behavior? How could standard costs be affected? Is this behavior ethical? "On
How did each of these companies implement its cost-cutting program? Could standard costing have an important role to play in cutting costs? "Xerox Pledges to Cut $1 Billion in Costs, Reports a
Refer to the data given in the preceding exercise for Dolphin Company.Required:1. Prepare a cost-volume-profit graph for the company.2. Calculate Dolphin Company's break-even point in units, and show
Starfish Company manufactures diving masks with a standard variable cost of $$12.50$ . The masks sell for $$17.00$ . Budgeted fixed manufacturing overhead for the most recent year was
Information taken from Collegiate Sporting Goods Company's records for the most recent year is as follows:Required:1. Assuming the company uses absorption costing, compute the inventoriable costs for
Pinellas Pillow Company's planned production for the year just ended was 10,000 units. This production level was achieved, but only 9,000 units were sold. Other data follows:There were no
Information taken from Ticonderoga Paper Company's records for the most recent year is as follows:Required:1. Assuming Ticonderoga Paper Company uses variable costing, compute the inventoriable costs
Chenango Can Company manufactures metal cans used in the food-processing industry. A case of cans sells for $$25$ . The variable standard costs of production for one case of cans are as
Adelphia Corporation, which uses throughput costing, just completed its first year of operations. Planned and actual production equaled 10,000 units, and sales totaled 9,600 units at $216 per unit.
Huron Chalk Company manufactures blackboard chalk for educational uses. The company's product is sold by the box at $$25$ per unit. Huron uses an actual costing system, which means that the actual
Refer to the information given in Problem 17-28 for Huron Chalk Company. Selected information from Huron's year-end balance sheets for its first two years of operation is as follows:Required:1. Why
Joe Duval was proud of the way he had guided Screen Technology Corporation over the past year since he had accepted the job as the company's president. Under Duval's direction, the privately held
Some management accountants argue that absorption costing provides an incentive to continue producing goods for inventory, even when sales decline. They go on to suggest that this incentive problem
What are some of the arguments against a more efficient system of product costing, which have in turn encouraged the use of an absorption-costing system. "The Reality of Product Costing," Management
Refer to the data given in the preceding exercise.Required: Calculate the landfill project's internal rate of return. Should the board approve the project?Data From Preceding Exercise:-Jefferson
Refer to the data given in Exercise 16-24.Required: Prepare a display to show the recovery of investment and return on investment for Jefferson County's landfill project.Data From Exercise
Toronto Shakespearean Theater's board of directors is considering the replacement oi the theater's lighting system. The old system requires two people to operate it. but the new system would require
The management of troquois National Bank is considering an investment in automatic teller machines.The machines would cost $$124,200$ and have a useful life of seven years. The bank's controller
Comment on GEs use of the payback criterion. "IT Spending Is Expected to Rebound." The Wall Street Journal, January 14, 2002, p. B4, Donna Fuscaldo. Overview General Electric plans to spend $3
How would discounted cash flow analysis be used in analyzing such major investment decisions? What types of cash flows would be the most difficult to project in a DCF analysis of renewable energy
How would discounted cash flow analysis be used in analyzing such a major acquisition decision? What were Kellogg's objectives in the acquisition? What kinds of qualitative issues could enter into
Win is a locus on the customer such a key principle of target costing?
The marginal cost, marginal revenue, and demand curves for Halifax Home and Garden's deluxe wheelbarrow are shown in the graph below.Required: Before completing any of the following requirements,
Serendipity Sound, Inc. manufactures compact disk players with unusual features in its Minneapolis Division. The divisional sales manager has estimated the following demand-curve data.Required:1.
Visit the website of one of the following companies, or a different company of your choosing.Required: Read about a new product or service to be offered by the company. Then explain how the firm
List the six steps in the decision-making process.
Choose an organization and a particular decision situation. Then give examples, using that context, of each step illustrated in Exhibit 14-1.
College Town Pizza's owner bought his current pizza oven two years ago for $$10,500$ , and it has one more year of life remaining. He is using straight-line depreciation for the oven. He could
Armstrong Corporation manufactures bicycle parts. The company currently has a $$19,500$ inventory of §1 parts that have become obsolete due to changes in design specifications. The parts could be
Plato Corporation manufactures two products, Alpha and Beta. Contribution margin data follow.Past experience has shown that the fixed manufacturing overhead component included in the cost per machine
Chef Gourmet, Inc. has assembled the following data pertaining to its two most popular products.Past experience has shown that the fixed manufacturing overhead component included in the cost per
In addition to fine chocolate, International Chocolate Company also produces chocolate-covered pretzels in its Savannah plant. This product is sold in five-pound metal canisters, which also are
The following data pertain to Pensacola Division's most recent year of operations.Required: Compute Pensacola Division's sales margin, capital turnover, and return on investment for the year.
The following data pertain to British Isles Aggregates Company, a producer of sand, gravel, and cement, for the year just ended.Required:1. Compute the company's sales margin, capital turnover, and
Suburban Lifestyles, Inc. has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers' lots. Suburban Lifestyles expanded into the
Golden Gate Construction Associates, a real estate developer and building contractor in San Francisco, has two sources of long-term capital: debt and equity. The cost to Golden Gate of issuing debt
Redstone Industrial Resources Company (RIRC) has several divisions. However, only two divisions transfer products to other divisions. The Mining Division refines toldine, which is then transferred to
Delta Telecom, Inc., which produces telecommunications equipment in the United States, has a very strong local market for its circuit board. The variable production cost is $$390,$ and the company
Why is goal congruence important to an organization's success?
How does a responsibility-accounting system foster goal congruence?
Define and give examples of the following terms: cost pool and cost object.
Define and give an example of cost allocation (or distribution).
Wyoming Community College has three divisions: Liberal Arts, Sciences, and Business Administration.The college's comptroller is trying to decide how to allocate the costs of the Admissions
The following costs were incurred by Akasaka Metals Company to maintain the quality of its products.{yen is the national currency of Japan.)1. Operating an X-ray machine to detect faulty welds.
The following data are the actual results for Marvelous Marshmallow Company for August.Standard cost and budget information for Marvelous Marshmallow Company follows:Required: Use any of the methods
Mankato Control Company, which manufactures electrical switches, uses a standard-costing system. The standard manufacturing overhead costs per switch are based on direct-labor hours and are as
Refer to DCdesserts.com's activity-based flexible budget. Suppose that the company's activity in June is described as follows:Required:1. Determine the flexible budgeted cost for each of the
You brought your work home one evening, and your nephew spilled his chocolate milk shake on the variance report you were preparing. Fortunately, you were able to reconstruct the obliterated
The controller for Rainbow Children's Hospital, located in Munich, Germany, estimates that the hospital uses 25 kilowatt-hours of electricity per patient-day, and that the electric rate will be .13
Refer to the data in Exercise 11-25 for Starlight Glassware Company. Prepare journal entries to:• Record the incurrence of actual variable overhead and actual fixed overhead.• Add variable and
LakeMaster Company manufactures outboard motors that are sold throughout the United States and Canada. The company uses a comprehensive budgeting process and compares actual results to budgeted
Western Auto Parts Company manufactures replacement parts for automobile repair. The company recently installed a flexible manufacturing system, which has significantly changed the production
Ice Box Gourmet, Inc. produces containers of frozen food. During April, The company produced 725 cases of food and incurred the following actual costs.Standard cost and annual budget information are
Refer to Review Question 10-11. Why does an analogous question not arise in the context of the direct labor variances?Data From Review Question 10-11:-Explain why the quantity purchased (PQ) is used
List eight criticisms of standard costing in an advanced manufacturing environment.
During April, Dryden Company's material purchases amounted to 6,500 pounds at a price of $$7.40$ per pound. Actual costs incurred in the production of 2,000 units were as follows:The standards for
Canandaigua Container Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and
Refer to the data in the preceding exercise. Use diagrams to determine the direct-material and direct-labor variances. Indicate whether each variance is favorable or unfavorable.Data From Preceding
Managerial accounting procedures developed for the manufacturing industry often are applied in non- manufacturing settings also. Ontario Bank and Trust Company's total output of financial services
Data Screen Corporation is a highly automated manufacturing firm. The vice president of finance has decided that traditional standards are inappropriate for performance measures in an automated
Hiawatha Hydrant Company manufactures fire hydrants in Oswego, New York. The following information pertains to operations during May.Required: Compute the following operational measures: (1)
Think carefully about the overall mission and goals of your college or university.Required:1. How does the task of building a balanced scorecard for an educational institution differ from that for a

Showing 1 - 100 of 327