Questions and Answers of Financial And Managerial Accounting The Basis For Business Decisions

During the month of October, current year, Weller Company had the following transactions.a. Revenues of $14,400 were earned and received in cash.b. Bank loans of $3,600 were paid off.c. Equipment of
Repeat Brief Exercise 2.8, except assume that rather than being a sole proprietorship or a partnership, Solway Company is organized as a corporation with capital stock of $48,000. How would the
Toole Corporation uses a job order costing system and allocates manufacturing overhead at a rate of $45 per machine hour. During the period, the company used 1,200 machine-hours and actually incurred
What is a cost accounting system?
Winona Enterprises uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information
Nicholes Corporation finished job no. 600 on June 1. On June 10, the company sold job no. 600 for $25,000 on account to a credit customer. Total manufacturing costs allocated to this job at the time
The information below was taken from the job cost sheets of Igmund Manufacturing.During July, jobs no. 103 and 104 were completed, and jobs no. 101, 102, and 104 were delivered to customers. Jobs no.
The following information relates to the manufacturing operations of Morrhead Manufacturing during the month of July. The company uses job order costing.a. Purchases of direct materials during the
Fox Manufacturing applies manufacturing overhead at a rate of $32 per machine hour.a. When during the year was this rate computed?b. Describe briefly how this rate was computed.c. Identify the
Lincoln Estates manufactures log homes to customers’ specifications and uses job order costing. A predetermined overhead rate is used in applying manufacturing overhead to individual jobs. In the
Hendersonville Roofing uses job order costing and applies manufacturing overhead to individual projects using predetermined overhead rates. In the Installation Division, overhead is applied on the
Indicate whether job order costing is appropriate for each of the following businesses. Explain why. a. Let Them Eat Cake (a small bakery that makes wedding cakes unique to each
Schmeltz Industries organized in January and recorded the following transactions during its first month of operations. Jan. 5 Purchased materials on account for $800,000. Jan. 9 Used
Lewis & Company applies manufacturing overhead to production using an activity-based costing system. The company’s utilities cost pool has accumulated $450,000, its maintenance cost pool has
Marshall uses a job order costing system to account for projects. It applies manufacturing overhead to jobs on the basis of direct labor hours and pays its direct labor workers $30 per hour. The
What is an activity cost pool?
Rachel’s Costume Creations has two product lines: machine-made costumes and hand-made costumes. The company assigns $96,000 in manufacturing overhead costs to two cost pools: power costs and
Why are direct labor hours likely to be an inappropriate activity base in a highly mechanized production facility?
Match the business with the appropriate cost system(s) for that business using the number of the cost system where 1 = job order costing, 2 = process costing, and 3 = activity-based costing. a.
One of Turf Smart’s products is a small lawnmower. Two processing departments are involved in the mower’s production. The deck is assembled in one department, and a second department assembles
Faulk Corporation uses a process costing system for its two production departments: Mixing and Baking. The company provided the following manufacturing cost information for the month of June.a.
Wrigley Company (a subsidiary of Mars Incorporated) manufactures chewing gum. Visit the following address for the company: http://www.wrigley.com/ea/about-us/how-gum-made.aspx. From this link,
Dittmar Products has provided the following information pertaining to equivalent units of production in its Molding Department for the month of April.All direct materials used in the Molding
Corner Suites began making high-quality office furniture in January. The company’s executive desks are produced in two departments: Cutting and Finishing. Component kits are produced in the Cutting
Milton Corporation had 15,000 units of beginning inventory in its Cutting Department on May 1. The units were 100 percent complete with respect to direct materials requirements but only 80 percent
Assume that on January 31 the Finishing Department of Corner Suites had 5,000 partially trimmed and assembled executive desks in ending inventory. These units were, of course, 100 percent complete
On June 1, the Grinding Department of Precision Lenses had costs carried forward from May totaling $400,000. Resources consumed to complete the beginning inventory totaled $80,000. The total cost of
Myer’s Treats uses one gallon of mix for each cake produced by the Baking Department. On August 1, the Baking Department had 600 cakes in process. These units were 100 percent complete with respect
Castner Corporation is considering implementation of a JIT inventory system. The company’s industrial engineer recently conducted a study to determine the average number of days spent in each
Quartex Corporation is considering implementation of a JIT inventory system. The company’s industrial engineer recently conducted a study to determine the average number of days spent in each
Assume Gamm’s, a retail establishment, wants to capture a 20 percent share of its local evening gown market. In order to capture that share, it has determined that the average selling price of an
Read Note 1 in Home Depot’s financial statements in Appendix A at the end of this textbook. With a group of students identified by your instructor, list answers to the following.Instructions.a.
Hall’s, a maker of handheld video games, recently analyzed its manufacturing process to identify value-added and non–value-added activities. Hall’s found that the total non–value-added
Assume you’ve just started a new business to manufacture Fry-Plate, a new solar-powered cooking pan for camping. Your business analyst tells you that in the long run Fry-Plate will sell for $32.50
Dust Buster’s Inc. manufactures two types of small hand-operated vacuum cleaners. Dust Busters is concerned about quality issues and has compiled the following information for the past year
Finley Corporation has monthly fixed costs of $240,000. It sells two products for which it has provided the following information.a. What total monthly sales revenue is required to break even if the
Wadena Search and Rescue estimates the monthly cost of responding to emergency calls to be $90,000, plus $450 per call.a. In a month in which the company responds to 90 emergency calls, determine the
In the Home Depot financial statements in Appendix A at the end of this textbook, find Note 1 to the financial statements summarizing the company’s significant accounting policies. Read the section
Simon Teguh is considering investing in a vending machine operation involving 20 vending machines located in various plants around the city. The machine manufacturer reports that similar vending
Dorsal Ranch raises fish for sale in the restaurant industry. The company can obtain batches of two million eggs from its supplier. Management is trying to decide whether to raise cod or salmon. Cod
Applying the high-low method, Bemidji Wilderness Resort estimates the total costs of providing guide services to be $9,000 per month, plus 25 percent of guide service revenue.a. What is the
Ed Winslow is considering investing in a sandwich machine operation involving 50 sandwich machines located in various locations throughout the city. The machine manufacturer reports that similar
New Berlin Corporation has annual fixed costs of $800,000, variable costs of $48 per unit, and a contribution margin ratio of 40 percent. Compute the following.a. Unit sales price and unit
Ivy Blooms sells wreaths and leis. The following is selected per-unit information for these two products.Fixed costs and expenses amount to $97,500 per month. The company generates total sales of
Dominic’s Deli recently calculated its annual break-even sales revenue to be $210,000. For each dollar of sales revenue, $0.30 goes to cover variable costs. Compute the following.a. The
Raquel Swimwear sells lines of adult and youth swimming suits. The following is per-unit information for these two product lines.Fixed costs and expenses amount to $117,000 per month. The company
Furrilo Furriers has a contribution margin ratio of 80 percent and must sell 12,000 stoles at a unit price of $400 to break even.a. Compute total fixed costs.b. Compute variable cost per unit.c.
Define (a) contribution margin, (b) contribution margin ratio, and (c) average contribution margin ratio.
Water World sells three products: ski vests, slalom skis, and ski ropes. Information related to each product line is provided as follows.The company’s annual fixed costs are approximately
Glow Worm Corporation makes flashlights and batteries. Its monthly fixed costs average $1,690,000. The company has provided the following information about its two product lines.a. Determine the
Chaps & Saddles, a retailer of tack and Western apparel, earns an average contribution margin of 30 percent on its sales volume. Recently, the advertising manager of a local country radio station
Dinklemyer Corporation uses direct labor hours as its single cost driver. Actual overhead costs and actual direct labor hours for the first five months of the current year are as follows.a. Compute
Schreiner Instruments currently produces and sells 80,000 financial calculators monthly. At this level, its variable cost per calculator is $9 and its fixed cost per calculator is $6. The company’s
Listed as follows are seven technical accounting terms introduced or emphasized in this chapter. Each of the following statements may (or may not) describe one of these terms. For each
Fox Run Outfitters manufactures lightweight frames that it uses in several of its backpack products. Management is considering whether to continue manufacturing the frames or to buy them from an
Yi Corporation produces a large number of fishing products. The costs per unit of a particular fishing reel are as follows.The company recently decided to buy 8,000 fishing reels from another
Dinklemyer Corporation uses direct labor hours as its single cost driver. Actual overhead costs and actual direct labor hours for the first five months of the current year are as follows.a. Compute
Schreiner Instruments currently produces and sells 80,000 financial calculators monthly. At this level, its variable cost per calculator is $9 and its fixed cost per calculator is $6. The company’s
Assume a store’s Clothing Department has a lower contribution margin ratio but a higher responsibility margin ratio than its Sporting Goods Department. If $15,000 in advertising is expected to
Jordahl’s grocery store has a small bakery that sells a variety of baked goods. Sales from the bakery average less than 5 percent of the store’s total revenue and is considered a cost center. As
Glide Behind Corporation manufactures and sells small cargo trailers. The Wheel Division creates parts that are both sold externally and transferred internally to the Assembly Division. Variable
Nelson Chemical consists of seven divisions. Divisions One through Five make products that are sold in the competitive market. Divisions Two and Three make their own investment and transfer pricing
Hilgen Hotel & Spa is located in beautiful Sydney, Australia. Hilgen operates three profit centers: the hotel, a restaurant, and a spa. The complex occupies 100,000 square feet and has 250
For each of the following costs associated with a chain of bicycle stores, decide if the cost is common or traceable to (1) the store departments (repairs and sales), (2) each store, or (3) the
Janice Black, manager of the Produce Department at Spanky’s Grocery, has a monthly responsibility margin of $4,000. The store manager has decided to allocate storewide common costs to each
Water World sells three products: ski vests, slalom skis, and ski ropes. Information related to each product line is provided as follows.The company’s annual fixed costs are approximately
Guthrie Industries manufactures and sells dog collars. The collars sell for $12 each. Information about the company’s costs is as follows.a. Determine the company’s monthly break-even point in
Vickery Machining Company is nearly finished constructing a specially designed piece of machining equipment when the customer declares bankruptcy and cannot pay for the equipment. Vickery estimates
Gunst Company produces three video games: Android, Bio-Mutant, and Cyclops. Cost and revenue data pertaining to each product are as follows.At the present time, demand for each of the company’s
Guthrie Generators manufactures a solenoid that it uses in several of its products. Management is considering whether to continue manufacturing the solenoids or to buy them from an outside source.
Vermont Treats makes blueberry jam and blueberry syrup. Both products come out of a joint process costing $60,000 per year. The sales value of the blueberry jam is $20,000 per year. The sales value
Olson manufactures and sells 5,000 gun cabinets each month. A principal component part in each cabinet is a lock mechanism to keep them secure. Olson’s plant currently has the monthly capacity to
It’s Alarming! produces alarm systems for cars and trucks. The company is trying to decide whether to outsource its Installation Department to A-One Technicians for $50 per installation. Although
Superior Instruments produces two models of instruments. Information for each model is as follows.The demand for either product is sufficient to keep the plant operating at full capacity (15,000
A friend offers you a ticket to a Chicago Cubs baseball game for $40. You know you can sell the ticket to another friend for $50. What is the opportunity cost of buying the ticket but then choosing
Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants. Its main factory has the capacity to produce and sell 12,000 cases per month. The following information is
Bacrometer, Inc., makes part no. 566 on one of its production lines. Each month Bacrometer makes 6,000 of part no. 566 at a variable cost of $4 per part. Bacrometer has been provided a bid for part
Melcher, Inc., originally sold 100,000 shares of its $10 par value common stock at $25 per share. Several years later the company repurchased 10,000 of these shares at $45 per share. Melcher
In the stock market crash of October 19, 1987, the market price of IBM’s capital stock fell by over $31 per share. Explain the effects, if any, of this decline on the recorded stockholders’
The common stock of Fido Corporation was trading at $45 per share on October 15 of the previous year. A year later, on October 15 of the current year, it was trading at $80 per share. On this date,
Ashton Company was experiencing financial difficulty late in the current year. The company’s income was sluggish, and the market price of its common stock was tumbling. On December 21, the company
A recent balance sheet for Kimberly-Clark Corporation indicates that the company has 1.2 billion shares of common stock authorized, of which approximately 378.6 million have been issued. In addition,
The financial statements of Home Depot, Inc., appear in Appendix A of this text. These statements contain information describing the details of the company’s stockholders’ equity. a. What is
Ferris, Inc., sells heavy machinery with a base unit price of $10,000. Ferris offers an optional service agreement for an initial three-year period for $1,500.a. Explain how Ferris should recognize
The following events were reported in the financial statements of large, publicly owned corporations. a. Atlantic Richfield Company (ARCO), previously a separate company that is now owned by BP
Explain the accounting principle of revenue recognition.
Eastern Aviation operated both an airline and several restaurants located near airports. During the year just ended, all restaurant operations were discontinued and the following operating results
Menter Company sells kitchen appliances to contractors to install in newly constructed houses. Mentor sold appliances to a single contractor for ten homes at a total price of $150,000. Mentor extends
Shown as follows are data relating to the operations of Beach, Inc., during 2021.Instructions.a. Prepare a condensed income statement for 2021, including earnings per share statistics. Beach, Inc.,
Jackson Publishing, Inc. (JPI), publishes two newspapers and, until recently, owned a professional baseball team. The baseball team had been losing money for several years and was sold at the end of
What are performance obligations, and how do performance obligations relate to the principle of revenue recognition?
The following data relate to the operations of Slick Software, Inc., during 2021.Instructions.a. Prepare a condensed income statement for 2021, including earnings per share figures. Slick Software,
Walts Used Cars sells late-model used cars and offers an optional 12-month service agreement. Walts estimates that the cost of the service agreement will be approximately 5 percent of the total sales
Elliot-Cole is a publicly owned international corporation, with operations in over 90 countries. Net income has been growing at approximately 15 percent per year, and the stock consistently trades at
A summary of the transactions affecting the stockholders’ equity of Riverton Corporation during the current year follows.Instructionsa. Prepare a statement of stockholders’ equity for the year.
For the year ended December 31, Southern Supply had net sales of $3,875,000, costs and other expenses (including income tax) of $3,100,000, and a gain from discontinued operations (net of income tax)
The following information has been excerpted from the statement of stockholders’ equity included in a recent annual report of Thompson Supply Company. (Dollar figures are in
The following income statement was prepared by a new and inexperienced employee in the accounting department of Dexter, Inc., a business organized as a corporation.Instructionsa. Prepare a corrected
The 2020 annual report of Software City, Inc., included the following comparative summary of earnings per share over the last three years. In 2021, Software City, Inc., declared and distributed a
Important information concerning a company’s operating performance can be found in its income statement and statement of financial position (balance sheet). Using the search mechanism of your

Showing 800 - 900 of 998