Questions and Answers of Managerial Accounting Tools For Business Decision Making 9th

Sharon Livingston Manufacturing Company uses the following budgets: Balance Sheet, Capital Expenditure, Cash, Direct Labor, Direct Materials, Income Statement, Manufacturing Overhead, Production,
Emil Company estimates that unit sales will be 10,000 in quarter 1; 12,000 in quarter 2; 14,000 in quarter 3; and 15,000 in quarter 4. Using a sales price of $70 per unit, prepare the sales budget by
Korenewych Company has 1 ,200 pounds of raw materials in its December 3 1 2002, ending inventory. Required production for January and February are 4,000 and 5,000 units, respectively. Two pounds of
For Shawn Green Company, units to be produced are 5,000 in quarter 1 and 6,000 in quarter 2. It takes 1.8 hours to make a finished unit, and the expected hourly wage rate is $12 per hour. Prepare a
For John Dunham Inc. variable manufacturing overhead costs are expected to be $$20,000$ in the first quarter of 2002, with $$3,000$ increments in each of the remaining three quarters. Fixed
Chudzick Company classifies its selling and administrative expense budget into variable and fixed components. Variable expenses are expected to be $$25,000$ in the first quarter, and $$5,000$
Bitter man Company has completed all of its operating budgets. The sales budget for the year shows 50,000 units and total sales of $2,000,000. The total unit cost of making one unit of sales is $28.
Jorie Aloisio Industries expects credit sales for January, February, and March to be $$200,000$, $$275,000$, and $$310,000$, respectively. It is expected that 70% of the sales will be collected
Maggie Sharrer Wholesalers is preparing its merchandise purchases budget. Budgeted sales are $$400,000$ for April and $$450,000$ for May. Cost of goods sold is expected to be 75% of sales. The
Quick Electronics Inc. produces and sells two models of pocket calculators, XQ-103 and XQ-104. The calculators sell for $12 and $20, respectively. Because of the in- tense competition Quick faces,
Stahl Company produces and sells two types of automobile batteries, the heavy- duty HD-240 and the long-life LL-250. The 2002 sales budget for the two products is as follows.The January 1, 2002,
Gosh-bv- Golly Industries has adopted the follow ing production budget for the first 4 months of 2003.Each unit requires 5 pounds of raw materials costing $1.50 per pound. On December 31, 2002, the
The W. Sublette Company budget committee has reached agreement on the fol- lowing data for the 6 months ending June 30, 2003The ending raw materials and finished goods inventories at December 31,
Twyla, Inc., is preparing its direct labor budget for 2002 from the following production budget based on a calendar Year.Each unit requires 1.5 hours of direct labor.Instructions Prepare a direct
Vincent Nathan Company is preparing its manufacturing overhead budget for 2002. Relevant data consist of the following. Units to be produced (by quarters): 10,000, 12,000, 14,000, 16,000. Direct
Marcum Company combines its operating expenses for budget purposes in a sell- ing and administrative expense budget. For the first 6 months of 2002, the following data are available.1. Sales: 15,000
Longhead Company has accumulated the following budget data for the year 2002.1. Sales: 30,000 units, unit selling price $80.2. Cost of one unit of finished goods: Direct materials 3 pounds at $$5$
Campagna Company expects to have a cash balance of $$46,000$ on January 1, 2002. Relevant monthly budget data for the first 2 months of 2002 are as follows.Collections from customers: January
In May 2002, the budget committee of Sherrick Stoics assembles the following data in preparation ol budgeted merchandise purchases lor the month ol June. I Expected sales: June $$500,000$. July
Oakbrook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2003.1. Sales: Quarter 1,
Joe Dunham Inc. is preparing its annual budgets for the year ending December 31, 2003. Accounting assistants furnish the following data.An accounting assistant has prepared the detailed manufacturing
Hindu Industries had sales in 2002 of $$6,300,000$ and gross profit of $$1,500,000$. Management is considering two alternative budget plans to increase its gross profit in 2003.Plan A would
Yaeger Company prepares monthly cash budgets. Relevant data from operating budgets for 2003 are:All sales are on account. Collections are expected to be 50% in the month of sale, "WA in the first
Additional information accumulated for the budgeting process is as follows. Budgeted data for the year 2003 include the following.To meet sales requirements and to have 2,500 units of finished goods
Alcorn Farm Supply Company manufactures and sells a fertilizer called Basic II. The following data are available for preparing budgets for Basic II for the first 2 quar- ters of 2002.1. Sales:
Borealis Inc. is preparing its annual budgets for the year ending December 31, 2002. Accounting assistants furnish the following data.An accounting assistant has prepared the detailed manufacturing
David Chambers Industries has sales in 2002 of $$5,250,000$ (656,250 units) and gross profit of $$1,587,500$. Management is considering two alternative budget plans to increase its gross profit
Flypaper Company prepares monthly cash budgets. Relevant data from operating budgets for 2003 are:All sales are on account. Collections are expected to be 60% in the month of sale, 30%in the first
Castle Corporation operates on a calendar-year basis. It begins the annual budgeting process in late August when the president establishes targets for the total dollar sales and net income before
The beau & Lewis Inc. manufactures ergonomic devices for computer users. Some of their more popular products include glare screens (for computer monitors), keyboard stands with wrist rests, and
The opportunities for business consulting in the areas of corporate planning, budgeting, and strategy are almost limitless as new, more powerful software continues to be developed. This exercise
The April 2000 issue of the Journal of Accountancy contains an article by Lawrence B. Macgregor Serval entitled "The Planning PerilInstructionsRead the article and answer the following questions.(a)
In the formula for residual income, the factors For computing residual income are:(a) contribution margin, controllable margin, and average total assets.(b) controllable margin, average total assets,
(a) What is budgetary control?(b) Tony Crespino is describing budgetary control.What steps should be included in Tony's description?
Don Cox questions the usefulness of a master sales budget in evaluating sales performance. Is there justification for Don's concern? Explain.
Distinguish among the three types of responsibility
Voss Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as followsFixed overhead costs per month
Using the information in E7-1, assume that in July 2002, Voss Company incurs the following manufacturing overhead costs.Instructions(a) Prepare a flexible budget performance report, assuming that the
Samano Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $$170,000$ to $$200,000$. Variable costs and their percentage relationship to sales
Sanchez Company's manufacturing overhead budget for the first quarter of 2002 contained the following data.Actual variable costs were: indirect materials $$14,200$, indirect labor $$9,600$,
As sales manager, Todd Keyser was given the following static budget report for selling expenses in the Clothing Department of Pace Company for the month of October.As a result oi this budget report,
Lockwood Company has two production departments, Fabricating and Assembling. At a department managers' meeting, the controller uses flexible budget graphs to explain total budgeted costs. Separate
Loeb's Company's organization chart includes the president; the vice president of production; three assembly plants —Dallas, Atlanta, and Tucson; and two departments within each plant —Machining
Haven Manufacturing Inc. has three divisions which are operated as profit centers. Operating data for the divisions listed alphabetically are as follows.Instructions (a) Compute the missing amounts.
The Hack craft Division of Nunez Company reported the following data for the current year.Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the
Presented below is selected information for three regional divisions of Sako Company.Instructions (a) Compute the return on investment for each division.(b) Compute the residual income for each
Tick Company estimates that 360,000 direct labor hours will be worked during the coming year, 2002, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data
Whalen Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2002. The following data were used in
Nigh Company uses budgets in controlling costs. The August 2002 budget report for the company's Assembling Department is as follows.The budget data in the report are based on the master budget for
Lococo Manufacturing Inc. operates the Patio Furniture Division as a profit cen- ter. Operating data for this division for the year ended December 31, 2002, are as follows.In addition, Lococo
Kurian Manufacturing Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home
Tilg Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The
Sawtell Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers' lots. Sawtell expanded into the precut housing market
Greish Company estimates that 240,000 direct labor hours will be worked during 2002 in the Assembly Department. On this basis, the following budgeted manufacturing overhead data are computed.It is
Jud's Manufacturing Company produces one product, Kebo. Because of wide fluctuations in demand for Kebo, the Assembly Department experiences significant variations in monthly production levels. The
Lorch Company uses budgets in controlling costs. The May 2002 budget report for the company's Packaging Department is as follows.The budget amounts in the report were on the master budget For the
Peters Manufacturing Inc. operates the Home Appliance Division as a profit center. Operating data for this division for the year ended December 31, 2002, are as follows:In addition, Peters
Ridder Manufacturing Company manufactures a variety of garden and lawn Prepare responsibility report equipment. The company operates through three divisions. Each division is an invest- for an
Lakem elder Dutch manufactures expensive watch eases sold as souvenirs.Three ol its sales departments are: Retail Sales, Wholesale Sales, and Outlet Sales. The Retail Sales Department is a profit
Computer Associates International, Inc., delivers the software that manages e-business. CA's world-class solutions address all aspects of e-business process management, information management, and
Genelle and Doug have recorded the story of their wedding planning. They are on a strict budget and need help in preparing what they call "a somewhat flexible budget." Address:
The February 2000 issue of the Journal of Accountancy contains an article by Russ Banham entitled "Better Budgets."InstructionsRead the article and answer the following questions.(a) Why have some
In order to meet competition and achieve its profit goals, NP Corporation has chosen the decentralized form of organization. Each manager of a decentralized investment center is measured on the basis
If the $$6.00$ per hour overhead rate in question 12 consists of $$4.00$ variable, and actual overhead costs were $$163,000$, what is the overhead controllable variance for June? Is the
Using the data in questions 12 and 13, what is the overhead volume variance for June? Is the variance favorable or unfavorable?
Ellen Landis does not understand why the overhead volume variance indicates that fixed overhead costs are under- or overapplied. Clarify this matter for Ellen.
Stan LaRue is attempting to outline the important points about overhead variances on a class examination. List four points that Stan should include in his outline.
Tumbo Company uses both standards and budgets. For the year, estimated production ot Product X is 500,000 units. Total estimated costs for materials and labor are $$1,200,000$ and $$1,600,000$.
Nurmi Company accumulates the following data concerning raw materials in making one gallon of finished product: (1) Price —net purchase price $$3.50$, freight-in$$0.20$, and receiving and
Nadia Company's standard materials cost per unit of output is $$8$ (2 pounds X $$4.00).$ During July, the company purchases and uses 3,300 pounds of materials costing $$13,365$ in making 1,500
Kimiko Company's standard labor cost per unit of output is $ 1 8 (2 hours X $$9.00$ per hour). During August, the company incurs 1,850 hours of direct labor at an hourly cost of $$9.60$ per hour
In October, Hilo Company reports 21,000 actual direct labor hours, and it in- curs $$98,000$ of manufacturing overhead costs. Standard hours allowed for the work done is 20,000 hours. The
Some overhead data for Hilo Company are given in BE8-6. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $$4.00$ variable per direct labor hour and $$25,000$
Journalize the following transactions for Nashua Manufacturing. (a) Purchased 6,000 units of raw materials on account for $$11,700$. The standard cost was $$12,000$. (b) Issued 5,600 units of raw
Journalize the following transactions for Harlem Manufacturing. (a) Incurred direct labor costs of $$24,000$ for 3,000 hours. The standard labor cost was $$24,300$. (b) Assigned 3.000 direct
Robin Ritz mamifactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch.3,000 ounces of grape concentrate
The standard cost of Product B manufactured by Lopez Company includes three units of direct materials at $5.00 per unit. During June, 30,000 units of direct materials are purchased at a cost of $4.80
Napier Company's standard labor cost of producing one unit of Product DD is 3.9 hours at the rate of $$12.00$ per hour. During August, 40,800 hours of labor are incurred at a cost of $$12.10$ per
Kayjay Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product.Direct materials (8 pounds at $$2.50$ per pound) $$20.00$ Direct labor (3
The follovving direct materials and direct labor data pertain to the operations of Juan Manufacturing Company for the month of AugustInstructions(a) Compute the total, price, and quantity variances
The following information was taken from the annual manufacturing overhead cost budget of Soo Tech Company.During the year, 4,000 units were produced, 16,100 hours were worked, and the actual
Manufacturing overhead data for the production of Product H by Fierello Company are as follows.Instructions(a) Compute the total, controllable, and volume overhead variances.(b) Journalize the
During March 2002, Tenza Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data.Analysis reveals that Job A257 was a repeat job. Job A258 was a
Alvarez Company uses a standard cost accounting system. During January, the company reported the following manufacturing variances account balances.In addition, 6,000 units ol product were sold at
DeSoto Company installed a standard cost system on January 1. Selected trans- actions for the month of January are as follows. 1. Purchased 18,000 units of raw materials on account at a cost of
Amanda Company uses a standard cost accounting system. Some of the ledger accounts have been destroyed in a lire. The controller asks your help in reconstructing some missing entries and balances.
A Moore Corporation manufactures a single product. The standard cost per unit Compute variances. of product is shown below.The predetermined manufacturing overhead rate is $$10$ per direct labor
Ellison Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2002Overhead is applied on the basis of standard machine hours. Three
Novall Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2003, 11,300 suits were produced. The following standard and
Calpine Manufacturing Company uses a standard cost accounting system. In 2002, 32,000 units were produced. Each unit took several pounds of direct materials and 1 standard hours of direct labor at a
Walton Corporation uses standard costs with its job order cost accounting system. In January an order (Job No. 12) for 2.000 units of Product B was received. The standard cost of one unit of Product
Flesch Corporation manufactures a single product. The standard cost per unit of product is as follows.The master manufacturing overhead budget for the year based on normal productive ca- pacity of 1
Onasis Manufacturing Company uses a standard cost accounting system. In July 2002, it accumulates the following data relative to jobs started and finished.Manufacturing overhead was applied on the
True-Value Clothiers manufactures women's business suits. The company uses a standard cost accounting system. In March 2002, 12,000 suits were made. The following standard and actual cost data
Oaks Manufacturing Company uses a standard cost accounting system. In 2002, 36,000 units were produced. Each unit took several pounds of direct materials and l'/4 standard hours of direct labor at a
Pomona Manufacturing Company uses standard costs with its job order cost ac- counting system. In January, an order (Job 84) was received for 4,000 units of Product D. The standard cost ol 1 unit of
Gates Professionals, a management consulting firm, specializes in strategic planning for financial institutions. Bob Menard and Alice Chavez, partners in the firm, are assembling a new strategic
Mo Vaugh and Associates is a medium-sized company located near a large metropolitan area in the Midwest. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensive
Glass master Co. was incorporated in 1946 as Koolvent Metal Awning Company. Its current name was adopted in 1982 to reflect the more general nature of its products. The company is organized as two
Computer manufacturer Hewlett-Packard's Web site provides information about Hewlett-Packard's 25,000 electronic products and services, its worldwide opera- tions, and its financial picture. Address:

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