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Chapter: 7 -Problem: 5 >> Identify the major distinction between the first two and the final three steps of the five major steps in accounting for process costs.
Answer Preview: The first two steps concentrate o…

, Chapter: 17 -Problem: 11 >> Based on your understanding of the TOC, explain why conventional standard costed work in process inventories might hide problems, obscure interdependencies and make it difficult to identify the real constraint in a system. Why might this conventional method lead companies to build excessive work in process inventories?
Answer Preview: The standard cost system will encourage overproduction due to t…

, Chapter: 14 -Problem: 4 >> Fill in the blanks:  Transcribed Image Text: Division ? ? ? % Income percentage of revenue Rate of return on invested capital 7% 3% Capital turnover 3 % 24% 20%
Answer Preview: The basic equation ROI Income perce…

, Chapter: 11 -Problem: 16 >> A favourable variance is always good news and an unfavourable variance is always bad news. Discuss.
Answer Preview: Whether a variance is good news or bad news depends on the item being analyse…

, Chapter: 14 -Problem: 4 >> What kinds of organizations find decentralization to be preferable to centralization?
Answer Preview: Decentralization is usually most successful in or…

, Chapter: 8 -Problem: 7 >> "There is a commonality of approach to various special decisions." Explain.
Answer Preview: The commonality of appro…

, Chapter: 14 -Problem: 2 >> Briefly explain the link(s) between strategy and managerial control systems.
Answer Preview: As the strategy provides a guide to the future direction of the organisation, it is impe…

, Chapter: 12 -Problem: 1 >> Manchester Machining Company (MMC) produces and sells three main product lines. The company employs a standard cost-accounting system for recordkeeping purposes. At the beginning of 2010, the president of MMC presented the budget to the parent company and accepted a commitment to earn a profit of £16,400 in 2010. The president has been confident that the year’s profit would exceed the budget targe
Answer Preview: 1 Because Manchester Machining Company MMC uses absorption costing the net income is influenced by both sales volume and production volume Sales volum…

, Chapter: 6 -Problem: 2 >> Consider the following data for Oxford Printing Company (in thousands):Inventories,                     December 31, 2011 Direct materials ...................................£ 22 Work-in-process .....................................27 Finished goods ......................................102Summarized transactions for 2012 area. Purchases of direct materials ........................................
Answer Preview: Entries are in British pounds 1 a Direct materials inventory 109 Accounts payable 109 b Workinproces…

, Chapter: 11 -Problem: 32 >> Consider the following information for Morgan’s Cheese and Butter Division. Additional information:Budgeted market size for cheese and butter .............................. 65 000 000 kg Actual market size for cheese and butter ..................................... 60 000 000 kg Budgeted selling price* .................................................................. $4.00 Budgeted cost of goods
Answer Preview: (a) Market size variance Change in market size budgeted market share planned average contribution ma…

, Chapter: 14 -Problem: 2 >> The Moncton division of Glencoe Corporation, operating at capacity, has been asked by the Antigonish division of Glencoe to supply it with Electrical Fitting No. LX29. Moncton sells this part to its regular customers for $10 each. Antigonish, which is operating at 50 percent capacity, is willing to pay $6.90 each for the fitting. Antigonish will put the fitting into a brake unit that it is manufac
Answer Preview: 1 Moncton should not supply Antigonish with fitting LX29 for the 690 per unit price Moncton is opera…

, Chapter: 14 -Problem: 11 >> In their 2014 annual report, airline Virgin Australia commented on the strategic direction of the company.26After completing the Game Change Program, the Group commenced Virgin Vision 2017, a strategy to maximise the Group’s potential by extracting value from the business. Over the next three years, the Virgin Australia Group focused on:• capitalising on growth business opportunities• driving yiel
Answer Preview: (a) Belief Systems To achieve the areas of focus outlined above, senior management will need to fost…

, Chapter: 13 -Problem: 4 >> Tom’s Maytag Laundry had the following results in 2011 and 2013. The laundry used the same facilities in 2013 as in 2011. During the past three years, however, the company put more effort into training its employees. The manager of Tom’s was curious about whether the training had increased labour productivity. 1. Compute a measure of labour productivity for 2013 based entirely on physical measures
Answer Preview: 1 The best productivity measure based on the physical measures given is kg of laundry processed dire…

, Chapter: 8 -Problem: 15 >> Why are customers one of the factors influencing price decisions?
Answer Preview: Customers are one of the factors influenci…

, Chapter: 14 -Problem: 13 >> Marissa Nafsik founded Mana Consulting (MANA) in 2010. The company has grown from a oneperson operation to a rather diverse consulting company specialising in management consulting, technology consulting, particularly with respect to internet technologies, and, more recently, a forensic accounting service. MANA now employs 45 professional staff and 10 administrative staff. In the early days, Maris
Answer Preview: (a) Belief Systems Essentially developed in the early days when the company was small with a focus o…

, Chapter: 14 -Problem: 4 >> Consider the following data regarding budgeted operations for 2012 of the Winnipeg division of Machine Products: a.1. What average unit sales price does the Winnipeg division need to obtain its desired rate of return on average available assets?2. What would be the expected capital turnover? 3. What would be the return on sales? 3b. 1. If the selling price is as computed above, what rate of return
Answer Preview: a a 25 of 960000 240000 target operating income Let X Unit sales price Dollar sales Variable expenses Fixed expenses Operating income 150000X 150000 1 …

, Chapter: 11 -Problem: 2 >> Identify four revenue drivers.
Answer Preview: Revenue drivers relate to attributes of either the …

, Chapter: 11 -Problem: 8 >> The inventory of the Manchester Appliance Company was £200,000 on May 31. The manager was upset because the inventory was too high. She has adopted the following policies regarding merchandise purchases and inventory. At the end of any month, the inventory should be £15,000 plus 90 percent of the cost of goods to be sold during the following month. The cost of merchandise sold averages 60 percent
Answer Preview: All amounts are in British pounds 1 200000 15000 0906 x 300000 200000 15000 091…

, Chapter: 14 -Problem: 18 >> Give four possible definitions of invested capital that can be used in measuring ROI or residual income.
Answer Preview: Four possible definitions of i…

, Chapter: 8 -Problem: 6 >> The Wittred division of Melbourne Sports Company manufactures boomerangs, which are sold to wholesalers and retailers. The division manager has set a target of 250,000 boomerangs for next month’s production and sales and developed an accurate budget for that level of sales. The manager has also prepared an analysis of the effects on operating income of deviations from the target:  The costs have t
Answer Preview: 1 Total variable costs are 080 060 140 per boomerang Total fixed costs are 125000 25…

, Chapter: 15 -Problem: 29 >> MacArthur’s is a fast food company planning to invest in a restaurant expansion that entails the refurbishment and opening of four new stores across the country. The cost of this investment is $4 800 000. It is to be depreciated (straight-line basis) over a period of 10 years with no residual value. The discount rate is 8 per cent. The company tax rate is 30 per cent. The other relevant cash flow
Answer Preview: (a) Note the following is calculated in Excel. Year Net after-tax cash inflow Discounted cash flows 1 $843 580* $781 093** 2 $1 263 580 $1 083 316 3 $…

, Chapter: 13 -Problem: 7 >> Interiors Inc., a privately held enterprise, has a subcontract to produce overhead storage bins for a Bombardier airplane. Although GL was a low bidder, Bombardier was reluctant to award the business to GL, a newcomer to this kind of activity. Consequently, GL assured Bombardier of its financial strength by submitting its audited financial statements. Moreover, GL agreed to a penalty clause of $5,
Answer Preview: Admittedly GL Interiors may have a legitimate claim against the supplier but for the sake of discuss…

, Chapter: 13 -Problem: 13 >> Give an example of joint products in a service industry and describe the main products and by-products.
Answer Preview: Here are a few examples; students may think of others that a…

, Chapter: 13 -Problem: 7 >> How do profit centres and investment centres differ?
Answer Preview: Investment centres go a step further than …

, Chapter: 8 -Problem: 8 >> "In relevant-cost analysis, beware of unit costs." Explain
Answer Preview: The lesson here is important No matt…

, Chapter: 16 -Problem: 14 >> Duncans sells doughnuts. Data for a recent week are as follows. The manager estimates that, if Duncans increased the price of doughnuts from $1.75 to $1.93 each, weekly volume would be cut to 850 doughnuts due to competition from other nearby cake shops. RequiredEstimate the profit-maximising price per doughnut. Transcribe
Answer Preview: Per cent change in price = ($1 93 $1 75)/$1 75 = +10% Per cent change in demand = (…

, Chapter: 14 -Problem: 11 >> Accountants often express ROI as the product of two components—capital turnover and return on sales. You are considering investing in one of three companies, all in the same industry, and are given the following information. 1. Why would you desire the breakdown of return on investment into income percentage of revenue and turnover on capital? 2. Compute the income percentage of revenue, turnover
Answer Preview: 1 The two separate components highlight certain features of profitability that are not revealed by the single calculation a The importance of capital …

, Chapter: 17 -Problem: 4 >> Outline the five steps in the theory of constraints. In many examples of the TOC in practice, idle capacity is generated. Why? Can this be a good thing?
Answer Preview: Five steps of TOC identify constraint decide how to exploit …

, Chapter: 14 -Problem: 16 >> This is an expansion of E14-8. The primary difference between the EVA and residual income measures is the increased focus on cash flow by EVA. EVA companies make several adjustments to both operating income from the income statement and invested capital from the balance sheet. Common examples of these adjustments are inventory adjustments and reporting warranty costs on a cash basis. Most EVA comp
Answer Preview: Income from operations Net adjustments to income for EV…

, Chapter: 11 -Problem: 22 >> The Neon Manufacturing Company is a joint venture between Australian and Chinese firms with an assembly plant located in Beijing. The company’s managers expected to produce 20 000 units of product in March. The standard cost for the materials used for 20 000 units is 173 600 yuan, and the standard cost per unit is 2.80 yuan per kilogram. Actual production in March was 19 100 units. The company pur
Answer Preview: (a) Standard quantity of kilograms per unit is calculated by dividing the total st…

, Chapter: 14 -Problem: 2 >> Northland Company makes bicycles. Components are made in various divisions and transferred to the Western division for assembly into final products. The Western division can also buy components from external suppliers. The wheels are made in the Eastern division, which also sells wheels to external customers. All divisions are profit centres and managers are free to negotiate transfer prices. Pric
Answer Preview: 1 If wheels were available for 14 each in the market Western would not be willing to pay more than 1…

, Chapter: 12 -Problem: 3 >> Describe the ABC cost hierarchies.
Answer Preview: 1. Organisation-sustaining activities are activities related to the overall organi…

, Chapter: 13 -Problem: 5 >> Digital Processors Ltd. monitors its cycle time closely in order to prevent schedule delays and excessive costs. The standard cycle time for the manufacture of printed circuit boards for one of its computers is 26.4 hours. Consider the following cycle time data from the past six weeks of circuit board production.  Analyze circuit board cycle time performance in light of the 26.4-hour objective.
Answer Preview: The cycle time objective was met only in the first weekAfter th…

, Chapter: 10 -Problem: 1 >> Which type of entities would be suited to the use of a standard cost system?
Answer Preview: An entity that has a repetitive type activity would be sui…

, Chapter: 13 -Problem: 22 >> "Non-financial measures of performance can be controlled just like financial measures." Do you agree? Explain.
Answer Preview: Yes Control of nonfinancial performance requir…

, Chapter: 14 -Problem: 14 >> Unilever is a large Dutch–British consumer product manufacturer with sites around the world including Australia and New Zealand. Unilever’s product range comprises well-known consumer product brands including personal hygiene products — Dove, Pond’s, Vaseline, Sunsilk, Lynx, Rexona; laundry detergents — Radiant, Surf, Lux; and food and nutrition products — Bertolli (olive oil), Amora (salad dressi
Answer Preview: (a) Jean-Lin wanted to give managers autonomy in decision-making that is, use loose versus tight controls. Following from the worldwide strategic init…

, Chapter: 12 -Problem: 5 >> Tailored Shirt Company (TSC) uses a special fabric in the production of dress shirts. During August TSC purchased 10,000 square metres of the fabric at $6.90 per metre and used 7,900 square metres in the production of 3,800 shirts. The standard allows 2 metres at $7.10 per metre for each shirt. Calculate the material price variance and the material efficiency variance.
Answer Preview: This simple problem highlights the calculation of mat…

, Chapter: 11 -Problem: 20 >> Sunset Solar installs solar panels throughout Australia. The accountants estimated the market size to be 2 million solar panels with Sunset Solar hoping to achieve 5 per cent market share. The static budget shows that each panel is expected to provide a $2000 contribution margin. At the end of the financial period, the actual sales volume was 90 000 panels. Management were surprised by the low sal
Answer Preview: (a) The actual market size has grown by 2% from 2 million to 2 04 million: Original market estimate …

, Chapter: 13 -Problem: 8 >> Cindy’s BBQ is a restaurant in Thunder Bay. Cindy expanded to a second location in Sudbury three years ago. Recently, Cindy decided to retire from active management of the individual restaurants but continued to oversee the entire company. She hired a manager for each restaurant. In 2012, the Thunder Bay restaurant had sales of $850,000 and the Sudbury restaurant also had sales of $850,000. Variab
Answer Preview: 1 2 a The new restaurant in Sudbury is not yet as profitable as the Thunder Bay restaurant The adver…

, Chapter: 15 -Problem: 3 >> A community health clinic operates as a not-for-profit entity. Typical capital expenditure decisions involve acquiring equipment that will perform medical tests beyond those currently possible at the clinic (hence, adding revenues) and/or perform tests more efficiently than currently (hence, decreasing expenses). To evaluate such expenditures, the clinic uses a discount rate equal to the return on
Answer Preview: The return on the investment portfoli…

, Chapter: 14 -Problem: 20 >> Company X uses net book value as a measure of invested capital when computing ROI. A division manager has suggested that the company change to using gross book value instead. What difference in motivation of division managers might result from such a change? Do you suppose most of the assets in the division of the manager proposing the change are relatively new or old? Why?
Answer Preview: The use of gross book value rather than net book value of asse…

, Chapter: 17 -Problem: 12 >> Briefly comment on how a lean approach will impact on accounting practices?
Answer Preview: Lean thinking is focused on identifying and eliminating any waste and non-value adding …

, Chapter: 12 -Problem: 5 >> Mark Ferguson, the president of Ferguson Foundry Limited (FFL), sat in his office early on June 2, 2010, reviewing the financial statements of FFL for the fiscal year ended May 31, 2010. The results for the year were both a shock and a disappointment. Ferguson called Carl Holitzner, an independent consultant, to meet him in his office. When Holitzner arrived, Ferguson described his concerns. “I d
Answer Preview: Standard Contribution Margin Actual Contribution Margin The next step although it is not required from students in answering the question is the preparation of a flexible budget The flexible budget sh…

, Chapter: 15 -Problem: 6 >> At recent management meeting the following statement was made by the Chief Operating Officer: ‘this project is strategic for the firm and therefore non-discretionary’. Briefly comment on this statement.
Answer Preview: Non-discretionary expenditures are those which need to be …

, Chapter: 13 -Problem: 5 >> Current River is a medium-sized city that has experienced rapid growth in the last two decades. For several of those years the city had the highest growth rate in the country. Much of the growth has occurred in the suburbs that now have full commercial facilities that are at least equal to those in the core area. Meanwhile, the core area has stagnated with many vacant stores and an increase in the
Answer Preview: This case is modelled on an experiment conducted by the Waterloo Regional Police Service in d…

, Chapter: 14 -Problem: 7 >> Differentiate between belief systems and boundary systems.
Answer Preview: Belief systems and boundary systems are two of the less accountin…

, Chapter: 14 -Problem: 7 >> Durst Industries Inc. (Durst), a multinational company, has its head office in Western Canada. Shares are listed on Canadian stock exchanges and on several foreign exchanges. For the fiscal year ended June 30, 2009, consolidated net sales amounted to $1.2 billion and net income was $45 million. The company manufactures and markets heavy-construction and farm equipment at its 22 separate manufactur
Answer Preview: Recommendations Change responsibility centre structure so manufacturing plants are standard cost centres and only marketing groups remain as profit centres Transfer parts and products between plants a…

, Chapter: 17 -Problem: 3 >> What is a just-in-time manufacturing system? Why would organisations choose to adopt it?
Answer Preview: Just-in-time (JIT) is an inventory management and manufactu…

, Chapter: 14 -Problem: 3 >> You are given the following data. Sales...................$120,000,000 Invested capital..$ 60,000,000 Net income...........$ 6,000,000 Compute the following: 1. Turnover of capital 2. Return on sales 3. Return on investment (ROI)
Answer Preview: 1 Turnover of capital Sales Invested capital 120000 60000 200 or 20 times …

, Chapter: 16 -Problem: 18 >> Arnie’s Flowers is a small Mt Macedon florist shop. Arnie sells flowers for bouquets, and she also prepares and delivers flower arrangements. Required(a) Arnie is trying to decide how much to charge for a new type of rose that wholesales for $0.40 per bud. he ran a special on a similar rose last month and discovered that a 20 per cent discount on the usual price increased sales by about 35 per cen
Answer Preview: (a) The elasticity is ln(1 + 0 35)/ln(1 0 20) = 0 30010/0 22314 = …

, Chapter: 13 -Problem: 17 >> "Always try to distinguish between the performance of a segment and its manager." Why?
Answer Preview: Managers should be judged on how …

, Chapter: 13 -Problem: 10 >> What kind of constraints would arise in an accounting entity during tax season? How could any constraints be relaxed?
Answer Preview: Labour hours are the constraint for an accounting firm d…

, Chapter: 13 -Problem: 27 >> How does a manager decide whether the management control system should be changed?
Answer Preview: First determine the organizations critical success factors and w…

, Chapter: 15 -Problem: 30 >> Diggers is a coal mining company. Diggers has planned to invest in replacement equipment. Its existing equipment has come to the end of its useful life and will be scrapped with no resale value. The cost of the new replacement investment is $2 500 000. It is to be depreciated (straight-line basis) over a period of 10 years with no residual value. The discount rate is 8 per cent. The company tax ra
Answer Preview: (a) Year Net after-tax cash inflow Discounted cash flows 1 $425 000* $393 519** 2 $635 000 $544 410 3 $915 000 $726 357 4 $1 475 000 $1 084 169 5 $1 7…

, Chapter: 7 -Problem: 10 >> Sonor Instruments Co. uses three operations in sequence to make two models of its depth finders for sport fishing. Consider the following: 1. Operation 2 was highly automated. Product costs depended on a budgeted application rate for conversion costs based on machinehours. The budgeted costs for 2011 were $220,000 direct labour and $580,000 factory overhead. Budgeted machine-hours were 20,000. Eac
Answer Preview: 1 Production per hour 60 minutes 6 minutes per depth finder 10 Cost per depth finder 40 per machineh…

, Chapter: 14 -Problem: 14 >> Antonio Company uses the decentralized form of organizational structure and considers each of its divisions as an investment centre. Division L is currently selling 15,000 air filters annually, although it has sufficient productive capacity to produce 21,000 units per year. Variable manufacturing costs amount to $17 per unit, while the total fixed costs amount to $90,000. These 15,000 air filters
Answer Preview: 1 1500 units x 36 17 28500 increase in operating income if units are purchased i…

, Chapter: 16 -Problem: 1 >> How might customer profitability analysis be used to improve organisational performance?
Answer Preview: Customer profitability analysis will enable the organisation to …

, Chapter: 9 -Problem: 8 >> Thomas bought a new truck in Calgary with a list price, including options, of $21,000. The dealer had given her a “generous trade-in allowance ?of $5,000 on her old truck that had a wholesale price of $3,000. GST was $800. The annual cash operating costs of the old truck were $4,200. The new truck was expected to reduce these costs by one-third, to $2,800 per year. Compute the amount of the origin
Answer Preview: The original investment is the cash equivalent cost Excess tradein al…

, Chapter: 14 -Problem: 2 >> “The essence of decentralization is the use of profit centresa.” Do you agree? Explain.
Answer Preview: No Profit centres facilitat…

, Chapter: 15 -Problem: 36 >> Paradise Resorts, a Hong Kong company that owns and operates holiday resorts, has hired you to analyse its investment opportunities in Australia. The entity’s managers have always used the payback method and have asked you to prepare an analysis comparing three different resorts: one on the Gold Coast, another on the Sunshine Coast and a third holiday resort in the Northern Territory. Required(a)
Answer Preview: (a) Net present value (NPV): The sum of todays and future cash flows discounted to todays dollars. Internal rate of return (IRR): Discount rate necessary for the present value of the discounted cash f…

, Chapter: 7 -Problem: 8 >> A Birmingham, UK, company manufactures and sells digital voice recorders. Business is booming. Various materials are added at various stages in the assembly department. Costs are accounted for on a process-cost basis. The end of the process involves conducting a final inspection and adding a cardboard carton.The final inspection requires 5 percent of the total processing time. All materials except
Answer Preview: 1 Step 2 Step 1 Equivalent Units Physical Direct Conversion Flow of Production Flow Materials Carton…

, Chapter: 13 -Problem: 26 >> How should self-interest be considered when designing incentives?
Answer Preview: Incentives should be des…

, Chapter: 14 -Problem: 12 >> Maddy is the divisional manager of the internet technologies division of IT World Ltd. The following information is currently available with respect to her role.• The internet technologies division is classified as a profit centre.• Maddy reports to the CEO.• The internet technologies division is responsible for software development, webpage construction, and IT services and consulting.• Maddy has
Answer Preview: (a) Work unit design: the internet technologies division is classified as profit centre; and the div…

, Chapter: 10 -Problem: 13 >> Capital investments are always more profitable in inflationary times because the cash inflows from operations generally increase with inflation. Comment on this statement.
Answer Preview: Although it may appear that cash flows are …

, Chapter: 14 -Problem: 3 >> Why is decentralization more popular in profit-seeking organizations than in non-profit organizations?
Answer Preview: It is more difficult to hold managers of notforp…

, Chapter: 5 -Problem: 24 >> Continuing from exercise 5.23, the financial controller of Data Processors recently attended an accounting conference which discussed the benefits of adopting kaizen budgeting within an activitybased budget. After meeting with operational managers at Data Processors, it was decided to instil a continuous improvement approach to operations by reducing the cost driver rate by 5 per cent in 2020 and
Answer Preview: a. Data Processors Budget 2020 Kaizen Budget Activity Non-business customers Business customers Tota…

, Chapter: 9 -Problem: 3 >> “I will give you my decision in about a week,” said Georges Villedary, director-general of the Le Centre Sheraton, Montreal, as he put down the phone and looked pensively at the letter before him. The letter, dated March 15, 1994, was from Alitalia requesting a one-year contract for 40 rooms at $42 per night. In addition, the hotel would have to provide a crew allowance of $25,000 per day. Bills a
Answer Preview: Immediate Issue Does Sheraton take Alitalia business and bump full rack rate customers during busy season What Happened The management of the hotel decided to accept the proposal The major reason for …

, Chapter: 12 -Problem: 11 >> Distributors reported the following budget and actual data for the month of March. Calculate the total sales-volume variance, the market-share variance, and the market size variance.  Transcribed Image Text: 16,000 units Budgeted total contribution margin, Bourgeau $1,200,000 200,000 units 21,600 un
Answer Preview: Budgeted contribution margin per unit 1200000 16000 75 Total sa…

, Chapter: 8 -Problem: 20 >> Describe two long-run effects that may lead to managers rejecting opportunities to cut prices and obtain increases in short-run profits.
Answer Preview: Two longrun effects that inhi…

, Chapter: 13 -Problem: 26 >> Snowbird Snowboards converts regular snowboards to enhance safety capabilities for children. The statement of profit or loss for last year, in which 500 snowboards were produced and sold, appears here. Required(a) What volume of snowboards must be sold to earn pre-tax profits of $30 000?(b) Snowbird’s supplier of snowboards is unable to ship more than 500 boards for the upcoming season. Snowbird h
Answer Preview: (a) It is first necessary to categorise costs and create a cost funct…

, Chapter: 9 -Problem: 12 >> "Recovering sunk costs is a major objective when replacing equipment." Do you agree? Explain.
Answer Preview: No Sunk cos…

, Chapter: 14 -Problem: 5 >> Consider the following data:  1. Prepare a similar tabular presentation, filling in all blanks. 2. Which division is the best performer? Explain. 3. Suppose each division is assessed an imputed interest rate of 12 percent on invested capital. Compute the residual income for each division. Transcribed Image Text:
Answer Preview: 1 The filledin blanks are in italics underscored 2 If the criterion …

, Chapter: 8 -Problem: 1 >> Banyan Industries Limited (Banyan) manufactures various models of alternators, mainly for the North American automobile industry. The company, located in Canada, has grown steadily over the past 15 years and, two years ago, installed a computer automated manufacturing system that significantly increased manufacturing capacity. Sales over the past few years have not grown at the rate predicted; the
Answer Preview: 1 Banyan has idle capacity therefore any price that exceeds variable costs will contribute to fixed costs On the other hand fixed overhead costs are substantial and cannot be ignored In 2010 only 70 o…

, Chapter: 15 -Problem: 14 >> When we covered cost–volume–profit (CVP) analysis in chapter 4, we calculated the amount of pre-tax profit needed to achieve a given level of after-tax profit. We could calculate a pre-tax rate of return given an after-tax rate of return. Why would it be inappropriate to use a pre-tax discount rate in capital budgeting? (For example, if an entity requires an after-tax return of 10 per cent and has
Answer Preview: There are two reasons to incorporate tax effects more formal…

, Chapter: 9 -Problem: 1 >> Sunshine State Fruit Company sells premium-quality oranges and other citrus fruits by mail order. Protecting the fruit during shipping is important, so the company has designed and produces shipping boxes. The annual cost to make 80,000 boxes is Therefore, the cost per box averages $2.60. Suppose National Boxes Inc. submits a bid to supply Sunshine State with boxes for $2.10 per box. Sunshine Stat
Answer Preview: 1 The key to this question is what will happen to the fixed overhead costs if production of the boxe…

, Chapter: 14 -Problem: 15 >> What two major items affect ROI?
Answer Preview: ROI is affecte…

, Chapter: 11 -Problem: 3 >> Why is the efficiency variance more useful for control purposes than the price variance?
Answer Preview: The price variance is dependent on negotia…

, Chapter: 9 -Problem: 14 >> A petrochemical factory produces two products, L and M, as a result of a joint process. Both products are sold to manufacturers as ingredients for assorted chemical products. Product L sells at split-off for $0.25 per litre; M, for $0.30 per litre. Data for April follow. Joint processing cost..........$1,600,000 Litres produced and sold:L............................................4,000,000 M.....
Answer Preview: Product M should not have been processed further The …

, Chapter: 14 -Problem: 7 >> Consider the following data.  1. Prepare a similar tabular presentation, filling in all blanks. 2. Which division is the best performer? Explain. Transcribed Image Text: Division J K $280,000 $ Income 2$ Revenue Invested capital $3,000,000 $16,000,000 Income percentage of revenue Capital turnover Ra
Answer Preview: Dollar amounts are in thousands 1 2 Using ROI as the criterion J is the best perf…

, Chapter: 11 -Problem: 33 >> Fasteners Company has several divisions, and has just built a new plant with a capacity of 20 000 units of a new product. A standard costing system has been introduced to aid in evaluating managers’ performance and for establishing a selling price for the new product. Fasteners Company currently faces no competitors in this product market. Managers price the product at standard variable and fixed
Answer Preview: (a) The problem states that management wants to maintain the selling price for several years, so the assumption is made that long-run standard costs will be used for pricing, rather than the expected …

, Chapter: 7 -Problem: 9 >> Fill in the unknowns:* Degree of completion: direct materials, 80%; conversion costs, 40%. † Degree of completion: direct materials, 40%; conversion costs, 10%. Transcribed Image Text: (Step 2) Equivalent Units (Step 1) PhysicalUnits Materials Direct Conversion Flow of Production in Units Costs Work
Answer Preview: Step 2 Step 1 Equivalent Units Physical Direct Conversion Flow of Production in Units Units Materia…

, Chapter: 14 -Problem: 13 >> Assume that a machine shop acquires $600,000 of fixed assets with a useful life of four years and no residual value. The shop uses straight-line depreciation. The company judges the shop manager based on income in relation to these fixed assets. Annual net income, after deducting depreciation, is $60,000. Assume that sales, and all expenses except depreciation, are on a cash basis. Dividends equal
Answer Preview: 1 Those who favour gross asset value as a base state that it facilitates comparisons among plants or divisions If income moves downward as a plant ages the decrease in earning power will be evident un…

, Chapter: 15 -Problem: 38 >> As part of community town planning, an industrial estate was proposed for development on the outskirts of a growing township which was a two-hour commute from the Melbourne CBD. The estate required water and sewerage facilities to be provided. At this stage, the land featured native vegetation including a few big old gum trees, an old cave with Indigenous Australian artefacts, an old building near
Answer Preview: (a) While the numbers would indicate Project 2 (as it is $4 000 000 cheaper) the qualitative data su…

, Chapter: 9 -Problem: 15 >> "Some expected future costs may be irrelevant." Do you agree? Explain.
Answer Preview: Yes Some expected futu…

, Chapter: 14 -Problem: 19 >> “Managers who use a historical-cost accounting system look backward at what something cost yesterday, instead of forward to what it will cost tomorrow.” Do you agree? Why?
Answer Preview: No Using a historical cost accou…

, Chapter: 13 -Problem: 2 >> Business publications frequently provide subscriptions to students at a substantial discount. Why do you suppose such offers are made?
Answer Preview: The magazine companies would want to cover their variable …

, Chapter: 9 -Problem: 7 >> Debraceny Company’s unit costs of manufacturing and selling a given item at the planned activity level of 10,000 units per month are Ignore income taxes in all requirements. These four parts have no connection with each other. 1. Compute the planned annual operating income at a selling price of $13 per unit. 2. Compute the expected annual operating income if the volume can be increased by 20 perce
Answer Preview: 1 2 A common student error is to use 144000 units at old fix…

, Chapter: 13 -Problem: 3 >> In early 2011, United Communications, a U.S.–based international telephone communications company, purchased the controlling interest in Bucharest Telecom Ltd. (BTL) in Romania. A key productivity measure monitored by United is the number of customer telephone lines per employee. Consider the following data for United.  1. What are United’s 2010 productivity and 2011 productivity without BTL? 2. W
Answer Preview: The purchase of BTL and the pooling of its operating statistics may be misleading because …

, Chapter: 16 -Problem: 15 >> Cougar Toys is a toy wholesaler supplying to a range of different customers. With concerns about sources of profitability from these different customers, Cougar has embarked on a relatively simple customer analysis exercise. In the first instance, customers have been classified as large, medium or small based essentially on sales volume. The results of this analysis are provided in the following t
Answer Preview: (a) Activity Allocation formula Activity cost rate Order filling costs $420 000 /160 orders $2625 pe…

, Chapter: 10 -Problem: 7 >> In November 2006 Charles Bird, President of Bird Packaging Co. in Guelph, Ontario, was trying to decide whether the company should purchase a new scoringprinting machine. The attraction of the new machine was that it would double capacity and also reduce labour costs. However, the relatively large capital outlay and the uncertainty of projected sales concerned Bird, so he was anxious for a thoroug
Answer Preview: Annual cash flows Revenues 400000 Cash expenses Materials 550 220000 Labour 100 40000 Overhead 2…

, Chapter: 14 -Problem: 14 >> Hershey Company manufactures, distributes, and sells many items with the Hershey brand name. It also has many other brands including Almond Joy, Milk Duds, and Twizzlers. Its financial results for two recent fiscal years included (in millions): 1. Suppose that Hershey’s cost of capital is 9.5 percent. Compute the company’s EVA for Years 1 and 2. Assume definitions of after-tax operating income a
Answer Preview: 1 Year 2 EVA 4836 3975 280 95 2654 329 Year 1 EVA 4429 3548 237 95 2…

, Chapter: 14 -Problem: 4 >> What role does management accounting and control information pay in monitoring the success of the new strategic direction taken by an entity?
Answer Preview: Management accounting and control information includes the use of …

, Chapter: 9 -Problem: 2 >> "I had a chance to rent my summer home for two weeks for $800. But I chose to leave it empty. I didn’t want strangers living in my summer house." What term in this chapter describes the $800? Why?
Answer Preview: The 800 represents an opportunity cost It is …

, Chapter: 10 -Problem: 22 >> Western Power is considering the replacement of an old billing system with new software that should save $5,000 per year in net cash operating costs. The old system has zero disposal value, but it could be used for the next 12 years. The estimated useful life of the new software is 12 years and it will cost $25,000. 1. What is the payback time? 2. Compute the internal rate of return. 3. Management
Answer Preview: This problem deals essentially with sensitivity analysis which asks how the basic forecasted results …

, Chapter: 11 -Problem: 7 >> Discuss the ‘bookkeeping’ role of standard costing and its performance role.
Answer Preview: Bookkeeping role as all costs in WIP are recorded at stand…

, Chapter: 11 -Problem: 1 >> Is budgeting used primarily for scorekeeping, attention directing, or problem solving?
Answer Preview: Budgeting is primarily attentio…

, Chapter: 14 -Problem: 6 >> Canadian Medical Instruments produces a variety of medical products at its plant in Saskatoon. The company has sales divisions worldwide. One of these sales divisions is located in Uppsala, Sweden. Assume that the combined federal and provincial income tax rate applied to Saskatoon operations is 34 percent, the Swedish rate is 60 percent, and a 12 percent import duty is imposed on medical supplies
Answer Preview: 1 The optimal transfer price is 650 per unit a Tax savings with 650 transfer pri…

, Chapter: 11 -Problem: 19 >> Recently the Victorian Government introduced a solar rebate of $2500 for eligible home owners. How might such an initiative impact on the budget variances for a business that installs solar panels given the rebate was announced halfway through the financial year?
Answer Preview: The introduction of the solar rebate would likely have a signifi…

, Chapter: 10 -Problem: 2 >> Can net present value ever be negative? Why? Net Present Value What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...
Answer Preview: Yes Net present value wil…

, Chapter: 14 -Problem: 17 >> Division A’s ROI is 20 percent, and B’s is 10 percent. Each manager is paid a bonus based on his or her division’s ROI. Discuss whether each division manager would accept or reject a proposed project with a rate of return of 15 percent. Would either of them make a different decision if managers were evaluated using residual income with an imputed interest rate of 11 percent? Explain.
Answer Preview: Division As manager would reject the project because it would decrease the divisions …

, Chapter: 11 -Problem: 1 >> Discuss the three variances that help explain the sales volume variance.
Answer Preview: The sales quantity (volume )variance reflects the difference betwee…

, Chapter: 11 -Problem: 1 >> You are the new manager of the Rapidbuy Electronics store in West Edmonton Mall. Top management of Rapidbuy Electronics is convinced that management training should include the active participation of store managers in the budgeting process. You have been asked to prepare a complete master budget for your store for June, July, and August. All accounting is done centrally, so you have no expert hel
Answer Preview: 1 Schedule b Cash Collections Schedule c Purchases Budget May June July August Desired purchases 62 …

, Chapter: 14 -Problem: 10 >> The St. Cloud division of Martinelli Company just purchased an asset for $150,000. The asset has a three-year life. Martinelli’s top management evaluates Freida Schmidt, manager of the St. Cloud division, based on her division’s ROI. She can choose to measure her assets using either gross asset value or net asset value. Her operating income before depreciation each year is $80,000. 1. What is the
Answer Preview: 1 2 3 Schmidt might prefer the net book value because it a…

, Chapter: 16 -Problem: 20 >> Refer to Paisley Insurance in comprehensive example 1 in chapter 12. In this example, an ABC and non-ABC version of the costs of servicing each type of account customer — residential and commercial — was determined. RequiredState some important qualitative and/or strategic factors that would warrant consideration alongside the quantified cost data.
Answer Preview: Paisley Insurance has two main customer categories Residential and Commercial Under the tradi…

, Chapter: 10 -Problem: 1 >> Chinn Wong wishes to purchase a $600,000 house. She has accumulated a $120,000 down payment, but she wishes to borrow $480,000 on a 30-year mortgage. For simplicity, assume annual mortgage payments occur at the end of each year and there are no loan fees. 1. What are Wong’s annual payments if her interest rate is (a) 8 percent, (b) 10 percent, and (c) 12 percent, compounded annually? 2. Repeat num
Answer Preview: 1 The present value is 480000 and the annual payments are an annuity requirin…

, Chapter: 14 -Problem: 3 >> The Whole Company is an integrated multidivisional manufacturing firm. Two of its divisions, Rod and Champ, are profit centres and their division managers have full responsibility for production and sales (both internal and external). Both the Rod and Champ division managers are evaluated by top management on the basis of total profit. Rod division is the exclusive producer of a special equipment
Answer Preview: 1 Maximum price per machine 650 Variable costs other than Q32 Direct materials 100 Direct labour 50 Variable overhead 35 185 Contribution available fo…

, Chapter: 15 -Problem: 34 >> Energy plays an important role in improving people’s lifestyles. In Australia, our energy consumption is growing and is forecasted to increase by 50 per cent over the next 15 years. The available power resources in Australia (currently 80 per cent coal-fuelled) will not cope with the increasing demands. Further investment opportunities are required for long-term power supply, and options are curre
Answer Preview: (a) Detailed risk assessment that would include the following: Stakeholde…

, Chapter: 10 -Problem: 7 >> What is the basic flaw in the payback model?
Answer Preview: The basic flaw in the payback metho…

, Chapter: 13 -Problem: 1 >> Wells and Severson are manufacturing companies. Comparative data for 2006 and 2012 are Assume that inflation has totalled 15 percent during these six years so that each 2006 dollar is equivalent to 1.15 2012 dollars, due to inflation. 1. Compute 2006 and 2012 productivity measures in terms of revenue per employee for Wells and Severson. 2. Compare the change in productivity between 2006 and 2012 f
Answer Preview: 1 Without adjusting for inflation it appears that both companies had large i…

, Chapter: 12 -Problem: 23 >> Prahran Daycare (PD) offers childcare services to the local community. For many years it simply offered services for preschoolers. In this environment, managing the costs and services seemed relatively straightforward. In recent years, government subsidies and building programs have enabled PD to offer expanded services. For example, two years ago PD added an after-school care program for older ch
Answer Preview: (a) Activity analysis will assist Noah Day to identify why and where the costs are being incurred in …

, Chapter: 10 -Problem: 6 >> "The higher the interest rate, the less I worry about errors in predicting terminal values." Do you agree? Explain.
Answer Preview: Yes the higher the interest rate …

, Chapter: 13 -Problem: 1 >> What is the purpose of a management control system?
Answer Preview: A management control system aids and …

, Chapter: 15 -Problem: 5 >> Due to a newly released safety regulation, Red Rock Chocolates will have to replace the fire safety equipment throughout its production facilities. How should Red Rock management assess this asset replacement?
Answer Preview: Capital budgeting tools like net-present-value analysis cou…

, Chapter: 12 -Problem: 8 >> Standard direct labour rate.....................................................$14.00 Actual direct labour rate...........................................................$12.20 Standard direct-labour-hours..................................................12,000 Direct labour quantity variance—unfavourable....................$9,800 Standard unit price of materials..................................
Answer Preview: 1 Quantity variance Actual hours Standard hours Standard rate 9800 A…

, Chapter: 13 -Problem: 3 >> An organisation is currently operating at capacity. Should it accept a request for a special order based on variable cost plus 40 per cent? Explain.
Answer Preview: If variable cost plus 40% is greater than or equal to the …

, Chapter: 10 -Problem: 14 >> “We can’t use sensitivity analysis because our cash-flow predictions are too inaccurate." Comment.
Answer Preview: All capital budgeting decisions involve risk and assumptions Co…

, Chapter: 14 -Problem: 21 >> Describe management by objectives (MBO).
Answer Preview: In organizations using management by objectiv…

, Chapter: 15 -Problem: 23 >> FreshTucker Limited allows divisional managers to make capital investment decisions up to $10 million. However, divisional managers are required to send to head office detailsof each decision taken, including their justifications. The manager of the hospitality and conference facilities division, Ceila Wang, has been trying to improve this process within her division. At present, department manage
Answer Preview: (a) Projects might not meet the NPV requirement for a number of reasons: The projects are simply not …

, Chapter: 9 -Problem: 1 >> Hotels operates many hotels throughout the world. Suppose one of its Calgary hotels is facing difficult times because of the opening of several new competing hotels. To accommodate its flight personnel, WestJet has offered International a contract for the coming year that provides a rate of $70 per night per room for a minimum of 50 rooms for 365 nights. This contract would assure International of
Answer Preview: 1 Opportunity cost is a slippery term so we are reluctant to be overly rigid about its definition du…

, Chapter: 14 -Problem: 5 >> The Lighting division of St. John’s Office Furniture needs 1,200 units of a leaded-glass lamp shade from the Fabricating division. The company has a policy of negotiated transfer prices. The Fabricating division has enough excess capacity to produce 2,000 units of the lamp shade. Its variable cost of production is $23. The market price of the lamp shade to external customers is $39. What is the na
Answer Preview: The minimum transfer price is 23 Any price below 23 would caus…

, Chapter: 15 -Problem: 39 >> Xi Phan, CEO of the Furniture Supply Group, is considering an investment to upgrade his current computer-aided design equipment. The new equipment would cost $110 000, have a five-year useful life and a zero terminal cash flow value. The new equipment would generate annual cash operating savings of $36 000. The entity’s required rate of return is 18 per cent each year. Required(a) Calculate the NP
Answer Preview: (a) Data for this problem is summarised as follows: Investment $110 000 Annual annuity $36 000 Period 5 years Discount rate 18% Terminal value $0 Annu…

, Chapter: 10 -Problem: 1 >> Suppose the Norlo Canadian Pacific Railway is considering replacement of a power jack tamper, used for maintenance of track, with a new automatic raising device that can be attached to a production tamper. The present power jack tamper cost $24,000 five years ago and had an estimated life of 12 years. A year from now, the machine will require a major overhaul estimated to cost $5,000. It can be di
Answer Preview: Some students will challenge this item as not being a real saving because the labourer will merely b…

, Chapter: 13 -Problem: 2 >> A major objective of Six Sigma quality-control programs is to better meet customers needs. One place where companies have applied Six Sigma is to order delivery times. They have directed efforts at reducing both the mean (average) time to delivery and the variance or standard deviation (dispersion) of the delivery times. Customers want to get their products sooner, as reflected in the mean. But th
Answer Preview: From a customer perspective simply lowering the mean delivery time witho…

, Chapter: 11 -Problem: 36 >> Data Processors Ltd performs credit card services for banks. The entity uses an activity based costing (ABC) system. Following is information for the past year: Required(a) Using standard values for costs and activity, calculate an ABC allocation rate for each activity.(b) Prepare an operating cost statement for Data Processors Ltd that compares the static budget, the flexible budget and actual co
Answer Preview: (a) Activity Estimated Cost Estimated Activity ABC Rate Processing transactions $2 000 000 5 000 000 $0 40 Issuing statements 1 000 000 250 000 $4 00 …

, Chapter: 10 -Problem: 9 >> Distinguish between average and marginal tax rates
Answer Preview: The average tax rate is the portion of pretax …

, Chapter: 14 -Problem: 1 >> In October 2009 CanWest Global Communications Corp. was declared insolvent and began selling media assets by announcing the sale of Global Television. CanWest also owned many major Canadian newspapers, including The National Post, Montreal Gazette, Vancouver Sun, and Calgary Herald. CanWest was founded by Izzy Asper, who obtained a licence for an independent TV station, CKND-TV, in Winnipeg in 197
Answer Preview: 1 Research should indicate that companies that attempted to implement media convergence did not succeed Time Inc and Warner Brothers initiated the strategy by merging in 1989 and another merger create…

, Chapter: 16 -Problem: 11 >> If fixed costs are included in the marked-up costs used in setting cost-based prices, a problem may occur when demand declines. Describe this problem.
Answer Preview: This problem is called the death spiral because as demand falls, average costs …

, Chapter: 9 -Problem: 3 >> On January 2, 2010, the S.H. Park Company installed a brand-new $90,000 special moulding machine for producing a new product. The product and the machine have an expected life of three years. The machine’s expected disposal value at the end of three years is zero. On January 3, 2010, Kimiyo Lee, a star salesperson for a machine tool manufacturer, tells Mr. Park, “I wish I had known earlier of your
Answer Preview: 1 Operating inflows for each year old machine 910000 810000 60000 40000 Operating inflows for each year new machine 910000 810000 22000 78000 60000 38000 Cash flow statements in thousands of dollars A…

, Chapter: 14 -Problem: 15 >> Tom Clay is the chief executive officer of Mayberry Company. Clay has a financial management background and is known throughout the organization as a “no-nonsense” executive. When Clay became chief executive officer, he emphasized cost reduction and savings and introduced a comprehensive cost-control and budget system. The company goals and budget plans were established by Clay and given to his su
Answer Preview: 1 Management by Objectives MBO is a formal system for developing and making measurable the goals for each position in the organization for a given tim…

, Chapter: 11 -Problem: 31 >> The following data represent the flexible budget for Mountain Mist Brewery, a boutique brewery that manufactures and sells boutique ales. Note that, overall, the increase in the final price of beer has contributed to the flattening of the Australian beer market. The budgeted market for beer sales in Australia was 1736 megalitres, but the actual market was 1730 megalitres. Required(a) Briefly expla
Answer Preview: (a) This has been calculated by deducing the profit plan contribution margin ($59 85M) from the flex…

, Chapter: 7 -Problem: 4 >> Ajax Meter Company manufactures a variety of measuring instruments. One product is an altimeter used by hikers and mountain climbers. Ajax adopted a JIT viewpoint with an automated, computer-controlled, robotic production system. The company schedules production only after an order is received, materials and parts arrive just as they are needed, the production cycle time for altimeters is less tha
Answer Preview: 1 Materials and parts inventory 287000 Accounts payable or cash 287000 Conversion costs 92000 Accrue…

, Chapter: 13 -Problem: 6 >> Name five kinds of responsibility centres.
Answer Preview: Five types of responsibility centres are Cost centre x responsibilit…

, Chapter: 9 -Problem: 4 >> A growing corporation in a large city has offered a 200-room hotel a one-year contract to rent 40 rooms at reduced rates of $50 per room instead of the regular rate of $86 per room. The corporation will sign the contract for 365-day occupancy because its visiting manufacturing and marketing personnel are virtually certain to use all the space each night. Each room occupied has a variable cost of $
Answer Preview: 1 2 Let X contribution margin per room 40365X 410552…

, Chapter: 14 -Problem: 13 >> Technology does business in three different business segments: (1) Entertainment, (2) Publishing/Information, and (3) Consumer/ Commercial Finance. Results for a recent year were (in millions):  1. Compute the following for each business segment. a. Return on sales b. Capital turnover c. ROI2. Comment on the differences in ROI among the business segments. Include reasons for the differences.
Answer Preview: 1 a Entertainment 223 1272 175 PublishingInformation 122 705 173 ConsumerCommercial Finance 244 1235 …

, Chapter: 9 -Problem: 21 >> Management of Consolidated Industries Inc. is considering closing its Oilfield Supply Manufacturing Division due to unfavourable and uncertain conditions in the oil markets. Each of the following three points addresses one financial impact of this decision. 1. Manufacturing equipment in Oilfield Supply was purchased three years ago for $12 million cash. This equipment is depreciated on a straight-
Answer Preview: The key to this problem is recognizing that historical acc…

, Chapter: 14 -Problem: 5 >> Why are transfer-pricing systems needed?
Answer Preview: Transfer pricing systems are needed to accurately determine the efficiency of various d…

, Chapter: 3 -Problem: 14 >> How can a company’s choice of technology affect its costs?
Answer Preview: High technology …

, Chapter: 9 -Problem: 18 >> "Machinery sales personnel sometimes erroneously brag about the low unit costs of using their machines." Identify one source of an error concerning the estimation of unit costs.
Answer Preview: Sales personnel sometimes neg…

, Chapter: 12 -Problem: 3 >> Sam Leaf, the president of Ginkgo Manufacturing Limited, was very pleased but puzzled by the 2012 operating results (Exhibit 12A-1). He knew that both manufacturing and marketing had problems during the year and he had not anticipated that the actual income from operations would exceed the budget. Sam placed a lot of importance on his managers’ staying within the budget to ensure that the target p
Answer Preview: i GINKGO MANUFACTURING LIMITED Flexible Budget for the Year Ended December 31 2010 Chlorine Bromine Total Sales Units 768000 1152000 1920000 Dollars 7680000 17280000 24960000 Variable costs Manufactur…

, Chapter: 13 -Problem: 25 >> Johnson and Sons Ltd produces organic orange juice from oranges it grows. Unfortunately, it has been a bad year for oranges because of severe frosts. Johnson has only 10 000 litres of juice. It usually sells 15 000 litres at $3 per litre. The variable costs of raising the oranges are $0.50 per litre. Johnson has loyal customers, but its managers are worried the entity will lose customers if it doe
Answer Preview: (a) Constrained resource problem. The manager needs to decide whether or not to buy more juice …

, Chapter: 2 -Problem: 5 >> Procter & Gamble Company produces household products under brand names such as Gillette, Bounty, Crest, Folgers, and Tide. The company’s 2008 income statement showed the following (in millions):Net sales ..................................................................................    $83,503Costs of products sold ...........................................................      40,695Selling,
Answer Preview: Amounts are in millions Net sales 08 x 83503 66802 Variable costs Cost of goods sold 08 x 40695 3255…

, Chapter: 9 -Problem: 5 >> From a particular joint process, Edgerton company produces three products, A, B, and C. Each product may be sold at the point of split-off or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. In 2011, all three products were processed beyond split-off. Joint production co
Answer Preview: 1

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