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- Roscoe Construction Company (RCC) is a company specializing in building roads and highways. As a part of its business, it receives supplies of aggregate from two suppliers: Toorak Gravel (TG) and Kilda Corporation (KC). RCC purchasing has expressed a preference for KC based on price, but occasionally has to order from TG when KC cannot fill the order. RCC has recently had problems with the quality and the timeliness of deliveries. When a supplier delivers a load to RCC, it goes through an initial inspection to assure it meets specification. If the load fails the initial inspection, it goes through a secondary inspection to determine the exact issue. Almost always, the issue can be resolved and the load can be used. The initial inspection costs $1,000 per load. A secondary inspection, which is more thorough, costs $5,000 per load. If a delivery is delayed, RCC has to hire temporary workers or pay overtime to some employees. The average cost of a delayed load is $2,000. The following are…Riverbed Company manufactures equipment. Riverbed's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $ 200,000 to $ 1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Riverbed has the following arrangement with Winkerbean Inc. Winkerbean purchases equipment from Riverbed fora price of $ 1,100,000 and contracts with Riverbed to install the equipment. Riverbed charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Riverbed determines installation service is estimated to have a standalone selling price of $ 46,000. The cost of the equipment is $ 580,000. Winkerbean is obligated to pay Riverbed the $ 1,100,000 upon the delivery and…n addition to an incremental analysis, qualitative factors should be included in an business situation analysis. 1. A diversified food company is considering the closing of its condiment division. What qualitative factors should be considered before discontinuing a division or product line? 2. An automobile manufacturer has decided to allow outside suppliers to bid on all parts necessary to make its vehicles. What qualitative factors should be considered by management in deciding whether or not to turn over the production of a part to an outside supplier?
- Manufacturing companies are not required to allocate joint-process costs in the valuation of inventories and cost of goods sold for O a. financial reporting. O b. tax reporting. c. managerial reporting. O d. All of the above.The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $179,000 of the fixed manufacturing expenses and $155,200 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required: What would be the financial advantage (disadvantage) of dropping B90D? Should the product be dropped? Net operating income (loss) would $ 745,000 $ 387,000 $ 253,400 $216,200 decline increase by if product B90D were dropped. Therefore, the product droppedWhich of the following is NOT an objective of determining product costs for manufacturing firms? A) To determine selling prices B) to reduce operating leverage C) to make decisions D) to do financial reporting
- Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and less expensive than the home consoles. The company only recently began producing the home model. Since the introduction of the new product, profits have been steadily declining. Management believes that the accounting system is not accurately allocating costs to products, particularly because sales of the new product have been increasing. Management has asked you to investigate the cost allocation problem. You find that manufacturing overhead is currently assigned to products based on their direct labor costs. For your investigation, you have data from last year. Manufacturing overhead was $1,237,000 based on production of 290,000 handheld consoles and 100,000 home consoles. Direct labor and direct materials costs were as follows. Handheld Home Total Direct labor $ 1,135,250 $ 411,000 $ 1,546,250 Materials 700,000 671,000 1,371,000…Linus Paper Company decided to close two small pulpmills in Conway, New Hampshire, and Corvallis, Oregon.These two closings do not represent a major shift instrategy for the company. Would these closings bereported in a separate section entitled “Discontinuedoperations after income from continuing operations”?Discuss.Competitors often inquire about the price of a competitive product. A firm called iSuppli will breakdown complex electronics for a fee and tell you how much it would cost to duplicate the device. The difference between the costs of the pairs and the labor costs to put the components together isn't entirely profit. Non-production expenses include things like research, design, marketing, patent fees, and selling. What are the types of costs associated with research, design, marketing, patent fees, and selling, and how are they accounted for?
- Competitors often inquire about a competitor's product's price. For a fee, iSuppli will deconstruct complex electronics and estimate the cost of duplicating the product. The difference between the pair's cost and the labor cost to put the pieces together isn't all profit. Research, design, marketing, patent fees, and selling charges are examples of non-production expenditures. What are the many types of costs, such as research, design, marketing, patent fees, and selling costs, and how are they addressed in accounting?Assume that you work for Greeble’s Sporting Goods, and your manager requests that you outline the pros and cons of discontinuing its Golf department. That department appears to be generating losses, and your manager believes that discontinuing it will increase overall store profits. Prepare a memorandum to your manager outlining what management should consider when trying to decide whether to discontinue its Golf department.Culver Company manufactures equipment. Culver’s products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Culver has the following arrangement with Winkerbean Inc. ● Winkerbean purchases equipment from Culver for a price of $1,040,000 and contracts with Culver to install the equipment. Culver charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $581,000. ● Winkerbean is obligated to pay Culver the $1,040,000 upon the delivery and installation of the equipment. Culver delivers the equipment on June 1, 2020, and completes the installation of the equipment…