Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 11, Problem 5TIF
Accepting service business at a special price
If you are not familiar with Priceline.com Inc. (PCLN), check out its website. Assume that an individual “names a price” of $85 on Priceline.com for a room in Nashville, Tennessee, on August 22. Assume that August 22 is a Saturday with low expected room demand at a Marriott International, Inc. (MAR), hotel in Nashville, so there is excess room capacity. The fully allocated cost per room per day is assumed from hotel records as follows:
Should Marriott accept the customer’s $85 bid? Why or why not?
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Beginning inventory, purchases, and sales for an inventory item are as follows:
Date
Line Item Description
Units and Cost
Sep. 1
Beginning Inventory
23 units @ $15
5
Sale
13 units
17
Purchase
25 units @ $17
30
Sale
17 units
Assuming a perpetual inventory system and the last-in, first-out method:
Determine the cost of goods sold for the September 30 sale.$
Determine the inventory on September 30.
$
Line Item Description
Units and Cost
Beginning inventory
12 units at $48
First purchase
15 units at $53
Second purchase
55 units at $56
Third purchase
13 units at $61
The firm uses the periodic inventory system, and there are 25 units of the commodity on hand at the end of the year.
What is the ending inventory balance of Commodity Z using LIFO?
a. $1,465
b. $1,265
c. $5,244
d. $1,200
Company sells blankets for $40 each. The following information was taken from the inventory records during May. The company had no beginning inventory on May 1. Company uses a perpetual inventory system.
Date
Blankets
Units
Cost
May 3
Purchase
11
$20
10
Sale
4
17
Purchase
10
$17
20
Sale
6
23
Sale
3
30
Purchase
8
$24
Determine the May 31 inventory balance using the FIFO inventory costing method.
a. $328
b. $272
c. $320
d. $384
Chapter 11 Solutions
Managerial Accounting
Ch. 11 - Explain the meaning of (A) differential revenue,...Ch. 11 - A company could sell a building for 250,000 or...Ch. 11 - A chemical company has a commodity-grade and...Ch. 11 - A company accepts incremental business at a...Ch. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Although the cost-plus approach to product pricing...Ch. 11 - How does the target cost method differ from...Ch. 11 - Prob. 10DQ
Ch. 11 - Lease or sell Plymouth Company owns equipment with...Ch. 11 - Prob. 2BECh. 11 - Make or buy A company manufactures various-sized...Ch. 11 - Replace equipment A machine with a book value of...Ch. 11 - Prob. 5BECh. 11 - Prob. 6BECh. 11 - Prob. 7BECh. 11 - Prob. 8BECh. 11 - Differential analysis for a lease or sell decision...Ch. 11 - Prob. 2ECh. 11 - Differential analysis for a discontinued product A...Ch. 11 - Differential analysis for a discontinued product...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Make-or-buy decision Somerset Computer Company has...Ch. 11 - Prob. 8ECh. 11 - Machine replacement decision A company is...Ch. 11 - Differential analysis for machine replacement...Ch. 11 - Sell or process further Calgary Lumber Company...Ch. 11 - Sell or process further Dakota Coffee Company...Ch. 11 - Prob. 13ECh. 11 - Accepting business at a special price Box Elder...Ch. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Product cost method of product costing Smart...Ch. 11 - Target costing Toyota Motor Corporation (TM) uses...Ch. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21ECh. 11 - Total cost method of product pricing Based on the...Ch. 11 - Variable cost method of product pricing Based on...Ch. 11 - Differential analysis involving opportunity costs...Ch. 11 - Differential analysis for machine replacement...Ch. 11 - Differential analysis for sales promotion proposal...Ch. 11 - Prob. 4PACh. 11 - Product pricing and profit analysis with...Ch. 11 - Product pricing using the cost-plus approach...Ch. 11 - Prob. 1PBCh. 11 - Differential analysis for machine replacement...Ch. 11 - Prob. 3PBCh. 11 - Prob. 4PBCh. 11 - Prob. 5PBCh. 11 - Prob. 6PBCh. 11 - Analyze Pacific Airways Pacific Airways provides...Ch. 11 - Service yield pricing and differential equations...Ch. 11 - Prob. 3MADCh. 11 - Prob. 4MADCh. 11 - Aaron McKinney is a cost accountant for Majik...Ch. 11 - Prob. 3TIFCh. 11 - Decision on accepting additional business A...Ch. 11 - Accepting service business at a special price If...Ch. 11 - Identifying product cost distortion Peachtree...Ch. 11 - Prob. 1CMACh. 11 - Prob. 2CMACh. 11 - Aril Industries is a multiproduct company that...Ch. 11 - Oakes Inc. manufactured 40,000 gallons of Mononate...
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- On the basis of the following data, what is the estimated cost of the inventory on May 31 using the retail method? Date Line Item Description Cost Retail May 1 Inventory $23,800 $39,670 May 1-31 Purchases 42,600 67,540 May 1-31 Sales 91,090 a. $24,690 b. $19,580 c. $29,564 d. $9,984arrow_forward00000000 The following lots of Commodity Z were available for sale during the year. Line Item Description Units and Cost Beginning inventory 12 units at $48 First purchase 15 units at $53 Second purchase 55 units at $56 Third purchase 13 units at $61 The firm uses the periodic inventory system, and there are 25 units of the commodity on hand at the end of the year. What is the ending inventory balance of Commodity Z using LIFO? a. $1,465 b. $1,265 c. $5,244 d. $1,200arrow_forwardBeginning inventory 8 units at $51 First purchase 17 units at $55 Second purchase 26 units at $58 Third purchase 15 units at $63 The firm uses the periodic inventory system, and there are 23 units of the commodity on hand at the end of the year. What is the ending inventory balance of Commodity Z using FIFO? a. $1,173 b. $1,409 c. $3,773 d. $3,796arrow_forward
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Chapter 6 Merchandise Inventory; Author: Vicki Stewart;https://www.youtube.com/watch?v=DnrcQLD2yKU;License: Standard YouTube License, CC-BY
Accounting for Merchandising Operations Recording Purchases of Merchandise; Author: Socrat Ghadban;https://www.youtube.com/watch?v=iQp5UoYpG20;License: Standard Youtube License