EBK HORNGREN'S COST ACCOUNTING
EBK HORNGREN'S COST ACCOUNTING
16th Edition
ISBN: 9780134475950
Author: Datar
Publisher: PEARSON CO
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Chapter 19, Problem 19.16MCQ

Rector Corporation is examining its quality control program. Which of the following statements is/are correct.

  1. I. Rework costs should be regarded as a cost of quality when the rework is caused by internal failure.
  2. II. Prevention costs are costs that are incurred to prevent the sale and production of defective units.
  3. III. Internal failure costs are costs of failure of machinery on the production line.
  4. 1. I, II, and III are correct.
  5. 2. II only is correct.
  6. 3. I and III only are correct.
  7. 4. I only is correct.
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Please answer the following requirements a and b on these general accounting question
General Accounting
Harper, Incorporated, acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2023, for $210,000 in cash. The book value of Kinman's net assets on that date was $400,000, although one of the company's buildings, with a $60,000 carrying amount, was actually worth $100,000. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $85,000. Kinman sold Inventory with an original cost of $60,000 to Harper during 2023 at a price of $90,000. Harper still held $15,000 (transfer price) of this amount in Inventory as of December 31, 2023. These goods are to be sold to outside parties during 2024. Kinman reported a $40,000 net loss and a $20,000 other comprehensive loss for 2023. The company still manages to declare and pay a $10,000 cash dividend during the year. During 2024, Kinman reported a $40,000 net income and declared and paid a cash dividend of $12,000. It made additional inventory sales…

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EBK HORNGREN'S COST ACCOUNTING

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