explain why your answers are different when delmar beverage is producing 4 000 gallo 639433

Aug 30, 2021 | Uncategorized

Relevant costs, special sales order—idle versus full capacity The Delmar Beverage Co. produces a premium root beer that is sold throughout its chain of restaurants in the Midwest. The company is currently producing 4,000 gallons of root beer per day, which represents 80% of its manufacturing capacity. The root beer is available to restaurant customers by the mug, in bottles, or packaged in six packs to take home. The selling price of a gallon of root beer averages $10, and cost accounting records indicate the following manufacturing costs per gallon of root beer:

In addition to the manufacturing costs just described, Delmar Beverage incurs an average cost of $0.50 per gallon to distribute the root beer to its restaurants.

SaveMore, Inc., a chain of grocery stores, is interested in selling the premium root beer in gallon jugs throughout its stores in the St. Louis area during holiday periods and has offered to purchase root beer from Delmar Beverage at a price of $7.70 per gallon. SaveMore believes it could sell 600 gallons per day. If Delmar Beverage agrees to sell root beer to SaveMore, it estimates the average distribution cost will be $0.70 per gallon.

Required:

a. Identify all the relevant costs that Delmar Beverage should consider in evaluating the special sales order from SaveMore.

b. How would Delmar Beverage’s daily operating income be affected by the acceptance of this offer?

c. Assume that Delmar Beverage is currently producing 5,000 gallons of root beer daily. Repeat requirements a and b.

d. Explain why your answers are different when Delmar Beverage is producing 4,000 gallons per day versus 5,000 gallons per day.

identify whether each of these operating expenses is relevant to the decision of dis 639435

Aug 30, 2021 | Uncategorized

Continue or discontinue a segment? MMV Inc. opened a chain of businesses several years ago that provide quick oil changes and other minor services in conjunction with a convenience operation consisting of a soup, sandwich, and snack bar. The strategy was that as customers brought autos in for oil changes, they would likely use the convenience operation to purchase a sandwich, bowl of soup, beverage, or some other snack while they were waiting for the work to be completed on their autos. The oil change operation occupies 75% of the facility and includes three service bays. The soup, sandwich, and snack bar occupies the remaining 25%. A general manager is responsible for the entire operation, but each segment also has a manager responsible for its individual operation.

Recently the following annual operating information for the soup, sandwich, and snack bar at one of MMV’s locations caught his attention. Sales for the year were $250,000, and cost of sales (food, beverages, and snack items) are 50% of sales revenue. Operating expense information for the convenience operation follows:

While investigating these operating expenses, MMV Inc., determines the following:

• Utilities are allocated to each segment based on square footage; however, 50% of the amount allocated to the soup, sandwich, and snack bar results from operating the food equipment.
• The general manager’s salary is allocated between the segments based on estimated time spent with each operation. It is determined that 20% of the general manager’s time is spent with the convenience operation.
• Advertising is allocated to each segment equally but could be reduced by $3,000 if MMV decided to advertise only the auto services.
• Insurance is allocated to each segment based on square footage, but only 25% of the amount allocated to the soup, sandwich, and snack bar results directly from its operation.
• Property taxes and building depreciation are allocated to each segment based on square footage.

Required:

a. From the preceding information, calculate the operating income from the soup, sandwich, and snack bar operation that has caught MMV’s attention.

b. Identify whether each of these operating expenses is relevant to the decision of discontinuing the soup, sandwich, and snack bar operation.

c. If MMV Inc., discontinues the soup, sandwich, and snack bar operation, how much will operating income increase or decrease for this location?

d. Should MMV continue or discontinue the soup, sandwich, and snack bar operation at this location? Consider possible opportunities for the use of this space in your response.

prepare a relevant cost analysis for the decision to continue or discontinue product 639436

Aug 30, 2021 | Uncategorized

Continue or discontinue a segment? The segmented income statement for XYZ Company for the year ended December 31, 2010, follows:

The company is concerned about the performance of product A, and you have been asked to analyze the situation and recommend to the president whether to continue or discontinue the product. During your investigation, you discover that certain fixed expenses are traceable directly to each product line as indicated here:

The remaining fixed expenses are considered to be corporate wide expenses that have been allocated to each product line based on sales revenue.

Required:

a. Prepare a relevant cost analysis for the decision to continue or discontinue product A. Comment on your analysis.

b. Assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporate wide fixed expenses as described.

c. Starting with the segmented income statement, use the information you discovered during your investigation to present a more appropriately designed segmented income statement.

d. Explain to the president why the redesigned segmented income statement is more appropriate than the current one.

what is the internal rate of return of this investment relative to the cost of capit 639438

Aug 30, 2021 | Uncategorized

Calculate NPV, present value ratio, and payback TopCap Co. is evaluating the purchase of another sewing machine that will be used to manufacture sport caps.

The invoice price of the machine is $208,000. In addition, delivery and installation costs will total $10,000. The machine has the capacity to produce 18,000 dozen caps per year. Sales are forecast to increase gradually, and production volumes for each of the five years of the machine’s life are expected to be:

The caps have a contribution margin of $6.00 per dozen. Fixed costs associated with the additional production (other than depreciation expense) will be negligible.

Salvage value and the investment in working capital should be ignored. TopCap Co.’s

cost of capital for this capacity expansion has been set at 14%.

Required:

a. Calculate the net present value of the proposed investment in the new sewing machine.

b. Calculate the present value ratio of the investment.

c. What is the internal rate of return of this investment relative to the cost of capital?

d. Calculate the payback period of the investment.

calculate the present value ratio of each proposal and indicate which proposal is th 639439

Aug 30, 2021 | Uncategorized

Present value ratios index Information about four investment proposals is summarized here:

Required:

Calculate the present value ratio of each proposal and indicate which proposal is the most desirable investment.

calculate npv mdash rank projects using present value ratios the following capital e 639440

Aug 30, 2021 | Uncategorized

Calculate NPV—rank projects using present value ratios The following capital expenditure projects have been proposed for management’s consideration at Heard, Inc., for the upcoming budget year:

Required:

a. Calculate the net present value of projects B, C, and D, using 14% as the cost of capital for Heard, Inc.

b. Calculate the present value ratio for projects B, C, D, and E.

c. Which projects would you recommend for investment if the cost of capital is 14% and

1. $100,000 is available for investment?

2. $300,000 is available for investment?

3. $500,000 is available for investment?

d. What additional factors (beyond those considered in parts a–c might influence your project rankings?

calculate the accounting rate of return for the first year of the product assume str 639441

Aug 30, 2021 | Uncategorized

Accounting rate of return and NPV Crichton Publications uses the accounting rate of return method to evaluate proposed capital investments. The company’s desired rate of return (its cost of capital) is 18%. The project being evaluated involves a new product that will have a three year life. The investment required is $300,000, which consists of a $240,000 machine, and inventories and accounts receivable totaling $60,000. The machine will have a useful life of three years and a salvage value of $150,000. The salvage value will be received during the fourth year, and the inventories and accounts receivable related to the product also will be converted back to cash in the fourth year.

Accrual accounting net income from the product will be $87,000 per year, before depreciation expense, for each of the three years. Because of the time lag between selling the product and collecting the accounts receivable, cash flows from the product will be:

Required:

a. Calculate the accounting rate of return for the first year of the product. Assume straight line depreciation. Based on this analysis, would the investment be made? Explain your answer.

b. Calculate the net present value of the product using a cost of capital of 18% and assuming that cash flows occur at the end of the respective years. Based on this analysis, would the investment be made? Explain your answer.

c. Which of these two analytical approaches is the more appropriate to use? Explain your answer.

calculate the payback period for this investment based on this analysis would the in 639442

Aug 30, 2021 | Uncategorized

Accounting rate of return, payback, and NPV Busy Beaver Corp. is interested in reviewing its method of evaluating capital expenditure proposals using the accounting rate of return method. A recent proposal involved a $50,000 investment in a machine that had an estimated useful life of five years and an estimated salvage value of $10,000. The machine was expected to increase net income (and cash flows) before depreciation expense by $15,000 per year. The criteria for approving a new investment are that it have a rate of return of 16% and a payback period of three years or less.

Required:

a. Calculate the accounting rate of return on this investment for the first year. Assume straight line depreciation. Based on this analysis, would the investment be made? Explain your answer.

b. Calculate the payback period for this investment. Based on this analysis, would the investment be made? Explain your answer.

c. Calculate the net present value of this investment using a cost of capital of 16%. Based on this analysis, would the investment be made? Explain your answer.

d. What recommendation would you make to the management of Busy Beaver Corp. about evaluating capital expenditure proposals? Support your recommendation with the appropriate rationale.

what is your overall recommendation include an explanation of any additional factors 639443

Aug 30, 2021 | Uncategorized

Case study—NPV of opening a small business Jinny Buffett recently retired as a flight attendant and is interested in opening a fitness center and health spa exclusively for women in Grand Cayman, where she resides. After careful study, she is somewhat puzzled as to how to proceed. In her words, “I see my business going in one of two directions: Either I open the fitness center and health spa all at once, or I start with the health spa and hold off on the fitness center for a while. Either way, it should be a success because women on this island love to be pampered. My only concern about the fitness center is the initial cost, but if the projections look good enough, I know some investors in Phoenix who can help me get started. In any event, I plan to retire permanently in 10 years.”

The following information is available:

• Jinny has identified a suitable location for her business in a new shopping center in George Town, capital of the Cayman Islands. The developer has units of 1,000 square feet and 2,500 square feet available and is willing to sell either unit for CI$150 per square foot (CI$1.00 _ US$1.25). Alternatively, the space can be leased at a cost of CI$1.80 per square foot per month, on an annual basis.

• Commercial real estate values have more than doubled in Grand Cayman during the past 10 years, with no slowdown in sight. As a result, Jinny is more attracted to the purchase option because she expects the price per square foot to be CI$300 by the time she is ready to sell her unit in 10 years.

• Exercise machines and other equipment necessary to open the fitness center would cost US$50,000. In addition, US$35,000 would need to be invested in equipment related to the health spa. The useful life for all such equipment is 10 years, and the expected salvage value is not large enough to be concerned about.

• In addition, US$8,000 would need to be invested in an inventory of cosmetics and skin care products necessary to operate the health spa. This level of inventory would need to be maintained throughout the 10 year period and will be given away to loyal customers when Jinny retires permanently.

• The health spa can be operated in the 1,000 square foot unit. Variable operating costs would include CI$0.10 per square foot per month for cleaning and CI$0.40 per square foot per month for utilities. The 2,500 square foot unit is large enough to operate both the fitness center and health spa, and the CI$0.10 rate per square foot for cleaning would not change. However, if the 2,500 square foot unit were used, the health spa would be located in an open loft that would need to be air conditioned at all times. As a result, utility costs are expected to be CI$0.60 per square foot per month under this option.

• Jinny is a certified aesthetician and expects to do most of the makeovers, facials, and peels herself, but she needs a qualified assistant for the health spa. She estimates that hiring an appropriate person will cost US$25,000 per year. Likewise, for the fitness center, two full time aerobics instructors would be hired for US$20,000 each per year, and a physical trainer would be hired for US$30,000 per year.

• Additional fixed costs include US$3,000 per year for advertising and US$4,500 per year for maintenance, insurance, and other items. These costs will be incurred without respect to the size of operations.

• Annual membership fees to the fitness center will be CI$300, and a preliminary market survey shows a demand of approximately 500 initial members.

Although members tend to come and go, the net change in membership from year to year is not expected to be significant. No additional fees will be charged to fitness center members.

• Health spa fees are assessed on a user basis, although the steam room facilities are available at no charge to fitness center members. The net cash inflow from cosmetics and skin care products (after deducting the cost of inventory used and sold) is expected to be CI$8,000 per month.

• Jinny’s cost of capital is 12%, and there are no taxes in the Cayman Islands.

Required:

a. Calculate the net present value in US$ of an investment in the health spa only, assuming that the 1,000 square foot unit is purchased and then resold at the end of 10 years.

b. Calculate the net present value in US$ of an investment in the fitness center and health spa, assuming that the 2,500 square foot unit is purchased and then resold at the end of 10 years.

c. Jinny is quite concerned about possible forecasting errors and has asked you to prepare a more conservative estimate. Repeat part b, assuming that the fitness center attracts only 300 members per year (rather than 500); that the net cash inflow per month from cosmetics and skin care products is only CI$6,000 per month (rather than CI$8,000 per month); and that commercial real estate values in Grand Cayman at the end of 10 years are only CI$200 per square foot (rather than CI$300 per square foot).

d. Explain why it might be in Jinny’s best interest to lease (rather than purchase) the 1,000 square foot unit if she initially decides to open the health spa only.

Although no calculations are required, you should consider both quantitative and qualitative factors in your response.

e. What is your overall recommendation? Include an explanation of any additional factors that you would consider in making your recommendation. Keep in mind that Jinny has not given herself a salary in her projections. Assume that a reasonable salary would be CI$4,000 per month.

calculate the net present value of the proposed investment ignore income taxes and r 639444

Aug 30, 2021 | Uncategorized

Comprehensive problem—quantitative and qualitative analysis The following data have been collected by capital budgeting analysts at Sunrise Beach, Inc., concerning an investment in an expansion of the company’s product line.

Analysts estimate that an investment of $400,000 will be required to initiate the project at the beginning of 2010. The estimated cash returns from the new product line are summarized in the following table; assume that the returns will be received in a lump sum at the end of each year:

The new product line will also require an investment in inventory and receivables of $64,000; this investment will become available for other purposes at the end of the project. The salvage value of machinery and equipment at the end of the product line’s life is expected to be $60,000. The cost of capital used in Sunrise Beach, Inc.’s, capital budgeting analysis is 12%.

Required:

a. Calculate the net present value of the proposed investment. Ignore income taxes and round all answers to the nearest $1.

b. Calculate the present value ratio of the investment.

c. What will the internal rate of return on this investment be relative to the cost of capital? Explain your answer.

d. Calculate the payback period of the investment.

e. Based on the quantitative analysis, would you recommend that the product line expansion project be undertaken? Explain your answer.

f. Identify some qualitative factors that you would want to have considered with respect to this project before management proceeds with the investment.

how much were the acquisitions net of cash acquired 639445

Aug 30, 2021 | Uncategorized

Capital budget expenditure analysis, Internet assignment Annual reports provide significant information about an organization’s capital budget and capital budgeting process. Intel Corporation provides financial reports for several years. This exercise will require you to use Intel’s consolidated statements of cash flows, management’s discussion and analysis of financial condition and results of operations, and notes to the consolidated financial statements for the most recent year presented.

Required:

Using Intel’s most recent annual report, answer the following:

a. From Intel’s consolidated statements of cash flows:

1. Identify the amount of capital expenditures from the investing activities section. How much were the additions to property, plant, and equipment?

How much were the acquisitions, net of cash acquired?

2. How do these amounts compare to the previous two years? Comment on the trend relative to the general cash flow position for each year.

b. Read Intel’s management’s discussion and analysis of financial condition and results of operations.

1. In the Strategy section, what information is provided about the Intel capital program?

2. In the Critical Accounting Estimates section, describe how Intel assesses the impairment of long lived assets.

3. In the Liquidity and Capital Resources section, how were investing cash flows used for capital expenditures?

4. In the Business Outlook section, describe Intel’s capital spending plan for the next year.

c. From Intel’s notes to the consolidated financial statements, determine the following:

1. How does Intel value and depreciate property, plant, and equipment?

2. If applicable, describe Intel’s acquisitions for the year.

3. If applicable, describe Intel’s divestitures for the year.

d. From Intel’s selected financial data, do the following:

1. For the five years presented, calculate the ratio of additions to property, plant, and equipment to net revenue.

2. For the five years presented, calculate the ratio of net investment in property, plant, and equipment to total assets.

3. Comment on the trends.

suppose that steady state electronics wins a major contract for its revolutionary co 639542

Aug 30, 2021 | Uncategorized

The Constant Growth Model

Suppose that Steady State Electronics wins a major contract for its revolutionary computer chip. The very profitable contract will enable it to increase the growth rate of dividends from 5% to 6% without reducing the current dividend from the projected value of $4.00 per share. What will happen to the stock price? What will happen to future expected rates of return on the stock?

The stock price ought to increase in response to the good news about the contract, and indeed it does. The stock price rises from its original value of $57.14 to a post announcement price of

d₁ / k g =$4.00/0.12 0.06=$66.67

Investors who are holding the stock when the good news about the contract is announced will receive a substantial windfall.

On the other hand, at the new price the expected rate of return on the stock is 12%, just as it was before the new contract was announced.

E(r) = D1/P0 + g = $4.00/$66.67 +0.06 = 0.12, or 12%

This result makes sense, of course. Once the news about the contract is reflected in the stock price, the expected rate of return will be consistent with the risk of the stock. Since the risk of the stock has not changed, neither should the expected rate of return.

comment on calculating the material price variance based on pounds purchased rather 639382

Aug 30, 2021 | Uncategorized

Direct material variances—solving for price and usage variances Fiber works Company is a manufacturer of fiberglass toy boats. The company has recently implemented a standard cost system and has designed the system to isolate variances as soon as possible. During the month of August, the following results were reported for the production of 50,000 toy boats:

Required:

a. Calculate the actual cost per pound of fiberglass purchased during August.

b. Calculate the direct materials purchase price variance for August.

c. Calculate the direct materials usage variance for August.

d. Comment on calculating the material price variance based on pounds purchased rather than pounds issued into production.

write a policy statement related to the allocation of fixed expenses 639383

Aug 30, 2021 | Uncategorized

Segmented income statement The president of Truman, Inc., attended a seminar about the contribution margin model and returned to her company full of enthusiasm about it. She requested that last year’s traditional model income statement be revised, and she received the following report:

The president was told that the fixed expenses of $120,000 included $84,000 that had been split evenly between divisions because they were general corporate expenses.

After looking at the statement, the president exclaimed, “I knew it! Division B is a drag on the whole company. Close it down!”

Required:

a. Evaluate the president’s remark.

b. Calculate what the company’s net income would be if Division B were closed down.

c. Write a policy statement related to the allocation of fixed expenses.

calculate the effect on total company net income if the mv12 model were discontinued 639384

Aug 30, 2021 | Uncategorized

Segmented income statement Vogel Co. produces three models of heating and air conditioning thermostat components. The following table summarizes data about each model:

Required:

a. Criticize the preceding presentation. On what basis does the $30,000 of company fixed expenses appear to be allocated?

b. Calculate the effect on total company net income if the MV12 model were discontinued.

c. Calculate the contribution margin ratio for each model.

d. If an advertising campaign focusing on a single model were to result in an increase of 5,000 units in the quantity of units sold, which model should be advertised? Explain your answer.

e. If an advertising campaign focusing on a single model were to result in an increase of $15,000 in revenues, which model should be advertised? Explain your answer.

provide an example to show how residual income improves decision making at the divis 639386

Aug 30, 2021 | Uncategorized

Investment center analysis; ROI and residual income Milano Corporation has three operating divisions and requires a 12% return on all investments. Selected information is presented here:

Required:

a. Calculate the missing amounts for each division.

b. Comment on the relative performance of each division.

c. Provide an example to show how residual income improves decision making at the divisional level.

calculate each of the following variances and provide plausible explanations for the 639387

Aug 30, 2021 | Uncategorized

Calculate variable cost variances—explain results The standards for one case of Spring fever Tonic are:

During the week ended March 28, the following activity took place:

16,000 lbs. of raw materials were purchased for inventory at a cost of $4.95 per pound.

2,500 cases of finished product were produced.

15,600 lbs. of raw materials were used.

12,200 direct labor hours were worked at a total cost of $152,500.

$76,860 of actual variable overhead costs were incurred.

Required:

Calculate each of the following variances and provide plausible explanations for the results:

a. Price variance for raw materials purchased.

b. Raw materials usage variance.

c. Direct labor rate variance.

d. Direct labor efficiency variance.

e. Variable overhead spending variance.

f. Variable overhead efficiency variance.

calculate variable cost variances mdash explain results the standards for one case o 639388

Aug 30, 2021 | Uncategorized

Calculate variable cost variances—explain results The standards for one case of liquid weed killer are:

During the week ended August 6, the following activity took place:

2,390 machine hours were worked.

11,400 lbs. of raw material were purchased for inventory at a total cost of $70,680.

3,800 cases of finished product were produced.

11,290 lbs. of raw material were used.

6,720 labor hours were worked at an average rate of $12.25 per hour.

$8,126 actual variable overhead costs were incurred.

Required:

Calculate each of the following variances and provide plausible explanations for the results:

a. Price variance for raw materials purchased.

b. Raw materials usage variance.

c. Direct labor rate variance.

d. Direct labor efficiency variance.

e. Variable overhead spending variance.

f. Variable overhead efficiency variance.

assume that 23 workers were actually available throughout the month of july 639389

Aug 30, 2021 | Uncategorized

Direct labor variances—insurance company application The Foster Insurance Company developed standard times for processing claims. When a claim was received at the processing center, it was first reviewed and classified as simple or complex. The standard time for processing was:

Employees were expected to be productive 7.5 hours per day. Compensation costs were $135 per day per employee. During July, which had 20 working days, the following number of claims were processed:

Required:

a. Calculate the number of workers that should have been available to process July claims.

b. Assume that 23 workers were actually available throughout the month of July.

Calculate a labor efficiency variance expressed as both a number of workers and a dollar amount for the month.

calculate a teller efficiency variance for the 11 00 to 1 00 period expressed in ter 639390

Aug 30, 2021 | Uncategorized

Direct labor variances—banking application Pioneer State Bank developed a standard for teller staffing that provided for one teller to handle 12 customers per hour. During April, the bank averaged 57 customers per hour and had six tellers on duty at all times. (Relief tellers filled in during lunch and rest breaks.) The teller compensation cost is $15 per hour. The bank is open eight hours a day, and there were 22 working days during April.

Required:

a. Calculate the teller efficiency variance during April expressed in terms of number of tellers and cost per hour.

b. Now assume that in April, during the 11:00 a.m. to 1:00 p.m. period every day, the bank served an average of 84 customers per hour. During the other six hours of the day, an average of 48 customers per hour were served.

1. Calculate a teller efficiency variance for the 11:00 to 1:00 period expressed in terms of number of tellers per hour and total cost for the month.

2. Calculate a teller efficiency variance for the other six hours of the da expressed in terms of number of tellers per hour and total cost for the month.

3. As teller supervisor, explain the significance of the variances calculated in (1) and (2), and explain how you might respond to the uneven work flow during each day .

calculate the predetermined fixed overhead application rate that would be used in ma 639391

Aug 30, 2021 | Uncategorized

Fixed overhead variances—various issues Silverstone’s production budget for March called for making 200,000 units of a single product. The firm’s production standards allow one quarter of a machine hour per unit produced. The fixed overhead budget for March was $108,000. Silverstone uses an absorption costing system.

Actual activity and costs for March were:

Required:

a. Calculate the predetermined fixed overhead application rate that would be used in March.

b. Calculate the number of machine hours that would be allowed for actual March production.

c. Calculate the fixed overhead applied to work in process during March.

d. Calculate the over or underapplied fixed overhead for March.

e. Calculate the fixed overhead budget and volume variances for March.

calculate the direct labor efficiency variance for july expressed in terms of direct 639392

Aug 30, 2021 | Uncategorized

Variable and fixed overhead variances—various issues Presented here are the original overhead budget and the actual costs incurred during July for Rembrant, Inc. Rembrant’s managers relate overhead to direct labor hours for planning, control, and product costing purposes. The original budget is based on budgeted production of 30,000 units in 6,000 standard direct labor hours. Actual production of 32,400 units required 6,750 actual direct labor hours.

Required:

a. Calculate the flexed budget allowances for variable and fixed overhead for July.

b. Calculate the direct labor efficiency variance for July expressed in terms of direct labor hours.

c. Calculate the predetermined overhead application rate for both variable and fixed overhead for July.

d. Calculate the fixed and variable overhead applied to production during July if overhead is applied on the basis of standard hours allowed for actual production achieved.

e. Calculate the fixed overhead budget and volume variances for July.

f. Calculate the over or underapplied fixed overhead for July.

explain what action should be taken with respect to the supplies budget when the act 639393

Aug 30, 2021 | Uncategorized

Performance reporting The chair of the Science Department of State University has a budget for laboratory supplies. Supplies have a variable cost behavior pattern that is a function of the number of students enrolled in laboratory courses. For planning purposes, when the budget was prepared in March 2010, it was estimated that there would be 300 students enrolled in laboratory courses during the fall 2010 semester.

Actual enrollment for the fall semester was 318 students.

Required:

a. Explain what action should be taken with respect to the supplies budget when the actual enrollment is known.

b. Would your answer to part a be any different if the actual enrollment turned out to be 273 students? Explain your answer.

c. Suppose the budget item in question was the salary for the lab assistant. How would your answer to part a and part b change, if at all? Explain your answer.

explain why and how flexible budgeting should be applied by the management of missio 639394

Aug 30, 2021 | Uncategorized

Flexible budgeting One of the significant costs for a nonpublic college or university is student aid in the form of gifts and grants awarded to students because of academic potential or performance, and/or financial need. Gifts and grants are only a part of a financial aid package, usually accounting for no more than 20% of the total package. Federal and state grants, other scholarships, loans, and income from work constitute the rest of financial aid, but these funds are not provided by the institution.

Assume that for the 2010–2011 academic year, Mission College had a gift and grant budget of $1,200,000 and that all of these funds had been committed to students by May 15, 2010. The college had capacity to enroll up to 250 additional students.

Required:

Explain why and how flexible budgeting should be applied by the management of Mission College in administering its gift and grant awards budget.

given the usefulness ranking in part a explain how the frequency of reporting and th 639395

Aug 30, 2021 | Uncategorized

Frequency of performance reporting If a company uses a standard cost system, should all variances be calculated with the same frequency (e.g., monthly) and should they always be expressed in dollar amounts? Explain your answer and include in it the reason for calculating variances.

Rank the importance of eight variances Assume that you are the production manager of a small branch plant of a large manufacturing firm. The central accounting control department sends you monthly performance reports showing the flexed budget amount, actual cost and variances for raw materials, direct labor, variable overhead (which is expressed on a direct labor hour basis), and fixed overhead. The variable cost budget variances are separated into quantity and cost per unit of input variances, and the fixed overhead budget and volume variances are shown. All variances are expressed in dollars.

Required:

a. Rank the eight variances in descending order of their usefulness to you for planning and controlling purposes. Explain your ranking.

b. Given the usefulness ranking in part a, explain how the frequency of reporting and the units in which each variance is reported might make the performance reports more useful.

how could the performance reporting system be improved to encourage more appropriate 639396

Aug 30, 2021 | Uncategorized

Direct material variances—the price versus usage trade off Williamson, Inc., manufactures quality replacement parts for the auto industry. The company uses a standard costing system and isolates variances as soon as possible. The purchasing manager is responsible for controlling the direct material price variances for hundreds of raw material items that are used in the company’s various production processes.

Recent experience indicates that, in the aggregate, direct material price variances have been favorable. However, several problems have occurred. Direct material usage

variances have become consistently unfavorable for many items, and the company’s total budget variance for direct materials has been unfavorable during each of the past six months. Direct laborers have complained about the quality of certain raw material items, and major customers have canceled purchase orders. In the meantime, the company’s raw materials inventory has increased by nearly 240%.

Required:

a. Give a probable explanation of why these results have occurred.

b. How could the performance reporting system be improved to encourage more appropriate behavior on the part of the purchasing manager?

comment about the effectiveness of the company rsquo s standards for controlling mat 639397

Aug 30, 2021 | Uncategorized

Evaluate the effects of erroneous standards During the year ended May 31, 2009, Teller Register Co. reported favorable raw material usage and direct labor and variable overhead efficiency variances that totaled $114,312. Price and rate variances were negligible. Total standard cost of goods manufactured during the year was $952,600.

Required:

a. Comment about the effectiveness of the company’s standards for controlling material and labor usage.

b. If standard costs are used for valuing finished goods inventory, will the ending inventory valuation be higher or lower than if actual costs are used? Explain your answer.

c. Assume that the ending inventory of finished goods valued at standard cost is $79,380. Calculate the adjustment to finished goods inventory that would be appropriate because of the erroneous standards.

consider cam i rsquo s private forums how would participation in cam i be justified 639399

Aug 30, 2021 | Uncategorized

The planning and control environment: Internet assignment The Consortium for Advanced Manufacturing—International (CAM I) is an international consortium of companies, consultancies, and academics that have elected to work cooperatively in a precompetitive environment to solve problems common to the group. Its sole purpose is to support member companies in their quest for excellence in today’s highly competitive global marketplace. This case requires you to to complete the following requirements.

Assume that a start up manufacturing company has recently hired you, and your first task is to develop a cost planning and control environment for the firm.

Required:

a. Review CAM I’s executive overview. Summarize the history of the organization and describe how CAM I’s “participative model” produces value for its members.

b. Review CAM I’s columns and news. Choose an article from the list that would guide you by specifically addressing a planning or control system topic, and write a brief summary of the article. Explain how information in the article will support the development of your planning and control system.

c. Review CAM I’s member companies. Choose two companies from different industries and list several reasons for their membership in the organization.

d. Review CAM I’s programs. Choose a program that you expect to be beneficial and write a memo to your new supervisor describing your rationale to justify the cost of joining this program.

e. Review CAM I’s online bookstore. Identify two items from the cost management resources that would help you with your new responsibility. Explain your choices.

f. Consider CAM I’s private forums. How would participation in CAM I be justified for your organization from a benefit/cost perspective?

match the appropriate letter for the key term or concept to each definition provided 639402

Aug 30, 2021 | Uncategorized

Match the appropriate letter for the key term or concept to each definition provided (items 1–15). Note that not all key terms and concepts will be used.

1. The level of ROI that must be earned to permit the firm to meet its interest obligations and provide the owners their expected return; the discount rate used in the present value calculations of capital budgeting.

2. A cost that has been incurred and that cannot be unincurred, or reversed, by some future action.

3. A capital budgeting analytical technique that calculates the length of time for the cash flows from an investment to equal the investment.

4. The process of comparing the assumptions used in a capital budgeting analysis with the actual results of the investment.

5. The operating condition when some available production resources are not being utilized.

6. The process of analyzing proposed investments in plant and equipment and other long lived assets.

7. An economic concept relating to income forgone because an alternative to earn income was not pursued.

8. A capital budgeting analytical technique that solves for the time adjusted rate of return on an investment over its life.

9. The ratio of the present value of cash flows to the investment; used to rank proposed capital expenditures by profitability.

10. The acquisition of resources or services from outside the organization as opposed to producing those resources or services internally.

11. A capital budgeting analytical technique that calculates the rate of return on the investment based on the financial statement impacts of the investment.

12. A cost that has been assigned to a product or activity using some sort of systematic process.

13. A cost that will differ based on the selection of an alternative activity.

14. A capital budgeting analytical technique that relates the present value of the returns (cash inflows) from an investment to the present value of the cost (cash outflows) of the investment, given a cost of capital.

15. A cost classification used in analyzing costs of decision alternatives.

using the present value factors in your text the estimated annual cash inflow 639410

Aug 30, 2021 | Uncategorized

Using the present value factors in your text, the estimated annual cash inflow

from the following investment proposal would be (rounded)

a. $3,800.

b. $3,900.

c. $4,000.

d. $4,100.

e. $4,200.

the payback period of the investment in equipment is approximately 639411

Aug 30, 2021 | Uncategorized

Antonio, Inc., has invested in new production equipment at a cost of $24,000. The equipment has an estimated useful life of eight years. The estimated annual sales and operating expense related to the equipment are as follows:

The payback period of the investment in equipment is approximately

a. 3.0 years.

b. 4.0 years.

c. 4.8 years.

d. 8.0 years.

the accounting rate of return is approximately 639412

Aug 30, 2021 | Uncategorized

Antonio, Inc., has invested in new production equipment at a cost of $24,000. The equipment has an estimated useful life of eight years. The estimated annual sales and operating expense related to the equipment are as follows:

The accounting rate of return is approximately

a. 12.5%.

b. 20.8%.

c. 25.0%.

d. 33.3%.

what is your advice to management of primetime sportswear 639353

Aug 30, 2021 | Uncategorized

Cash budget—part 1 PrimeTime Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded management’s most optimistic projections. Sales are made on account and collected as follows: 60% in the month after the sale is made and 35% in the second month after sale. Merchandise purchases and operating expenses are paid as follows:

PrimeTime Sportswear’s income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows:

Cash on hand June 30 is estimated to be $75,000. Collections of June 30 accounts receivable were estimated to be $40,000 in July and $30,000 in August. Payments of June 30 accounts payable and accrued expenses in July were estimated to be $48,000.

Required:

a. Prepare a cash budget for July.

b. What is your advice to management of PrimeTime Sportswear?

cash budget mdash comprehensive following are the budgeted income statements for the 639356

Aug 30, 2021 | Uncategorized

Cash budget—comprehensive Following are the budgeted income statements for the second quarter of 2010 for Marine Tech, Inc.:

The company expects about 40% of sales to be cash transactions. Of sales on account, 65% are expected to be collected in the first month after the sale is made, and 35% are expected to be collected in the second month after sale. Depreciation, insurance, and property taxes represent $19,200 of the estimated monthly cost of goods sold and $12,800 of the estimated monthly operating expenses. The annual insurance premium is paid in January, and the annual property taxes are paid in August. Of the remainder of the cost of goods sold and operating expenses, 90% are expected to be paid in the month in which they are incurred, and the balance is expected to be paid in the following month.

Current assets as of April 1, 2010, consist of cash of $22,400 and accounts receivable of $239,680 ($168,000 from March credit sales and $71,680 from February credit sales). Current liabilities as of April 1 consist of $28,800 of accounts payable for product costs incurred in March; $7,360 of accrued liabilities for operating expenses incurred in March; and a $76,000, 12%, 120 day note payable that is due on April 17, 2010.

An estimated income tax payment of $72,000 will be made in May. The regular quarterly dividend of $25,600 is expected to be declared in May and paid in June.

Capital expenditures amounting to $27,520 will be made in April.

Required:

a. Complete the monthly cash budgets for the second quarter of 2010 using the following format. Note that the ending cash balance for June is provided as a check figure.

b. Assume that management of Marine Tech, Inc., desires to maintain a minimum cash balance of $20,000 at the beginning of each month and has arranged a $100,000 line of credit with a local bank at an interest rate of 10% to ensure the availability of funds. Borrowing transactions are to occur only at the end of months in which the budgeted cash balance would otherwise fall short of the $20,000 minimum balance. Repayments of principal and interest are to occur at the end of the earliest month in which sufficient funds are expected to be available for repayment. Explain how this minimum cash balance requirement would affect the monthly cash budgets prepared in part a.

prepare a sales budget in units and dollars by month and in total for the fourth qua 639358

Aug 30, 2021 | Uncategorized

Sales, production, purchases, and cash budgets Rolen, Inc., is in the process of preparing the fourth quarter budget for 2010, and the following data have been assembled:

• The company sells a single product at a price of $25 per unit. The estimated sales volume for the next six months is as follows:

All sales are on account. The company’s collection experience has been that 30% of a month’s sales are collected in the month of sale, 68% are collected in the month following the sale, and 2% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be $211,000 on September 30, 2010.

• Management’s policy is to maintain ending finished goods inventory each month at a level equal to 30% of the next month’s budgeted sales.
• The finished goods inventory on September 30, 2010, is expected to be 3,600 units.
• To make one unit of finished product, 5 pounds of materials are required. Management’s policy is to have enough materials on hand at the end of each month to equal 40% of the next month’s estimated usage. The raw materials inventory is expected to be 25,200 pounds on September 30, 2010.
• The cost per pound of raw material is $2, and 70% of all purchases are paid for in the month of purchase; the remainder is paid in the following month.

The accounts payable for raw material purchases is expected to be $37,980 on September 30, 2010.

Required:

a. Prepare a sales budget in units and dollars, by month and in total, for the fourth quarter (October, November, and December) of 2010.

b. Prepare a schedule of cash collections from sales, by month and in total, for the fourth quarter of 2010.

c. Prepare a production budget in units, by month and in total, for the fourth quarter of 2010.

d. Prepare a materials purchases budget in pounds, by month and in total, for the fourth quarter of 2010.

e. Prepare a schedule of cash payments for materials, by month and in total, for the fourth quarter of 2010.

what qualitative factors should cpgi consider when setting a standard for the same m 639359

Aug 30, 2021 | Uncategorized

Standard setting process Canada Printing Group, Inc. (CPGI), has recently begun the process of acquiring small to medium size local and regional printing firms across the country to facilitate its corporate strategy of becoming the low cost provider of graphic arts and printing services in Canada. To emphasize the importance of cost control, CPGI uses a standard cost system in all of its printing plants. Most of the smaller firms that CPGI has acquired have never used a standard cost system before. Therefore, when CPGI acquires a new printing plant, its first task is to evaluate the operation and set standards for the printing presses.

One such recent acquisition was Pierre’s Lithographing of Montreal. Pierre has a five year old, 40 inch, four color press that is in very good condition. Specifications provided by the manufacturer of the press indicate that under ideal conditions, the press should be able to produce 10,000 impressions per hour. CPGI has many similar presses throughout its organization, and in most locations the standard has been set at 9,000 impressions per hour. Many of Pierre’s jobs have been for smaller run quantities, which means that the presses are stopped many times during the day as the press operator sets up the press for each new job. Additionally, the jobs that Pierre attracts are very complex and require high quality results. Pierre suggests that even if everything ran perfectly throughout a day, the most he could expect the press to run would be 8,000 impressions per hour.

As usual with new acquisitions, CPGI has prepared a time study of the press for the past six months to determine how productive each of the operators has been. The results of the time study are as follows:

Required:

a. CPGI is considering five possibilities for setting the press standard for impressions per hour: 10,000, 9,000, 8,000, 7,400, or 6,500. Discuss the appropriateness, including a list of pros and cons, of setting the press standard at each level identified.

b. What qualitative factors should CPGI consider when setting a standard for the same model press at other sites across Canada?

c. Which level would you choose for the press standard at Pierre’s Lithographing of Montreal? Explain your answer.

what was the amount of total receipts where did they come from 639360

Aug 30, 2021 | Uncategorized

Budget of the United States government: Internet assignment The Office of Management and Budget provides access to the budget of the United States government. “A Citizen’s Guide to the Federal Budget” provides information about the budget and the budget process for the general public. Access the guide for the most current fiscal year and complete the following requirements:

Required:

a. Why was the guide designed, and what information is presented at this site?

b. What is the federal budget?

c. What percentage of the gross domestic product does spending for federal programs represent? What percentage does state and local government spending represent?

d. What was the amount of total receipts? Where did they come from?

e. What was the amount of total outlays? Where did they go?

f. Explain the process used by the government to create a budget.

g. How is the federal budget monitored?

h. What is meant by a budget surplus? A budget deficit?

i. Why is a budget deficit important? A budget surplus?

j. How does the government’s budget process compare to the operating budgeting process described in the chapter? What are the similarities and differences?

what does it mean when an investment center manager sub optimizes company performanc 639363

Aug 30, 2021 | Uncategorized

1. What does it mean to state that a favorable usage variance may not really be favorable?
2. What does it mean to state that for variance analysis to be effective, it should result in better communication between managers?
3. What does it mean to state that the analysis of fixed manufacturing overhead variance is not likely to be done with the same frequency as the analysis of variable cost variances?
4. What does it mean to have a responsibility reporting system?
5. What does it mean to state that common fixed expenses should never be arbitrarily allocated to segments (for example, products or organizational units)?
6. What does it mean when an investment center manager sub optimizes company performance?

match the appropriate letter for the key term or concept to each definition provided 639364

Aug 30, 2021 | Uncategorized

Match the appropriate letter for the key term or concept to each definition provided (items 1–20). Note that not all key terms and concepts will be used.

1. The excess of actual cost over budgeted cost.

2. The contribution of a segment of an organization to the common fixed expenses and operating income of the organization.

3. A system of performance reporting that involves successive degrees of summarization as the number of management levels being reported about increases.

4. A management concept that involves thorough planning and then exerting corrective effort only in those areas that do not show results consistent with the plan.

5. A report comparing planned and actual activity or costs.

6. A budget that has been adjusted to reflect a budget allowance based on actual level of activity rather than the planned level of activity used to establish the original budget.

7. An expense assigned to an organizational segment in a segmented income statement that would not be incurred if the segment were eliminated.

8. The excess of budgeted cost over actual cost.

9. An expense that is not assigned to an organizational segment in a segmented income statement because the expense would be incurred even if the segment were eliminated.

10. A set of integrated financial and operating performance measures that communicate an organization’s strategic goals and priorities.

11. That part of the variable overhead variance due to the difference between actual hours required and standard hours allowed for the work done.

12. A fixed manufacturing overhead variance caused by actual activity being different from the estimated activity used in calculating the predetermined overhead application rate.

13. That part of the direct labor variance due to the difference between actual hours required and standard hours allowed for the work done.

14. A debit balance in the manufacturing overhead account that results from actual overhead costs in excess of applied overhead.

15. That part of the total raw materials variance due to the difference between standard usage and actual usage of raw materials.

16. That part of the variable overhead variance due to the difference between actual variable overhead cost per hour and the standard rate used to apply overhead.

17. The difference between budgeted amount and actual amount.

18. That part of the direct labor variance due to the difference between the actual hourly wage rate paid and the standard rate used to cost a product.

19. That part of the total raw materials variance due to the difference between standard cost and actual cost of raw materials used.

20. The amount of income an investment center generates above a minimum required return on investment.

if brand z rsquo s sales increase by 25 000 and its direct fixed expenses increase b 639366

Aug 30, 2021 | Uncategorized

Zona Company’s income statement for 2010 for Brands A and Z and for the company as a whole follows:

If Brand Z’s sales increase by $25,000 and its direct fixed expenses increase by $3,000, operating income for the company as a whole would increase by a. $875.

b. $1,167.

c. $1,750.

d. $4,167.

e. $1,900.

raw material price variance is 639367

Aug 30, 2021 | Uncategorized

Precision Inc.’s standard cost per unit, based on a budgeted level of production of 400 units, is as follows:

The actual results for the 380 units produced were as follows:

Raw material price variance is

a. $2,905 U.

b. $3,052 U.

c. $3,075 U.

d. $3,052 F.

e. $3,075 F.

raw material usage variance is 639368

Aug 30, 2021 | Uncategorized

Precision Inc.’s standard cost per unit, based on a budgeted level of production of 400 units, is as follows:

The actual results for the 380 units produced were as follows:

Raw material usage variance is

a. $300 U.

b. $180 U.

c. $90 U.

d. $300 F.

e. $90 F.

labor rate variance is 639369

Aug 30, 2021 | Uncategorized

Precision Inc.’s standard cost per unit, based on a budgeted level of production of 400 units, is as follows:

The actual results for the 380 units produced were as follows:

Labor rate variance is

a. $1,200 U.

b. $1,800 U.

c. $1,200 F.

d. $1,800 F.

labor efficiency variance is 639370

Aug 30, 2021 | Uncategorized

Precision Inc.’s standard cost per unit, based on a budgeted level of production of 400 units, is as follows:

The actual results for the 380 units produced were as follows:

Labor efficiency variance is

a. $0.

b. $900 U.

c. $300 U.

d. $900 F.

the variable overhead spending variance was 639371

Aug 30, 2021 | Uncategorized

Air Fresh Industries uses a standard overhead costing system for the production of its EnergyPro cooling systems. Based on a capacity of 120,000 direct labor hours, the standard costs per unit of EnergyPro are applied to production as follows:

During August, 30,000 units of EnergyPro were scheduled for production, but only 27,000 units were actually produced. Actual direct labor cost incurred was $885,600 for 55,350 actual hours of work. Actual variable overhead cost incurred was $863,450, and actual fixed overhead cost was $622,000.

The variable overhead spending variance was

a. $540 U.

b. $21,600 F.

c. $22,140 F.

d. $24,000 F.

e. $96,540 F.

the variable overhead efficiency variance was 639372

Aug 30, 2021 | Uncategorized

Air Fresh Industries uses a standard overhead costing system for the production of its EnergyPro cooling systems. Based on a capacity of 120,000 direct labor hours, the standard costs per unit of EnergyPro are applied to production as follows:

During August, 30,000 units of EnergyPro were scheduled for production, but only 27,000 units were actually produced. Actual direct labor cost incurred was $885,600 for 55,350 actual hours of work. Actual variable overhead cost incurred was $863,450, and actual fixed overhead cost was $622,000.

The variable overhead efficiency variance was

a. $540 U.

b. $21,600 U.

c. $20,700 U.

d. $74,400 F.

e. $72,540 F.

the fixed overhead budget variance was 639373

Aug 30, 2021 | Uncategorized

Air Fresh Industries uses a standard overhead costing system for the production of its EnergyPro cooling systems. Based on a capacity of 120,000 direct labor hours, the standard costs per unit of EnergyPro are applied to production as follows:

During August, 30,000 units of EnergyPro were scheduled for production, but only 27,000 units were actually produced. Actual direct labor cost incurred was $885,600 for 55,350 actual hours of work. Actual variable overhead cost incurred was $863,450, and actual fixed overhead cost was $622,000.

The fixed overhead budget variance was

a. $22,000 U.

b. $46,500 U.

c. $60,000 U.

d. $46,500 F.

e. $60,000 F.

the fixed overhead volume variance was 639374

Aug 30, 2021 | Uncategorized

Air Fresh Industries uses a standard overhead costing system for the production of its EnergyPro cooling systems. Based on a capacity of 120,000 direct labor hours, the standard costs per unit of EnergyPro are applied to production as follows:

During August, 30,000 units of EnergyPro were scheduled for production, but only 27,000 units were actually produced. Actual direct labor cost incurred was $885,600 for 55,350 actual hours of work. Actual variable overhead cost incurred was $863,450, and actual fixed overhead cost was $622,000.

The fixed overhead volume variance was

a. $22,000 U.

b. $46,500 U.

c. $60,000 U.

d. $46,500 F.

e. $60,000 F.

prepare an appropriate performance report for the manufacturing department 639376

Aug 30, 2021 | Uncategorized

Flexible budgeting Rocky Mountain Manufacturing produces a single product.

The original budget for November was based on expected production of 35,000 units; actual production for November was 33,250 units. The original budget and actual costs incurred for the manufacturing department follow:

Required:

Prepare an appropriate performance report for the manufacturing department.

calculate the flexed budget amount against which actual performance should be evalua 639377

Aug 30, 2021 | Uncategorized

Performance reporting and flexible budgeting Following is a partially completed performance report for a recent week for direct labor in the binding department of a book publisher:

The original budget is based on the expectation that 8,000 books would be bound; the standard is 20 books per hour at a pay rate of $12 per hour. During the week, 7,600 books were actually bound. Employees worked 410 hours at an actual total cost of $5,330.

Required:

a. Calculate the flexed budget amount against which actual performance should be evaluated and then calculate the budget variance.

b. Calculate the direct labor efficiency variance in terms of hours.

c. Calculate the direct labor rate variance.

analyze the budget variance by calculating the direct labor efficiency and rate vari 639378

Aug 30, 2021 | Uncategorized

Performance reporting and flexible budgeting For the stamping department of a manufacturing firm, the standard cost for direct labor is $12 per hour, and the production standard calls for 1,000 stampings per hour. During June, 168 hours were required for actual production of 148,000 stampings. Actual direct labor cost for the stamping department for June was $2,184.

Required:

a. Complete the following performance report for June:

b. Analyze the budget variance by calculating the direct labor efficiency and rate variances for June.

c. What alternatives to the preceding monthly report could improve control over the stamping department’s direct labor?

calculate the dollar amount of the direct labor efficiency variance for march 639380

Aug 30, 2021 | Uncategorized

Direct labor variances—solving for unknowns Coastal Industries has established direct labor performance standards for its maintenance and repair shop.

However, some of the labor records were destroyed during a recent fire. The actual hours worked during March were 4,000, and the total direct labor budget variance was $2,200 unfavorable. The standard labor rate was $18 per hour, but recent resignations allowed the firm to hire lower paid replacement workers for some jobs, and this produced a favorable rate variance of $3,200 for March.

Required:

a. Calculate the actual direct labor rate paid per hour during March.

b. Calculate the dollar amount of the direct labor efficiency variance for March.

c. Calculate the standard direct labor hours allowed for the actual level of activity during March.

calculate the cost of goods manufactured during june and the average cost per unit o 639322

Aug 30, 2021 | Uncategorized

Cost of goods manufactured, cost of goods sold, and income statement Gravois, Inc., incurred the following costs during June:

Required:

During the month, 19,500 units of product were manufactured and 11,000 units of product were sold. On June 1, Gravois, Inc., carried no inventories. On June 30, there were no inventories for raw materials or work in process.

a. Calculate the cost of goods manufactured during June and the average cost per unit of product manufactured.

b. Calculate the cost of goods sold during June.

c. Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements?

d. (Optional) Prepare a traditional (absorption) income statement for Gravois, Inc., for the month of June. Assume that sales for the month were $1,035,000 and the company’s effective income tax rate was 35%.

calculate the cost of goods manufactured for march 639323

Aug 30, 2021 | Uncategorized

Cost of goods manufactured and cost of goods sold The following table summarizes the beginning and ending inventories of Decatur Manufacturing, Inc., for the month of March:

Raw materials purchased during the month of March totaled $198,240. Direct labor costs incurred totaled $499,520 for the month. Actual and applied manufacturing overhead costs for March totaled $301,440 and $307,680, respectively. Over/ underapplied overhead is written off to cost of goods sold at the end of the year in December.

Required:

a. Calculate the cost of goods manufactured for March.

b. Calculate the cost of goods sold for March.

prepare a statement of cost of goods manufactured for the month of april and calcula 639324

Aug 30, 2021 | Uncategorized

Cost of goods manufactured, cost of goods sold, and income statement Big Thunder Co. incurred the following costs during April:

Manufacturing overhead is applied on the basis of $37.50 per direct labor hour. Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the year. During the month, 7,500 units of product were manufactured and 7,950 units of product were sold. On April 1 and April 30, Big Thunder Co. carried the following inventory balances:

Required:

a. Prepare a statement of cost of goods manufactured for the month of April and calculate the average cost per unit of product manufactured.

b. Calculate the cost of goods sold during April.

c. Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements?

d. (Optional) Prepare a traditional (absorption) income statement for Big Thunder Co. for the month of April. Assume that sales for the month were $722,925 and the company’s effective income tax rate was 40%.

cost of goods manufactured cost of goods sold and income statement determine each of 639325

Aug 30, 2021 | Uncategorized

Cost of goods manufactured, cost of goods sold, and income statement Determine each of the following missing amounts:

if necessary and calculate the inventory turnover and day rsquo s sales in inventory 639327

Aug 30, 2021 | Uncategorized

Financial reporting, manufacturing firm—Internet assignment Intel Corporation provides access to its annual reports. The annual reports are found in the “About Intel/Investor Relations/Financials and Filings” area. Locate the following information in the annual reports provided for 2008, 2007, and 2006:

1. From the notes to consolidated financial statements, find the composition of the beginning and ending inventory for each of the following accounts: Raw Material, Work in Process, and Finished Goods.

2. From the consolidated statements of income, find the amount for Cost of Sales.

3. From the consolidated balance sheets, find the amount for Inventories.

4. From the management’s discussion and analysis, find the overview section that explains the Results of Operations.

Required:

a. Calculate the cost of goods manufactured for 2008, 2007, and 2006.

b. Calculate the total amount of combined cost incurred in 2008, 2007, and 2006 for raw material, direct labor, and manufacturing overhead.

c. From the 2008 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” identify the ratio of cost of sales to net revenue.

Comment on the overall trend.

d. if necessary and calculate the inventory turnover and day’s sales in inventory for 2008, 2007, and 2006. Comment on the overall trend.

write a summary report describing how that organization is using activity based mana 639328

Aug 30, 2021 | Uncategorized

Activity based management—Internet assignment SAS® is a world leader in business analytics software, delivering breakthrough technology to transform the way organizations do business. For SAS the mission is to empower organizations around the world with superior software, solutions, and services and give them The Power to Know®. many activity based management success stories are presented from a variety of firms in different industries.

Required:

a. Locate the product information about SAS’s activity based management solution. Read the product overview and write a summary report detailing your findings.

b. Locate the Success Stories for activity based management. Choose an organization and read its testimonial. Write a summary report describing how that organization is using activity based management.

match the appropriate letter for the key term or concept to each definition provided 639330

Aug 30, 2021 | Uncategorized

Match the appropriate letter for the key term or concept to each definition provided (items 1–12). Note that not all key terms and concepts will be used.

1. A budgeting process that involves justifying resource requirements based on an analysis and prioritization of unit objectives without reference to prior period budget allowances.

2. A budgeting approach that implies little or no input from lower levels of management.

3. A budget that is prepared for several periods in the future and that is revised several times prior to the budget period.

4. A plan comprised of the sales budget (or sales forecast), the purchases/ production budget, the operating expense budget, the income statement budget, the cash budget, and the budgeted balance sheet.

5. A budgeting process that involves input and negotiation at several management layers.

6. Allowances for contingencies built into a budget.

7. A cost that is incurred because of a long range policy decision.

8. A unit budget allowance for a cost component of a product or an activity.

9. A standard cost or production standard that is based on historical data.

10. A standard cost or production standard that assumes optimal operating conditions and maximum efficiency at all times.

11. The rate per unit of activity (e.g., direct labor hour) used to apply manufacturing overhead to work in process.

12. A standard cost or production standard that is achievable under actual operating conditions.

the ending inventory of finished goods for each month must be equal to 40 of the nex 639336

Aug 30, 2021 | Uncategorized

Long Company’s budgeted sales are as follows:

The ending inventory of finished goods for each month must be equal to 40% of the next month’s budgeted unit sales. Finished goods inventory on January 1 was 600 units. Calculate the number of units scheduled for production in March.

a. 1,275.

b. 1,400.

c. 1,525.

d. 1,625.

calculate the number of medallions to be produced in february 639341

Aug 30, 2021 | Uncategorized

Production and purchases budgets Olympia Productions, Inc., makes award medallions that are attached to ribbons. Each medallion requires 18 inches of ribbon. The sales forecast for February is 8,000 medallions. Estimated beginning inventories and desired ending inventories for February are:

Required:

a. Calculate the number of medallions to be produced in February.

b. Calculate the number of yards of ribbon to be purchased in February.

calculate the number of pounds of raw materials to be purchased during october 639342

Aug 30, 2021 | Uncategorized

Production and purchases budgets Pelican Co. is forecasting sales of 40,300units of product for October. To make one unit of finished product, 10 pounds of raw materials are required. Actual beginning and desired ending inventories of raw materials and finished goods are:

Required:

a. Calculate the number of units of product to be produced during October.

b. Calculate the number of pounds of raw materials to be purchased during October.

calculate the number of ounces of ocean scent to be purchased in each of the first t 639343

Aug 30, 2021 | Uncategorized

Purchases budget Each gallon of Old Guard, a popular aftershave lotion, requires 6 ounces of ocean scent. Budgeted production of Old Guard for the first three quarters of 2010 is:

Management’s policy is to have on hand at the end of every quarter enough ocean scent inventory to meet 30% of the next quarter’s production needs. At the beginning of Quarter I, 18,000 ounces of ocean scent were on hand.

Required:

a. Calculate the number of ounces of ocean scent to be purchased in each of the first two quarters of 2010.

b. Explain why management plans for an ending inventory instead of planning to purchase each quarter the amount of raw materials needed for that quarter’s production.

production and purchases budgets osage inc has actual sales for june and july and fo 639344

Aug 30, 2021 | Uncategorized

Production and purchases budgets Osage Inc. has actual sales for June and July and forecast sales for August, September, October, and November as follows:

Required:

a. The firm’s policy is to have finished goods inventory on hand at the end of the month that is equal to 70% of the next month’s sales. It is currently estimated that there will be 3,300 units on hand at the end of July. Calculate the number of units to be produced in each of the months of August, September, and October.

b. Each unit of finished product requires 5 pounds of raw materials. The firm’s policy is to have raw material inventory on hand at the end of each month that is equal to 80% of the next month’s estimated usage. It is currently estimated that 13,000 pounds of raw materials will be on hand at the end of July. Calculate the number of pounds of raw materials to be purchased in each of the months of August and September.

calculate the cash collections that would be included in the cash budgets for august 639345

Aug 30, 2021 | Uncategorized

Cash receipts budget Kiel Center’s sales are all made on account. The firm’s collection experience has been that 35% of a month’s sales are collected in the month the sale is made, 55% are collected in the month following the sale, and 8% are collected in the second month following the sale. The sales forecast for the months of June through September is:

Required:

Calculate the cash collections that would be included in the cash budgets for August and September.

calculate the estimated cash receipts for september october and november 639346

Aug 30, 2021 | Uncategorized

Cash receipts budget Flagstaff Co. has actual sales for July and August and forecast sales for September, October, November, and December as follows:

Based on past experience, it is estimated that 30% of a month’s sales are collected in the month of sale, 50% are collected in the month following the sale, and 18% are collected in the second month following the sale.

Required:

Calculate the estimated cash receipts for September, October, and November.

using the preceding data calculate the direct labor cost for a cambridge model pedes 639347

Aug 30, 2021 | Uncategorized

Developing direct labor cost standards Brass Creations Co. makes decorative candle pedestals. An industrial engineer consultant developed ideal time standards for one unit of the Cambridge model pedestal. The standards follow, along with the cost accountant’s determination of current labor pay rates:

Required:

a. Using the preceding data, calculate the direct labor cost for a Cambridge model pedestal.

b. Would it be appropriate to use the cost calculated in part a as a standard cost for evaluating direct labor performance and valuing inventory? Explain your answer.

explain the process that would be used to develop the direct labor cost standard for 639348

Aug 30, 2021 | Uncategorized

Developing raw material cost standards Ozark Manufacturing Co. manufactures and sells household cleaning products. The company’s research department has developed a new cleaner for which a standard cost must be determined. The new cleaner is made by mixing 18 quarts of triphate solution and 8 pounds of so base granules and boiling the mixture for several minutes. After the solution has cooled, 4 ounces of methage are added. This “recipe” produces 15 quarts of the cleaner, which is then packaged in one quart plastic dispenser bottles. Raw material costs are:

Required:

a. Using the preceding data, calculate the raw material cost for one bottle of the new cleaner.

b. Assume that the preceding costs are the current best estimates of the costs at which required quantities of the raw material can be purchased. Would you recommend that any other factors be considered in establishing the raw material cost standard for the new cleaner?

c. Explain the process that would be used to develop the direct labor cost standard for the new product.

comment about the usefulness of this standard cost for management planning and contr 639349

Aug 30, 2021 | Uncategorized

Standard absorption cost per unit DMA, Inc., processes corn into corn starch and corn syrup. The company’s productivity and cost standards follow:

From every bushel of corn processed, 12 pounds of starch and 6 pounds of syrup should be produced.

Standard direct labor and variable overhead total $0.86 per bushel of corn processed.

Standard fixed overhead (the predetermined fixed overhead application rate) is $0.66 per bushel processed.

Required:

a. Calculate the standard absorption cost per pound for the starch and syrup produced from the processing of 15,000 bushels of corn if the average cost per bushel is $5.68.

b. Comment about the usefulness of this standard cost for management planning and control purposes.

calculate the cost per package that is relevant for this analysis 639350

Aug 30, 2021 | Uncategorized

Standard absorption cost per unit A cost analyst for Stamper Manufacturing Co. has assembled the following data about the Model 24 stamp pad:

The piece of sheet metal from which five pad cases can be made costs $0.24.

This amount is based on the number of sheets in a 4,200 pound bundle of sheet metal, which is the usual purchase quantity.

The foam pad that is put in the case costs $0.06, based on the number of pads that can be cut from a large roll of foam.

Production standards, based on engineering analysis recognizing attainable performance, provide for the manufacture of 1,000 pads by two workers in an eight hour shift. The standard direct labor pay rate is $15 per hour.

Manufacturing overhead is applied to units produced using a predetermined overhead application rate of $16 per direct labor hour, of which $6 per hour is fixed manufacturing overhead.

Required:

a. Calculate the standard absorption cost of a package of 10 stamp pads.

b. Stamper Manufacturing Co.’s management is considering a special promotion that would result in increased sales of 500 packages of 10 pads per package.

Calculate the cost per package that is relevant for this analysis.

calculate the purchases budget in dollars for the months of may and june 639351

Aug 30, 2021 | Uncategorized

Purchases budget Brooklyn Furniture, a retail store, has an average gross profit ratio of 42%. The sales forecast for the next four months follows:

Management’s inventory policy is to have ending inventory equal to 80% of the cost of sales for the subsequent month, although it is estimated that the cost of inventory at April 30 will be $45,000.

Required:

Calculate the purchases budget, in dollars, for the months of May and June.

calculate a purchases budget in dollars for each product for the month of september 639352

Aug 30, 2021 | Uncategorized

Purchases budget—analytical Gemstone, Ltd., is a retail jeweler. Most of the firm’s business is in jewelry and watches. The firm’s average gross profit ratio for jewelry and watches is 80% and 40%, respectively. The sales forecast for the next two months for each product category is as follows:

The company’s policy, which is expected to be achieved at the end of August, is to have ending inventory equal to 120% of the next month’s cost of goods sold.

Required:

a. Calculate the cost of goods sold for jewelry and watches for September and October.

b. Calculate a purchases budget, in dollars, for each product for the month of September.

calculate the company rsquo s total operating income under the proposed expansion 639282

Aug 30, 2021 | Uncategorized

CVP application—expand existing product line? Nautical Canvas Co. currently makes and sells two models of a boat cover. Data applicable to the current operation are summarized in the following columns labeled Current Operation.

Management is considering adding a Value model to its current Luxury and Economy models. Expected data if the new model is added are shown in the following columns labeled Proposed Expansion:

Required:

a. Calculate the company’s current total contribution margin and the current average contribution margin ratio.

b. Calculate the company’s current amount of operating income.

c. Calculate the company’s current break even point in dollar sales.

d. Explain why the company might incur a loss, even if the sales amount calculated in part c was achieved and selling prices and costs didn’t change.

e. Calculate the company’s total operating income under the proposed expansion.

f. Based on the proposed expansion data, would you recommend adding the Value model? Why or why not?

g. Would your answer to part of change if the Value model sales volume were to increase to 1,000 units annually, and all other data remained the same? Why or why not?

calculate the contribution margin ratio of each product 639283

Aug 30, 2021 | Uncategorized

CVP application—eliminate product from operations? Body Sculpture, Inc., makes three models of high performance weight training benches. Current operating data are summarized here:

Required:

a. Calculate the contribution margin ratio of each product.

b. Calculate the firm’s overall contribution margin ratio.

c. Calculate the firm’s monthly break even point in sales dollars.

d. Calculate the firm’s monthly operating income.

e. Management is considering the elimination of the ProForce model due to its low sales volume and low contribution margin ratio. As a result, total fixed expenses can be reduced to $1,080,000 per month. Assuming that this change would not affect the other models, would you recommend the elimination of the ProForce model? Explain your answer.

f. Assume the same facts as in part e. Assume also that the sales volume for the PowerGym model will increase by 1,000 units per month if the ProForce model is eliminated. Would you recommend eliminating the ProForce model? Explain your answer.

why would you suggest that management seriously consider investing in the automated 639284

Aug 30, 2021 | Uncategorized

CVP analysis—effects of changes in cost structure; breakeven Riveria Co. makes and sells a single product. The current selling price is $32 per unit. Variable expenses are $20 per unit, and fixed expenses total $43,200 per month. Sales volume for May totaled 4,100 units.

Required:

a. Calculate operating income for May.

b. Calculate the break even point in terms of units sold and total revenues.

c. Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenses would drop to $14 per unit, but fixed expenses would increase to $67,800 per month.

1. Calculate operating income at a volume of 4,100 units per month with the new cost structure.

2. Calculate the break even point in units with the new cost structure. (Round your answer.)

3. Why would you suggest that management seriously consider investing in the automated equipment and accept the new cost structure?

4. Why might management not accept your recommendation but decide instead to maintain the old cost structure?

calculate the firm rsquo s operating income assuming that the new machine is leased 639285

Aug 30, 2021 | Uncategorized

CVP analysis—effects of change in cost structure; breakeven Ozark, Inc. Produces small scale replicas of vintage automobiles for collectors and museums. Finished products are built on a 1/20 scale of originals. The firm’s income statement showed the following:

An automated stamping machine has been developed that can efficiently produce body frames, hoods, and doors to the desired scale. If the machine is leased, fixed expenses will increase by $58,000 per year. The firm’s production capacity will increase, which is expected to result in a 25% increase in sales volume. It is also estimated that labor costs of $33 per unit could be saved because less polishing and finishing time will be required.

Required:

a. Calculate the firm’s current contribution margin ratio and break even point in terms of revenues. (Round your answer.)

b. Calculate the firm’s contribution margin ratio and break even point in terms of revenues if the new machine is leased.

c. Calculate the firm’s operating income assuming that the new machine is leased.

d. Do you believe that management of Ozark, Inc., should lease the new machine? Explain your answer.

prepare a memo to tommy outlining the possible offers he might make to the restauran 639287

Aug 30, 2021 | Uncategorized

CVP application—determine offering price Tommy Appleton is in charge of arranging the “attitude adjustment” period and dinner for the monthly meetings of the local chapter of the Management Accountants Association. Tommy is negotiating with a new restaurant that would like to have the group’s business, and Tommy wants to apply some of the cost–volume–profit analysis concepts he has learned. The restaurant is proposing its regular menu prices of $4.00 for a before dinner drink and $22.00 for dinner. Tommy has determined that on average, the people attending the meeting have 1.5 drinks before dinner. He also believes that the contribution margin ratios for the drinks and dinner are 50% and 40%, respectively.

Required:

Prepare a memo to Tommy outlining the possible offers he might make to the restaurant owner, and recommend which offer he should make.

calculate the break even point for each firm in terms of revenue 639289

Aug 30, 2021 | Uncategorized

Understanding the effects of operating leverage HighTech, Inc., and OldTime Co. compete within the same industry and had the following operating results in 2010:

Required:

a. Calculate the break even point for each firm in terms of revenue.

b. What observations can you draw by examining the break even point of each firm given that they earned an equal amount of operating income on identical sales volumes in 2010?

c. Calculate the amount of operating income (or loss) that you would expect each firm to report in 2011 if sales were to

1. Increase by 20%.

2. Decrease by 20%.

d. Using the amounts computed in requirement c, calculate the increase or decrease in the amount of operating income expected in 2011 from the amount reported in 2010.

e. Explain why an equal percentage increase (or decrease) in sales for each firm would have such differing effects on operating income.

f. Calculate the ratio of contribution margin to operating income for each firm in 2010.

g. Multiply the expected increase in sales of 20% for 2011 by the ratio of contribution margin to operating income for 2010 computed in requirement f for each firm.

h. Multiply your answer in requirement g by the operating income of $210,000 reported in 2010 for each firm.

i. Compare your answer in requirement h with your answer in requirement d.

What conclusions can you draw about the effects of operating leverage from the steps you performed in requirements f, g, and h?

calculate the break even point in pizzas per month and print your results using the 639290

Aug 30, 2021 | Uncategorized

Break even analysis, CVP application using Internet tools You have recently been engaged by Dominic’s Italian Cafe to evaluate the financial impact of adding gourmet pizza items to the menu. A survey of the clientele indicates that demand for the product exists at an average selling price of $18 per pizza. Fixed costs related to new equipment would be $12,000 per month. Variable costs for ingredients, labor, and electricity for the oven would average $6 per pizza. You decide that a good starting point is to conduct an initial break even analysis on the new project.

Knowing that many commercial Internet companies provide free downloads or online demos of their products for your evaluation and testing pleasure, you decide to conduct the break even analysis using break even.

Required:

a. Calculate the break even point in pizzas per month and print your results using the online break even analysis tools

b. Calculate the break even point in pizzas per month and print your results using the break even chart analysis:

c. Write a comparative analysis of each of the four tools that you used to calculate the break even point. You might discuss strengths, weaknesses, usefulness, and user interaction for each tool.

d. Dominic’s now is interested in the amount of operating income available from the gourmet pizza operation if sales are initially expected to be 2,000 pizzas each month. Calculate the operating income and print your results using the Excel file “Contribution Income Analysis”.

e. Dominic’s now would like to understand the effect on operating income if certain changes in costs or volume occur. Use the “Contribution Income Analysis” Excel spreadsheet to evaluate each of the following independent cases assuming sales are initially expected to be 2,000 pizzas each month:

1. Selling price is decreased by 10%, and pizza sales are expected to increase by 5%.

2. Selling price is increased to $20, and pizza sales are expected to decrease by 20%.

3. Higher quality ingredients are used at a cost increase of $2 to $8 per pizza, and pizza sales are expected to increase to 2,200 pizzas per month.

4. A more efficient pizza oven is available that would reduce the electricity used in baking each pizza. Variable costs would be reduced to $5 per pizza. The more efficient oven would increase the fixed costs to $15,000 per month.

f. Write a memo to Dominic’s explaining the results of your analysis.

match the appropriate letter for the key term or concept to each definition provided 639292

Aug 30, 2021 | Uncategorized

Match the appropriate letter for the key term or concept to each definition provided (items 1–14). Note that not all key terms and concepts will be used.

1. A product costing method by which only variable manufacturing costs are included in product cost.

2. Any reference point for which management wants to measure cost.

3. A supplementary financial statement that supports the cost of goods sold figure on the income statement by summarizing raw materials, direct labor, and manufacturing overhead costs incurred during the period.

4. Noninventoriable costs, including selling, general, and administrative expenses, that relate to an accounting period.

5. The process of allocating an amount of cost to a cost object.

6. The rate used to allocate overhead to specific production runs.

7. A cost incurred because of the product or activity under consideration; the cost would not be incurred if the product or activity were discontinued.

8. A product costing method by which both variable and fixed manufacturing costs are included in product cost.

9. A product costing system used when discrete products, such as sailboats tailored to the buyer’s specifications, are manufactured.

10. Effort provided by workers who are directly involved in the manufacture of a product.

11. The sequence of functions (R&D, design, production, marketing, distribution, and customer service) and related activities that, over the life of a product or service, adds value for the customer.

12. Inventoriable costs including raw materials, direct labor, and manufacturing overhead.

13. A cost related to the product or activity under consideration but not incurred solely because of the product or activity; the cost would continue to be incurred if the product or activity were discontinued.

14. Expected or allotted times and costs to make a product or perform an activity.

based on this information manufacturing overhead was 639299

Aug 30, 2021 | Uncategorized

Sterner Company computes its predetermined overhead application rate using direct labor hours as the activity base. Estimated and actual overhead costs and direct labor hours for the year were as follows:

Based on this information, manufacturing overhead was

a. underapplied by $2,100.

b. underapplied by $3,420.

c. overapplied by $3,420.

d. overapplied by $5,580.

e. none of the above.

the cost of goods manufactured for blue heron inc in 2010 was 639301

Aug 30, 2021 | Uncategorized

Information obtained from Blue Heron, Inc.’s accounts on December 31 included:

The cost of goods manufactured for Blue Heron, Inc., in 2010 was

a. $172,000.

c. $192,000.

b. $180,000.

d. $196,000.

e. $202,000.

the cost of goods sold for blue heron inc in 2010 was 639302

Aug 30, 2021 | Uncategorized

Information obtained from Blue Heron, Inc.’s accounts on December 31 included:

The cost of goods sold for Blue Heron, Inc., in 2010 was

a. $154,000.

b. $190,000.

c. $198,000.

d. $210,000.

e. $214,000.

value chain classifications match each of the following cost items with the value ch 639303

Aug 30, 2021 | Uncategorized

Value chain classifications Match each of the following cost items with the value chain business function where you would expect the cost to be incurred:

value chain classifications match each of the following cost items with the value 639304

Aug 30, 2021 | Uncategorized

Value chain classifications Match each of the following cost items with the value

chain business function where you would expect the cost to be incurred:

cost classifications for each of the following costs check the columns that most lik 639305

Aug 30, 2021 | Uncategorized

Cost classifications For each of the following costs, check the columns that most likely apply (both variable and fixed might apply for some costs).

cost classifications for each of the following costs check the columns that most lik 639306

Aug 30, 2021 | Uncategorized

Cost classifications For each of the following costs, check the columns that most likely apply (both variable and fixed might apply for some costs).

explain the advantages of the abc approach relative to using a single predetermined 639317

Aug 30, 2021 | Uncategorized

Activity based costing MedTech, Inc., manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning four manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $25 per hour and that there were no beginning inventories. The following information was available for 2010, based on an expected production level of 100,000 units for the year:

The following production, costs, and activities occurred during the month of August:

Required:

a. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for MedTech, Inc.

b. Explain the advantages of the ABC approach relative to using a single predetermined overhead application rate based on direct labor hours.

calculate the total manufacturing costs and the cost per unit of the windows produce 639318

Aug 30, 2021 | Uncategorized

Activity based costing versus traditional overhead allocation methods Galvaset Industries manufactures and sells custom made windows. Its job costing system was designed using an activity based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $20 per hour and that there were no beginning inventories. The following information was available for 2010, based on an expected production level of 50,000 units for the year, which will require 200,000 direct labor hours:

The following production, costs, and activities occurred during the month of March:

Required:

a. Calculate the total manufacturing costs and the cost per unit of the windows produced during the month of March (using the activity based costing approach).

b. Assume instead that Galvaset Industries applies manufacturing overhead on a direct labor hours basis (rather than using the activity based costing system previously described). Calculate the total manufacturing cost and the cost per unit of the windows produced during the month of March.

c. Compare the per unit cost figures calculated in parts a and b. Which approach do you think provides better information for manufacturing managers? Explain your answer.

calculate the cost per fishing rod under both variable costing and absorption costin 639319

Aug 30, 2021 | Uncategorized

Variable versus absorption costing TroutPro Co. manufactures fishing equipment. During 2010, total costs associated with manufacturing 35,000 fly cast fishing rods (a new product introduced this year) were as follows:

Required:

a. Calculate the cost per fishing rod under both variable costing and absorption costing.

b. If 750 of these fishing rods were in finished goods inventory at the end of2010, by how much and in what direction (higher or lower) would 2010 operating income be different under variable costing than under absorption costing?

c. Express the fishing rod cost in a cost formula. What does this formula suggest the total cost of making an additional 500 fishing rods would be?

calculate the cost per recorder under both variable costing and absorption costing 639320

Aug 30, 2021 | Uncategorized

Variable versus absorption costing Millan, Inc., manufactures digital voice recorders. During 2010, total costs associated with manufacturing 208,000 of the new MV 5253 model (introduced this year) were as follows:

Required:

a. Calculate the cost per recorder under both variable costing and absorption costing.

b. If 20,400 of these recorders were in finished goods inventory at the end of 2010, by how much and in what direction (higher or lower) would 2010 cost of goods sold be different under variable costing than under absorption costing?

c. Express the digital voice recorder cost in a cost formula. What does this formula suggest the total cost of making an additional 1,700 recorders would be?

calculate the cost of goods manufactured during may and the average cost per unit of 639321

Aug 30, 2021 | Uncategorized

Cost of goods manufactured, cost of goods sold, and income statement Richards, Inc., incurred the following costs during May:

Required:

During the month, 59,625 units of product were manufactured and 54,000 units of product were sold. On May 1, Richards, Inc., carried no inventories. On May 31, there were no inventories other than finished goods.

a. Calculate the cost of goods manufactured during May and the average cost per unit of product manufactured.

b. Calculate the cost of goods sold during May.

c. Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements?

d. (Optional) Prepare a traditional (absorption) income statement for Richards, Inc., for the month of May. Assume that sales for the month were $4,896,000 and the company’s effective income tax rate was 35%.

which of the following steps is not considered to be part of this systems survey 639161

Aug 30, 2021 | Uncategorized

1. Which of the following steps is NOT considered to be part of this systems survey?

a. Interviews are conducted with operating people and managers.

b. The complete documentation of the system is obtained and reviewed.

c. Measures of processing volume are obtained for each operation.

d. Equipment sold by various computer manufacturers is reviewed in terms of capability, cost, and availability.

e. Work measurement studies are conducted to determine the time required to complete various tasks or jobs.

2. A systems development approach that starts with broad organizational goals and the types of decisions organizational executives make is called

a. bottom up.

b. network.

c. top down.

d. strategic.

e. sequential.

3. The TELOS study that determines whether a project can be completed in an acceptable time frame is

a. a schedule feasibility study.

b. a time frame feasibility study.

c. an on time feasibility study.

d. an economic completion feasibility study.

e. a length of contract feasibility study.

4. Which of the following is least likely to be an accountant’s role in the SDLC?

a. user

b. consultant

c. auditor

d. programmer

e. all of these are likely roles

5. The TELOS acronym is often used for determining the need for system changes. Which of the following types of feasibility studies are elements of TELOS?

a. legal, environmental, and economic

b. environmental, operational, and economic

c. technical, economic, legal, and practical

d. practical, technical, and operational

e. technical, operational, and economic

which of the following aspects of a cost benefit study would have the greatest uncer 639162

Aug 30, 2021 | Uncategorized

1. What name is given to the time value of money technique that discounts the after tax cash flows for a project over its life to time period zero using the company’s minimum desired rate of return?

a. net present value method

b. capital rationing method

c. payback method

d. average rate of return method

e. accounting rate of return method

2. One time costs of system development include all of the following EXCEPT

a. site preparation.

b. hardware maintenance.

c. programming.

d. hardware acquisition.

e. data conversion.

3. Which of the following aspects of a cost benefit study would have the greatest uncertainty as to its precise value?

a. the tangible costs

b. the intangible costs

c. the tangible benefits

d. the intangible benefits

e. none of the above because they are equally precise

what does it mean to expand the contribution margin model 639250

Aug 30, 2021 | Uncategorized

1. What does it mean to state that the contribution margin model is more useful than the traditional model for determining the effect of changes in activity on operating income?
2. What does it mean to expand the contribution margin model?
3. What does it mean to state that the contribution model provides better support for decision making?
4. What does it mean that fixed expenses should not be unitized because they don’t behave that way?
5. What does it mean to state that contribution margin ratio is frequently a more useful measurement than contribution margin per unit?
6. What does it mean to break even?
7. What does it mean to state that a firm has a relatively high degree of operating leverage?

match the appropriate letter for the key term or concept to each definition provided 639251

Aug 30, 2021 | Uncategorized

Match the appropriate letter for the key term or concept to each definition provided (items 1–12). Note that not all key terms and concepts will be used.

1. The proportion of total sales represented by various products or categories of products.

2. The difference between revenues and variable costs.

3. The concept that operating income changes proportionately more than revenues for any given change in revenues.

4. The amount of revenue required to have neither operating income nor operating loss.

5. The percentage of each dollar in revenues that is available to cover fixed expenses; revenues minus variable costs, divided by revenues.

6. An income statement presentation in which variable costs are subtracted from revenues to show contribution margin, from which fixed costs are subtracted to determine operating income.

7. Analysis of the impact on profit of volume and cost changes using knowledge about the behavior patterns of the costs involved.

8. An arithmetic expression that reflects the fixed and variable elements of a cost.

9. The range of activity over which the fixed or variable cost behavior pattern exists.

10. A cost that has both fixed and variable elements.

11. A cost that does not change in total as the level of activity changes within a relevant range.

12. Planning, organizing, and controlling the activities of an organization so I can accomplish its purpose.

if o rsquo brien inc rsquo s advertising costs increased by 8 000 by how much would 639260

Aug 30, 2021 | Uncategorized

O’Brien, Inc.’s, 2010 contribution margin income statement shows the following:

If O’Brien, Inc.’s, advertising costs increased by $8,000, by how much would sales have to increase for the company to achieve an operating income of $6,000?

a. $66,000.

b. $96,000.

c. $102,000.

d. $130,000.

e. None of the above.

what would o rsquo brien inc rsquo s operating income or loss be if fixed costs were 639261

Aug 30, 2021 | Uncategorized

O’Brien, Inc.’s, 2010 contribution margin income statement shows the following:

What would O’Brien, Inc.’s, operating income (or loss) be if fixed costs were increased by 10 percent and sales volume increased by 30 percent?

a. $1,290.

b. $2,650.

c. $(6,800).

d. $(9,680).

e. None of the above.

cost classifications for each of the following costs check the column s that most li 639262

Aug 30, 2021 | Uncategorized

Cost classifications For each of the following costs, check the column(s) that most likely apply:

how much cost would you expect to be incurred for each of these items during june wh 639265

Aug 30, 2021 | Uncategorized

Estimating costs based on behavior patterns The following information provides the amount of cost incurred in May for the cost items indicated. During May 16,000 units of the firm’s single product were manufactured.

Required:

a. How much cost would you expect to be incurred for each of these items during June when 19,200 units of the product are planned for production?

b. Calculate the average total cost per unit for the 16,000 units manufactured in May. Explain why this figure would not be useful to a manager interested in predicting the cost of producing 19,200 units in June.

understanding cvp relationships calculate the missing amounts for each of the follow 639267

Aug 30, 2021 | Uncategorized

Understanding CVP relationships Calculate the missing amounts for each of the following firms:

describe how the analysis of adding the new product would be complicated if it were 639269

Aug 30, 2021 | Uncategorized

Calculate selling price of new product; what if questions; break even Meyers Corp. has annual revenues of $450,000, an average contribution margin ratio of 35%, and fixed expenses of $175,000.

Required:

a. Management is considering adding a new product to the company’s product line. The new item will have $9.75 of variable costs per unit. Calculate the selling price that will be required if this product is not to affect the average contribution margin ratio.

b. If the new product adds an additional $37,800 to Meyers’s fixed expenses, how many units of the new product must be sold at the price calculated in part a to break even on the new product?

c. If 15,000 units of the new product could be sold at a price of $16.00 per unit, and the company’s other business did not change, calculate Meyers’s total operating income and average contribution margin ratio.

d. Describe how the analysis of adding the new product would be complicated if it were to “steal” some volume from existing products.

what other factors should management consider in evaluating the pros and cons of the 639271

Aug 30, 2021 | Uncategorized

Special promotion—effects of a 1 cent sale The management of Rocko’s Pizzeria is considering a special promotion for the last two weeks of October, whichis normally a relatively low demand period. The special promotion would involve selling two medium pizzas for the price of one, plus 1 cent. The medium pizza normally sells for $12.99 and has variable expenses of $4.50. Expected sales volume without the special promotion is 600 medium pizzas per week.

Required:

a. Calculate the total contribution margin generated by the normal volume of medium pizzas in a week.

b. Calculate the total number of medium pizzas that would have to be sold during the 1 cent sale to generate the same amount of contribution margin that results from the normal volume.

c. What other factors should management consider in evaluating the pros and cons of the special promotion?

calculate the variable costs fixed costs and mixed costs incurred during october 639272

Aug 30, 2021 | Uncategorized

High–low method A department of Alpha Co. incurred the following costs for the month of September. Variable costs, and the variable portion of mixed costs, are a function of the number of units of activity:

During October the activity level was 8,000 units, and the total costs incurred were $70,500.

Required:

a. Calculate the variable costs, fixed costs, and mixed costs incurred during October.

b. Use the high–low method to calculate the cost formula for mixed cost.

identify the two key cost behavior assumptions made in the calculation of your answe 639273

Aug 30, 2021 | Uncategorized

High–low method—missing amounts The following data have been extracted from the records of Riddle Co.:

Required:

a. Calculate the missing costs.

b. Calculate the cost formula for mixed cost using the high–low method.

c. Calculate the total cost that would be incurred for the production of 8,000 units.

d. Identify the two key cost behavior assumptions made in the calculation of your answer to part c.

prepare an income statement in the contribution margin format 639275

Aug 30, 2021 | Uncategorized

Prepare a contribution margin format income statement; answer what if questions Shown here is an income statement in the traditional format for a firm with a sales volume of 20,000 units:

Required:

a. Prepare an income statement in the contribution margin format.

b. Calculate the contribution margin per unit and the contribution margin ratio.

c. Calculate the firm’s operating income (or loss) if the volume changed from 20,000 units to

1. 25,000 units.

2. 11,000 units.

calculate the contribution margin per unit and the contribution margin ratio 639276

Aug 30, 2021 | Uncategorized

Prepare a contribution margin format income statement; answer what if questions Shown here is an income statement in the traditional format for a firm with a sales volume of 20,000 units. Cost formulas also are shown:

Required:

a. Prepare an income statement in the contribution margin format.

b. Calculate the contribution margin per unit and the contribution margin ratio.

c. Calculate the firm’s operating income (or loss) if the volume changed from 20,000 units to

1. 28,000 units.

2. 12,000 units.

d. Refer to your answer to part a for total revenues of $200,000. Calculate the firm’s operating income (or loss) if unit selling price and variable expenses per unit do not change, and total revenues

1. Increase $60,000.

2. Decrease $52,000.

prepare an income statement in the contribution margin format 639277

Aug 30, 2021 | Uncategorized

Prepare a contribution margin format income statement; answer what if questions Shown here is an income statement in the traditional format for a firm with a sales volume of 20,000 units:

Required:

a. Prepare an income statement in the contribution margin format.

b. Calculate the contribution margin per unit and the contribution margin ratio.

c. Calculate the firm’s operating income (or loss) if the volume changed from 20,000 units to

1. 25,000 units.

2. 11,000 units.

d. Refer to your answer to part a when total revenues were $160,000. Calculate the firm’s operating income (or loss) if unit selling price and variable expenses do not change, and total revenues

1. Increase by $18,000.

2. Decrease by $12,000.

if sales increase by 10 what will be the firm rsquo s operating income 639278

Aug 30, 2021 | Uncategorized

Prepare a contribution margin format income statement; calculate breakeven point Presented here is the income statement for Big Surf, Inc., for the month of May:

Based on an analysis of cost behavior patterns, it has been determined that the company’s contribution margin ratio is 30%.

Required:

a. Rearrange the preceding income statement to the contribution margin format.

b. If sales increase by 10%, what will be the firm’s operating income?

c. Calculate the amount of revenue required for Big Surf, Inc., to break even.

calculate operating income if sales volume increases by 20 639279

Aug 30, 2021 | Uncategorized

Prepare a contribution margin format income statement; calculate break even point Presented here is the income statement for Edwards Co. for February:

Based on an analysis of cost behavior patterns, it has been determined that the company’s contribution margin ratio is 35%.

Required:

a. Rearrange the preceding income statement to the contribution margin format.

b. Calculate operating income if sales volume increases by 20%.

c. Calculate the amount of revenue required for Edwards to break even.

calculate the monthly operating income or loss at a sales volume of 5 400 units per 639280

Aug 30, 2021 | Uncategorized

CVP analysis—what if questions; breakeven Monterey Co. makes and sells a single product. The current selling price is $15 per unit. Variable expenses are $9 per unit, and fixed expenses total $27,000 per month.

Required:

(Unless otherwise stated, consider each requirement separately.)

a. Calculate the break even point expressed in terms of total sales dollars and sales volume.

b. Calculate the margin of safety and the margin of safety ratio. Assume current sales are $75,000.

c. Calculate the monthly operating income (or loss) at a sales volume of 5,400 units per month.

d. Calculate monthly operating income (or loss) if a $2 per unit reduction in selling price results in a volume increase to 8,400 units per month.

e. What questions would have to be answered about the cost–volume–profit analysis simplifying assumptions before adopting the price cut strategy of part d?

f. Calculate the monthly operating income (or loss) that would result from a $1 per unit price increase and a $6,000 per month increase in advertising expenses, both relative to the original data. Assume a sales volume of 5,400 units per month.

g. Management is considering a change in the sales force compensation plan. Currently each of the firm’s two salespeople is paid a salary of $2,500 per month. Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.80 per unit, assuming a sales volume of

1. 5,400 units per month.

2. 6,000 units per month.

h. Assuming that the sales volume of 6,000 units per month achieved in part g could also be achieved by increasing advertising by $1,000 per month instead of changing the sales force compensation plan, which strategy would you recommend? Explain your answer.

explain why operating income is different in parts e and f even though sales totaled 639281

Aug 30, 2021 | Uncategorized

CVP analysis—what if questions; sales mix issue Camden Metal Co. makes a single product that sells for $84.00 per unit. Variable costs are $54.00 per unit, and fixed costs total $120,000 per month.

Required:

a. Calculate the number of units that must be sold each month for the firm to break even.

b. Assume current sales are $400,000. Calculate the margin of safety and the margin of safety ratio.

c. Calculate operating income if 5,000 units are sold in a month.

d. Calculate operating income if the selling price is raised to $88 per unit, advertising expenditures are increased by $16,000 per month, and monthly unit sales volume becomes 5,200 units.

e. Assume that the firm adds another product to its product line and that the new product sells for $40 per unit, has variable costs of $28 per unit, and causes fixed expenses in total to increase to $150,000 per month. Calculate the firm’s operating income if 5,000 units of the original product and 3,000 units of the new product are sold each month. For the original product, use the selling price and variable cost data given in the problem statement.

f. Calculate the firm’s operating income if 4,000 units of the original product and 4,000 units of the new product are sold each month.

g. Explain why operating income is different in parts e and f, even though sales totaled 8,000 units in each case.

a table of data for a library is shown in the table for problem normalize these data 639085

Aug 30, 2021 | Uncategorized

A table of data for a library is shown in the table for Problem. Normalize these data into the third normal form, preparing it for use in a relational database environment. The library’s computer is programmed to compute the due date to be 14 days after the checkout date. Document the steps necessary to normalize the data similar to the procedures found in the chapter. Index any fields necessary and show how the databases are related.

a college bookstore maintains all of its records on index cards this has proven to b 639086

Aug 30, 2021 | Uncategorized

A college bookstore maintains all of its records on index cards. This has proven to be a very tedious chore, and the manager has asked you to design a database that will simplify this task. The index cards are preprinted and contain the following labels:

Title:

Author(s):

Edition:

Publisher:

Publisher Address:

Publisher Phone #:

Cost of Text:

Selling Price:

Number on Hand:

Professor:

Class:

Semester:

Year:

Professor Phone #:

Using your understanding of the business rules that exist in most colleges and for most college bookstores, prepare the base tables (in third normal form) that will be required to translate the index card information into a working database for the bookstore.

prepare the base tables in third normal form needed to produce the user view in the 639087

Aug 30, 2021 | Uncategorized

Prepare the base tables, in third normal form, needed to produce the user view in the table for Problem.

prepare the base tables in third normal form needed to produce the user view in the 639088

Aug 30, 2021 | Uncategorized

Prepare the base tables, in third normal form, needed to produce the user view in the table for Problem.

Prepare the 3NF base tables needed to produce the sales report view shown in the diagram for Problem

employees at the sagerod manufacturing company record their hours worked on paper ti 639090

Aug 30, 2021 | Uncategorized

Employees at the Sagerod Manufacturing Company record their hours worked on paper time cards that are inserted into a time clock machine at the beginning and end of each shift. On Fridays, the supervisor collects the time cards, reviews and signs them, and sends them to the payroll clerk. The clerk calculates the pay for each employee and updates the employee earnings file. This involves adding a new record for each employee in the pay period that reflects the employee’s gross pay, tax deductions, and other withholdings for the period. The clerk then prepares a paycheck for each employee and records them in the check register. The check register and corresponding paychecks reflect each employee’s net earnings for the period. Based on these records, the clerk prepares a payroll summary, which is sent with the paychecks to the cash disbursements clerk. The clerk reviews the payroll summary, updates the cash disbursements journal to record the total payroll, and prepares a check for the total payroll, which is deposited into the payroll imprest account. The clerk then signs the paychecks and distributes them to the employees.

Required

Assume that this manual system is to be automated using a relational database system. Perform the following tasks. You may need to make assumptions about how certain automated activities will be performed.

a. List all candidate entities in the procedures described.

b. Identify the valid entities and explain why the rejected entities should not be modeled.

c. Create a data model of the process showing entity associations.

the business rules that constitute the purchases system for the safe buy grocery sto 639091

Aug 30, 2021 | Uncategorized

The business rules that constitute the purchases system for the Safe Buy Grocery Stores chain are similar at all the store locations. The purchase manager at each location is responsible for selecting his or her local suppliers. If the manager needs a product, he or she chooses a supplier. Each store follows the steps described here.

1. The purchasing function begins with sales representatives from suppliers periodically observing the shelves and displays at each location and recognizing the need to restock inventory. Inventory declines by direct sales to the customers or by spoilage of perishable goods. In addition, the supplier’s sales representatives review obsolescence reports that the purchase manager prepares. These reports identify slow moving and dated products that are deemed unsalable at a particular location. These products are returned to the supplier and replaced with more successful products. The sales representatives prepare a hard copy purchase requisition and meet with the purchase managers of the individual store locations. Together, the sales representative and the purchase manager create a purchase order defining the products, the quantity, and the delivery date.

2. At the intended delivery date, Safe Buy Grocery Stores receive the goods from the suppliers. Goods received are unloaded from the delivery trucks and stocked on the shelves and displays by part time employees.

3. The unloading personnel create a receiving report. Each day a receiving report summary is prepared and sent to the purchase managers for review.

4. The supplier subsequently submits an invoice to the AP department clerk, who creates an invoice record. The clerk reconciles the invoice against the receiving report and purchase order and then creates a payment obligation to be paid at a future date, depending on the terms of trade.

5. On the due date, a check is automatically prepared and sent to the supplier, and the payment is recorded in the check register. At the end of each day, a payment summary is sent to the purchase managers for review.

Required

Assume that the manual system described is to be automated using a relational database system. Perform the following tasks. You may need to make assumptions about how certain automated activities will be performed.

a. List all candidate entities in the procedures described.

b. Identify the valid entities and explain why the rejected entities should not be modeled.

c. Create a data model of the process showing entity associations.

d. Create a fully attributed model by adding primary keys, foreign keys, and data attributes. Normalize the model.

given the following business rules construct an er diagram so each rule is captured 639094

Aug 30, 2021 | Uncategorized

Given the following business rules, construct an ER diagram so each rule is captured for the database. Presume each rule is to be treated individually. Construct an ER diagram for each rule.

a. A retail sales company prepares sales orders for its customers’ purchases. A customer can make many purchases, but a sales order is written for a single customer.

b. A retail sales company orders inventory using a purchase order. An inventory item may be ordered many times, and a purchase order may be created for more than one inventory item.

c. A company that sells antique cars prepares a sales order for each car sold. The inventory for this company consists of unique automobiles, and only one of these automobiles may be listed on a sales order.

d. A grocery store identifies returning customers via a plastic card that the clerk scans at the time of each purchase. The purpose of this card is to track inventory and to maintain a database of customers and their purchases. Obviously, a customer may purchase an unlimited number of items from the grocery store. Items are unique only by a UPC code, and each UPC code may be associated with many different customers.

e. A video rental store uniquely identifies each of its inventory items so customers can rent a movie and return the movie via a drop box, and the store can identify which copy of the movie was rented and returned. A customer is allowed to rent up to six movies at a time, but a copy of a movie can only be rented by one customer at a time.

the concept of duality means that an rea diagram must consist of 639103

Aug 30, 2021 | Uncategorized

1. The concept of duality means that an REA diagram must consist of

a. two events—one of them economic and the other support.

b. two agents—one of them internal and the other external.

c. two resources—one increased and the other decreased by the same event.

d. all of the above.

e. none of the above.

2. Each economic event in an REA diagram is always

a. linked to at least two resource entities.

b. linked to two external agents.

c. linked to two internal agents.

d. linked to another economic event.

e. linked to a support event.

3. Which of the following are characteristics of economic agents?

a. They participate in economic events, but do not assume control of the resources.

b. They participate in economic events, but not in support events.

c. Internal agents are employees of the company whose system is being modeled.

d. External agents are not employees of the company whose system is being modeled.

e. All of the above describe agents.

4. Which of the following is true?

a. REA diagram entities are arranged in constellations by entity class.

b. ER diagrams present a static picture of the underlying business phenomena.

c. Entity names in ER diagrams are always in the noun form.

d. Events entity names in REA diagrams are in the verb form.

e. All of the above are true statements.

5. Which of the following events would be LEAST likely to be modeled in an REA diagram?

a. customer inquiries

b. sales to a customer

c. accounts payable

d. cash

e. all of these events would be modeled

feinman computers sells desktop computer systems that it manufactures from parts and 639107

Aug 30, 2021 | Uncategorized

Feinman Computers sells desktop computer systems that it manufactures from parts and software that thirdparty vendors provide. Customers are both private consumers and small businesses. Consumers pay cash or by credit card, but business customers buy on credit. A credit check is made of all new business customers before approving a line of credit. Sales are made online or by a hard copy order document that customers mail or fax to the company. When a credit order is received, the sales clerk verifies inventory availability, prepares a sales order and sends the stock release copy to Willy, a warehouse employee who picks the goods and arranges shipment. Willy then prepares the bills of lading and shipping notices. Barb in the billing department receives the shipping notice from Willy and updates the inventory subsidiary ledger to account for the reduction in inventory. Barb files the stock release, prepares the invoice, and mails a copy of it to the customer. Barb then updates the sales journal and then sends the invoice, sales order, stock release, and shipping notice to the AR department. Adam in the AR department files the documents that Barb sent him and updates the AR subsidiary ledger. Mickey in the mail room receives remittance advices and customer checks sent in payment of accounts. He sends the remittance advice to Adam for posting to the AR ledger and sends the checks to Carol, the cash receipts clerk. At the end of the day, she prepares a deposit slip and deposits the checks into the company’s bank account, files the bank receipt, and updates the cash receipts journal. Cash sales to consumer customers are handled in a manner similar to the process described here except that checks or credit card account numbers are submitted with the original order. At the end of each week, John, an accounting clerk, reconciles all transactions and posts them to the general ledger.

Required

a. Prepare the REA model of the sales/collection process.

b. Show the cardinalities for all associations.

c. List the tables, keys, and attributes needed t implement this model in a relational database.

k cannon inc is a manufacturer of portable cd players the company purchases raw mate 639108

Aug 30, 2021 | Uncategorized

K Cannon, Inc., is a manufacturer of portable CD players. The company purchases raw materials such as plastics and computer chips for its conversion cycle. The following describes K Cannon’s purchases and payments procedures. John, the purchasing department clerk, monitors raw materials inventory levels and prepares a purchase requisition when purchases are necessary. These are sent to the purchasing agent, who prepares six copies of a purchase order. Two purchase orders are sent directly to the vendor. One is placed in an open purchase order file in the purchasing department, and one is used to post to the purchases journal. Each week the purchasing department clerk prepares a journal voucher from the purchases journal and sends it to the general ledger department for posting. The AP and the receiving departments also each receive a copy of the purchase order, which they file temporarily. Upon receiving the raw materials, the receiving department clerk creates five copies of the receiving report. One copy is sent to the raw materials warehouse and one copy is sent to the AP department. Two copies are sent to the purchasing department, where one is filed and one is used to update the inventory records. The final copy is filed in the receiving department with the purchase order and packing slip. Vendors send their invoices to the AP department, where they are used to update the AP subsidiary ledger. In the cash disbursements department, Larry receives the information from the AP department, such as the purchase requisition, purchase order, receiving report, and invoice. He then prepares and signs the checks for the suppliers. After preparation of the checks, these supporting documents are sent back to the AP department. Each week, Larry prepares a journal voucher and sends it to the general ledger department for posting. Required

a. Prepare the REA model of the purchase cash payments process.

b. Show the cardinalities for all associations.

c. List the tables, keys, and attributes needed to implement this model in a relational database.

each of the following is a necessary element for the successful warehousing of data 639121

Aug 30, 2021 | Uncategorized

1. Closed database architecture is

a. a control technique intended to prevent unauthorized access from trading partners.

b. a limitation inherent in traditional information systems that prevents data sharing.

c. a data warehouse control that prevents unclean data from entering the warehouse.

d. a technique used to restrict access to data marts.

e. a database structure that many of the leading

ERPs use to support OLTP applications.

2. Each of the following is a necessary element for the successful warehousing of data EXCEPT

a. cleansing extracted data.

b. transforming data.

c. modeling data.

d. loading data.

e. all of the above are necessary.

3. Which of the following is typically NOT part of an ERP’s OLAP applications?

a. decision support systems

b. information retrieval

c. ad hoc reporting/analysis

d. logistics

e. what if analysis

4. There are a number of risks that may be associated with ERP implementation. Which of the following was NOT stated as a risk in the chapter?

a. A drop in firm performance after implementation because the firm looks and works differently than it did while using a legacy system.

b. Implementing companies have found that staff members, employed by ERP consulting firms, do not have sufficient experience in implementing new systems.

c. Implementing firms fail to select systems that properly support their business activities.

d. The selected system does not adequately meet the adopting firm’s economic growth.

e. ERPs are too large, complex, and generic for them to bewell integrated into most company cultures.

5. Which statement is NOT true?

a. In a typical two tier client server architecture, the server handles both application and database duties.

b. Client computers are responsible for presenting data to the user and passing user input back to the server.

c. Two tier architecture is for local area network applications where the demand on the server is restricted to a relatively small population of users.

d. The database and application functions are separated in the three tier model.

e. In three tier client server architectures, one tier is for user presentation, one is for database and applications access, and the third is for Internet access.

sap one of the leading erp producers makes several modules available to adopters whi 639122

Aug 30, 2021 | Uncategorized

1. Which statement is NOT true?

a. Drill down capability is an OLAP feature of data mining tools available to the user.

b. The data warehouse should be separate from operational systems.

c. De normalization of data involves dividing the data into very small tables that support detailed analysis.

d. Some decisions supported by a data warehouse are not fundamentally different from those that are supported by traditional databases.

e. Data cleansing involves transforming data into standard business terms with standard data values.

2. Which statement is LEAST accurate?

a. Implementing an ERP system has more to do with changing the way an organization does business than it does with technology.

b. The phased in approach to ERP implementation is particularly suited to diversified organizations whose units do not share common processes and data.

c. Because the primary reason for implementing an ERP is to standardize and integrate operations, diversified organizations whose units do not share common processes and data do not benefit and tend not to implement ERPs.

d. To take full advantage of the ERP process, reengineering will need to occur.

e. A common reason for ERP failure is that the ERP does not support one or more important business processes of the organization.

3. SAP, one of the leading ERP producers, makes several modules available to adopters. Which of the following is not a SAP module?

a. Business Process Support

b. Internet Development Support

c. Logistics

d. E Commerce Support

e. Human Resources

4. Auditors of ERP systems

a. need not be concerned about segregation of duties because these systems possess strong computer controls.

b. focus on output controls such as independent verification to reconcile batch totals.

c. are concerned that managers fail to exercise adequate care in assigning permissions.

d. do not see the data warehouse as an audit or control issue at all because financial records are not stored there.

e. need not review access levels granted to users because these are determined when the system is configured and never change.

5. Which statement is most correct?

a. SAP is more suited to service industries than manufacturing clients.

b. J.D. Edwards’s ERP is designed to accept the best practices modules of other vendors.

c. Oracle evolved from a human resources system.

d. PeopleSoft is the world’s leading supplier of software for information management.

e. Soft Brands provides enterprise software for the hospitality and manufacturing sectors.

explain any merit to this proposal what are the control issues if any 639123

Aug 30, 2021 | Uncategorized

You are the CEO of a large organization that implemented a data warehouse for internal analysis of corporate data. The operations manager has written you a memo advocating opening the data warehouse to your suppliers and customers. Explain any merit to this proposal. What are the control issues, if any?

Your organization is planning to implement an ERP system. Some managers in the organization favor the big bang approach. Others are advocating a phased in approach. The CEO has asked you, as project leader, to write a memo summarizing the advantages and disadvantages of each approach and to make a recommendation. This is a traditional organization with a strong internal hierarchy. The company was acquired in a merger 2 years ago, and the ERP project is an effort on the part of the parent company to standardize business processes and reporting across the organization. Prior to this, the organization had been using a general ledger package that it acquired in 1979. Most of the transaction processing is a combination of manual and batch processing. Most employees think that the legacy system works well. At this point, the implementation project is behind schedule.

for each of the following processes state whether oltp or olap is appropriate and wh 639124

Aug 30, 2021 | Uncategorized

For each of the following processes, state whether OLTP or OLAP is appropriate and why.

a. An order entry system that retrieves customer information, invoice information, and inventory information for local sales.

b. An order entry system that retrieves customer information, invoice information, inventory information, and several years of sales information about both the customer and the inventory items.

c. An order entry system that retrieves customer information, invoice information, inventory information, and information to compare the current sale to sales across several geographic regions.

d. An order entry system that retrieves customer information, invoice information, inventory information, and accounts receivable information for sales within one marketing region.

e. An insurance company requires a system that will allow it to determine total claims by region, determine whether a relationship exists between claims and meteorological phenomenon, and why one region seems to be more profitable than another.

f. A manufacturing company has only one factory, but that factory employs several thousand people and has nearly $1 billion in revenue each year. The company has seen no reason to make comparisons about its operations from year to year or from process to process. Its information needs focus primarily on operations, but it has maintained backup of prior year operations activities. Examination of prior year financial reports have shown that the company, while profitable, is not growing and return on investment is decreasing. The owners are not satisfied with this situation.

the nevada department of motor vehicles dmv is the agency responsible for licensing 639127

Aug 30, 2021 | Uncategorized

The Nevada Department of Motor Vehicles (DMV) is the agency responsible for licensing both drivers and vehicles in the state of Nevada. Until recently, legacy systems were used for both licensing needs. The legacy system for driver’s licenses maintained the following information about each licensed driver: name, age, address, violation, license classification, organ donation, and restrictions. The vehicle licensing system maintained information about each vehicle, including cost, taxes, vehicle identification number (VIN), weight, insurance, and ownership. In the summer of 1999, over a 3 day weekend, information from the two legacy systems was transferred to a new ERP. The ERP and all new hardware were installed in every DMV across the state, and when employees returned from their long weekend, an entirely new system was in place. The DMV employees were not well trained on the new system, and the system itself presented a few bugs. As a result of these obstacles, customers at the DMV faced excessively long lines and extended waiting times, and several of the employees simply quit their jobs because of frustrations with the system and difficulty dealing with irate customers. Knowing that the waiting times were so long, many drivers simply refused to renew licenses or obtain new licenses. Assume that the ERP the DMV management selected was correctly configured and was capable of meeting all requirements of the DMV; consider data warehousing implications, business culture implications, and disruption to operations; and discuss the advantages and disadvantages associated with the decision to implement the new system using the big bang approach versus the phased in approach.

do an internet search of complaints about erp consultants write a report about the 639130

Aug 30, 2021 | Uncategorized

Do an Internet search of complaints about ERP consultants. Write a report about the most common complaints and cite examples.

The Sports Car Factory is a SAP based project that deals with transaction processing, master file maintenance, adequacy of role definitions, and internal control issues. Students may download the case materials from the student resources section of the text’s Web site (www.cengage.com/accounting/hall). These materials include screen by screen instructions for how to process key transactions in the Order to Cash and Purchase to Pay modules. Members of the SAP University Alliance who wish to supplement their course with hands on SAP training may request the Sports Car Factory client from their SAP provider. For more on the SAP University Alliance please refer to http://www.sap.com/about/ citizenship/education/universityalliances.epx.

which of the following statements about the client server model is correct 639141

Aug 30, 2021 | Uncategorized

1. A DDos attack

a. is more intensive than a Dos attack because it emanates from single source.

b. may take the form of either a SYN flood or smurf attack.

c. is so named because it affects many victims simultaneously, which are distributed across the Internet.

d. turns the target victim’s computers into zombies that are unable to access the Internet.

e. none of the above is correct.

2. A ping signal is used to initiate

a. URL masquerading.

b. digital signature forging.

c. Internet protocol spoofing.

d. a smurf attack

e. a SYN ACK packet.

3. A digital signature

a. is the encrypted mathematical value of the message sender’s name.

b. is derived from the digest of a document that has been encrypted with the sender’s private key.

c. is derived from the digest of a document that has been encrypted with the sender’s public key.

d. is the computed digest of the sender’s digital certificate.

e. allows digital messages to be sent over an analog telephone line.

4. Which of the following statements about the client server model is correct?

a. It is best suited to the token ring topology because the random access method this topology uses detects data collisions.

b. It distributes both data and processing tasks to the server node. The client server model can use the bus or ring topology.

c. It is most effective when used as a bus topology because its deterministic access method avoids collisions and prevents data loss during transmissions.

d. It is more efficient than the bus or ring topologies because it transmits an entire file of records to the requesting node rather than only a single record.

e. It is not used in conjunction with either the bus or ring topologies.

5. Which of the following statements is correct?

a. A bridge is used to connect a LAN and a

b. Packet switching combines the messages of multiple users into a packet for transmission.

At the receiving end, the packet is disassembled into individual messages and distributed to the user.

c. The decision to partition a database assumes that no identifiable primary user exists in the organization.

d. Message switching is used to establish temporary connections between network devices for the duration of a communications session.

e. A deadlock is a temporary phenomenon that disrupts transaction processing. It will resolve itself when the primary computer completes processing its transaction and releases the data the other nodes need.

do some research on your own what edi options other than the one mr gresko suggested 639145

Aug 30, 2021 | Uncategorized

Mr. and Mrs. Gresko started Gresko Toys in the early 1960s. Initially, the company was small and few toys were produced. The talent and skills of Mr. Gresko were by far the major assets of the company. Toys were mainly made of wood and had few or no electronic parts; they were mainly manually operated and included toy cars, several kinds of dolls, and toy guns. Gresko Toys became part of the Pennsylvania tradition. Kids loved them and parents had no choice but to buy them. Gresko Toys quickly expanded, and by 1969 it reported a sales volume of $400,000, $50,000 of which was profit. Such profits caught the attention of other businesspeople, who began entering the market. The innovative spirit of some competitors through the introduction of fancy, battery operated toys stole some of Gresko’s market share. As the competition became more intense, the Greskos saw their market share declining even further. Children liked batteryoperated toys. Mr. Gresko saw this as both a threat and a challenge. He would not give up, however. He knew that he needed better machinery to make competitive toys. With a loan from the local bank and his savings, he sought and bought what he needed. After a period of training and test marketing, Gresko Toys was again in the market and boosting sales. However, the company was generating orders that the factory could not handle. The workforce rose from a low of 50 to a high of 350 people. Most of the workforce was on the factory floor. More equipment was purchased and the company has been expanding ever since. Today, the company sells $20 million of toys per year. The president of the company is Mrs. Gresko. Mr. Gresko thought that he should be on the factory floor managing production. Under him are the purchasing agent, supervising a buyer; the warehouse manager, managing two inventory clerks; a chief engineer; and a supervisor who is in charge of the factory workers. The controller of the company is Randi, the Greskos’ elder daughter. An accounting clerk, a cashier, and a personnel manager work for her. Finally, Bob, the Greskos’only son, is the sales manager. A credit manager and two salespeople work for him. Company Information At present, the company’s profit margin is 9 percent, only 2 percent below the industry average. According to Mr. Gresko, $850,000 in sales was lost last year because of insufficient inventory of parts. Because of the seasonal nature of the market and the short popularity span of most toys, Gresko customers require fast delivery; if the parts are not available, it takes at least 2 weeks to get the paperwork ready, order the parts, and have the suppliers deliver them. Some customers cannot wait that long; others order the toys and subsequently cancel the order if it takes too long to complete. Often orders are accepted on the assumption that the parts are readily available in the warehouse; when they are not, orders are delayed for weeks. A missing part not only delays an order, but the whole assembly line. To alleviate the problem, many parts are rushed in, which raises the cost of the toys tremendously. The fine quality of the products allows for slight price increases to make up for part of the extra cost, but customers have already complained about such price fluctuations. The Greskos are on good terms with their suppliers. After all, the market is so competitive that a reliable supplier is crucial to a firm’s survival. Most of their major suppliers are located in Pennsylvania, where the Greskos have about 35 percent of the market share. However, those suppliers deal with the Greskos’ competitors as well. There are about a dozen suppliers with whom the Greskos deal; eight of them supply about 95 percent of all inventory parts. Even though good supplier relations are crucial to Gresko Toys, suppliers have often complained about the Greskos’ promptness in paying. The Greskos’ demand on time delivery; the payment of the supplier invoice, however, is usually not timely. Mr. Gresko said that he does not have the time to run from the factory to the accounting department to make sure payments are on time. Late payments, however, also mean a loss of the 2 percent discount the suppliers offer for early payment. Besides resulting in lost sales, insufficient inventory of parts also delays the whole assembly line. Workers spend much time switching jobs. A just in time inventory system would, according to Mr. Gresko, be more appropriate for the factory. If the parts were available in the warehouse, the machines could be set up on an assembly line fashion and operated on scheduled runs. But the fact that the necessary parts are frequently missing, forcing production to switch to another job, is a major obstacle to a just in time inventory system. The Purchasing Cycle Gresko Toys is very involved in purchasing the parts used in the production of toys. The company uses a periodic inventory system. When sales orders are received, Bob Gresko sends a copy to the production floor. This copy is used to trigger production as well as to indicate the potential need of parts not available in inventory. The inventory clerks search for parts; when parts are out of stock, the inventory clerks issue two copies of a purchase requisition. Mr. Gresko approves this requisition before a purchase order is issued. One copy is sent to the purchasing manager and the other to the accounting department. The buyer checks the suppliers’ prices for the needed parts. Based on cost as well as past experience with a particular supplier, two suppliers are recommended. The purchasing manager subsequently decides on the supplier, and four copies of a purchase order are issued. The first copy is sent to the supplier, the purchasing manager files the second copy, the third is sent to the warehouse, and the fourth is sent to the accounting department. All purchase order copies are filed by supplier number. Approximately a week after the initiation of the purchase, the parts are received. The warehouse manager, along with the inventory clerks, inspects and counts the received parts. The purchase order copy that the purchasing manager previously received is used as the basis of comparison. A receiving report in three parts is prepared. If prices and quantities received agree with those ordered and with the information on the packing slip the carrier receives, the parts are accepted. If any differences exist, Mr. Gresko is called in to decide whether to accept or reject the parts. On many occasions, acceptance of parts will be delayed for days until the suppliers are informed and an agreement is reached. One copy of the receiving report is sent to the purchasing manager and another to the accounting department. The original copy is kept at the warehouse. The accounting clerk files the receiving report along with the purchase requisition and the purchase order by supplier number. The clerk also prepares the necessary journal entry and credits the related supplier in the subsidiary ledger. When the supplier sends the invoice, the accounting clerk matches the information to the purchase requisition, purchase order, and receiving report and prepares a disbursement voucher. This voucher is used for two purposes. It initiates the journal entry for the disbursement of cash, and the cashier uses it to issue a check. Randi Gresko, as well as Mrs. Gresko, must sign the checks before they are sent to the suppliers. Electronic Data Interchange In search of anything that could improve the present system at the Gresko Toys factory, Mr. Gresko came across the EDI system. One of his suppliers had attended a conference on EDI and had supplied Mr. Gresko with the conference material. Looking at the present system, Mr. Gresko tried to find EDI applications that would benefit the company’s operations and at the same time improve its financial position. For EDI to be implemented, certain databases will need to be established. An inventory master file with all relevant information is the key to the system. Predetermined order quantities and minimum inventory levels will need to be set for each item based on forecasts. At the warehouse, the inventory clerks will be constantly updating this database. When inventory levels drop below acceptable levels, an EDI purchase requisition will be issued to the purchasing department. A supplier master file with related information on supplier performance will be accessed to identify potential suppliers. Depending on how advanced the system is, the computer or the purchasing manager will choose the proper supplier and issue an EDI order. This means that the factory’s suppliers will also need to be using EDI. Various ways of developing EDI links with suppliers are available. In the Gresko case, developing an independent system seems more appropriate; it is cheaper and perhaps easier to convince suppliers to join in. Software is readily available in the market and is easy to set up. Someone, however, should help set up the EDI links with the suppliers. Once an EDI order is issued, the supplier will receive the message instantaneously. The open purchase order will be kept in a database until the receipt of the parts. Any changes to the order can be made by accessing the particular transmitted order and making the change. Suppliers can send the parts as well as their invoices more quickly. An EDI invoice can be sent to the Gresko factory upon shipment. On arrival of the parts, the receiving clerk will prepare a receiving report and file it in a receiving database file. This report will be used to verify prices by accessing the purchase order. Credit terms, volume discounts, trade allowances, and other adjustments to quoted prices can be settled through EDI transmitted messages. If adjustments from disagreements occur, the transaction is entered into the adjusted database file. The inventory master file is also updated, and the open purchase order is closed. In addition, the supplier history file and the accounts payable file are updated, and an evaluated receipts settlement (ERS) is established. An ERS is a database containing records to be used for the payment of suppliers. The EDI order is matched against the receiving and adjusted database files. This comparison creates a payment input file that contains the following three data items: (1) the scheduled payment date, within which any discount can be obtained; (2) the latest possible payment date; and (3) the remittance record for such payments. At the beginning of every day, the treasurer (who presently does not exist at Gresko Toys) should receive a listing of the payment input file; this listing will indicate what has to be paid and when. The treasurer will initiate an EDI payment pending the approval of Mrs. Gresko. Upon approval and the transmission of the payment, the supplier records as well as the accounts payable records will be automatically updated. For an EFT to occur, the banks that serve Gresko and its suppliers will also need to be using EDI. If such intermediary banks are not using EDI, Gresko and its suppliers will need to rely on a manual system of cash disbursement to settle their transactions. Conclusion Mr. Gresko has hired you to look at the present accounting system and his suggested EDI implementation plan. He wants you to identify the problem areas and look into the feasibility of setting up EDI links with the company’s suppliers.

Required

a. Draw a system flowchart of the present accounting system at Gresko.

b. What control problems, if any, exist in the accounting system?

c. Draw a system flowchart of the accounting system of the Gresko Toys factory using EDI as Mr. Gresko suggested.

d. Do some research on your own. What EDI options, other than the one Mr. Gresko suggested, are  available to the Gresko Toys factory?

e. Discuss the possible implementation of an EDI system at the Gresko Toys factory. What areas should

Mr. Gresko concentrate on, and what are the related issues associated with implementing EDI at the factory?

discuss the control and security weaknesses in this system 639147

Aug 30, 2021 | Uncategorized

Santa’sAttic.com is an online retailer/manufacturer of children’s toys. Its main competitors are larger electronic commerce toy companies including Amazon.com; Yahoo Shopping, which includes ToysRUs.com and KBKids.com; and all of the other retail stores with online shopping. It has a low market share compared to the industry leaders and is possibly a victim of Internet fraud. The CEO of Santa’sAttic.com has noticed that the level of accounts receivable has been quite high in comparison to prior years. He is wondering if this is a sign of weak internal controls. He has also heard through the grapevine that some of his customers were noticing unauthorized charges on their credit cards and is wondering if there may be online security issues to deal with as well. For this reason, you have been contacted to help Santa’sAttic.com restructure its company to prevent possible company failure. Santa’sAttic.com employs 100 individuals, 75 of whom work directly on the manufacturing line and 25 of whom hold administrative positions. Its customer base consists mainly of individuals, but also smaller toy stores, day care centers, and schools. Santa’sAttic.com works on a cash basis with its customers and accepts all major credit cards. It has running credit balances with all of its suppliers. Its credit terms are 2/10, n30. Being the technical genius that he is, the vice president of marketing took it upon himself to design the company Web site. The Web site has pages where customers can view all of the products and prices. There is a virtual shopping cart available for each customer once he or she has set up a demographic information account. If the customer chooses to make a purchase, he or she simply clicks on the direct link to the shopping cart from the product that he or she wishes to purchase and proceeds to the checkout. Here the customer is prompted to choose a payment method and enter the shipping address. Once this information has been entered, the customer chooses a shipping method. All shipping is done through U.S. Mail, UPS, Federal Express, Airborne Express, or certified mail. The customer is then informed of the total price and the date to expect shipment. Within the purchasing system, Santa’sAttic.com purchases raw materials for production, such as plastics, wood, metal, and certain fabrics. There is no formal purchasing department at Santa’sAttic.com. Judy, the inventory clerk in the warehouse department, is responsible for all purchasing activity. Santa’sAttic.com currently has only one warehouse, which is located in Cooperstown, New York. Within the warehouse department, Judy has access to the inventory records and knows when certain materials have to be repurchased. If materials are needed, she prepares a single purchase requisition and also five copies of the purchase order form. Judy includes all of the necessary information on all copies of the form, including the material to be purchased, the price of the material, the quantity needed, and the requested delivery date. Once completed, two copies of the form are sent to the vendor along with the order. One is placed in the open purchase order file in the warehouse, and one is used to update the inventory records that are also kept within the warehouse department. The final copy is forwarded to the receiving department. Harry, the receiving clerk, receives the materials and creates four copies of a receiving report based on the packing slip and purchase order information. Two of these receiving reports are forwarded to the warehouse, where one is used to update inventory records and the other is filed. One copy of the receiving report is also maintained within the receiving department and is filed along with the packing slip and the purchase order. The final copy is sent to the accounts payable department, where it is reconciled with the vendor invoice. Once the receiving report and the vendor invoice are reconciled in the accounts payable department, the liability is posted to the purchases journal and the total amount due is paid to the vendor. Finally, both the receiving report and the invoice are filed within the accounts payable department and Joanna, the accounts payable clerk, posts the liability to the general ledger. Santa’sAttic.com’s production workers each have time cards that they punch at a punch in station when they arrive and when they leave. The punch in station is located at the entrance to the plant and is not monitored. At the end of the week, the supervisor reviews, authorizes, and signs the time cards. He then sends the time cards to cash disbursements. Supervisors do not keep their own attendance records. Rose, in cash disbursements, receives the time cards and reconciles them with personnel records on the company database to verify the time cards for accuracy. All personnel records are maintained in a database. Access to the database is restricted. Personnel can update the records only once a year. Rose’s only view displays employee demographic information and does not allow access to salary information. Rose prepares the paychecks and signs them. She then prepares the payroll register using only information gained from the time cards. Sally in accounts payable receives a copy of the payroll register and uses it to update the general ledger. Accounts payable receives no information besides the payroll register. Rose, in cash disbursements, hands the prepared paychecks to the supervisors of each department for distribution. All checks are written directly from the company’s only cash account. Supervisors distribute the checks directly to the employees and themselves. Engaging in electronic commerce has exposed Santa’sAttic.com to a whole new nature of risks within its real time revenue cycle. A customer has the option of paying with a credit card or personal check. Upon entering the credit card information, it becomes attached to the customer’s e mail file. This information includes the type of card, the customer’s name as it appears on the card, the credit card number, and the expiration date. Once an order is placed, an employee reviews the order in question, verifies credit, and enters the transaction into main database. The main problem with this system is that orders have been placed with the company where the customer in question honestly denies ever submitting orders. It turns out that their children have placed many of these orders without the customer’s knowledge. The children were able to gain access to their parent’s account after the system recognized cookies in the hard drive. When the children went to the Web site, the page recognized them as the users of the account and gave them authorized access to make purchases. Another problem with the information in the revenue cycle has been that hackers have been able to enter the database and obtain information concerning customers. This unauthorized access has sent top management into a frenzy knowing that their customer information is insecure.

Required

a. Discuss the control and security weaknesses in this system.

b. Make specific recommendations for improving controls.

all of the following individuals would likely be sdlc participants except 639160

Aug 30, 2021 | Uncategorized

1. All of the following individuals would likely be SDLC participants EXCEPT

a. accountants.

b. shareholders.

c. management.

d. programmers.

e. all of the above.

2. Which of the following represents the correct order in problem resolution?

a. Define the problem, recognize the problem, perform feasibility studies, specify system objectives, and prepare a project proposal.

b. Recognize the problem, define the problem, perform feasibility studies, specify system objectives, and prepare a project proposal.

c. Define the problem, recognize the problem, specify system objectives, perform feasibility studies, and prepare a project proposal.

d. Recognize the problem, define the problem, specify system objectives, perform feasibility studies, and prepare a project proposal.

3. A feasibility study for a new computer system should

a. consider costs, savings, controls, profit improvement, and other benefits analyzed by application area.

b. provide the preliminary plan for converting existing manual systems and clerical operations.

c. provide management with assurance from qualified, independent consultants that the use of a computer system appeared justified.

d. include a report by the internal audit department that evaluated internal control features for each planned application.

4. Which of the following is the most important factor in planning for a system change?

a. Having an auditor as a member of the design team.

b. Using state of the art techniques.

c. Concentrating on software rather than hardware.

d. Involving top management and people who use the system.

e. Selecting a user to lead the design team.

5. In the context of the TELOS acronym, technical feasibility refers to whether

a. a proposed system is attainable, given the existing technology.

b. the systems manager can coordinate and control the activities of the systems department.

c. an adequate computer site exists for the proposed system.

d. the proposed system will produce economic benefits exceeding its costs.

e. the system will be used effectively within the operating environment of an organization.

which of the following is least likely to be an attribute of an employee table in a 639079

Aug 30, 2021 | Uncategorized

1. Which of the following is least likely to be an attribute of an employee table in a normalized database?

a. employee name

b. employee address

c. employee number

d. employee supervisor’s name

e. all of these would be attributes of the employee table in a normalized database.

2. The advantages to using a partitioned database approach include all of the following EXCEPT

a. the possibility for the deadlock phenomenon is reduced.

b. user control is increased.

c. transaction processing time is decreased.

d. the potential for wide scale disaster is reduced.

e. these are all advantages of partitioned databases.

3. Of the following, select the attribute that would be the best primary key in an inventory table.

a. ITEM NAME

b. ITEM LOCATION

c. ITEM COST

d. ITEM NUMBER

e. ITEM SUPPLIER

mark the attribute you have selected as the primary key pk as well as the attributes 639082

Aug 30, 2021 | Uncategorized

Design a relational database for a video rental store. The store, which rents only DVDs and has no sales other than DVD rentals, has approximately 5,000 customers and approximately 1,200 DVD titles. There are 25 suppliers of DVDs. Business rules include: (1) each DVD title may have many copies; (2) customers use their telephone numbers to uniquely identify themselves for video rentals; (3) a telephone number may apply to anyone in the household; (4) customers may rent more than one copy of any title, but, obviously, a copy of a title can only be rented by one customer at a time; and (5) suppliers may provide many titles and a DVD may be acquired from several different suppliers. Design the necessary database tables. State the primary key for each table as well as all other necessary attributes. Make certain the tables are in third normal form. Mark the attribute you have selected as the primary key (PK) as well as the attributes that serve as foreign keys (FK).

how is a lockout different from a deadlock 639084

Aug 30, 2021 | Uncategorized

How is a lockout different from a deadlock? Give an accounting example to illustrate why a database lockout is necessary and how a deadlock can occur. Provide meaningful table names in your example.

The XYZ Company is a geographically distributed organization with several sites around the country. Users at these sites need rapid access to common data for read only purposes. Which distributed database method is best under these circumstances? Explain your reasoning.

The ABC Company is a geographically distributed organization with several sites around the country. Users at these sites need rapid access to data for transaction processing purposes. The sites are autonomous; they do not share the same customers, products, or suppliers. Which distributed database method is best under these circumstances? Explain your reasoning.

why is it important to organizationally separate the accounting function from other 639029

Aug 30, 2021 | Uncategorized

1. Why is it important to organizationally separate the accounting function from other functions of the organization?

2. What is the most likely system acquisition method—in house, turnkey, backbone, or vendor supported—for each of the following situations?

• A plumbing supply company with 12 employees that sells standard products to wholesale customers in a local community needs a system to manage its affairs.

• A major oil company with diverse holdings, complex oil leases, and esoteric accounting practices needs a system that can coordinate its many enterprises.

• A municipal government needs a system that complies with standard government accounting practices but can be integrated with other existing systems.

3. The REA model is based on the premise that “business data must not be preformatted or artificially constrained and must reflect all relevant aspects of the underlying economic events.” What does this mean and how is it applied?

4. ERP systems are composed of a highly integrated set of standardized modules. Discuss the advantages and potential disadvantages of this approach.

which of the following is not a financial transaction 639030

Aug 30, 2021 | Uncategorized

1. Which of the following is NOT a financial transaction?

a. purchase of products

b. cash receipts

c. update valid vendor file

d. sale of inventory

2. The following are subsystems of the Accounting Information System, EXCEPT

a. Transaction Processing System.

b. Human Resources System.

c. General Ledger/Financial Reporting System.

d. Management Reporting System.

3. Which of the following is NOT a purpose of the Transaction Processing System?

a. managing and reporting on the status of financial investments

b. converting economic events into financial transactions

c. distributing essential information to operations personnel to support their daily operations

d. recording financial transactions in the accounting records

4. The objectives of the data collection activity of the general model for AIS are to collect data that are

a. relevant and redundant.

b. efficient and objective.

c. efficient and redundant.

d. efficient and relevant.

5. Which of the following is NOT a characteristic of effective information?

a. relevance

b. accuracy

c. summarization

d. precision

which of the following is not a database management task 639031

Aug 30, 2021 | Uncategorized

1. Which of the following is NOT a database management task?

a. retrieval

b. storage

c. summarization

d. deletion

2. When viewed from the highest to most elemental level, the data hierarchy is

a. attribute, record, file.

b. record, attribute, key.

c. file, record, attribute.

d. file, record, key.

e. key, record, file.

3. Which is NOT an accountant’s primary role in information systems?

a. system user

b. system auditor

c. system designer

d. system programmer

4. Which of the following is NOT an objective of all information systems?

a. support for the stewardship function of management

b. support for management decision making

c. support for the day to day operations of the firm

d. all of the above are objectives

5. Which of the following best describes the activities of the materials management function?

a. purchasing, receiving, and inventory control

b. receiving, sales, distribution, and purchasing

c. receiving, storage, purchasing, and accounts payable

d. purchasing, receiving, and storage

e. purchasing, storage, and distribution

explain why an organization would choose to install a distributed instead of a centr 639037

Aug 30, 2021 | Uncategorized

All records in a file must be uniquely identifiable in at least one attribute, which is its primary key. Drawing on your general knowledge of accounting, identify the primary key for the following types of accounting records. To illustrate, the first record is done for you.

7.

Drawing from your basic accounting knowledge, list the relevant data attributes that constitute the record types below. Identify which attribute is the primary key for the record.

Accounts Payable record

Inventory record

Customer Sales Orders record

Purchase Orders to vendors

Cash Receipts (checks) from customers

Employee Payroll Earnings records

Explain why an organization would choose to install a distributed instead of a centralized computer environment.

if management control and strategic planning decisions do not receive a high level o 639050

Aug 30, 2021 | Uncategorized

1. If management control and strategic planning decisions do not receive a high level of support from traditional information systems, then how do they get the support?

2. In terms of decision making capabilities, which type of report do you think is generally more important—scheduled reports or on demand reports? Explain your answer and give an example of each type of report.

3. Scheduled reports may contain some information that is relevant to some decisions and irrelevant to other decisions. Why are some scheduled reports designed this way, rather than multiple reports being generated for various decision making purposes?

4. Sometimes a trade off must be made between information accuracy and timeliness. Give an example in which it is imperative to make an estimate now, rather than wait a couple of weeks for an exact number.

which file has as its primary purpose to provide historical financial data for compa 639053

Aug 30, 2021 | Uncategorized

1. Sequential access means that

a. data are stored on magnetic tape.

b. the address of the location of data is found through the use of either an algorithm or an index.

c. to read any record on the file, all of the preceding records must first be read.

d. each record can be accessed in the same amount of time.

2. Which file has as its primary purpose to provide historical financial data for comparative financial reports?

a. journal voucher history file

b. budget master file

c. responsibility file

d. general ledger history file

3. Which of the following statements is true?

a. Journal vouchers detailing transaction activity flow from various operational departments into the GLS, where they are independently reconciled and posted to the journal voucher history file.

b. Journal vouchers summarizing transaction activity flow from the accounting department into the GLS, where they are independently reconciled and posted to the general ledger accounts.

c. Journal vouchers summarizing transaction activity flow from various operational departments into the GLS, where they are independently reconciled and posted to the general ledger accounts.

d. Journal vouchers summarizing transaction activity flow from various operational departments into the GLS, where they are independently reconciled and posted to the journal voucher history file.

4. Which of the following statements best describes a computer based GL/FRS?

a. Most firms derive little additional benefit from a real time FRS.

b. Batch processing is typically not appropriate for transaction processing of GLS.

c. The sequential file approach is an inefficient use of technology.

d. A batch system with direct access files recreates the entire database each time the file is updated.

5. Which of the following is NOT a potential exposure of the FRS?

a. a defective audit trail

b. general ledger accounts that are out of balance with subsidiary accounts

c. unauthorized access to the check register

d. unauthorized access to the general ledger

which task should the general ledger perform 639054

Aug 30, 2021 | Uncategorized

1. Which task should the general ledger perform?

a. update the general ledger

b. prepare journal vouchers

c. have custody of physical assets

d. have record keeping responsibility for special journals of subsidiary ledgers

2. The Ozment Corporation uses a performance reporting system that shows online the data for each subordinate who reports to a supervisor. The data presented show the actual costs incurred during the period, the budgeted costs, and all variances from budget for that subordinate’s department. The name of this system of reporting is a. contribution accounting.

b. responsibility accounting.

c. flexible budgeting.

d. program budgeting.

e. cost benefit accounting.

3. Which of the following is not a characteristic of the strategic planning process?

a. emphasis on both the short and long run

b. analysis of external economic factors

c. review of the attributes and behavior of the organization’s competition

d. analysis and review of departmental process

e. analysis of consumer demand

4. The following are all output reports of the financial reporting system, EXCEPT

a. variance analysis report.

b. statement of cash flows.

c. tax return.

d. comparative balance sheet.

5. Which of the following budgeting processes is LEAST likely to motivate managers toward organizational goals?

a. setting budget targets at attainable levels

b. participation by subordinates in the budgetary process

c. use of management by exception

d. holding subordinates accountable for the items they control

e. having top management set budget levels

which of the following would normally be considered in a strategic plan 639055

Aug 30, 2021 | Uncategorized

1. Which of the following would normally be considered in a strategic plan?

a. setting a target of 12 percent return on sales

b. maintaining the image of the company as the industry leader

c. setting a market price per share of stock outstanding

d. distributing monthly reports for departmental variance analysis

e. tightening credit terms for customers to 2/10, n/30

2. At what level of management is the long range planning function most important?

a. at top management levels

b. at middle management levels

c. at lower management levels

d. for staff functions

e. for line functions

3. Which of the following is the basic purpose of a responsibility accounting?

a. variance analysis

b. motivation

c. authority

d. budgeting

e. pricing

4. Which statement below best describes a profit center?

a. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply.

b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets, sources of supply, and significant control over the amount of invested capital.

c. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply.

d. The authority to provide specialized support to other units within the organization.

e. The responsibility for combining the raw materials, direct labor, and other factors of production into a final product.

5. Which statement below best describes an investment center?

a. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply.

b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply, and significant control over the amount of invested capital.

c. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply.

d. The authority to provide specialized support to other units within the organization.

e. The responsibility for developing markets for and selling of the output of the organization.

draw a diagram depicting the relationship between the general ledger master file con 639056

Aug 30, 2021 | Uncategorized

Draw a diagram depicting the relationship between the general ledger master file, control accounts, subsidiary files, and financial statements.

The following contains the various steps of the financial reporting process. Place these steps in the proper order and indicate whether each step is a function of the TPS, GLS, or FRS.

_ Record transaction in special journal

_ Make adjusting entries

_ Capture the transaction

_ Prepare the post closing trial balance

_ Prepare the adjusted trial balance

_ Prepare the financial statements

_ Journalize and post the adjusting entries

_ Post to the subsidiary ledger

_ Post to the general ledger

_ Journalize and post the closing entries

_ Prepare the unadjusted trial balance

john ozment director of special projects and analysis for ozment rsquo s corporation 639057

Aug 30, 2021 | Uncategorized

John Ozment, director of special projects and analysis for Ozment’s Corporation, is responsible for preparing corporate financial analyses and monthly statements and reviewing and presenting the financial impacts of proposed strategies to upper management. Data for such financial analyses are obtained from operations and financial databases through direct queries of Ozment’s department staff. Reports and charts for presentations are then prepared by hand and typed. Multiple copies are prepared and distributed to various users. The pressure on Ozment’s group has intensified as demand for more and more current information increases. A solution to this reporting problem must be found. The systems department wants to develop a proprietary software package to produce the reports automatically. The project would require the company to make a considerable programming investment. Ozment is concerned about the accuracy, completeness, and currency of data in automatically produced reports. He has heard about a reporting system called XBRL and wonders whether a new system based on this technology would not be more effective and reliable.

Required

a. Research the current state of XBRL and determine if this technology is appropriate for internal reporting projects such as this.

b. Identify the enhancements to current information and reporting that the company could realize by using XBRL.

c. Discuss any data integrity, internal control, and reporting concerns associated with XBRL.

classify the following decisions as being characteristic of strategic planning tacti 639059

Aug 30, 2021 | Uncategorized

Prepare an organizational chart for your university.

Classify the following decisions as being characteristic of strategic planning, tactical planning, managerial control, or operational control.

Determining the mix of products to manufacture this year

Examining whether the number of defective goods manufactured is within a certain range

Expanding a product line overseas

Determining the best distribution route

Examining whether the cost of raw materials is within a certain range

Examining whether personnel development cost is rising

Employing more automated manufacturing this year

Examining whether the amount of scrap material is acceptable

Building a new plant facility

Examining whether employees’ attitudes are improving

Examining whether production levels are within a predicted range

Making purchasing arrangements with a new supplier

Increasing production capabilities this year by purchasing a more efficient piece of machinery

Closing a plant

while attending night school to earn a degree in computer engineering stan wilson wo 639061

Aug 30, 2021 | Uncategorized

While attending night school to earn a degree in computer engineering, Stan Wilson worked for Morlot Container Company (MCC) as an assembly line supervisor. MCC was located near Wilson’s hometown and had been a prominent employer in the area for many years. MCC’s main product was milk cartons that were distributed throughout the Midwest for milk processing plants. The technology at MCC was stable, and the assembly lines were monitored closely. MCC employed a standard cost system because cost control was considered important. The employees who manned the assembly lines were generally unskilled workers who had been with the company for many years; the majority of these workers belonged to the local union. Wilson was glad he was nearly finished with school because he found the work at MCC to be repetitive and boring, even as a supervisor. The supervisors were monitored almost as closely as the line workers, and standard policies and procedures existed that applied to most situations. Most of MCC’s management had been with the company for several years and believed in clear lines of authority and well defined responsibilities. Whereas he knew he had performed well against the company’s standards, Wilson also knew that there probably would be little opportunity for advancement or significant compensation increases. After receiving his degree, Wilson went to work in the research and development department of Alden Computers, a 5 year old company specializing in educational computer systems for elementary schools. The company was customer oriented and willing to tailor its computer systems to the needs of the end users. The customization of its systems, combined with continual changes in technology, resulted in a job shop orientation in the company’s production facility. The employees who assembled Alden’s systems were skilled technicians who worked closely with the engineering staff. Wilson was gratified by the respect and authority his newly acquired knowledge and skills afforded him at Alden. If changes were required in his area of expertise, Wilson often made recommendations about how the work should proceed and was involved in decisions on new product development. The company’s management team frequently ‘‘rolled up its sleeves’’ and worked alongside the technicians when production problems arose; the lines of authority were sometimes difficult to distinguish, and decisions were often made by the expert on the spot. Wilson believed that his skills were appreciated at Alden, and he would be fairly compensated for his professional expertise.

Required

a. Morlot Container Company and Alden Computers represent two different types of organizational structures. In terms of each of the following points, explain how MCC differs from Alden Computers.

1. General organizational structure and climate

2. Bases of authority

3. Evaluation criteria

4. Bases of compensation

b. Both structures have potential benefits or can create problems. Discuss the features of the structure used by

1. Alden Computers that might benefit MCC.

2. Alden that might create problems for Alden.

3. MCC that might benefit Alden Computers.a

a variety of quantitative measures are used to evaluate employee performance includi 639063

Aug 30, 2021 | Uncategorized

A variety of quantitative measures are used to evaluate employee performance, including standard costs, financial ratios, human resource forecasts, and operating budgets.

Required

a. Discuss the following aspects of a standard cost system.

1. Discuss the characteristics that should be present to encourage positive employee motivation.

2. Discuss how the system should be implemented to positively motivate employees.

b. The use of variance analysis often results in management by exception.

1. Explain the meaning of management by exception.

2. Discuss the behavioral implications of management by exception.

c. Explain how employee behavior could be adversely affected when actual to budget comparisons are used as the basis for performance evaluation.

engineers education association eea is a volunteer membership organization providing 639065

Aug 30, 2021 | Uncategorized

Engineers Education Association (EEA) is a volunteer membership organization providing educational and professional services to its members. The professional staff is organized into four divisions with a total of 14 operating departments. EEA adopted an annual budget program many years ago as a means for planning and controlling activities. Each department of EEA prepares an annual budget in consultation with its respective volunteer committee(s). After a series of reviews by both the professional staff and the volunteer structure, the budget is adopted. The professional staff is expected to comply with the budget in conducting its activities and operations. The EEA’s accounting department generates monthly income statements that present actual performance as compared to budget for each EEA department. The November 2010 statement for the publications department is shown in the first figure designated Problem 17. Accompanying the report this month was a memorandum from EEA’s president, Daniel Riley, which is shown in the second figure designated as Problem 17. Marie Paige, publications manager, was having lunch with Jon Franklin, continuing education manager, when the following conversation about Riley’s memorandum took place.

Paige: The volunteers must be giving Riley some static—the memo doesn’t sound like him. Franklin: I think you’re right. One of EEA’s problems is that membership is down. Paige: I heard that both growth and retention are bad. This is confirmed by my results. A set percentage of the membership dues of each member is assigned to us each month for the magazine subscription. This amount is down 12 percent. I have no control over this number because only members get the magazine. Franklin: I wonder if the results are really as bad as they look. For instance, accounting has December 9, 2009 TO: Department Managers FROM: Daniel Riley, President SUBJECT: Performance Analysis The November 2009 operating results for your department are attached. The results for the entire organization and most departments are unfavorable as compared to budget. In fact, our results for the first three months of this fiscal year are substantially below budget. I want to determine our problems as quickly as possible. Prepare an explanation of all unfavorable (negative) variances by line item that exceed budget by 5 percent or more, and present a plan to eliminate such variances in the future. Remember that you played a key role in the development of the budget, and you have a responsibility to achieve the budget figures. These negative variances must be eliminated if we are to get back on steam. Please submit your analysis to your divisional director and accounting by noon, Monday, December 14. Divisional directors will meet at 10 a.m. on Tuesday, December 15, to review these analyses. divided all of the annual budget figures by 12 to derive the monthly figures. This is okay for some things but not for most. What about you? Paige: I agree. I don’t know why they do that when we spend so much time up front developing the annual budget. I know what Riley is attempting, but I don’t think he is going to get the results he wants. I know he wants to eliminate the negative variances, but some positive variances are really not favorable! We should be analyzing all significant variances—positive and negative. Franklin: What are you going to do—analyze just the negatives? Should we do anything before we prepare our reports?

Required

a. The monthly income statements that EEA’s accounting department prepares for each department of EEA are a form of communication.

1. Explain why the departmental income statements are considered a form of communication.

2. In terms of the format of the income statement presented for the publications department, evaluate

EEA’s departmental income statement as a communication device.

b. Paige stated that all significant variances should be analyzed because some positive variances are not favorable. Discuss why EEA’s departments should be analyzing all significant variances, both positive (favorable) and negative (unfavorable). As support for your answer, identify a positive variance from the publications department’s income statement that may not be favorable to EEA’s operations and explain why.

c. Recommend a course of action that Paige or Franklin could take to encourage Riley to have all significant variances reviewed.

the database approach has several unique characteristics not found in traditional fl 639076

Aug 30, 2021 | Uncategorized

1. The data attributes that a particular user has permission to access are defined by the

a. operating system view.

b. systems design view.

c. database schema.

d. user view.

e. application program.

2. The database approach has several unique characteristics not found in traditional (flat file) systems. Which of the following statements does not apply to the database model?

a. Database systems have data independence; that is, the data and the programs are maintained separately except during processing.

b. Database systems contain a data definition language that helps describe each schema and subschema.

c. The database administrator is the part of the software package that instructs the operating aspects of the program when data are retrieved.

d. A primary goal of database systems is to minimize data redundancy.

e. Database systems provide increased accessibility to data and flexibility in its usage.

3. One of the first steps in the creation of a relational database is to

a. integrate accounting and nonfinancial data.

b. plan for increased secondary storage capacity.

c. order data mining software that will facilitate data retrieval.

d. create a data model of the key entities in the system.

e. construct the physical user view using SQL.

4. Database currency is achieved by

a. implementing partitioned databases at remote sites.

b. employing data cleansing techniques.

c. ensuring that the database is secure from accidental entry.

d. an external auditor’s reconciliation of reports from multiple sites.

e. a database lockout that prevents multiple simultaneous access.

5. The installation of a database management system is likely to have the least impact on

a. data redundancy.

b. entity wide sharing of common data.

c. exclusive ownership of data.

d. the logic needed to solve a problem in an application program.

e. the internal controls over data access.

a relational database system contains the following inventory data part number descr 639077

Aug 30, 2021 | Uncategorized

1. The functions of a database administrator are

a. database planning, data input preparation, and database design.

b. data input preparation, database design, and database operation.

c. database design, database operation, and equipment operations.

d. database design, database implementation, and database planning.

e. database operations, database maintenance, and data input preparation.

2. A relational database system contains the following inventory data: part number, description, quantity on hand, and reorder point. These individual items are called

a. attributes.

b. relations.

c. associations.

d. occurrences.

3. Which of the following is a characteristic of a relational database system?

a. All data within the system are shared by all users to facilitate integration.

b. Database processing follows explicit links that are contained within the records.

c. User views limit access to the database.

d. Transaction processing and data warehousing systems share a common database.

4. Partitioned databases are most effective when

a. users in the system need to share common data.

b. primary users of the data are clearly identifiable.

c. read only access is needed at each site.

d. all of the above.

5. Database entities

a. may contain zero or many occurrences.

b. are represented as verbs in an ER diagram.

c. may represent both physical assets and intangible phenomena.

d. are often defined by common attributes that also define other entities.

e. are unique to a specific user view.

the database model most likely to be used in the development of a modern not legacy 639078

Aug 30, 2021 | Uncategorized

1. A transitive dependency

a. is a database condition that is resolved through special monitoring software.

b. is a name given to one of the three anomalies that result from un normalized database tables.

c. can exist only in a table with a composite primary key.

d. cannot exist in tables that are normalized at the 2NF level.

e. is none of the above.

2. A partial dependency

a. is the result of simultaneous user requests for the same data in a partitioned database environment.

b. is a name given to one of the three anomalies that result from un normalized database tables.

c. can exist only in a table with a composite primary key.

d. may exist in tables that are normalized at the 2NF level.

e. is none of the above.

3. Repeating group data

a. is a form of data redundancy common to replicated databases in a distributed database environment.

b. is a name given to one of the three anomalies that result from un normalized database tables.

c. can exist only in a table with a composite primary key.

d. cannot exist in tables that are normalized at the 2NF level.

e. is none of the above.

4. The database model most likely to be used in the development of a modern (not legacy) system is

a. hierarchical

b. structured

c. relational

d. network

e. navigational

5. Typical DBMS features include all of the following EXCEPT

a. database interface design and development.

b. backup and recovery.

c. program development.

d. database access.

e. all of these are typical DBMS features.

when comparing the banking crisis in the united states to the crises in latin americ 638990

Aug 30, 2021 | Uncategorized

Banking Crises Throughout the World

1) As in the United States, an important factor in the banking crises in Norway, Sweden, and

Finland was the

A) financial liberalization that occurred in the 1980s.

B) decline in real interest rates that occurred in the 1980s.

C) high inflation that occurred in the 1980s.

D) sluggish economic growth that occurred in the 1980s.

2) As in the United States, an important factor in the banking crises in Latin America was the

A) financial liberalization that occurred in the 1980s.

B) decline in real interest rates that occurred in the 1980s.

C) high inflation that occurred in the 1980s.

D) sluggish economic growth that occurred in the 1980s.

3) The Argentine banking crisis of 2001 resulted from Argentina”s banks being required to

A) purchase large amounts of government debt.

B) pay back the value of failed loans.

C) make risky real estate loans.

D) make loans to only state owned businesses.

4) When comparing the banking crisis in the United States to the crises in Latin America, cost to the taxpayers of the government bailouts was

A) higher in Latin American than in the United States.

B) higher in the United States than in Latin America.

C) about the same in both Latin America and the United States.

D) positive in Latin America but negative in the United States.

banking crises have occurred throughout the world what similarities do we find when 638991

Aug 30, 2021 | Uncategorized

1) The Japanese banking system went through a cycle of ________ in the 1990s similar to the one that occurred in the U.S. in the 1980s.

A) regulatory forbearance

B) policy antagonism

C) regulatory ignorance

D) policy renewal

2) China is trying to move its banking system from being strictly ________ owned by having them issue shares overseas.

A) state

B) domestic investor

C) depositor

D) domestic corporate

3) The evidence from banking crises in other countries indicates that

A) deposit insurance is to blame in each country.

B) a government safety net for depositors need not increase moral hazard.

C) regulatory forbearance never leads to problems.

D) deregulation combined with poor regulatory supervision raises moral hazard incentives.

4) Banking crises have occurred throughout the world. What similarities do we find when we look at the different countries?

the modern commercial banking system began in america when the a bank of united stat 638992

Aug 30, 2021 | Uncategorized

1) The modern commercial banking system began in America when the

A) Bank of United States was chartered in New York in 1801.

B) Bank of North America was chartered in Philadelphia in 1782.

C) Bank of United States was chartered in Philadelphia in 1801.

D) Bank of North America was chartered in New York in 1782.

2) A major controversy involving the banking industry in its early years was

A) whether banks should both accept deposits and make loans or whether these functions should be separated into different institutions.

B) whether the federal government or the states should charter banks.

C) what percent of deposits banks should hold as fractional reserves.

D) whether banks should be allowed to issue their own bank notes.

3) The government institution that has responsibility for the amount of money and credit supplied in the economy as a whole is the

A) central bank.

B) commercial bank.

C) bank of settlement.

D) monetary fund.

4) Because of the abuses by state banks and the clear need for a central bank to help the federal government raise funds during the War of 1812, Congress created the

A) Bank of United States in 1812.

B) Bank of North America in 1814.

C) Second Bank of the United States in 1816.

D) Second Bank of North America in 1815.

the second bank of the united states was denied a new charter by a president andrew 638993

Aug 30, 2021 | Uncategorized

1) The Second Bank of the United States was denied a new charter by

A) President Andrew Jackson.

B) Vice President John Calhoun.

C) President Benjamin Harrison.

D) President John Q. Adams.

2) Currency circulated by banks that could be redeemed for gold was called ________.

A) junk bonds

B) banknotes

C) gold bills

D) state money

3) To eliminate the abuses of the state chartered banks, the ________ created a new banking system of federally chartered banks, supervised by the ________.

A) National Bank Act of 1863; Office of the Comptroller of the Currency

B) Federal Reserve Act of 1863; Office of the Comptroller of the Currency

C) National Bank Act of 1863; Office of Thrift Supervision

D) Federal Reserve Act of 1863; Office of Thrift Supervision

the belief that bank failures were regularly caused by fraud or the lack of sufficie 638994

Aug 30, 2021 | Uncategorized

1) The belief that bank failures were regularly caused by fraud or the lack of sufficient bank capital explains, in part, the passage of

A) the National Bank Charter Amendments of 1918.

B) the Garn St. Germain Act of 1982.

C) the National Bank Act of 1863.

D) Federal Reserve Act of 1913.

2) Before 1863,

A) federally chartered banks had regulatory advantages not granted to state chartered banks.

B) the number of federally chartered banks grew at a much faster rate than at any other time since the end of the Civil War.

C) banks acquired funds by issuing bank notes.

D) banks were required to maintain 100% of their deposits as reserves.

3) Although the National Bank Act of 1863 was designed to eliminate state chartered banks by imposing a prohibitive tax on banknotes, these banks have been able to stay in business by

A) issuing credit cards.

B) ignoring the regulations.

C) acquiring funds through deposits.

D) branching into other states.

probably the most significant factor explaining the drastic drop in the number of ba 638996

Aug 30, 2021 | Uncategorized

1) The U.S. banking system is considered to be a dual system because

A) banks offer both checking and savings accounts.

B) it actually includes both banks and thrift institutions.

C) it is regulated by both state and federal governments.

D) it was established before the Civil War, requiring separate regulatory bodies for the North and South.

2) The Federal Reserve Act of 1913 required that

A) state banks be subject to the same regulations as national banks.

B) national banks establish branches in the cities containing Federal Reserve banks.

C) national banks join the Federal Reserve System.

D) state banks could not join the Federal Reserve System.

3) The Federal Reserve Act required all ________ banks to become members of the Federal Reserve System, while ________ banks could choose to become members of the system.

A) state; national

B) state; municipal

C) national; state

D) national; municipal

4) Probably the most significant factor explaining the drastic drop in the number of bank failures since the Great Depression has been

A) the creation of the FDIC.

B) rapid economic growth since 1941.

C) the employment of new procedures by the Federal Reserve.

D) better bank management.

member banks of the federal reserve system were given the option to purchase fdic in 638997

Aug 30, 2021 | Uncategorized

1) With the creation of the Federal Deposit Insurance Corporation, member banks of the Federal Reserve System ________ to purchase FDIC insurance for their depositors, while non member commercial banks ________ to buy deposit insurance.

A) could choose; were required

B) could choose; were given the option

C) were required, could choose

D) were required; were required

2) With the creation of the Federal Deposit Insurance Corporation,

A) member banks of the Federal Reserve System were given the option to purchase FDIC insurance for their depositors, while non member commercial banks were required to buy deposit insurance.

B) member banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors, while non member commercial banks could choose to buy deposit insurance.

C) both member and non member banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors.

D) both member and non member banks of the Federal Reserve System could choose, but were not required, to purchase FDIC insurance for their depositors.

3) The Glass Steagall Act, before its repeal in 1999, prohibited commercial banks from

A) issuing equity to finance bank expansion.

B) engaging in underwriting and dealing of corporate securities.

C) selling new issues of government securities.

D) purchasing any debt securities.

the legislation that separated investment banking from commercial banking until its 638998

Aug 30, 2021 | Uncategorized

1) The legislation that separated investment banking from commercial banking until its repeal in 1999 is known as the:

A) National Bank Act of 1863.

B) Federal Reserve Act of 1913.

C) Glass Steagall Act.

D) McFadden Act.

2) Which of the following statements concerning bank regulation in the United States are true?

A) The Office of the Comptroller of the Currency has the primary responsibility for state banks that are members of the Federal Reserve System.

B) The Federal Reserve and the state banking authorities jointly have responsibility for the 900 state banks that are members of the Federal Reserve System.

C) The Office of the Comptroller of the Currency has sole regulatory responsibility over bank holding companies.

D) The state banking authorities have sole regulatory responsibility for all state banks.

 3) Which bank regulatory agency has the sole regulatory authority over bank holding companies?

A) The FDIC

B) The Comptroller of the Currency

C) The FHLBS

D) The Federal Reserve System

4) State banks that are not members of the Federal Reserve System are most likely to be examined by the

A) Federal Reserve System.

B) FDIC.

C) FHLBS.

D) Comptroller of the Currency.

the most significant change in the economic environment that changed the demand for 638999

Aug 30, 2021 | Uncategorized

1) State banking authorities have sole jurisdiction over state banks

A) without FDIC insurance.

B) that are not members of the Federal Reserve System.

C) operating as bank holding companies.

D) chartered in the 21st century.

Financial Innovation and the Growth of the “Shadow Banking System”

1) Financial innovations occur because of financial institutions search for ________.

A) profits

B) fame

C) stability

D) recognition

2) ________ is the process of researching and developing profitable new products and services by financial institutions.

A) Financial engineering

B) Financial manipulation

C) Customer manipulation

D) Customer engineering

3) The most significant change in the economic environment that changed the demand for financial products in recent years has been

A) the aging of the baby boomer generation.

B) the dramatic increase in the volatility of interest rates.

C) the dramatic increase in competition from foreign banks.

D) the deregulation of financial institutions.

in the 1950s the interest rate on three month treasury bills fluctuated between 1 pe 639000

Aug 30, 2021 | Uncategorized

1) In the 1950s the interest rate on three month Treasury bills fluctuated between 1 percent and 3.5 percent; in the 1980s it fluctuated between ________ percent and ________ percent.

A) 5; 15

B) 4; 11.5

C) 4; 18

D) 5; 10

2) Uncertainty about interest rate movements and returns is called ________.

A) market potential

B) interest rate irregularities

C) interest rate risk

D) financial creativity

6) Rising interest rate risk

A) increased the cost of financial innovation.

B) increased the demand for financial innovation.

C) reduced the cost of financial innovation.

D) reduced the demand for financial innovation.

7) Adjustable rate mortgages

A) protect households against higher mortgage payments when interest rates rise.

B) keep financial institutions” earnings high even when interest rates are falling.

C) benefit homeowners when interest rates are falling.

D) generally have higher initial interest rates than on conventional fixed rate mortgages.

the most important source of the changes in supply conditions that stimulate financi 639002

Aug 30, 2021 | Uncategorized

1) The most important source of the changes in supply conditions that stimulate financial innovation has been the

A) deregulation of financial institutions.

B) dramatic increase in the volatility of interest rates.

C) improvement in computer and telecommunications technology.

D) dramatic increase in competition from foreign banks.

2) New computer technology has

A) increased the cost of financial innovation.

B) increased the demand for financial innovation.

C) reduced the cost of financial innovation.

D) reduced the demand for financial innovation.

3) Credit cards date back to

A) prior to the second World War.

B) just after the second World War.

C) the early 1950s.

D) the late 1950s.

4) A firm issuing credit cards earns income from

A) loans it makes to credit card holders.

B) subsidies from the local governments.

C) payments made to it by manufacturers of the products sold in stores on credit card purchases.

D) sales of the card in foreign countries.

the declining cost of computer technology has made a reality 639004

Aug 30, 2021 | Uncategorized

1) The declining cost of computer technology has made ________ a reality.

A) brick and mortar banking

B) commercial banking

C) virtual banking

D) investment banking

2) Bank customers perceive Internet banks as being

A) more secure than physical bank branches.

B) a better method for the purchase of long term savings products.

C) better at keeping customer information private.

D) prone to many more technical problems.

3) A disadvantage of virtual banks (clicks) is that

A) their hours are more limited than physical banks.

B) they are less convenient than physical banks.

C) they are more costly to operate than physical banks.

D) customers worry about the security of on line transactions.

4) So called fallen angels differ from junk bonds in that

A) junk bonds refer to newly issued bonds with low credit ratings, whereas fallen angels refer to previously bonds that have had their credit ratings fall below Baa.

B) junk bonds refer to previously bonds that have had their credit ratings fall below Baa, whereas fallen angels refer to newly issued bonds with low credit ratings.

C) junk bonds have ratings below Baa, whereas fallen angels have ratings below C.

D) fallen angels have ratings below Baa, whereas junk bonds have ratings below C.

out camping is a manufacturer of supplies and has several divisions one of which is 639006

Aug 30, 2021 | Uncategorized

Out Camping is a manufacturer of supplies and has several divisions, one of which is the tent division that produces the deluxe tent Away From Home. Fourteen thousand of these tents are made each year. This model of tent incorporates two zipping doors in each model. Zippers for these doors are purchased from Zippy Zippers. Out Camping began this year with 500 zippers in inventory, but is now adopting an economic order quantity approach to inventory. A review of last year’s records reveals the following information concerning each order placed with Zippy Zippers: variable labor— $12; variable supplies—$1; fixed computer costs—$4; fixed office expenses—$2; fixed mailing expenses— $2; and fixed supplies—$1. No differences are expected this year. Last year, the cost of carrying one zipper in inventory for the entire year was $1, but Out Camping has recently negotiated a new lease on its warehouse, and the cost of carrying each zipper is now expected to increase by 25 cents. Out Camping also found that it took 7 days from the time an order was sent to Zippy until the zippers were received.

Required

a. Compute economic order quantity.

b. Compute re order point. Presume Out Camping has a desire to reduce its ending inventory to one half of this year’s beginning amount and that the company produces the Away From Home model 140 days each year.

nautilus water pumps inc manufactures automotive water pumps since 1988 it has suppl 639010

Aug 30, 2021 | Uncategorized

Nautilus Water Pumps, Inc., manufactures automotive water pumps. Since 1988 it has supplied the Big Three (Ford Motor Company, General Motors, and Chrysler) North American auto manufacturers. Nautilus has recently broken into the American made Japanese car market. The company now supplies Toyota, Nissan, and Honda with automotive water pumps for their assembly operations in North America. Conversion Cycle At the start of the year each automobile manufacturer provides Nautilus with an order that is based on budgeted sales predictions. However, this order is guaranteed for only the first month; after that each automobile manufacturer can revise orders on a monthly basis. Nautilus’s current system requires orders for raw material to be placed with suppliers on a quarterly basis. Although the order provides a general idea of what is to be expected, orders from the automobile manufacturers can increase or decrease dramatically after the initial month. Under the current batch production process in the conversion cycle, the auto manufacturer sends the blanket order to the Materials and Operations Requirements Department. In this phase production documents (bills of materials, route sheets) are created and combined with inventory status reports from inventory control and the required engineering specifications from the engineering department to create a purchase requisition. Currently, the production scheduling phase falls under the responsibility of the work center. At the work center, the supervisor in charge prepares work orders, move tickets, and materials requisitions. These documents are sent to the cost accounting department and are also used to create an open work order file. The work center also retains copies of these documents so they can be used to initiate production activities. Under the current system, once production is initiated, any excess material is immediately scrapped. The work center also prepares the necessary timekeeping documents (payroll time card and job tickets) and sends this information to the cost accounting department as well. Upon completion of the production cycle, the production schedule and move tickets are used to close the open work order file, while one copy of the work order is sent to the finished goods warehouse and another is sent to inventory control. At the start of the production phase, a copy of the materials requisition is sent to storekeeping so that the necessary raw materials can be issued to the work center. A copy of the materials requisition is kept on file in storekeeping. Inventory control is involved in the batch production process throughout the entire operation. It releases the inventory status document to production, planning, and control so that materials and operations requirements can be determined. A copy of the materials requisition document is received from storekeeping so that inventory files can be updated. Once files are updated, the materials requisition is sent to cost accounting, while the updated files are also used to prepare a journal voucher that is sent to the general ledger department. A copy of the materials requisition, purchase requisition, and work order documents are kept on file in inventory control. Once the cost accounting department has received all the necessary information from the other departments, the work in process file is updated. All work center documents (move tickets, job tickets, materials requisitions, excess materials, and materials returns), along with a copy of the work order, are filed in the cost accounting department. At the end of the phase, the cost accounting department prepares a journal voucher and sends it to the general ledger department. This journal voucher, along with the one sent by inventory control, is used to update the general ledger. Both journal vouchers are kept on file in the general ledger department.

Required

a. Create a data flow diagram of the current system.

b. Create a system flowchart of the existing system.

c. Analyze the internal control weaknesses in the system. Model your response according to the six categories of physical control activities specified in the SAS 78/COSO control model.

d. Prepare a system flowchart of a redesigned computer based system that resolves the control weaknesses you identified. Explain your solution.

saga fly fishing inc is a manufacturer of high quality fly fishing equipment that in 639011

Aug 30, 2021 | Uncategorized

SAGA Fly Fishing, Inc., is a manufacturer of high quality fly fishing equipment that includes rods, reels, fly lines, nets, drift boats, waders, and other equipment. It also produces low end and moderately priced spinning rods and saltwater fishing equipment, which it sells under a different brand name to protect the high quality image associated with its fly fishing division. Its home office/fly fishing production plant is located near Manchester, New Hampshire. The spinning and saltwater manufacturing plants are in upstate New York. In total, SAGA employs 1,500 workers. SAGA distributes its products worldwide through three distribution centers. Sales are currently $200 million per year and growing. Although equipped with up to date production and shop floor machinery, SAGA’s Manchester plant’s inventory management, production planning, and control procedures employ little computer technology. The process begins in the storekeeping department, where Mr. Holt controls the inventory and maintains the inventory records. He checks daily on the inventory control files to assess the raw material inventory needs and sends an inventory status report to production planning and control. The production planning and control department is led by Mr. Brackenbury. Once the inventory status report is received, as well as the sales forecasts from marketing, Mr. Brackenbury takes a copy of the bill of materials and route sheet and assesses the inventory requirements. If the inventory amounts are adequate, Mr. Brackenbury prepares a production schedule, work order, move tickets, and materials requisitions, which he sends to the work centers. Mr. Brackenbury then sends a purchase requisition to the purchasing and storekeeping departments. Mr. Brackenbury also heads the various work centers, and the supervisors of the different work centers report to him. These supervisors, upon receipt of the aforementioned documents, send the materials requisitions to the storekeeping department, and Mr. Holt sends the necessary materials to the work center. He then files a copy of the materials requisition and updates the raw material inventory ledger. At the end of each day, he sends a copy of the materials requisitions to the cost accounting department. He also sends a journal voucher for the use of materials and a journal voucher for finished goods to the general ledger department. In the work centers, the managers of each center collect the employees’ time cards and send them to cost accounting, along with a copy to payroll. They also send the job and move tickets, which outline the various costs that have been incurred, to cost accounting. Ms. Kay, who heads the cost accounting department, collects all of the data, determines the overall cost, compares it to the standard costs, and determines the variances. Only the total variances are compared; the information is then used to evaluate managers and supervisors of the various departments. Ms. Kay updates the work in process files and finished goods inventory files. She then creates a journal voucher and sends it to the general ledger department. In the general ledger department, the information from the journal vouchers is entered in the general ledger computer program, where the files are updated. The journal vouchers are filed.

Required

a. Create a data flow diagram of the current system.

b. Create a system flowchart of the existing system.

c. Analyze the internal control weaknesses in the system. Model your response according to the six categories of physical control activities specified in the SAS 78/COSO control model.

d. Prepare a system flowchart of a redesigned computer based system that resolves the control weaknesses you identified. Explain your solution.

the production process at general manufacturing inc involves the planning scheduling 639012

Aug 30, 2021 | Uncategorized

The production process at General Manufacturing Inc. involves the planning, scheduling, and controlling of the physical products through the manufacturing process. General’s manufacturing process begins in the production planning and control department, where June determines the materials and operations requirements and combines information from various departments to assess inventory requirements needed to produce a product. Marketing provides the sales forecast, engineering provides the engineering specifications, and the storeroom provides the raw material inventory status. June reviews this information to prepare a purchase requisition document, which she sends to purchasing. June then reviews the bill of materials and route sheets and prepares the following documents: work orders, move tickets, and materials requisitions. Three copies of each document are prepared. One copy of the work order, move ticket, and materials requisitions document is sent to cost accounting. The remaining two copies are sent to Mike, the supervisor in the work center. Once Mike receives the production control documents, he initiates the production process. Mike sends a copy of the materials requisitions to the inventory storeroom in exchange for necessary raw material. When additional raw material is needed for a job in process, they are obtained by calling Steve, the storeroom clerk. Materials in excess of those needed for production are kept in the work center and used in the future. When the job passes through all production stages and is complete, Mike sends the finished product to the finished goods warehouse. He files one copy each of the work order, move ticket, and materials requisition and sends the remaining copies of the work order and move ticket to the cost accounting department. One of Mike’s duties is to review the job tickets and the employee timecards, which are sent to cost accounting and payroll, respectively. Steve, in the inventory storeroom, accepts materials requisitions from the work center employees and releases the raw material to the work centers. Steve files a copy of the materials requisitions and updates the raw material inventory records. At the end of the day he creates a journal voucher that is sent to Ronica in the cost accounting department. Ronica receives the following documents: work orders, move tickets, and materials requisitions from the production planning department; job tickets, work orders, and move tickets from the work center; and journal vouchers from the inventory storeroom. Ronica uses these to initiate a work in process account and to update the work in process as work progresses, to calculate variances, and to update the general ledger accounts. Ronica files all documents in the department. Required

a. Create a data flow diagram of the current system.

b. Create a system flowchart of the existing system.

c. Analyze the internal control weaknesses in the system. Model your response according to the six categories of physical control activities specified in the SAS 78/COSO control model.

d. Prepare a system flowchart of a redesigned computer based system that resolves the control weaknesses you identified. Explain your solution.

in 1983 mr amusement created bumper cars ltd a company whose main concern was the ma 639013

Aug 30, 2021 | Uncategorized

In 1983, Mr. Amusement created Bumper Cars, Ltd., a company whose main concern was the manufacture and repair of the exterior shells of bumper cars used in amusement parks. Although the company functioned on a small scale for a few years, it has recently expanded to some new areas, including larger scale amusement parks like Coney Island. Despite the recent increase in business, Bumper Cars still operates as a small company with limited technology invested in computer systems. Many departments run totally manual systems. Because of the expansion, however, Mr. Amusement has taken a serious look at the setup of his company and determined that some problems exist. The most pressing problem is in the area of inventory management and control. Inventory Control Department At Bumper Cars, raw material is stored in a warehouse until it is transferred to the production department for manufacturing. The inventory control department, which consists of three workers employed under the inventory manager, Ms. Coaster, works with the inventory at the raw material stage. Each worker’s responsibilities involve periodic inventory counts, along with the dayto day jobs of storing and transferring inventory. Each day, when the workers transfer the inventory to workin process, they also attempt to keep track of the levels of inventory to inform the purchasing department to reorder if the stock of materials becomes too low. However, in their attempt to achieve efficient and speedy transfers of raw material to manufacturing, the workers find it difficult and inconvenient to constantly check for low levels of inventory. As a result, the inventory frequently runs out before the workers reorder, which causes a gap in raw material needed for production. Production Department The production department receives the goods from inventory control and then puts them into production. Recently, Mr. Ferris, the production manager, complained to the president about the inconvenience caused by the lack of raw material at crucial periods of production. As he stated at an important managerial meeting: ‘‘Each week, we have a certain number of orders that must be filled, along with an indeterminable and changing number of repair requests. When we receive these orders, we immediately start work in order to fill our quotas on time. Lately, however, my workers have been handicapped by the fact that the raw material is not available to put into production at the times we need it. During these lags, production stops, workers become idle, and back orders pile up. Although we inform the inventory control and purchases departments of the problem right away, it still takes time for them to order and get the inventory to the warehouse. Then, it takes even more time for them to get the inventory to us in production. As a result, when we finally receive the necessary materials, my workers are forced to work overtime and at an unreasonable rate to meet demand. This up anddown method of working is bad for general morale in my department. My workers tend to become lazy, expecting a lag to occur. Also, requests for repairs become nearly impossible to fulfill because we never know if the materials needed to fix the problem will be available. Usually we fall so far behind on regular production during these lags that we must concentrate all our efforts just to meet daily demand. As a result, our repair business has dropped steadily over the past year. I feel that these production lags are extremely detrimental to our expanding business, and we should immediately work on finding a solution.’’ Possible Solutions As a result of Mr. Ferris’s complaints, Bumper Cars realized that some changes must be made. Basically, the company determined that both the inventory control and production departments needed reorganization at a reasonable cost. Another managerial meeting of all the department heads took place specifically to discuss this problem. Each manager came to the meeting with his or her own ideas for a possible solution. Mr. Flume, the controller, aggressively suggested that a new companywide computer system be installed. This system would solve the inventory control problems by keeping up todate records of the inventory available at any given time. At the same time, the system could be set up to reduce paperwork in the accounting and finance departments. In addition, this computer could link all the departments and thus alleviate communication breakdowns. Finally, the computer could be linked to the company from which Bumper Cars ordered its inventory, so that as soon as materials became low, it could immediately reorder before a problem developed. At this point in the meeting, the president, Mr. Amusement, jumped up and exclaimed: ‘‘Wait a minute! This system would solve our problems. But as you all know, we are not a large company. The cost of implementing a companywide computer system would be excessive. We would have to consider research, installation, maintenance, and repair costs involved in developing a complex system such as this one. When you take everything into consideration, I’m not sure if the costs would greatly exceed the benefits. Let’s search for some other less costly, but still efficient, solutions.’’ Mr. Ferris, the production manager, then offered a second possible solution. After agreeing that a computer system might be too expensive, he went on to suggest: ‘‘My main problem is meeting demand after a backlog has occurred: another possible solution might be to hire temporary workers to help alleviate the overload problem. These workers would not cost much because they would not receive benefits. Yet they would help solve the immediate problem. They would then be trained for production, so if people leave the production department, it would be easy to find replacements. As a result, production could continue with a minimum of problems and lags.’’ The managers discussed Mr. Ferris’s suggestion for a few minutes. Then Ms. Coaster, the inventory control manager, stood up and offered a third solution for the inventory problems. She explained: ‘‘Although Mr. Ferris’s plan might work, I feel that the real root of the problem lies in my department rather than in the area of production. It seems that the problem is that my employees have too many tasks to perform all at once. Therefore, what we really need are more employees in the inventory control department to continually check and recheck inventory levels. Then my other employees could concentrate solely on the transfer of raw material to production. By this separation of tasks, I feel we could efficiently solve our inventory problems. Also, the cost of hiring a few more people would not be excessive.’’ By the end of the meeting, management still had not made a decision. They had identified the need to reorganize, but they could not decide which approach would be the best for the company.

Required

Using the information about Bumper Cars, Ltd., along with your knowledge, either agree or disagree with the various solutions that the company’s employees suggest.

Discuss what you feel is the best solution for the company’s inventory problem.

blades r us is a growing manufacturing firm that produces high pressure turbine blad 639014

Aug 30, 2021 | Uncategorized

Blades R Us is a growing manufacturing firm that produces high pressure turbine blades. The company supplies these to airline companies as replacement parts for use in large commercial jet engines. The high pressure turbine is the segment of the engine that undergoes the most stress and heat. This requires that these parts be replaced frequently, so Blades R Us operates a relatively large firm with constant demand for its products. It operates out of Philadelphia, Pennsylvania, with a workforce of approximately 1,000 employees. Its annual output is based on demand, yet at full capacity, it has the ability to produce 100,000 blades a year. The company’s largest suppliers are casting houses, which take a rough shape of the final product to very demanding specifications given by Blades. Blades R Us then does the final detail work to bring it to Federal Aviation Administration regulations. The general business environment of Blades R Us is one in which it sees expansion in its future. This is because of the recent boom in the commercial airline industry. In addition, with the recent attention to airline safety and the discovery of bogus parts used in engines, the airlines will be doing better checks and needing to replace parts more frequently to ensure safety. Blades R Us has been around for some time, and therefore has no computer operated accounting systems. Some of the problems the company faces include (1) lack of inventory control; (2) keeping track of items in production or production that was completed in 1 day; (3) a need for trends and tracking of the largest customers so that future demand might be more accurate; (4) supervisory issues dealing with theft of parts, near substandard parts, and hiding of scrap; and (5) large inventories on hand of both finished goods and raw material. Procurement Procedures The company reviewed the records associated with the raw material inventory files. Mr. Sampson, the inventory manager, was in charge of this procedure. Once he finished his manual review of the inventory, he issued two purchase requisitions. He kept one of the purchase requisitions in the inventory department, filing it in a cabinet. He sent the second purchase requisition to the purchasing department. Ms. Connolly in the purchasing department took the requisition and completed a purchase order in triplicate. One copy was sent to the supplier, the second was filed in the purchases department filing cabinet, and the third was sent back to Mr. Sampson in the inventory department. Mr. Sampson used this purchase order to update his inventory records so he knew exactly how much inventory was on hand at all times. Once the inventory was updated, the purchase order was put in the filing cabinet in the inventory department with the original purchase requisition. The supplier received the purchase order and sent the requested blades, including a packing slip with the shipment. At the same time shipment was made, the supplier also sent an invoice to the accounts payable department. In receiving, Mr. Hiro simply used the packing slip that was included with the goods to make three copies of the receiving report. The first copy was sent to the purchasing department, where it was filed. The second copy was sent to accounts payable, and Mr. Hiro filed the third copy in the filing cabinet. The accounts payable department filed the receiving report until the invoice from the supplier arrived. Then Mr. Maldonado checked both the receiving report and invoice to make sure everything sent was actually received. Mr. Maldonado then handed off the documents to Mr. Bailey so that he could do the appropriate posting and filing of the checked documents. Mr. Bailey posted the changes to the voucher register and purchases journal, sending a journal voucher to the general ledger department after the purchases journal was updated. Mr. Bailey then put the receiving report and invoice in the appropriate file. Also in accounts payable, Mr. Dresden scanned the records to see when it was time to write checks to the different vendors. Whenever a due date arrived, Mr. Dresden would write a check in two copies. The first copy was filed in the cabinet, and the other was sent to the appropriate vendor. Then Mr. Dresden updated the accounts payable subsidiary ledger and sent an account summary to the general ledger department. The general ledger department was a tight ship. Mr. Callahan received the account summary and journal voucher and then posted the necessary changes to the general ledger. After posting, the documents were filed in the general ledger department. Conversion Cycle Procedures The conversion cycle at Blades R Us begins with the production planning and control department receiving the inventory levels from the finished goods warehouse. If the number of a given part in the finished goods warehouse is below the set minimum, then production for the part is to be run. The production planning and control department gathers the bill of materials and the route sheet for that part and makes up the production schedule and work orders. A copy of the work order, route sheet, bill of materials, and production schedule is filed at the production planning and control department. A copy of the production schedule, work order, and bill of materials is sent to the work centers. Once the work centers receive the paperwork from the production planning and control department, production is initiated. The work order is sent to the finished goods warehouse, and the production schedule and route sheet are filed. Time cards are filled out and given to the payroll department. Materials requisition forms are filled out to attain the necessary materials—one is filed and the other is sent to the inventory control department. When inventory control receives the materials requisition, they send the desired material to the work center, update the inventory records, and then file the material requisition. The inventory control department makes the decision to buy raw material based on a predetermined minimum of parts in inventory and a set order number. The inventory records are periodically reviewed, and when the number of a part in inventory falls below the set minimum, a purchase requisition is completed. One copy is sent to the purchasing department and the other is filed. The purchasing department sends inventory control a purchase order, which it then uses to update its inventory records. The purchase order is then filed. Blades R Us has made the decision to try to become a world class company. It realizes that it will have to make many fundamental changes to achieve this goal. One of the first steps that they have decided to take is to implement a MRP system. They feel this will help them to keep better track of their inventories, work in process, and customer demands and trends. They also realize that there are many weaknesses in the other pieces of their conversion cycles, and they would like to take steps in improving those as well.

Required

a. Create a data flow diagram of the current system.

b. Create a system flowchart of the existing system.

c. Analyze the internal control weaknesses in the system. Model your response according to the six categories of physical control activities specified in the SAS 78/COSO control model.

d. Prepare a system flowchart of a redesigned computer based system that resolves the control weaknesses you identified. Explain your solution.

automotive component corporation acc began in 1979 as a small machine shop supplying 639015

Aug 30, 2021 | Uncategorized

Automotive Component Corporation (ACC) began in 1979 as a small machine shop supplying the Big Three automakers. The business is now a $2 billion component manufacturing firm. During the three decades from 1979 to 2009, ACC expanded from a common machine shop to a modern manufacturing operation with CNC machines, automatic guided vehicles (AGVs), and a world class quality program. Consequently, ACC’s direct labor cost component has decreased significantly since 1979 from 46 percent to 11 percent. ACC’s current cost structure is as follows:

Despite efforts to expand, revenues leveled off and margins declined in the late 1980s and early 1990s. ACC began to question its investment in the latest flexible equipment and even considered scrapping some. Bill Brown, ACC’s controller, explains: ‘‘At ACC, we have made a concerted effort to keep up with current technology. We invested in CNC machines to reduce setup time and setup labor and to improve quality. Although we accomplished these objectives, they did not translate to our bottom line. Another investment we made was in AGVs. Our opinion at the time was that the reduction in labor and increased accuracy of the AGVs combined with the CNC machines continue to dwindle, it becomes harder and harder to defend my position.’’ With these sentiments in mind, Bill decided to study the current costing system at ACC in detail. He had attended a seminar recently that discussed some of the problems that arise in traditional cost accounting systems. Bill felt that some of the issues discussed in the meeting directly applied to ACC’s situation. The speaker mentioned that activity based costing (ABC) was a tool that corporations could use to better identify their true product costs. He also mentioned that better strategic decisions could be made based on the information provided from the activity based reports. Bill decided to form an ABC team to look at the prospect of implementing ABC at ACC. The team consisted of two other members: Sally Summers, a product engineer with a finance background, and Jim Schmidt, an industrial engineer with an MBA. Sally had some feelings about the current state of ACC: ‘‘ACC is a very customer focused company. When the automakers demanded small volume orders, we did what we could to change our manufacturing processes. The problem is that no one realized that it takes just as long for the engineering department to design a ten component part and process for a small volume order as it does for a ten component, large volume order. Our engineering departments cannot handle this kind of workload much longer. On top of this, we hear rumors about layoffs in the not too distant future.’’ Jim felt similarly: ‘‘Sally is correct. As an industrial engineer, I get involved in certain aspects of production that are simply not volume dependent. For example, I oversee first run inspections. We run a predetermined number of parts before each full run to ensure the process is under control. Most of the inspections we perform on the automobile components are looking for burrs, which can severely affect fit or function downstream in our assembly process. Many times, we can inspect sample part runs right on the line. The real consumption of resources comes from running a sample batch, not by inspecting each part.’’ To begin its study, the team obtained a cost report from the plant’s cost accountant. A summary of the product costs is as follows:

ACC has been determining product costs basically the same way it did in 1979. Raw material cost is determined by multiplying the number of components by the standard raw material price. Direct labor cost is determined by multiplying the standard labor hours per unit by the standard labor rate per hour. Manufacturing overhead is allocated to product based on direct labor content. The team then applied the traditional 20 percent markup to the three products. This represents the target price that ACC tries to achieve on its products. They then compared the target price to the market price. ACC was achieving its 20 percent target gross margin on Product 101, but not on Products 102 or 103, as illustrated in the following table.

Bill was concerned; he remembered the conference he had attended. The speaker had mentioned examples of firms headed in a downward spiral because of a faulty cost system. Bill asked the team, ‘‘Is ACC beginning to show signs of a faulty cost system?’’ Next, the team looked at the manufacturing overhead breakdown (Case 6, Fig. 1). The current cost accounting system allocated 100 percent of this overhead to product based on labor dollars. The team felt ACC could do a better job of tracing costs to products based on transaction volume. Jim explains: ‘‘The manufacturing overhead really consists of the six cost pools shown in Figure 1. Each of these activity cost pools should be traced individually to products based on the proportion of transactions they consume, not the amount of direct labor they consume.’’ The team conducted the following interviews to determine the specific transactions ACC should use to trace costs from activities to products. John ‘‘Bull’’ Adams, the supervisor in charge of material movement, provided the floor layout shown in Figure 2 for Case 6 and commented on his department’s workload: ‘‘Since ACC began accepting small volume orders, we have had our hands full. Each time we design a new part, a new program must be written. Additionally, it seems the new small volume parts we are producing are much more complex than the largevolume parts we produced just a few years ago. This translates into more moves per run. Consequently, we wind up performing AGV maintenance much more frequently. Sometimes I wish we would get rid of those AGVs; our old system of forklifts and operators was much less resistant to change.’’ Sara Nightingale, the most experienced jobsetter at ACC, spoke about the current status of setups: ‘‘The changeover crew has changed drastically recently. Our team has shifted from mostly mechanically skilled maintenance people to a team of highly trained programmers and mechanically skilled people. This shift has greatly reduced our head count. Yet the majority of our work is still spent on setup labor time.’’ Phil Johnson, the shipping supervisor, told the team what he felt drove the activity of the shipping department: ‘‘The volume of work we have at the shipping department is completely dependent on the number of trucks we load. Recently, we have been filling more trucks per day with less volume. Our workload has increased, not decreased. We still have to deal with all of the paperwork and administrative hassles for each shipment. Also, the smaller trucks they use these days are sideloaders, and our loading docks are not set up to handle these trucks. Therefore, it takes us a while to coordinate our docks.’’ Once the interviews were complete, the team went to the systems department to request basic product information on the three products ACC manufactured. The information is shown.

Required

The team has conducted all of the required interviews and collected all of the necessary information in order to proceed with its activity based costing (ABC) pilot study.

a. The first three steps in an activity based cost implementation are to define the resource categories, activity centers, and first stage resource drivers. These steps have already been completed at ACC, and the results are displayed. Using the information from the case, perform the next step for the implementation team and determine the second stage cost drivers ACC should use in its ABC system. Support your choices with discussion.

b. Using the second stage cost drivers identified in part (a), compute the new product costs for Products 101, 102, and 103.

c. Modify Figure 2 for Case 6 and include the cost drivers identified in part (a).

d. Compare the product costs computed under the current cost accounting system to the product costs computed under the activity based system.

e. Explain the differences in product cost.

f. Given the new information provided by the ABC system, recommend a strategy ACC should pursue to regain its margins, and comment on specific improvements that would reduce ACC’s overhead burden in the long run.

discuss what is meant by the statement ldquo the accounting system is a conceptual f 639027

Aug 30, 2021 | Uncategorized

1. Discuss what is meant by the statement, “The accounting system is a conceptual flow of information that represents the physical flows of personnel, raw materials, machinery, and cash through the organization.”

2. Discuss the importance of accounting independence in accounting information systems. Give an example of where this concept is important (use an example other than inventory control).

3. Discuss why it is crucial that internal auditors report solely to the uppermost level of management (either to the chief executive officer or the audit committee of the board of directors) and answer to no other group.

4. Contrast centralized data processing with distributed data processing. How do the roles of systems professionals and end users change? What do you think the trend is today?

in may 1991 the fdic announced that it would sell the government s final 26 stake in 638968

Aug 30, 2021 | Uncategorized

1) In May 1991, the FDIC announced that it would sell the government”s final 26% stake in Continental Illinois, ending government ownership of the bank that it had rescued in 1984. The FDIC took control of the bank, rather than liquidate it, because it believed that Continental Illinois

A) was a good investment opportunity for the government.

B) could be the Chicago branch of a new governmentally owned interstate banking system.

C) was too big to fail.

D) would become the center of the new midwest region central bank system.

2) If the FDIC decides that a bank is too big to fail, it will use the ________ method, effectively ensuring that ________ depositors will suffer losses.

A) payoff; large

B) payoff; no

C) purchase and assumption; large

D) purchase and assumption; no

3) Federal deposit insurance covers deposits up to $100,000, but as part of a doctrine called “too big to fail” the FDIC sometimes ends up covering all deposits to avoid disrupting the financial system. When the FDIC does this, it uses the

A) “payoff” method.

B) “purchase and assumption” method.

C) “inequity” method.

D) “Basel” method.

a well capitalized financial institution has to lose if it fails and thus is likely 638969

Aug 30, 2021 | Uncategorized

1) The result of the too big to fail policy is that ________ banks will take on ________ risks, making bank failures more likely.

A) small; fewer

B) small; greater

C) big; fewer

D) big; greater

2) A problem with the too big to fail policy is that it ________ the incentives for ________ by big banks.

A) increases; moral hazard

B) decreases; moral hazard

C) decreases; adverse selection

D) increases; adverse selection

3) The too big to fail policy

A) reduces moral hazard problems.

B) puts large banks at a competitive disadvantage in attracting large deposits.

C) treats large depositors of small banks inequitably when compared to depositors of large banks.

D) allows small banks to take on more risk than large banks.

4) Regulators attempt to reduce the riskiness of banks” asset portfolios by

A) limiting the amount of loans in particular categories or to individual borrowers.

B) encouraging banks to hold risky assets such as common stocks.

C) establishing a minimum interest rate floor that banks can earn on certain assets.

D) requiring collateral for all loans.

27) A well capitalized financial institution has ________ to lose if it fails and thus is ________ likely to pursue risky activities.

A) more; more

B) more; less

C) less; more

D) less; less

a bank failure is less likely to occur when a a bank holds less u s government secur 638970

Aug 30, 2021 | Uncategorized

1) A bank failure is less likely to occur when

A) a bank holds less U.S. government securities.

B) a bank suffers large deposit outflows.

C) a bank holds fewer excess reserves.

D) a bank has more bank capital.

2) The leverage ratio is the ratio of a bank”s

A) assets divided by its liabilities.

B) income divided by its assets.

C) capital divided by its total assets.

D) capital divided by its total liabilities.

3) To be considered well capitalized, a bank”s leverage ratio must exceed ________.

A) 10%

B) 8%

C) 5%

D) 3%

4) Off balance sheet activities

A) generate fee income with no increase in risk.

B) increase bank risk but do not increase income.

C) generate fee income but increase a bank”s risk.

D) generate fee income and reduce risk.

the practice of keeping high risk assets on a bank s books while removing low risk a 638972

Aug 30, 2021 | Uncategorized

1) The practice of keeping high risk assets on a bank”s books while removing low risk assets with the same capital requirement is know as

A) competition in laxity.

B) depositor supervision.

C) regulatory arbitrage.

D) a dual banking system.

2) Banks engage in regulatory arbitrage by

A) keeping high risk assets on their books while removing low risk assets with the same capital requirement.

B) keeping low risk assets on their books while removing high risk assets with the same capital requirement.

C) hiding risky assets from regulators.

D) buying risky assets from arbitragers.

3) Because banks engage in regulatory arbitrage, the Basel Accord on risk based capital requirements may result in

A) reduced risk taking by banks.

B) reduced supervision of banks by regulators.

C) increased fraudulent behavior by banks.

D) increased risk taking by banks.

the chartering process is similar to potential borrowers and the restriction of risk 638973

Aug 30, 2021 | Uncategorized

1) One of the criticisms of Basel 2 is that it is procyclical. That means that

A) banks may be required to hold more capital during times when capital is short.

B) banks may become professional at a cyclical response to economic conditions.

C) banks may be required to hold less capital during times when capital is short.

D) banks will not be required to hold capital during an expansion.

2) Overseeing who operates banks and how they are operated is called ________.

A) prudential supervision

B) hazard insurance

C) regulatory interference

D) loan loss reserves

3) The chartering process is especially designed to deal with the ________ problem, and regular bank examinations help to reduce the ________ problem.

A) adverse selection; adverse selection

B) adverse selection; moral hazard

C) moral hazard; adverse selection

D) moral hazard; moral hazard

4) The chartering process is similar to ________ potential borrowers and the restriction of risk assets by regulators is similar to ________ in private financial markets.

A) screening; restrictive covenants

B) screening; branching restrictions

C) identifying; branching restrictions

D) identifying; credit rationing

regular bank examinations and restrictions on asset holdings help to indirectly redu 638974

Aug 30, 2021 | Uncategorized

1) Banks will be examined at least once a year and given a CAMELS rating by examiners. The L stands for ________.

A) liabilities

B) liquidity

C) loans

D) leverage

2) The federal agencies that examine banks include

A) the Federal Reserve System.

B) the Internal Revenue Service.

C) the SEC.

D) the U.S. Treasury.

3) Banks are required to file ________ usually quarterly that list information on the bank”s assets and liabilities, income and dividends, and so forth.

A) call reports

B) balance reports

C) regulatory sheets

D) examiner updates

4) Regular bank examinations and restrictions on asset holdings help to indirectly reduce the ________ problem because, given fewer opportunities to take on risk, risk prone entrepreneurs will be discouraged from entering the banking industry.

A) moral hazard

B) adverse selection

C) ex post shirking

D) post contractual opportunism

consumer protection legislation includes legislation to a reduce discrimination in c 638976

Aug 30, 2021 | Uncategorized

1) Consumer protection legislation includes legislation to

A) reduce discrimination in credit markets.

B) require banks to make loans to everyone who applies.

C) reduce the amount of interest that bank”s can charge on loans.

D) require banks to make periodic reports to the Better Business Bureau.

2) An important factor in producing the subprime mortgage crisis was

A) lax consumer protection regulation.

B) onerous rules placed on mortgage originators.

C) weak incentives for mortgage brokers to use complicated mortgage products.

D) strong incentives for the mortgage brokers to verify income information.

3) Competition between banks

A) encourages greater risk taking.

B) encourages conservative bank management.

C) increases bank profitability.

D) eliminates the need for government regulation.

4) Regulations that reduced competition between banks included

A) branching restrictions.

B) bank reserve requirements.

C) the dual system of granting bank charters.

D) interest rate ceilings.

which of the following is not a reason financial regulation and supervision is diffi 638977

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1) The ________ that required separation of commercial and investment banking was repealed in 1999.

A) the Federal Reserve Act.

B) the Glass Steagall Act.

C) the Bank Holding Company Act.

D) the Monetary Control Act.

2) Which of the following is not a reason financial regulation and supervision is difficult in real life?

A) Financial institutions have strong incentives to avoid existing regulations.

B) Unintended consequences may happen if details in the regulations are not precise.

C) Regulated firms lobby politicians to lean on regulators to ease the rules.

D) Financial institutions are not required to follow the rules.

3) Who has regulatory responsibility when a bank operates branches in many countries?

A) It is not always clear.

B) The WTO.

C) The U.S. Federal Reserve System.

D) The first country to submit an application.

the collapse of the bank of credit and commerce international bcci showed the diffic 638978

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1) The collapse of the Bank of Credit and Commerce International, BCCI, showed the difficulty of international banking regulation. BCCI operated in more than ________ countries and was supervised by the small country of ________.

A) 70, Luxembourg

B) 100, Monaco

C) 70, Monaco

D) 100, Luxembourg

2) Agreements such as the ________ are attempts to standardize international banking regulations.

A) Basel Accord

B) UN Bank Accord

C) GATT Accord

D) WTO Accord

3) The Basel Committee ruled that regulators in other countries can ________ the operations of a foreign bank if they believe that it lacks effective oversight.

A) restrict

B) encourage

C) renegotiate

D) enhance

in the ten year period 1981 1990 1202 commercial banks were closed with a peak of 20 638979

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1) The government safety net creates both an adverse selection problem and a moral hazard problem. Explain.

The 1980″s Savings and Loan and Banking Crisis

1) In the ten year period 1981 1990, 1202 commercial banks were closed, with a peak of 206 failures in 1989. This rate of failures was approximately ________ times greater than that in the period from 1934 to 1980.

A) two

B) three

C) five

D) ten