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Kozloff Cheesy Wedding Company makes very elaborate wedding cakes to order. The owner of the company has provided the following data concerning the activity rates in its activity-based costing system: Activity Cost Pools Activity Rate Size-related $1.16 per guest Complexity-related $33.47 per tier Order-related $65.95 per order The measure of activity for the size-related activity cost pool is the number of planned guests at the wedding reception. The greater the number of guests, the larger the cake. The measure of complexity is the number of tiers in the cake. The activity measure for the order-related cost pool is the number of orders. (Each wedding involves one order.) The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and shortening. The activity rates do not include the costs of purchased decorations such as miniature statues and wedding bells, which are accounted for separately. Data concerning two recent orders appear below:   Winterhalter Wedding Manliguis Wedding Number of reception guests 45 183 Number of tiers on the cake 4 5 Cost of purchased decorations for cake $19.65 $61.84 Assuming that the company charges $613.98 for the Manliguis wedding cake, what would be the overall margin on the order?

The Jabba Corporation manufactures the “Snack Buster” which consists of a wooden snack chip bowl with an attached porcelain dip bowl. Which of the following would be relevant in Jabba’s decision to make the dip bowls or buy them from an outside supplier?     Fixed overhead cost that can be eliminated if the bowls are purchased from the outside supplier The variable selling cost of the Snack Buster A) Yes Yes B) Yes No C) No Yes D) No No

Sunripe Corporation manufactures and sells two types of beach towels, standard and deluxe. Sunripe expects the following operating results next year:       Standard Deluxe   Total sales $ 450,000   $ 50,000   Total variable expenses $ 360,000   $ 20,000       Sunripe expects to have a total of $57,600 in fixed expenses next year. What is Sunripe’s overall break-even point next year in sales dollars?

Vanikoro Corporation currently has two divisions which had the following operating results for last year:     Cork Division Rubber Division Sales $600,000 $300,000 Variable costs $310,000 $200,000 Contribution margin $290,000 $100,000 Fixed costs for the division $110,000 $60,000 Segment margin $180,000 $40,000 Allocated corporate fixed costs $100,000 $50,000 Net operating income (loss) $80,000 ($10,000)   Since the Rubber Division sustained a loss, the president of Vanikoro is considering the elimination of this division. All of the fixed costs for the division could be eliminated if the division was dropped. If the Rubber Division was dropped at the beginning of last year, how much higher or lower would Vanikoro’s total net operating income have been for the year?

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:   Selling price $140     Units in beginning inventory 0 Units produced 1,200 Units sold 800 Units in ending inventory 400     Variable costs per unit:   Direct materials $25 Direct labor $41 Variable manufacturing overhead $6 Variable selling and administrative $6     Fixed costs:   Fixed manufacturing overhead $24,000 Fixed selling and administrative $12,000 What is the net operating income for the month under variable costing?

Douglas Corporation plans to sell 24,000 units of Product A during July and 30,000 units during August. Sales of Product A during June were 25,000 units. Past experience has shown that end-of-month inventory should equal 3,000 units plus 30% of the next month’s sales. On June 30 this requirement was met. Based on these data, how many units of Product A must be produced during the month of July?

Why is a balanced scorecard critical when evaluating a firm with significant intangibles?

The LaGrange Corporation had the following budgeted sales for the first half of the current year:     Cash Sales   Credit Sales January $ 70,000 $ 340,000 February $ 50,000 $ 190,000 March $ 40,000 $ 135,000 April $ 35,000 $ 120,000 May $ 45,000 $ 160,000 June $ 40,000 $ 140,000   The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on sales: 60% in month of sale 30% in month following sale 10% in second month following sale The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales. The total cash collected during January by LaGrange Corporation would be:

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store’s operations follow: Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 80% in the month of sale and 20% in the month following the sale. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month’s cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,000. Monthly depreciation is $15,000. Ignore taxes.   Balance Sheet October 31   Assets     Cash $ 20,000 Accounts receivable   70,000 Merchandise inventory   153,000 Property, plant and equipment, net of $572,000 accumulated depreciation   1,094,000 Total assets $ 1,337,000       Liabilities and Stockholders’ Equity     Accounts payable $ 254,000 Common stock   820,000 Retained earnings   263,000 Total liabilities and stockholders’ equity $ 1,337,000 December cash disbursements for merchandise purchases would be:

Marst Corporation’s budgeted production in units and budgeted raw materials purchases over the next three months are given below:     January February March Budgeted production (in units) 70,000 ? 80,000 Budgeted raw materials purchases (in pounds) 142,400 151,600 158,800   Two pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 30% of the following month’s production needs. The company is expected to have 42,000 pounds of raw materials on hand on January 1. Budgeted production for February should be: