Question & Answer

1.15     Structural cost drivers (a) With reference to Marino Designs in Self-study problem 2, demonstrate the meaning of the structural cost drivers: scope, technology and experience. (b) Classify Marino Designs’ likely strategy as low cost or product differentiation. Explain.

Which of the above causes are reflected in differences in the marginal revenue product of factors?

(a) How are the components of revenues and expenses different for a merchandising company? (b) Explain the income measurement process of a merchandising company.

When a corporation’s S election is terminated midyear, what options does the corporation have for allocating the annual income between the S corporation short year and the C corporation short year?

Distinguish between FHA and conventional mortgages. (LO1)

There are 19 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage on the quiz is based on the total number of correct answers. 40.1 The manufacturing engineering department in an organization is best described as which one of the following: (a) branch of the sales department, (b) concurrent engineers, (c) management, (d) product designers, (e) production supervisors, or (f) technical staff function? 40.2 Which of the following are the usual responsibilities of the manufacturing engineering department (four best answers): (a) advising on design for manufacturability, (b) facilities planning, (c) marketing the product, (d) plant management, (e) process improvement, (f) process planning, (g) product design, (h) solving technical problems in the production departments, and (i) supervision of production workers? 40.3 Which of the following are considered basic processes, as opposed to secondary processes (four correct answers): (a) annealing, (b) anodizing, (c) drilling, (d) electroplating, (e) forward hot extrusion to produce aluminum bar stock, (f) impression die forging, (g) rolling of sheet steel, (h) sand casting, (i) sheet-metal stamping, (j) spot welding, (k) surface grinding of hardened steel, (l) tempering of martensitic steel, and (m) turning? 40.4 Which of the following would be considered secondary processes, as opposed to basic processes (four correct answers): (a) annealing, (b) arc welding, (c) drilling, (d) electroplating, (e) extrusion to produce steel automotive components, (f) impression die forging, (g) painting, (h) plastic injection molding, (i) rolling of sheet steel, (j) sand casting, (k) sheet-metal stamping, (l) sintering of pressed ceramic powders, and (m) ultrasonic machining? 40.5 Which of the following are operations to enhance physical properties (three correct answers): (a) annealing, (b) anodizing, (c) die casting, (d) drilling, (e) electroplating, (f) rolling of nickel alloys, (g) sheet metal drawing, (h) sintering of pressed ceramic powders, (i) surface grinding of hardened steel, (j) tempering of martensitic steel, (k) turning, and (l) ultrasonic cleaning? 40.6 A route sheet is a document whose principal function is which one of the following: (a) continuous improvement, (b) design for manufacturability, (c) provides authorization for material handlers to move the part, (d) quality inspection procedure, (e) specifies the process plan, or (f) specifies the detailed method for a given operation? 40.7 In a make or buy situation, the decision should always be to purchase the component if the vendor’s quoted price is less than the in-house estimated cost of the component: (a) true or (b) false? 40.8 Which one of the following types of computer-aided process planning relies on parts classification and coding in group technology: (a) generative CAPP, (b) retrieval CAPP, (c) traditional process planning, or (d) none of the preceding?

For what types of parts are VTLs (vertical turret lathes) used?

Direct method using estimated costs, benchmarking Devon Ltd allocates support department costs using the direct method and estimated costs. The support department costs are budgeted at $88 000 for department A, $63 000 for department B, and $40 000 for department C. These costs are allocated using the proportion of total cost the firm would pay to an outside service provider.   Required (a)          Allocate budgeted support department costs using the direct method, first using labour hours and then with the outside cost proportions as the allocation bases. (b)          Could Devon Ltd use the cost of purchasing outside as an efficiency benchmark for the cost of both the support departments and the user departments? List several advantages and disadvantages of this approach.

What will be the effect of an expansionary fiscal policy on interest rates and national income if there is a perfectly elastic supply of international finance?

Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2023 (effective immediately), in preparation for taking it public.  Miley had previously elected S corporation status on January 1, 2022.  At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000.  During 2024, Miley’s corporation reported $0 taxable income or loss.  Also, during 2024 the corporation made distributions to Miley of $80,000 and $60,000.  How are these distributions taxed to Miley assuming the following?

What are some of the applications of PVD?

1.       : Can you think of potential drawbacks to retailers using labor-waste elimination systems based on scientific management principles, as described in the text? Do you believe that scientific management characteristics will ever cease to be a part of organizational life, since they are now about 100 years old? Discuss.

On June 1, year 1, Jasper Corporation’s S election was involuntarily terminated.  What is the earliest Jasper may be taxed as an S corporation again?  Are there any exceptions to the general rule?  Explain.

(Threshold Concept 13) When comparing two countries’ GDP growth rates, does it matter if we use nominal figures, provided we use them for both countries?

What are the three steps in the LIGA process?

Gator Inc. reported taxable income of $1,000,000 this year and paid federal income taxes of $210,000. Included in the company’s computation of taxable income is gain from the sale of a depreciable asset of $50,000. The income tax basis of the asset was $100,000. The E&P basis of the asset using the alternative depreciation system was $175,000. Compute Gator’s current E&P.

Determine the starting disk diameter required to spin the part in Figure P20.32 using a conventional spinning operation. The starting thickness = 2.4 mm

1. Why does this conclusion remain the same if the BP curve is steeper than the LM curve?   2. Trace through the effects of a fall in exports (thereby shifting the BP curve)   3. Show what will happen if there is (a) a rise in business confidence and a resulting increase in investment; (b) a rise in the demand for money balances (say for precautionary purposes).

When incorporating Spotfree, a cleaning company, Jayne transferred accounts receivable (fair market value $20,000 and $0 tax basis) and $12,000 of accounts payable from her cash-method sole proprietorship to Spotfree in exchange for Spotfree stock valued at $8,000. Assume the transfer qualifies under §351.   a. What are the amount and character of the gain Jayne must recognize on the exchange?  b. What is Jayne's basis in the Spotfree stock she received in the exchange?

What is preform molding?

How do hot assets affect the character of gain or loss on the sale of a partnership interest?

Current setup time on a certain machine is 3.0 hr. Cost of downtime on this machine is estimated at $200/hr. Annual holding cost per part made on the equipment, Ch = $1.00. Annual demand for the part is 15,000 units. Determine (a) EOQ and (b) total inventory costs for this data. Also, determine (c) EOQ and (d) total inventory costs, if the changeover time could be reduced to six minutes.

What will happen to the equilibrium price and quantity of butter in each of the following cases? You should state whether demand or supply (or both) have shifted and in which direction. (In each case assume ceteris paribus.) (a) A rise in the price of non-dairy spread. (b) A rise in the demand for cream. (c) A rise in the price of bread. (d) A rise in the demand for bread. (e) An expected rise in the price of butter in the near future. (f) A tax on butter production. (g) The invention of a new, but expensive, process for removing all saturated fat from butter, alongside the passing of a law which states that all butter producers must use this process.

Describe an inventoriable product cost.

Anne Cleves Company reported the following amounts in the stockholders’ equity section of its December 31, 2013, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000 Common stock, $5 par (100,000 shares authorized, 20,000 shares issued) 100,000 Additional paid-in capital 125,000 Retained earnings 450,000 Total $875,000 During 2014, Cleves took part in the following transactions concerning stockholders’ equity. 1. Paid the annual 2013 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2013. 2. Purchased 1,700 shares of its own outstanding common stock for $40 per share. Cleves uses the cost method. 3. Reissued 700 treasury shares for land valued at $30,000. 4. Issued 500 shares of preferred stock at $105 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share. 6. Issued the stock dividend. 7. Declared the annual 2014 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2015. Instructions (a) Prepare journal entries to record the transactions described above. (b) Prepare the December 31, 2014, stockholders’ equity section. Assume 2014 net income was $330,000.