



Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
exam 2 Material Type: Notes; Class: Financial Accounting 1 - Introduction; Subject: Accounting; University: SUNY at Albany; Term: Forever 1989;
Typology: Study notes
1 / 5
This page cannot be seen from the preview
Don't miss anything!
Chapter 5: Relevant Information for Special Decisions A. Relevant Information What are the characteristics of Relevant Information?
_1. differs among alternatives
At what selling price per pound will the company be indifferent between accepting and rejecting the special order? $5.50 per pound (Part 2) Use the costs based on capacity (above). Assume the Greener Bean Coffee Co. produces 120,000 pounds of roasted coffee each year, and is at capacity. The Company has received a Special Order for 10, pounds of roasted coffee. If this order is accepted, the company will have to spend an additional $15,000 of costs, due to surpassing capacity. Assuming the Company normally charges customers $8/pound, should the Company accept the special offer at a price of $7.20/pound? Why or why not? Yes, because the differential income (differential revenue – avoidable costs) is $7.00 per pound, therefore, Greener Bean Coffee Co. will still be making a $0.20 profit on each pound of coffee sold. Problem 2: Glassworks Inc. currently outsources all of its colored glass used in building its stained glass mosaic sculptures, to a foreign entity. The each sheet of 9x9 colored glass costs $400. As Glassworks Inc. has changed management and desires to create a more sustainable company, with an emphasis on “local” product offerings, the Company is considering producing the colored glass in house. Management has projected the following annual production costs: Unit-Level material cost $ Unit-Level labor cost $ Unit-Level overhead $ Batch-level set up cost (20 glass sheets per batch) $5, Product-Level supervisory salaries $70, Allocated facility-level costs $5, The company expects an annual need of 200 sheets of colored glass. If the company decides to make the glass, total costs will be: $168,200 total cost $841 per sheet of glass Chapter 6: Cost Management in an Automated Business Environment A. ABC vs. Traditional Costing systems
Cost of goods sold is expected to be 65% of sales. The company would like to have ending inventory each month equal to 35% of the following month's predicted Budgeted sales. The total cost of purchases in February is: $73, (Part 2) All purchases made by Hootz Company are made on account and paid in full in the month following each quarter close. Hootz follows a January 1 – December 31 financial year. Hootz expects April, 2010’s sales to be $140,000. What should Hootz report on its pro forma balance sheet for Accounts Payable for inventory, for the first quarter of 2010 reported on March 31, 2010? $223, Problem 2 The following information is provided for Circle C Company for June 2010. All operating expenses are paid in cash in the month incurred. What would the amount of expected cash outflow for selling and administrative expenses be for January 2010? $116, Chapter 8: Performance Evaluation Problem 1 The following static budget is provided:
What will be the volume variance if 19,000 units are produced and sold? Unfavorable variance of $4,