SURVEY OF ACCOUNTING 360DAY CONNECT CAR
5th Edition
ISBN: 9781260591811
Author: Edmonds
Publisher: MCG
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Textbook Question
Chapter 10, Problem 16E
Exercise 1-14A Using JIT to minimize waste and lost opportunity
Becky Shelton, a teacher at Kemp Middle School, is in charge of ordering the T-shirts to be sold for the school’s annual fund-raising project. The T-shirts are printed with a special Kemp School logo. In some years, the supply of T-shirts has been insufficient to satisfy the number of sales orders. In other years, T-shirts have been left over. Excess T-shirts are normally donated to some charitable organization. T-shirts cost the school $5 each and are normally sold for $12 each. Ms. Shelton has decided to order 700 shirts.
Required
a. If the school receives actual sales orders for 600 shirts, what amount of profit will the school earn? What is the cost of waste due to excess inventory?
b. If the school receives actual sales orders for 800 shirts, what amount of profit will the school earn? What amount of opportunity cost will the school incur?
c. Explain how a JIT inventory system could maximize profitability by eliminating waste and opportunity cost.
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Exercise 5-25: Awards Etc. carries an inventory of trophies and ribbons for local sports teams and school clubs. The cost of trophies has dropped in the past year, which pleases the company except for the fact that it has on hand considerable inventory that was purchased at the higher prices. The president is not pleased with the lower profit margin the company is earning. “The lower profit margin will continue until we sell all of this old inventory,” he grumbled to the new accountant. “Not really,” said the accountant. “Let’s write down the inventory to the replacement cost this year, and then next year our profit margin will be in line with the competition.”
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HOMEWORK Question 1
Compute the incremental profit (or loss) from accepting the special order. Please solve and explain.
MSI has been approached by a fourth-grade teacher from Portland about the possibility of creating a specially designed game that would be customized for her classroom and environment. The teacher would like an educational game to correspond to her classroom coverage of the history of the Pacific Northwest, and the state of Oregon in particular. MSI has not sold its products directly to teachers or school systems in the past, but its Marketing Department identified that possibility during a recent meeting.
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Ethical Dilemma: Recognition Point and Ethical Considerations
C7. Business Application ▶ Robert Shah, a sales representative for Quality Office
Supplies Corporation, will receive a substantial bonus if he meets his annual sales goal.
The company’s recognition point for sales is the day of shipment. On December 31,
Shah realizes he needs sales of $2,000 to reach his sales goal and receive the bonus. He
calls a purchaser for a local insurance company, whom he knows well, and asks him to
buy $2,000 worth of copier paper today. The purchaser says, “But Robert, that’s more
than a year’s supply for us.” Shah says, “Buy it today. If you decide it’s too much, you
can return however much you want for full credit next month.” The purchaser says,
“Okay, ship it.” The paper is shipped on December 31 and recorded as a sale. On January 15, the purchaser returns $1,750 worth of paper for full credit (approved by Shah)
against the bill. Should the shipment on December 31 be recorded as a…
Chapter 10 Solutions
SURVEY OF ACCOUNTING 360DAY CONNECT CAR
Ch. 10 - 1. What are some differences between financial and...Ch. 10 - 2. What does the value-added principle mean as it...Ch. 10 - 4. How does product costing used in financial...Ch. 10 - 5. What does the statement costs can be assets or...Ch. 10 - 6. Why are the salaries of production workers...Ch. 10 - 7. How do product costs affect the financial...Ch. 10 - 8. What is an indirect cost? Provide examples of...Ch. 10 - 9. How does a product cost differ from a selling,...Ch. 10 - 10. Why is cost classification important to...Ch. 10 - 11. What is cost allocation? Give an example of a...
Ch. 10 - 13. What are some of the common ethical conflicts...Ch. 10 - 14. What costs should be considered in determining...Ch. 10 - 15. What is a just-in-time (JIT) inventory system?...Ch. 10 - Prob. 14QCh. 10 - Prob. 15QCh. 10 - Prob. 16QCh. 10 - Prob. 17QCh. 10 - Prob. 18QCh. 10 - Prob. 19QCh. 10 - Prob. 1ECh. 10 - Exercise 1-2A Identifying product versus selling,...Ch. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Exercise 1-6A Identifying product versus SGA costs...Ch. 10 - LO 1-3 Exercise 1-7A Recording product versus SGA...Ch. 10 - Prob. 8ECh. 10 - LO 1-4 Exercise 1-9A Upstream, midstream, and...Ch. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Cost of goods manufactured and sold The following...Ch. 10 - Prob. 15ECh. 10 - Exercise 1-14A Using JIT to minimize waste and...Ch. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Problem 1-19A Characteristics of financial versus...Ch. 10 - Prob. 22PCh. 10 - Problem 1-21A Effect of product versus period...Ch. 10 - Problem 1-22A Product versus SGA costs The...Ch. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 1ATCCh. 10 - Prob. 2ATCCh. 10 - Prob. 3ATCCh. 10 - Prob. 4ATCCh. 10 - Ethical Dilemma Product cost versus selling and...
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