Industrial Market Segmentation

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Industrial Market Segmentation Questions and Answers

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The Heather Honey Company purchases honeycombs from beekeepers for $3.0 a pound. The company produces two main products from the honeycombs-honey and beeswax. Honey is drained from the honeycombs,...
Cost Accounting Barbour Corporation, located in Buffalo, New York, is a retailer of high-tech products and is known for its excellent quality and innovation. Recently the firm conducted a relevant...
Barbour Corporation, located in Buffalo, New York, is a retailer of high tech products and is known for its excellent quality and innovation. Recently the firm conducted a relevant cost analysis of...
Shanghai Exporters produces wall mounts for flat-panel television sets. The forecasted income statement for 2014 is as follows: Unit Price 44 Revenue $ 4,400,000 Cost of Goods Sold (3,200,000) Gro...
A pulpwood-forming machine was purchased and installed 8 years ago for $45,000. The declared salvage value was $5,000, with a useful life of 10 years. The machine can be replaced with a more effici...
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: Superior Markets, I...
Which of the following statements is true regarding special order decisions? a. Special order decisions are long-run decisions. b. The sales price of a special order should never be below the pr...
Cawley Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $300,000 $500,000 $200,000 Variable expenses 150,000 200,000 145,000 C...
BCD Inc sells its products for $12 each. The company's volume has remained unchanged for some time at 10,000 units per month although it has spare capacity. Production costs are $10 per unit includ...
Stooge Enterprises manufactures ceiling fans that normally sell for $93 each. There are 340 defective fans in inventory, which cost $59 each to manufacture. These defective units can be sold as is...
Rublum Micro Devices currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct materials : $47 Direct labor: 44 Variable overhead: 42 Fixed overhead: 3...
Easton Company makes and sells scooters. Easton incurred the following costs in its most recent fiscal year: Easton can currently purchase the scooters it makes from Weston Company. If the company...
Han Products manufactures 30,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials: $3.60 Direct labor: 10...
Swine Enterprises produces hams from locally raised pigs. The cost of getting the meat ready for the market is $1 per pound. Hams weigh 12 pounds and sell for $1.50 per pound. The company can smoke...
To decide to adopt a short term decision such as to drop a segment, you should consider which types of costs? a. Sunk costs b. Past costs c. Historical costs d. Variable costs
Segment A Segment B Service Revenue $135,000 $55,000 Unit-level materials ($31,000) ($13,000) Unit-level labor ($41,000) ($25,000) Product wide S&A costs ($21,000) ($14,500) Company-wide facility l...
Pepper's Automotive produces auto parts for various automotive retailers. Pepper's is evaluating the exhaust system division of the company and has come up with the following data for the year: net...
Explain why it might be difficult for decision maker to ignore sunk costs.
What is a relevant cost, and how does one determine relevance?
Our company manufactures and sells calculators for $90 each. A major University has offered us $70 per calculator for a one-time order of 500 calculators. Our costs to manufacture a calculator inc...
Cost Accounting Pepper's Automotive produces auto parts for various automotive retailers. Pepper's is evaluating the exhaust system division of the company and has come up with the following data...
Central administration allocates its costs of $1 million to the two operating divisions (A and B) of the company. These costs are not avoidable if one division is dropped. With an equal allocation...
A company has 7,000 obsolete toys carried in inventory at manufacturing cost of P6 per unit. If the toys are reworked for P2 per unit they could be sold for P3 per unit. If the toys are scrapped, t...
Data covering QMB Corporation's two product lines are as follows: Product "W" Product "Z" Sales P36,000 P25,200 Income before income tax 15,936 (8,388) Sales price per unit 30 14 Variable cost per...
Sports Hats, Etc. has two product lines, Baseball helmets and Football helmets. Income statement data for the most recent year follow: Should the company keep or drop Football Helmets? Give numeric...
Edwards company plans to discontinue a department that has a contribution margin of 25,000 and 48,000 in fixed costs. Of the fixed costs, $21,000 cannot be eliminated. The effect of this discontinu...
Jamison Health Care is trying to decide if it should eliminate its orthopedic care division. Last year, the orthopedic division had a total contribution margin of $100,000 and allocated overhead co...
Prepare an incremental analysis to show whether Movie Street should drop the VCR-tape product line. TABLE Will dropping VCR tapes add $41,000 to operating income? Explain.
Henry Horticultural, Ltd., is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of...
Pottery Unlimited has two product lines: cups and pitchers. Income statement dat for the most recent year follow: Total Cups Pitchers Sales revenue $460,000 $310,000 $150,000 Variable expenses 355...
Kristen Lu purchased a used automobile for $25,100 at the beginning of last year and incurred the following operating costs: Depreciation ($25,100/5 years) $5,020 Insurance $2,600 Garage rent $1,3...
Gutierrez Company has four operating divisions. During the first quarter of 2014, the company reported aggregate income from operations of $213,000 and the following divisional results. Division I...
Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $ 231,300 and the following divisional results :
Members of the board of directors of Safety Step have received the following operating income data for the year ended May 31, 2018. Safety Step Income Statement For the Year Ended May 31, 20...
The Regal Cycle Company manufactures three types of bicycles a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Management is concerned about...
For The Ages Inc. produces solid-oak umbrella stands. Each stand is handmade and hand finished using the finest materials available. The firm has been operating at capacity (2,000 stands per year)...
Thalasines Katakeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution forma...
Han Products manufactures 16,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials: $5.70 Direct labor: 5....
Thrifty Markets Inc. operates three stores in a large metropolitan area. The company's segmented absorption costing income statement for the last quarter is given below: Thrifty Markets Inc. Incom...
Marscoro Company recently discontinued the manufacture of product J15. The production costs per unit of J15 are as follows: Direct material $50 Direct labor 20 Variable overhead 14 Fixed overhead 3...
10 years ago, when the relevant cost index was 125, a nuclear centrifuge cost $40,000. The centrifuge had a capacity of separating 1500 gallons of ionized solution per hour. Today, it is desire to...
Clipper Corporation is a specialty component manufacturer with idle capacity. Management would like to use its unused capacity to generate additional profits. A potential customer has offered to bu...
For most construction projects, Bradley buys sheet metal and forms the metal into heating/cooling ducts as needed. The company estimates the cost of making and installing ductwork for a shopping ma...
The Shoe Department at the Baton Rouge Department Store is being considered for closure. The following information relates to shoe activity: Sales Revenue $350,000 Variable Costs: Cost of Goods Sol...
Prince Company's racquet division has projected a net operating loss of $190,000 for the coming year; fixed costs for the division total $325,000 (of which $115,000 are considered to be avoidable)....
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $2,100. The division sales for the year were $1,041,000 and the vari...
Globals special order also require 1,200 kilograms of genatope, a solid chemical regularly used in the companys products .The current stock of genatope is 8,500 kilograms at a book value of 8.80 p p
Twyla Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows. Product C Product D Units sold 9,00
Happy Feet Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Happy Feet Inc. Product Income...
A cost that requires a future outlay of cash, and is relevant for current and future decision making, is a(n): a) Out-of-pocket cost. b) Sunk cost. c) Opportunity cost. d) Operating cost. e) U...
The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total Direct Bikes Mountain Bi...
The following are the Jensen Corporation's unit costs of making and selling an item at a volume of 1,000 units per month (which represents the company's capacity): Manufacturing: Direct materials $...
Betty's Fashions operates retail stores in both downtown and suburban locations. The company has two responsibility centers: the City Division, which contains stores in downtown locations, and the...
Suresh Co expects its five departments to yield the following income for next year Recompute and prepare the department income statements including e combined total column for the company under eac...
Tipton -Stop Decorating sells paint and paint supplies, carpet, and wallpaper at a single-store location in suburban Des Moines. Although the company has been very profitable over the years, manage...
Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn's board of directo
Adam Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replAdam Company is considering the replacement of...
The Regal Cycle Company manufactures dirt bikes, mountain bikes, and racing bikes. Data on sales and expenses for the past quarter follow: Management is concerned about the
J.M Smucker Company operates two divisions, the Fruit Preserves Division and the Snack Foods Division. The Fruit Preserves Division manufactures and sells jelly and jams to supermarkets. The Snack...
The following information is for X Company's two products - A and B: Product A Product B Total contribution margin $41,760 $37,800 Contribution margin rate 48% 42% Fixed costs $54,830 $26,510 Prof...
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