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99.
External failure activities:
100.
Prevention activities:
101.
Appraisal activities:
102.
Forensic Specialists developed the following information for its first quarter cost of quality
report:
Sales
$5,600,000
Cost of goods sold
$3,360,000
Disposing of scrap
$235,200
Quality training
$84,000
Inspecting materials on delivery
$280,000
Performance reviews
$70,000
Resolving customer complaints
$31,920
Certifying suppliers
$140,000
103.
Forensic Specialists developed the following information for its first quarter cost of quality
report:
Sales
$5,600,000
Cost of goods sold
$3,360,000
Disposing of scrap
$235,200
Quality training
$84,000
Inspecting materials on delivery
$280,000
Performance reviews
$70,000
Resolving customer complaints
$31,920
Certifying suppliers
$140,000
104.
Forensic Specialists developed the following information for its first quarter cost of quality
report:
Sales
$5,600,000
Cost of goods sold
$3,360,000
Disposing of scrap
$235,200
Quality training
$84,000
Inspecting materials on delivery
$280,000
Performance reviews
$70,000
Resolving customer complaints
$31,920
Certifying suppliers
$140,000
105.
Forensic Specialists developed the following information for its first quarter cost of quality
report:
Sales
$5,600,000
Cost of goods sold
$3,360,000
Disposing of scrap
$235,200
Quality training
$84,000
Inspecting materials on delivery
$280,000
Performance reviews
$70,000
Resolving customer complaints
$31,920
Certifying suppliers
$140,000
10-88
106.
Tabor Detective Services is evaluating its system. The company gathered the information
below:
Available
Value-Adding
Process
Hours per
Week
Time (hours
per client)
Average
Demand
Interviews
70
2
20
Research
130
3
30
Pursuit
75
0.5
120
Travel
200
4
45
Essay Questions
10-89
107.
Windom Corporation manufactures small airplane propellers. Sales for April totaled
$850,000. Information regarding resources for the month follows:
Resources
Used
Resources
Supplied
Parts management
$30,000
$35,000
Energy
50,000
50,000
Quality inspections
45,000
50,000
Long-term labor
25,000
35,000
Temporary labor
20,000
24,000
Setups
70,000
100,000
Materials
150,000
150,000
Depreciation
60,000
100,000
Marketing
70,000
75,000
Customer service
10,000
20,000
Administrative
50,000
70,000
10-92
108.
Rock Island Manufacturing makes motor brackets. Information regarding resources for the
month follows:
Resources
Used
Resources
Supplied
Parts management
$60,000
$70,000
Energy
100,000
100,000
Quality inspections
90,000
100,000
Long-term labor
50,000
70,000
Temporary labor
40,000
48,000
Setups
140,000
200,000
Materials
300,000
300,000
Depreciation
120,000
200,000
Marketing
140,000
150,000
Customer service
20,000
40,000
Administrative
100,000
140,000
In addition, Rock Island spent $25,000 on 40 engineering changes with a cost driver rate
of $600.
Required:
a. Prepare an analysis of the unused resource capacity for the month.
10-93
109.
Mirror Industries manufactures electric trolling motors. Sales for the month totaled
$1,700,000. Information regarding resources for the month follows:
10-94
Resources
Used
Resources
Supplied
Administrative
$100,000
$140,000
Customer service
20,000
40,000
Depreciation
120,000
200,000
Energy
100,000
100,000
Engineering
50,000
52,000
Long-term labor
50,000
70,000
Marketing
140,000
150,000
Materials
300,000
300,000
Parts management
60,000
70,000
Quality inspections
90,000
100,000
Setups
140,000
200,000
Temporary labor
40,000
48,000
Required:
a. Prepare a traditional income statement.
b. Prepare an activity-based income statement.
10-97
110.
Miracle Mile Corporation manufactures electric scooters. Information regarding resources
for the month follows:
Resources
Used
Resources
Supplied
Administrative
$100,000
$140,000
Customer service
20,000
40,000
Depreciation
120,000
200,000
Energy
100,000
100,000
Engineering
50,000
52,000
Long-term labor
50,000
70,000
Marketing
140,000
150,000
Materials
300,000
300,000
Parts management
60,000
70,000
Quality inspections
90,000
100,000
Setups
140,000
200,000
Temporary labor
40,000
48,000
10-98
111.
Taylor's Cafe Supply Company delivers restaurant supplies throughout the city. Taylor's
adds 4% to the order cost to cover the delivery cost. The delivery fee is meant to just cover
the cost of delivery. A consultant has analyzed the delivery service using activity-based
costing methods and identified four activities. Data on these activities are:
Activity
Cost Driver
Cost
Driver
Volume
Process order
number of
orders
$25,000
4,000
orders
Load truck
number of
items
50,000
80,000
items
Deliver
merchandise
number of
orders
30,000
4,000
orders
Process
invoice
number of
invoices
24,000
6,000
invoices
Total overhead
$129,000
Two of Taylor’s customers are City Diner and Le Chien Chaud. Below are data on orders
and deliveries to these two customers:
City Diner
Le Chien
Chaud
Order value
$24,000
$32,000
Number of
orders
50
100
Number of
items
550
1,600
Number of
invoices
12
120
10-100
