The following information was taken from the accounting records of Dunbar Mifflin Company in 2018.
Beginning of 2018Ending of 2018
Direct materials inventory135,00083,000
Work-in-process inventory185,000154,000
Finished-goods inventory255,000216,000
Purchases of direct materials270,000
Direct manufacturing labor225,000
Indirect manufacturing labor103,000
Plant insurance11,000
Depreciation-plant, building, and equipment48,000
Plant utilities29,500
Repairs and maintenance-plant13,500
Equipment leasing costs66,800
Marketing, distribution, and customer-service costs129,500
General and administrative costs72,500
Required:
Question 2(Total: 38 marks)
Following are the account balances for the DC Company in 2018:
Beginning of 2018Ending of 2018
Direct materials inventory26,50027,000
Work-in-process inventory30,50028,400
Finished-goods inventory16,50022,100
Purchases of direct materials79,000
Direct manufacturing labor24,500
Indirect manufacturing labor18,600
Plant insurance7,900
Depreciation-plant, building, and equipment11,800
Repairs and maintenance-plant3,500
Marketing, distribution, and customer-service costs87,900
General and administrative costs26,500
Required:
Question 3(Total: 30 marks)
Identify if the following costs are “product” or “period” costs:
|
COST |
Period Cost or Product Cost? |
|
1. Television advertisements for Bailey’s products |
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2. Lubricants used in running bottling machines |
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3. Research and Development related to elimination of antibiotic residues in milk |
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4. Gasoline used to operate refrigerated trucks delivering finished dairy products to grocery stores |
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5. Company president’s annual bonus |
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6. Depreciation on refrigerated trucks used to collect raw milk |
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7. Plastic gallon containers in which milk is packaged |
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8. Property insurance on dairy processing plant |
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9. Cost of milk purchased from local dairy farmers |
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10. Depreciation on tablets used by sales staff |
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11. Depreciation on chairs and tables in the factory lunchroom. |
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12. The cost of packaging the company’s product. |
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13. The wages of the receptionist in the administrative offices. |
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14. Cost of leasing the corporate jet used by the company’s executives. |
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15. The cost of renting rooms at a BC resort for the annual conference. |
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Question 4(Total: 14 marks)
The Trump International Hotel & Tower is a five-star hotel located in downtown Toronto. The hotel’s operations vice president would like to replace the hotel’s legacy computer terminals at the registration desk with attractive state-of-the-art flat-panel displays. The new displays would take less space, consume less power than the old computer terminals, and provide additional security, since they can be viewed only from a restrictive angle. The new computer displays would not require any new wiring. However, the hotel’s chef believes the funds would be better spent on a new bulk freezer for the kitchen.
Required:
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Item |
Differential Cost |
Opportunity Cost |
Sunk Cost |
None |
|
Cost of the old computer terminals |
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Rent on the space occupied by the registration desk |
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Benefits from a new freezer |
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Cost of removing the old computer terminals |
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Cost of the new flat-panel displays |
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Wages of registration desk personnel |
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Cost of existing registration desk wiring |
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What are the steps to be followed in building the Knowledge Management System in hotel.
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A combination of quantitative indicators:
1. Facilities (F&B, IT, Business and Health Related)
2. Location
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