Timberlake Company owns equipment with a cost of $165,000 and an accumulated depreciation of$60,000 that can be sold for $82,000, less a 6% sales commission. Alternatively, the equipment can be leased by Timberlake Company for five years for a total of$84,600, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Timberlake Company on the equipment would total $7,950 over the five years. Prepare a differential analysis on March 23, 2014, as to whether Timberlake Company should lease (Alternative 1) or sell (Alternative 2) the equipment.

The Commercial Division of Herring Company has income from operations of $420,000 and assets of$910,000. The minimum acceptable return on assets is 8%. What is the residual income for the division?

The Commercial Division of Herring Company generated income from operations of $420,000 and assets of$910,000. The minimum acceptable rate of return on assets is 8%. What is the residual income for the division?

The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and the Commercial Division has used 1,250 hours of computer technology service.

Using the data for Hardy Company with the following data, determine the divisional income from operations for the Retail Division and the Commercial Division:

$$\begin{array}{lrc} & \text { Retall Division } & \text { Commercial Division } \\ \hline \text { Sales } & \$ 2,150,000 & \$ 1,200,000 \\ \text { Cost of goods sold } & 1,300,000 & 800,000 \\ \text { Selling expenses } & 150,000 & 175,000 \end{array}$$

Conley Company’s costs were under budget by $198,000. The company is divided into North and South regions. The North Region’s costs were over budget by$52,000. Determine the amount that the South Region’s costs were over or under budget.

Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions:

a. Purchased 2,450 units of copper tubing on account at $52.00 per unit. The standard price is$48.50 per unit.

b. Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners. Ten units of copper tubing are required, at standard, to produce one air conditioner.

For the given service department, identify an activity base that could be used for charging the expense to the profit center.

e. Telecommunications

The materials used by the Multinomah Division of Isbister Company are currently purchased from outside suppliers at $90 per unit. These same materials are produced by the Pembroke Division. The Pembroke Division can produce the materials needed by the Multinomah Division at a variable cost of$75 per unit. The division is currently producing 120,000 units and has capacity of 150,000 units. The two divisions have recently negotiated a transfer price of $82 per unit for 15,000 units. By how much will each division’s income increase as a result of this transfer?

Briggs Company has income from operations of $36,000, invested assets of$180,000, and sales of $720,000. Use the DuPont formula to compute the rate of return on investment and show the profit margin, the investment turnover, and the rate of return on investment.

Two infrared spectra are shown. One is the spectrum of cyclohexane, and the other is the spectrum of cyclohexene. Identify them, and explain your answer.

Explain the meaning of (a) differential revenue.

Jerrod Company owns a machine with a cost of $305,000 and an accumulated depreciation of$45,000 that can be sold for $231,000, less a 5% sales commission. Alternatively, the machine can be leased by Jerrod Company for three years for a total of$243,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Jerrod Company on the machine would total $16,900 over the three years. Prepare a differential analysis on January 12, 2014, as to whether Jerrod Company should lease (Alternative 1) or sell (Alternative 2) the machine.

What is the appropriate measure of a product’s value when a firm is operating under production bottlenecks?

Under what conditions might a company use activity-based costing to allocate factory overhead to products?