ACCT 521 Connect Plus Homework 1 Solution (Liberty University)

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 Mall Division, which contains stores in suburban locations. 

 Betty’s CEO is concerned about the profitability of the City Division, which has been operating at a loss for the last several years.

 The most recent City Division income statement follows.

 The CEO has asked for your advice on shutting down the City Division’s operations. 

 If the City Division is eliminated, corporate administration is not expected to change, nor are any other changes expected in the operations or costs of the Mall Division.

State University Business School (SUBS) offers several degrees, including Bachelor of Business Administration (BBA).

 The new dean believes in using cost accounting information to make decisions and is reviewing a staff-developed income statement broken down by the degree offered. 

 The dean is considering closing down the BBA program because the analysis, which follows, shows a loss

 Tuition increases are not possible.

 The dean has asked for your advice. 

 If the BBA degree program is dropped, school administration costs are not expected to change, but direct costs of the program, such as operating costs, building maintenance, and classroom costs, would be saved.

 There will be no other changes in the operations or costs of other programs.

Assume that Carmen's Cookies is preparing a budget for the month ending June 30.

 Management prepares the budget by starting with the actual results for April 30. 

 Next, management considers what the differences in costs will be between April and June

 Management expects the number of cookies sold to be 10 percent greater in June than in April, and it expects all food costs (e.g., flour, eggs) to be 10 percent higher in June than in April.

 Management expects "other" labor costs to be 15 percent higher in June than in April, partly because more labor will be required in June and partly because employees will get a pay raise

  The manager will get a pay raise that will increase the salary from $4,000 in April to $4,850 in June.

 Rent and utilities are not expected to change.

The following data apply to the provision of psychological testing services.

Terracotta, Inc., provides you with the following data for their single product:

The following balances are from the accounts of Hill Components