Wood Company makes two types of chairs. One of the chairs is a rocking chair. The other is a straight-back chair. Both chairs are made by hand. Wood Company uses a companywide overhead rate that is based on direct labor hours to assign overhead costs to the two products. If Wood Company automates the production of straight-back chairs and continues to use direct labor hours as a companywide allocation basis:

a. rocking chairs will be undercosted
b. there should be no impact on unit cost
c. straight back chairs will be overcosted
d. rocking chairs will be overcosted.

Acompany has $80,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. experience suggests that 6% of outstanding receivables are uncollectible. the current credit balance (before adjustments) in the allowance for doubtful accounts is $1,200. the journal entry to record the adjustment to the allowance account includes a debit to bad debts expense for $4,800. true or false

Analyzing and computing accrued warranty liability and expense waymire company sells a motor that carries a 60-day unconditional warranty against product failure. from prior years' experience, waymire estimates that 2% of units sold each period will require repair at an average cost of $100 per unit. during the current period, waymire sold 69,000 units and repaired 1,000 units. (a) how much warranty expense must waymire report in its current period income statement? (b) what warranty liability related to current period sales will waymire report on its current period-end balance sheet? (hint: remember that some units were repaired in the current period.) (c) what analysis issues must we consider with respect to reported warranty liabilities?

Which of these is an example of innovation?