Description

Chapter: 14 -Problem: 10 >> Refer to Problem 14.43. In 20x3, Jack Carter, president of Kartel, requested that environmental costs be assigned to the two major products produced by the company. He felt that knowledge of the environmental product costs would help guide the design decisions that would be necessary to improve environmental performance. The products represent two different models of a cellular phone (Model XA2 an
Answer Preview: 1. Activity rates: Hazardous waste: $200,000/200 = $1,000 per ton Measurement: $10,000/5,000 = $2 per transaction Contaminants: $500,000/250 = $2,000 …

, Chapter: 4 -Problem: 2 >> Electan Company produces two types of printers. The company uses ABC, and all activity drivers are duration drivers. Electan Company is considering using DBC and has gathered the following data to help with its decision.A. Activities with duration drivers:B. Activities with consumption ratios and costs:C. Products with cycle time and practical capacity: Required:1. Using cycle time and practical c
Answer Preview: 1 Printer A: T a = 2 50 10,000 = 25,000 hours Printer B: T b = 1 25 20,000 = 25,000 hours Thus, T = …

, For years, companies have been announcing outsourcing decisions and plant closings. Check the recent business news (e.g., http://www.wsj.com or http://www.businessweek.com) for this type of announcement. Go to the company’s website for information on the decision. Write a brief (one- to two-page) description of the decision, and speculate on what types of costing information might have led to it.
Answer Preview: Explanation. Outsourcing is when a company contracts with another company to provide goods or servic…

, Chapter: 2 -Problem: 1 >> Orinder Company provided the following information for the last calendar year:Beginning inventory:Direct materials………………………………………..$19,300Work in process………………………………………….41,200Ending inventory:Direct materials………………………………………..$16,000Work in process………………………………………….30,600During the year, direct materials purchases amounted to $275,800, direct labor cost was $153,000, and overhead cost was $267,300.
Answer Preview: a. Direct materials used = $19,300 + $275,800 $16,000 = $279,100 Direct …

, Understanding the nature of process manufacturing helps to understand the nature of process costing. Using an Internet search, find the home pages of one or more cement companies where the processes used to manufacture Portland cement are described. Other Internet resources such as an online encyclopedia might also prove to be useful. Required:1. Describe in detail each process in the manufacture
Answer Preview: 1 . The manufacturing process for Portland cement typically begins with the answeion of limestone and clay from quar ries . The materials are then c…

, Chapter: 5 -Problem: 3 >> 1. A CPA would recommend using plantwide overhead application rates under which of the following circumstances?a. The client is a multi-product manufacturer with predominantly indirect costs.b. The client produces products that heterogeneously consume resources.c. The client produces multiple services that heterogeneously consume resources.d. The client produces a single product.2. Which of the fo
Answer Preview: 1. d. The c…

, Chapter: 16 -Problem: 2 >> 1. Junior Company has a breakeven point of 34,600 units and is selling 35,000 units. If unit variable costs increase, the margin of safety willa. increaseb. decreasec. remain the samed. it is impossible to tell2. Bialy Company had the following information:Total sales…………………..$120,000Total variable cost…………..48,000Operating income…………..12,000What is the breakeven sales revenue?a. $72,000b. $60,000
Answer Preview: 1. b. 2. c. Total fixed cost = $120,00…

, Chapter: 7 -Problem: 3 >> Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this process were $50,000, and 14,000 units of overs and 36,000 units of unders were produced. Separable processing costs beyond the split-off point were as follows: overs, $18,000; unders, $23,040. Overs sell for $2.00 per unit; unders sell for $3.14 per unit. Required:1. Allocate the $50,000 joint cos
Answer Preview: 1. Overs Unders Joint cost .... $ 50,000 $50,000 Percent of hypothetic…

, Chapter: 15 -Problem: 4 >> In 20x1, Fleming Chemicals used the following input combination to produce 55,000 gallons of an industrial solvent:Materials€¦€¦€¦€¦€¦€¦€¦€¦€¦.33,000 lbs.Labor€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦..66,000 hrs.In 20x2, Fleming again planned to produce 55,000 gallons of solvent and was considering two different changes in process, both of which would be able to produce the desired output. The following input combi
Answer Preview: 1. Productivity profiles: Materials Labor a. 20x1 .. 1 67 0 83 b. Change I . 1 43 1 25 Change II .. 2 00 1 00 c. Optimal .. 2 50 1 25 Change I shows a…

, Chapter: 14 -Problem: 5 >> In 20x4, Tru-Delite Frozen Desserts, Inc., instituted a quality improvement program. At the end of 20x5, the management of the corporation requested a report to show the amount saved by the measures taken during the year. The actual sales and quality costs for 20x4 and 20x5 are as follows:Tru-Delite€™s management believes that quality costs can be reduced to 2.5 percent of sales within the next fi
Answer Preview: 1. Quality costs, 20x4 . $ 110,000 Less quality costs, 20x5 .. 81,000 . $ 29,000 2. *Adjusted for sa…

, Chapter: 14 -Problem: 1 >> What is ecoefficiency?
Answer Preview: Ecoefficiency is the belief that organizations …

, On the Internet, access the homepages of several enterprise resource planning (ERP) vendors such as http://www.infor.com; http://www.ca.com; http://www.oracle.com; and http://www .sap.com. (Hint: Enter “erp” in the search box for each site to get more specific results.) What are the advantages touted by each? Does there appear to be any difference between the companies? Write a memo from the CFO (
Answer Preview: There are many advantages to implementing an ERP system, as they can increase efficiency and optimiz…

, Standard costing concepts can also be applied to services. Standard service costs are similar in concept to standard product costs. In the medical field, costs of caring for a patient have been increasing at a high rate for many years. Hospitals, for example, have often been paid on a retrospective basis. Essentially, they have been able to recover (from Medicare or their insurers) most of what th
Answer Preview: Per-case payment is a type of prospective payment system in which hospitals are paid a fixed amount for each patient treated, rather than being reimbu…

, Chapter: 6 -Problem: 4 >> 1. As goods are transferred from a prior process to a subsequent process, the following entry to record the cost of abnormal spoilage would be made:a. debit Work in Process (subsequent department) and credit Work in Process (prior department)b. debit Abnormal Spoilage Loss and credit Work in Process (prior department)c. debit Finished Goods and credit Work in Process (prior department)d. debit Fin
Answer Preview: 1. b. (Abnormal loss is recorded in a separate account and t…

, Chapter: 16 -Problem: 1 >> 1. Jester Company had unit contribution margin on $3.60 and fixed costs of $29,664. Income was $2,520. What was the margin of safety in units?a. 630b. 700c. 8,940d. 7,5402. Loessing Company produced and sold 12,000 units last year with sales price of $45 per unit and unit variable cost of $20. Fixed costs totaled $250,000. In the coming year, Loessing expects price to decrease by ten percent. Neit
Answer Preview: 1. b. Breakeven units = $29,664/$3 60 = 8,240 units Units sold = ($29,664 $2…

, Supply chain management can be a major source of cost savings for manufacturing and service firms. A firm can reduce its costs by understanding the linkages it has with its suppliers and customers. A major factor in assessing and understanding these linkages is the measurement of costs across the supply chain. Activity-based costing is now assuming a major role in this measurementrequirement. The
Answer Preview: 1 . Supply chain management ( SC M ) is a business practice that involves managing the flow of goods …

, Chapter: 14 -Problem: 4 >> Muskogee Company had sales of $60,000,000 in 20x1. In 20x5, sales had increased to $75,000,000. A quality improvement program was implemented at the beginning of 20x1. Overall conformance quality was targeted for improvement. The quality costs for 20x1 and 20x5 follow. Assume any changes in quality costs are attributable to improvements in quality. Required:1. Compute the quality cost-to-sales rat
Answer Preview: 1. 20x1: $15,000,000/$60,000,000 = 0 25 20x5: $1,875,000/$75,000,000 = 0 025 The quality cost-to-sales ratio improved from 25 percent to 2 5 percent. …

, Chapter: 4 -Problem: 4 >> 1.Cushing, Inc., costs products using a normal costing system. The following data are available for last year:Budgeted:Overhead………………………$357,000Machine hours………………..140,000Direct labor hours…………….17,000Actual:Overhead……………………..$355,000Machine hours……………….137,000Direct labor hours……………16,500Prime cost……………………$753,500Number of units…………….250,000Overhead is applied on the basis of direct labor hours.
Answer Preview: 1. b. The unit product cost is the sum of prime cos…

, Interview an accountant who works for a service organization that uses job-order costing. For a small firm, you may need to talk to an owner/manager. Examples are a funeral home, insurance firm, repair shop, medical clinic, and dental clinic. Write a paper that describes the joborder costing system used by the firm. Some of the questions that the paper should address are:a. What service(s) does th
Answer Preview: In a small service organization that uses job order costing , the owner or manager is responsible for collecting the costs of the services performed f…

, Chapter: 14 -Problem: 8 >> At the beginning of 20x2, Heber Company, an international telecommunications company, embarked on an environmental improvement program. The company set a goal to have all its facilities ISO 14001 registered by 20x5. (There are 60 facilities worldwide.) To communicate the environmental progress made, management decided to issue, on a voluntary basis, an annual environmental progress report. Interna
Answer Preview: 1. The trends are all favorable, signaling a marked improvement in environme…

, Capital budgeting for environmental projects offers an interesting area for additional study. The Environmental Protection Agency (EPA) has partnered with Tellus Institute (www. tellus.org) to further its ongoing interest in environmental cost management. Much of the the information relating to the U.S. EPA environmental accounting project can be found in the archives at the EPA website (www.epa.g
Answer Preview: 1. Evidence suggests that firms use the payback period for screening and evaluating environmental pr…

, Chapter: 6 -Problem: 1 >> What are transferred-in costs?
Answer Preview: Transferred-in costs are …

, Chapter: 17 -Problem: 1 >> Describe a tactical decision you personally have had to make. Apply the tactical decisionmaking model to your decision. How did it turn out? (Hint: You could discuss buying a car, choosing a college, buying a puppy, etc.)
Answer Preview: I (second author) have used this as a writing assignment for se…

, Check the Boeing website at http://www.boeing.com, and go to commercial aircraft orders. (Find “Products,” “Commercial Airplanes,” then “Orders and Deliveries.”) Boeing gives the number of orders per type of plane (e.g., 767). For which type of plane would you expect Boeing to gain the most from learning effects? Why? What impact will this have on costs? Prices? Time to delivery?
Answer Preview: Boeing would gain the most from learning effects for the type of …

, Chapter: 13 -Problem: 2 >> At the end of 20x1, Mejorar Company implemented a low-cost strategy to improve its competitive position. Its objective was to become the low-cost producer in its industry. A Balanced Scorecard was developed to guide the company toward this objective. To lower costs, Mejorar undertook a number of improvement activities such as JIT production, total quality management, and activity-based management.
Answer Preview: 1. 2. 20x1 a. 208,000/104,000 = 2/hr. 60/2 = 30 min. b. 5,200/208,000 = 0 025 c. 83,200/208…

, Chapter: 1 -Problem: 1 >> What are the two parts to the CMA examination? What do they indicate about cost and management accounting versus financial accounting?
Answer Preview: The two parts are (1) Financial planning and …

, Chapter: 6 -Problem: 2 >> K-Briggs Company uses the FIFO method to account for the costs of production. For Crushing, the first processing department, the following equivalent units schedule has been prepared:The cost per equivalent unit for the period was as followsDirect materials€¦€¦€¦..$2.00Conversion costs€¦€¦€¦..6.00Total€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦.$8.00The cost of beginning work in process was direct materials, $40,000; co
Answer Preview: 1. Ending work in process: Direct materials (6,000 $2 00).. $ 12,000 Conver…

, View the website for SAP at http://www.sap.com/usa/industries/index.epx to see how the company helps other companies improve profitability. Write a brief paper on the companies featured on the SAP site, and tell how the software company’s product can improve profits.
Answer Preview: Explanation. SAP is a software company that provides enterprise softw…

, Using an Internet search engine, find the home page for the firm that registered the EVA trademark. When did this happen? Write a one- to two-page paper giving your opinion of this action. What are the advantages and disadvantages of registering an acronym such as this one? Should Robert Kaplan have registered the term “Balanced Scorecard”? Should someone have registered “ROI”? Discuss this issue
Answer Preview: Explanation. The EVA trademark was registered by the firm of Kaplan & Norton in 1992…

, Chapter: 14 -Problem: 2 >> What does full environmental costing mean? Full private costing?
Answer Preview: Full environmental costing means that …

, Chapter: 12 -Problem: 2 >> A company is spending $70,000 per year for inspecting, $60,000 per year for purchasing, and $56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. $126,000 b. $70,000 c. $56,000 d. $130,000
Answer Preview: a. Inspecting and rewo…

, Chapter: 15 -Problem: 3 >> Helix, Inc., formed the following matrix for its five products: Required:Using the information in the matrix, identify the value streams. Transcribed Image Text: Production Activities/Processes Subassembly 47A Cell Packaging Product Model Assembly Cell Order Entry Production Planning Basic Cell Warr
Answer Preview: Value streams: A & D: …

, Chapter: 8 -Problem: 1 >> 1. Which of the following describes the order in which the four types of budgets must be prepared?a. Production, sales, direct materials purchases, cash received on accountb. Sales, production, direct materials purchases, cash budgetc. Cash receipts, direct labor, production, salesd. Sales, direct materials purchases, production, cash disbursements.2. The budget that adjusts unit sales for beginni
Answer Preview: 1. b. Sales, prod…

, Chapter: 13 -Problem: 1 >> Which of the following objectives would be associated with the process perspective?a. Increasing information system capabilitiesb. Increasing service qualityc. Decreasing unit product costd. Increasing customer satisfaction
Answer Preview: b. Inc…

, Chapter: 7 -Problem: 4 >> 1. A CPA would recommend changing from plantwide overhead rate application to departmental rates under which of the following circumstances?a. The plant produces one product.b. The plant produces multiple products that may or may not pass through all producing departments.c. The plant produces multiple products that pass through all of the producing departments.d. The plant produces many different
Answer Preview: 1. b. The plant produces multiple products …

, Chapter: 17 -Problem: 2 >> 1. A company is considering a special order for 1,000 units to be priced at $8.90 (the normal price would be $11.50). The order would require specialized materials costing $4.00 per unit. Direct labor and variable factory overhead would cost $2.15 per unit. Fixed factory overhead is $1.20 per unit. However, the company has excess capacity, and acceptance of the order would not raise total fixed fa
Answer Preview: 1. d. 2. a. …

, The second stage of customer-based activity-based costing entails the assignment of: a. Resource costs to sales departments. b. Resources costs to distribution channels. c. Customer-related activity costs to products. d. Customer-related activity costs to customers. Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to
Answer Preview: The correct answer is d. Customer-related activity costs to customers. The second stage of customer-…

, A number of companies are involved in creating Internet solutions to medical recordkeeping. Given that clinics and doctors’ offices use a job-order costing system, discuss how software may improve productivity and efficiency. What problems remain to be solved? Use the Athena Health (http://www.athenahealth.com) and VisionaryMed (http://visionarymed.com/emr/? Src=gEMR&gclid=CLXZ0JmfjZwCFSQMDQodX3Bh
Answer Preview: Software solutions to medical record keeping can improve productivity and efficiency by stream lining the record keeping process . For example , with …

, Chapter: 6 -Problem: 3 >> 1. Under either weighted average or FIFO, when materials are added at the beginning of a process, rather than being added uniformly throughout the process, a unit cost should be calculated for thea. materials and conversion categoriesb. conversion category onlyc. materials category onlyd. labor category only2. During the month of June, the mixing department produced and transferred out 3,500 units
Answer Preview: 1. a. Conversion costs are always assumed to be …

, Chapter: 4 -Problem: 5 >> 1. Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year:Plata produces two models of microwave ovens with the following activity demands:The company€™s normal activity is 21,000 machine hours.Calculate the total overhead cost that would be assigned to Model X using an activity-based costing system:a. $230,000b. $240,000c. $280,000d. $190,0
Answer Preview: 1. a. First calculate activity rates: Setups: $120,000/300 = $400 per setup Ordering…

, Explain why either normal or peak capacity of the producing (or user) departments should be used to allocate the fixed costs of support departments.
Answer Preview: Using normal capacity will result in a more accu…

, Chapter: 15 -Problem: 1 >> What is the price-recovery component?
Answer Preview: The price-recovery compone…

, Have each student find the websites of four companies—two service companies and two manufacturing companies. By reviewing the description of each company’s operations, determine what types of support departments are needed. Do the websites refer to these support departments?
Answer Preview: Thorough explanation. The types of support departments needed for …

, Chapter: 4 -Problem: 1 >> What is activity-based product costing?
Answer Preview: Activity-based product costing is a costing a…

, Chapter: 14 -Problem: 7 >> In 20x5, Major Company initiated a full-scale, quality improvement program. At the end of the year, Jack Aldredge, the president, noted with some satisfaction that the defects per unit of product had dropped significantly compared to the prior year. He was also pleased that relationships with suppliers had improved and defective materials had declined. The new quality training program was also wel
Answer Preview: 1. 20x4 Appraisal: $360,000/$2,048,000 = 17 6% Prevention: $8,000/$2,048,000 = 0 4% Internal failure: $1,000,000/$2,048,000 = 48 8% External failure: $680,000/$2,048,000 = 33 2% The pie chart for 20x4 is as follows: 20x5 Appraisal: $328,000/$2,048,000 = 16 0% Prevention: $160,000/$2,048,000 = 7 8% Internal failure: $820,000/$2,048,000 = 40 0% External failure: $740,000/$2,048,000 = 36 1% The pie chart for 20x5 is as follows: Yes. More effort is clearly needed for prevention and appraisal activities. The movement is in that direction, and total failure …

, 1. Relevant information for direct labor is as follows:Actual hours worked…………840Actual wage………………….$15.25Standard hours allowed……820Standard wage…………….$15.50What was the direct labor efficiency variance?a. $305 favorableb. $305 unfavorablec. $310 favorabled. $310 unfavorable 2. Which of the following is the most likely explanation for an unfavorable materials usage variance and a favorable labor
Answer Preview: or the first question: To calculate the direct labor efficiency variance, you need to calculate the difference between the actual labor cost and the s…

, Search the Internet for five companies in different industries. Then, see what clues are given on the websites as to factors affecting sales budgeting for each company. Write a brief, one-page description of the factors affecting sales budgeting for each of your companies.
Answer Preview: Factors affecting sales budgeting can vary depending on the industry. For example, in the retail ind…

, Many companies are now preparing corporate sustainability reports. Many such reports are found at http://www.sustainability-reports.com. Other reports can be found at the websites of individual companies. For example, Baxter and 3M voluntarily prepare and publish reports on health, safety, and the environment. In 2000, Baxter expanded its environmental reporting to include a report on sustainabili
Answer Preview: 1. The amount saved due to environmental actions varies by company. For example, 3M has saved over $2 billion since 1975 through energy efficiency imp…

, 1. Thomas Company is investing $10,000 in a project that has a two-year life with an internal rate of return (IRR) of 10%. The project yields a net cash flow of $7,260 for Year 2.The present value of $1 for one year at 10 percent is 0.90909The present value of $1 for two years at 10 percent is 0.86245What is the net cash flow produced by the project for Year 1? Round any calculations to the nea
Answer Preview: Answers: 1 . a . $ 2 , 740 2 . 2. b . $ 6 , 800 Explanations a Th…

, Chapter: 2 -Problem: 2 >> Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for $60 each. The actual variable unit cost is as follows:Direct materials……………………………$16.00Direct labor………………………………………5.30Variable overhead…………………………….2.90Variable selling expense……………………2.40Total unit variable cost………………….$26.60Fixed overhead was $320,000. Fixed selling expenses consisted of advertising copayments totaling $
Answer Preview: b. Units ending finished goods = 4,000 + 25,000 26,500 = 2,500 Direct materials ..... $16 00 Di…

, Lean manufacturing and lean accounting promise significant benefits to an organization. Yet, the initial effect of lean manufacturing is often an initial drop in profits reported on the financial statements. Required:1. Go to www.journalofaccountancy.com and search for articles on lean accounting. Using articles found in this search, answer the following questions:a. Why do standard-costing practi
Answer Preview: 1) a. Standard costing practices no longer make sense for a lean organization because the traditiona…

, Please answer each of the following: Required:               1. Go to http://www.goldratt.com, and locate the list of cases detailing successful use of the theory of constraints. Pick three cases, and summarize the benefits each firm realized from implementing TOC.2. Access the library at http://www.goldratt.com, and see if you can find any information on what TOC followers call the “Thinking Proc
Answer Preview: 1 . One example of a firm that experienced benefits from implementing T OC is the She t land Amen it…

, Chapter: 10 -Problem: 1 >> 1. Anders Company provided the following information:Turnover……………………………………..1.4Average operating assets…..$120,000Operating income…………………$6,720What is margin?a. 5.6%b. 11.2%c. 8%d. Cannot be determined from the above information.2. Refer to 10.22. If the imputed interest rate is 6%, what is Anders Company residual income for the year?a. ($480)b. $480c. $2,400d. ($2,400)3. A company had WACC (weig
Answer Preview: 1. c. Turnover = Sales/$120,000 = 1 4 S…

, Chapter: 3 -Problem: 2 >> 1. Alard Manufacturing Company has a billing department staffed by four billing clerks. Each clerk is paid $32,000 per year and is able to process 8,000 bills. Last year, 27,360 bills were processed by the four agents. Calculate the unused capacity in terms of number of bills.a. 27,360b. 4,640c. 8,000d. 32,0002. Refer to 3.27. What if one of the billing clerks agreed to work half time for $16,000?
Answer Preview: 1. b. Total activity availability = 4 8,000 = 32,000 bills Unused capacity = 32,000 2…

, Chapter: 19 -Problem: 1 >> 1. An investment of $2,000 produces a net cash flow of $800 in the first year, and $2,000 in the second year. What is the payback period?a. 1.60 yearsb. 1.25 yearsc. 0.50 yearsd. 1.10 years2. Which of the following is a deficiency of the payback period?a. It helps control the risk of obsolescence.b. It ignores the financial performance of the project beyond the payback period.c. It is a rough meas
Answer Preview: 1. a. $800 are recovered in Year 1, leaving $1,200 to be recoverd in …

, Go to the website of the Institute of Management Accountants (www.imanet.org) and describe the exam content of each of the two parts. Identify the requirements that must be met to take the CMA examination. Now go to http://www.aicpa.org and describe the content of the CPA examination. Discuss the differences in content of the CMA and CPA exams. How do the requirements differ? (Answer this last que
Answer Preview: The CMA exam covers financial reporting, planning, performance management, cost management, and inte…

, Find five companies with home pages on the Internet. Be sure that there is at least one company from each of the following categories: manufacturing, service, and wholesale-retail. Determine how each of the companies would define its product(s) for the purposes of costvolume- profit analysis. Write a brief description of each company and your assessment of its product/service structure. Give your
Answer Preview: Explanation. 1. Company: Nike Nike is a manufacturing company that produces athletic shoes and appar…

, Chapter: 7 -Problem: 1 >> Why must support service costs be assigned to products for purposes of inventory valuation?
Answer Preview: GAAP requires that …

, Chapter: 20 -Problem: 2 >> 1. Which of the following describes the economic order quantity (EOQ)?a. It is associated with a pull inventory system.b. It is the heart of a JIT purchasing system.c. It minimizes total ordering and carrying costs.d. It minimizes stock-out costs.2. A JIT inventory management system maintains which of the following?a. Goods should be pushed through the system on a fixed schedule based on anticip
Answer Preview: 1. c. EOQ is the quantity …

, Chapter: 14 -Problem: 9 >> The following environmental cost reports for 20x3, 20x4, and 20x5 (year end December 31) are for the Communications Products Division of Kartel, a telecommunications company. In 2011, Kartel committed itself to a continuous environmental improvement program, which was implemented throughout the company.At the beginning of 20x5, Kartel began a new program of recycling nonhazardous scrap.The effort
Answer Preview: 1. 2. The total environmental costs in 20x3 were $1,785,000. The total costs in 20x5 were $1,179,000…

, Chapter: 12 -Problem: 1 >> Refer to Exercise 12.14. Suppose that for 20x2, Sanford, Inc., has chosen suppliers that provide higher-quality parts and redesigned its plant layout to reduce material movement. Additionally, Sanford implemented a new setup procedure and provided training for its purchasing agents. As a consequence, less setup time is required and fewer purchasing mistakes are made. At the end of 20x2, the inform
Answer Preview: 1. Note: The above amounts were computed for each year, using the following formula: (AQ SQ)SP. 2. F…

, The objective of benchmarking is to improve performance by identifying, understanding, and adopting outstanding best practices from others. If this process is carried out inside the organization, then it is called internal benchmarking. It is not uncommon for one facility within an organization to have better practices than another. Unfortunately, it is unusual for these better practices to natura
Answer Preview: 1 . Internal benchmark ing is an attractive option for an organization because it allows them to ide…

, Chapter: 5 -Problem: 1 >> When using normal costing, how are jobs charged with overhead?
Answer Preview: When normal costing is …

, 1. Which of the following markets is characterized by the following: many buyers and sellers, a homogeneous product, easy entry into and exit from the industry, and all firms are price takers?a. perfectly competitive marketb. monopolistic competitionc. monopolyd. oligopoly2. The following information pertains to three different products being sold byWhich product or products have an inelastic dema
Answer Preview: Question 1 Answer : a. perfectly competitive market Explanation : The characteristics described are …

, Chapter: 15 -Problem: 2 >> In 20x2, Choctaw Company implements a new process affecting labor and materials. The following reported data are provided to evaluate the effect on the company€™s productivity: Required:1. Calculate the productivity profile for 20x1.2. Calculate the productivity profile for 20x2, and comment on the effect of the new production and assembly process.3. What if the labor hours used in 20x2 were 112,5
Answer Preview: 1 Partial Operational Productivity Ratios 20x1 Profile* Labor productivity ratio ... 5 00 Material p…

, Chapter: 4 -Problem: 3 >> Gee Manufacturing produces two models of camshafts used in the production of automobile engines: Regular and High Performance. Gee currently uses an ABC system to assign costs to the two products. For the coming year, the company has the following overhead activities, costs, and activity drivers:At practical capacity, the expected activity demands for each product are as follows:The production cyc
Answer Preview: 1. Activity consumption ratios: * 8,000/10,000; 2,000/10,000 ** 6,000/20,000; 14,000/20,000 *** 1,00…

, Chapter: 2 -Problem: 3 >> 1. Refer to the information in 2.24. The gross margin percentage for last year wasa. 12.57%b. 55.67%c. 28.95%d. 38.33%2. The ability to assign a cost directly to a cost object by means of a causal relationship isa. allocationb. traceabilityc. separabilityd. value chain process
Answer Preview: 1. d. Sales (26,500 $60) .... $ 1,5…

, Chapter: 14 -Problem: 6 >> At the end of 20x5, Bing Pharmaceuticals began to implement an environmental quality management program. As a first step, it identified the following costs in its accounting records as environmentally related for the calendar year just ended:                                                                                                            20x5Settling personal injury claims………………………………………
Answer Preview: 1. 2. This distribution reveals that the company is paying little attention to preventing and …

, Chapter: 14 -Problem: 3 >> Kang Company reported sales of $3,240,000 in 20x5. At the end of the calendar year, the following quality costs were reported:Design review………………………………….$162,000Recalls…………………………………………………54,000Reinspection………………………………………27,000Materials inspection………………………….21,600Quality training………………………………….54,000Process acceptance…………………………..27,000Scrap…………………………………………………18,900Lost sales………………………………………..108,000P
Answer Preview: 1. 2. Failure costs are almost 50 percent of the total costs. This indi…

, Chapter: 5 -Problem: 2 >> CleanCom Company specializes in cleaning commercial buildings and construction sites. Each building and site is different, requiring amounts and types of supplies and labor for each job. CleanCom estimated the following for the year:Number of direct labor hours………………..5,110Direct labor cost…………………………………$76,650Overhead cost…………………………………….$45,990During the year, the following actual amounts were exp
Answer Preview: a. Predetermined overhead rate = $45,990/5,110 = 0 60 times direct labor cost Average wage …

, Chapter: 3 -Problem: 1 >> Cost Behavior, Flexible and Committed Resources State University’s football team just received a bowl game invitation, and the students and alumni are excited. Holiday Travel Agency, located close to campus, decided to put together a bowl game package. For $50,000, a 737 jet could be chartered to take up to 170 people to and from the bowl city. A block of 85 hotel rooms could be confirmed for $400
Answer Preview: 1. Resource Jet rental Hotel rooms Bu…

, Search the Internet to find a complete description of a company that has implemented the Balanced Scorecard. Possible sources include the following: Palladium Executive Strategy (http://www.thepalladiumgroup.com), SAP (http://www.sap.com), and http://www.sas.com. Once you have a company located, answer the following questions:1. What is/are the strategy or strategies of the company?2. What perspec
Answer Preview: 1. The strategy of the company is to provide the best customer service possible while maintaining a …

, Chapter: 13 -Problem: 3 >> At the beginning of the last quarter of 20x1, Youngston, Inc., a consumer products firm, hired Maria Carrillo to take over one of its divisions. The division manufactured small home appliances and was struggling to survive in a very competitive market. Maria immediately requested a projected income statement for 20x1. In response, the controller provided the following statement:Sales……………………………………
Answer Preview: 1. 2. The if-then sequence strategy representation: If employee capabilities are increased and if information systems capability is improved, then employees will increase the number of suggested impro…

Additional Information

6 Reviews for Cornerstones of Cost Management Textbook Questions And Answers