Refer to the data for AnimPix, Inc., in Problem 8-26. In addition, the company has provided the
Question:
Management has provided the following ease of adjustment codes for the various costs:
Ease of
Adjustment Code
Technical staff salaries . . . . . . . . . . . . . . . . Red
Animation equipment depreciation . . . . . . . Red
Administrative wages and salaries . . . . . . Yellow
Supplies costs . . . . . . . . . . . . . . . . . . . . . . . Green
Facility costs . . . . . . . . . . . . . . . . . . . . . . . . Red
These codes created some controversy. In particular, some administrators objected to coding their own salaries Yellow, while the technical staff salaries were coded Red. However, the founders of the firm overruled these objections by pointing out that our technical staff is our most valuable asset. Good animators are extremely difficult to find, and they would be the last to go if we had to cut back.
Required:
1. Using Exhibit 8A3 as a guide, determine the cost of the local commercials market. (Think of the local commercials market as a product.)
2. Using Exhibit 8A5 as a guide, prepare an action analysis report concerning the local commercials market. (This company has no direct materials or direct labor costs.)
3. What would you recommend to management concerning the local commercialsmarket?
Step by Step Answer:
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer