Questions and Answers of Horngrens Cost Accounting A Managerial Emphasis

Khan Sunil Enterprises, a software engineering firm, uses the account analysis approach to identify the cost behavior of production costs for its premium software. The following details relate to the
Differentiate between the industrial engineering method of cost estimation and the quantitative method.
Paul Nellis manufactures nail cutters which has a fixed cost of $200 and 100 items cost $1,000. Which of the following is the cost function, assuming that it is linear?a. 8 b. 4.5 c.
Karil Teeze Building Ltd is an estate developer based in Laos. The company’s overhead costs fluctuate considerably from year to year according to the number of direct labor-hours worked in the
Hamwey, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2020.RequiredHamwey, Inc., produced
Lynda Donovan is examining customer-service costs in the southern region of Clement Products. Clement Products has more than 200 separate electrical products that are sold with a 6-month guarantee of
Carney Cabinets Ltd is a furniture manufacturing company with its factories located in six cities in the United Kingdom. The company has recently introduced an automated system, but management is
FlyHigh Vacations offers helicopter service from suburban towns to Heathrow Airport in the United Kingdom. Each of its 10 helicopters makes between 1,000 and 2,000 round-trips per year. The records
Lucy Hall owns a professional character business in a large metropolitan area. She hires local college students to play these characters at children’s parties and other events. Linda provides
Global Defender manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow:aUsing the formula (page 402) for
Ken Howard, financial analyst at KMW Corporation, is examining the behavior of quarterly maintenance costs for budgeting purposes. Howard collects the following data on machinehours worked and
Coronavirus disease (COVID-19) caused by a new virus results in respiratory illness (like the flu). The disease was first identified in December 2019 and has since spread globally, resulting in the
Unicorn Freightways is a leader in transporting agricultural products in the western provinces of Italy. Rita Bonnie, a financial analyst at Unicorn Freightways, is studying the behavior of
Farm Fresh, a cooperative of organic familyowned farms outside of New South Wales, Australia, has recently started a fresh produce club to provide support to the group’s member farms and to promote
Apollo Hospital specializes in outpatient surgeries for relatively minor procedures. Apollo is a nonprofit institution and places great emphasis on controlling costs in order to provide services to
Assume the same information for the WLJ Boat Company as in Problem 10-40 with one exception. This exception is that WLJ Boat uses a 90% incremental unit-time learning model as a basis for predicting
Hankuk Electronics started production on a sophisticated new smartphone running the Android operating system in January 2020. Given the razor-thin margins in the consumer electronics industry,
Nandita Summers works at Modus, a store that caters to fashion for young adults. Nandita is responsible for the store’s online advertising and promotion budget. For the past year, she has studied
How do management accountants work with data scientists to create value for an organization?
What is the seven-step decision-making process for applying machine-learning techniques in business situations?
Define target leakage.
Describe the decision tree technique of predictive modeling.
What is Gini impurity?
Why does overfitting occur?
What is pruning? Why is it helpful?
How do data scientists use cross-validation and holdout samples?
What is the likelihood value? Why do prediction models attempt to maximize it?
Explain the bias–variance tradeoff.
What is the receiver operating characteristic (ROC) curve?
What is the confusion matrix?
Explain false positives (FP) and false negatives (FN).
How does the management accountant use the payoff matrix to make decisions using data science models?
How do management accountants help managers to operationalize data science models?
Which of the following is not a primary component of business applications of data science?a. Computer science and data skillsb. Substantive expertise in natural sciencesc. Math and statisticsd.
Which of the following statements describes cross-validation?a. Cross-validation is close and intense monitoring of all the manufacturing steps and critical points in at least the first three
What is the proper order of the steps in the data science framework?a. Visualize and communicate insights, build a model, obtain and explore relevant data, prepare data, deploy the model, evaluate
Laurie Rech is a management accountant at Donnelly Bank, which has recently suffered significant loan losses. Rech and her team are worried that they do not fully understand the risk profile of their
Which of the following statements about decision trees is true?a. Evaluate and choose among candidate decision trees based on their performance on the cross validation data, not the training data
At what point does an analyst stop the building and/or pruning process of a decision tree model?a. Several models with different amounts of pruning are evaluated against the validation sample to find
TelMark Mobile Services provides mobile phone services to millions of customers in the U.S. TelMark’s customer base is constantly changing as old customers leave the service and new customers join.
Margo London is the management accountant at Norse Credit. Norse Credit spends a lot of time and resources trying to detect fraudulent activity within customers’ accounts. For most customers this
Sun TV sells TV sets. It does not sell smart TVs so customers do not come to Sun TV if they want to purchase smart TVs. Sun TV wants to start selling smart TVs and will only sell smart TVs to
Blanda Brothers is a produce processing company that specializes in fruits, with apple sales representing the majority of their revenue. Their main facility receives a daily shipment of apples, which
James Silva is a management accountant at Keebler-Olson, where he is in charge of their investment portfolio. In 2015, James worked with a data scientist to develop a model that predicts how a given
Sarah Letourneau is the management accountant at Turcotte Manufacturing, an auto supplier that produces brake pads. Turcotte’s customers have high safety standards, and managers at Turcotte believe
It is June, and the manager of the retail chain Stapleton wants to increase revenues during the back-to-school period. To do that, he plans to attract more customers in August whose children are
David Porter is the management accountant at Spruce Bank, where the data science department is leading an initiative to predict whether loans will default or repay. The default rate in the training
Assume the same information for Spruce Bank as in Problem 11-39. David believes that within the pool of borrowers he invests in, the timing of when borrowers ultimately default could be different
Define relevant costs. Why are historical costs irrelevant?
What is a one-time-only special order?
State the importance of cost information in decision making.
Define opportunity cost.
Jacobs Enterprise rents a small workshop for £50 per week, but at present does not use it. The firm could sub-let the workshop for £80 per week, but they are considering using it themselves for a
Which of the following factors are considered by managers when making make-or-buy decisions?a. Quality of goods and services and dependability of suppliers to deliver on schedule.b. Confidentiality
In order to determine whether a special order should be accepted at full capacity, the sales price of the special order must be compared to the per unita. Contribution margin of the special order.b.
Lees Corp. is deciding whether to keep or drop a small segment of its business. Key information regarding the segment include:Contribution margin: 35,000Avoidable fixed costs: 30,000Unavoidable fixed
1. DeCesare Computers makes 5,200 units of a circuit board, CB76, at a cost of $280 each. Variable cost per unit is $190 and fixed cost per unit is $90. Pinnacle Electronics offers to supply 5,200
The Gold Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 11,000 medals each month. Current production and sales
Edward Jingo runs a modern sawmill in Old Trafford, Manchester. The company received an order for its MIC wood for which the labor and machine time is available but requires three types of wood
The Svenson Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information
Oscar Ltd manufactures small electrical parts in Hamburg, Germany. The company has a production capacity of 18,000 electrical units per year and the unit cost is as follows:The company’s accountant
Alpha Cables Ltd manufactures electric cables for households. The company has capacity to produce 16,000 units per month. However, the current plans call for monthly production and sales of 10,000
Isochlorine is produced in a chemical process that is very threatening to the environment. As a result of this, the government has limited the yearly production.Company Soleil uses isochlorine to
LMTC Ltd manufactures PE clothes for primary schools in Northamptonshire, the United Kingdom. The company produces 30,000 units per academic session. The following is the cost per unit:It has been
Cuddly Critters, Inc., manufactures plush toys in a facility in Queensland, Brisbane. Recently, the company designed a group of collectible resin figurines to go with the plush toy line. Management
The TechGuide Company produces and sells 7,500 modular computer desks per year at a selling price of $750 each. Its current production equipment, purchased for $1,800,000 and with a 5-year useful
Julie Bolts Ltd manufactures mechanical bolts for different vehicle engines. The company has been approached to submit a quote for supply of some 3-D Bolts. The company’s inventory and production
Jersey Acres Dairy, maker of specialty cheeses, produces a soft cheese from the milk of Friesian cows raised on a special corn-based diet. One kilogram of soft cheese, which has a contribution margin
Mitch McCalister, the general manager of Time Sprint, must decide when to release the new version of Time Sprint’s fitness watch, TS-12. Development of TS-12 is complete, but the product has not
Sandy’s Paint Shop paints exterior surfaces for commercial and residential customers. It charges $175 per hour for a crew of painters. For March 2020, Sandy expects the crew to operate at 80% of
The Allen Company produces chairs. This year’s expected production is 30,000 units. Currently, Allen makes the upholstery for the chairs in its factory. Allen’s management accountant reports the
Denver Engineering manufactures small engines that it sells to manufacturers who install them in products such as lawn mowers. The company currently manufactures all the parts used in these engines
Rush Industries manufactures electronic testing equipment. Rush also installs the equipment at customers’ sites and ensures that it functions smoothly. Additional information on the manufacturing
Talking Toys (TT) produces dolls in two processes: molding and assembly. TT is currently producing two models: Chatty Chelsey and Talking Tanya. Production in the molding department is limited by the
Ainsley Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2020 follows:Further analysis of costs reveals the following percentages of variable costs
Mechum River Anglers, a division of Old Dominion Travel, offers two types of guided fishing tours, Basic and Deluxe. Operating income for each tour type in 2020 is as follows:The equipment has a
Della Simpson, Inc., sells two popular brands of cookies: Della’s Delight and Bonny’s Bourbon. Della’s Delight goes through the mixing and baking departments, and Bonny’s Bourbon, a filled
Define strategy.
Managers usually focus on five areas when analyzing the industry. Discuss any two focus areas.
Describe the two generic strategies.
What is a customer preference map, and why is it useful?
What are ways that a company can achieve cost leadership?
Differentiate between a strategy map and a balanced scorecard.
What are the key components of the financial perspective and customer perspective of a balanced scorecard?
What are three important pitfalls to avoid when implementing a balanced scorecard?
What are unused capacity costs?
What is downsizing?
What is a partial-productivity measure?
“We are already measuring total factor productivity. Measuring partial productivities would be of no value.” Do you agree? Explain briefly.
Pineway Electric manufactures electric motors. It competes and plans to grow by selling high-quality motors at a low price and by delivering them to customers in a reasonable time after receiving
Jacobs Inc. is a relatively new company that has established a position in the highly competitive biotechnology industry. Which of the following statements is correct regarding Jacobs’
Which of the following statements is/are true regarding the implementation of a balanced scorecard in an organization?a. To sustain long-run financial performance, a company must strengthen all links
An analysis of Pineway’s operating-income changes between 2019 and 2020 shows the following:RequiredThe industry market size for electric motors did not grow in 2020, input prices did not change,
Dominic & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Dominic wants to be known for its trendsetting
Refer to Exercise 13-22. Suppose that the market for silk-screened T-shirts grew by 10% during 2020. All increases in sales greater than 10% are the result of Dominic’s strategic actions.Data From
Refer to Exercise 13-21.Data From Exercise 13-21Dominic & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers.
Methuen Corporation makes a special-purpose machine, D4H, used in the textile industry. Methuen has designed the D4H machine for 2020 to be distinct from its competitors. It has been generally
Refer to Exercise 13-25.Data From Exercise 13-25Methuen Corporation makes a special-purpose machine, D4H, used in the textile industry. Methuen has designed the D4H machine for 2020 to be distinct
Refer to Exercise 13-25.Data From Exercise 13-25Methuen Corporation makes a special-purpose machine, D4H, used in the textile industry. Methuen has designed the D4H machine for 2020 to be distinct
Suppose that during 2020, the market for Methuen’s special-purpose machines grew by 3%. All increases in market share (that is, sales increases greater than 3%) are the result of Methuen’s

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