New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
management accounting information
Management Accounting Information For Creating And Managing Value 9th Edition Kim Langfield Smith, David Smith, Paul Andon, Ronald W. Hilton - Solutions
6.7 Estimate service costs in a job costing environment.
6.8 Explain the concepts of billable hours, chargeout rates and realisation rates, and their use in estimating service costs, prices and profits.
6.9 Estimate service costs in a process costing environment.
6.10 Describe how to estimate service costs in a hybrid costing environment.
6.11 Assess when a service entity should implement service costing, by considering the costs and benefits of information about service costs.
6.12 Describe the flow of costs in service firms, including accounting for overhead and the recording of Inventory where appropriate. 6.13 Estimate the costs of the goods (and services) provided by retailers and wholesalers.
6.1 What are the distinguishing features of service organisations? Consider the extent to which these features are present in the following industries: LO 6.1 (a) cultural and recreational (b) finance and insurance.
6.2 Do retail and wholesale businesses provide services or goods to customers? Discuss. LO 6.1, 6.4
6.3 A doctor's clinic is a service organisation. Think of an example of a fixed cost and a variable cost for a doctor's clinic and specify the cost driver for the variable cost. How might the clinic's management use this information? LO 6.2
6.4 Flight Centre is a service entity. Give two examples each of the organisations's direct and indirect costs, specifying the cost object. How might the organisation's management use this information? LO 6.2
6.5 What is a value chain? Focusing on your university, describe the segments that you think would be included in its value chain. Provide a brief explanation of the role of each segment. LO 6.3
6.6 In estimating the costs of products, manufacturers usually identify direct material, direct labour and manufacturing overhead costs. What modifications may be made to these classifications in estimating service costs? LO 6.3
6.7 Using an example, explain how a retailer could focus on the purchasing segment of their value chain to create competitive advantage. LO 6.4
6.8 For each type of service organisation (professional service firms, service shops and mass service entities): LO 6.5, 6.6 (a) identify the key features (b) identify three business examples (c) describe the type of costing system that would be most appropriate to that type of service
6.10 Refer to the Real Life titled 'The downside of using billable hours to charge for legal services' in the section 'Costing services at Adelaide Bank. Describe the adverse consequences for clients that billing systems may encourage, particularly where the system is also used to measure employee
6.11 Describe the problems that can arise in using process costing to estimate the cost of the services produced in mass service entities. LO 6.9
6.12 Consider the costs across the various segments of the value chain of a software developer. Which of these costs should be included in the cost of the firm's software products? Explain your answer. LO 6.10
6.13 Explain how estimates of service costs help managers to manage resources and create value. LO 6.11
6.14 Describe the three factors that influence the costs and benefits associated with service costing. How are these factors affected by the type of service firm? LO 6.11
6.15 Do service costs provide a useful basis for planning and controlling costs? LO 6.11
6.16 'Despite the use of predetermined overhead rates in estimating service costs, there is no need to consider underapplied or overapplied overhead. Do you agree with this statement? Explain your reasons. LO 6.12
6.17 Identify three service firms that are likely to produce work in process inventory and explain how the costs of work in process are recorded in the accounting system. LO 6.12
6.18 Identify the costs that should be included in the cost of inventories purchased for resale according to the Australian accounting standards. LO 6.13
E6.19 LO 6.2 Classifying costs; controllable costs: hospital Which of the following costs are likely to be controllable by the director of a hospital emergency room? (a) medication administered (b) overtime paid to nurses due to scheduling errors (c) disposal of medical supplies past their use-by
E6.20 LO 6.2 Classifying costs; direct costs: restaurant Indicate whether each of the following costs is a direct cost for an individual franchise of a gourmet pizza chain, providing reasons to explain your answer: (a) cost of food served (b) pizza chef's salary and labour on-costs (c) costs
E6.21 LO 6.3 Classifying costs; value chain: insurance Using the value chain classifications provided, classify the costs listed below for a major bank: (a) research and development (b) design (c) production/delivery (d) marketing (e) customer support. Costs: 1. Salaries of the customer service
E6.22 LO 6.4 Classifying costs; value chain: retailer Walworths is a major independent supermarket located in West Wyalong. Classify the costs listed below, using these value chain classifications: (a) purchasing (b) production/sales (c) marketing (d) distribution (e) customer support. Costs: 1.
E6.23 LO 6.5 Service firm types Classify the following organisations as professional service firms, mass service entities or service shops. In each case, explain the reasons for your classification. 1. One-stop shop providing public assistance with a range of government services, including the
E6.24 LO 6.7 Job costing: feature film production Australia has a vibrant film industry and has been host to the filming of many Hollywood blockbusters. A list of films made in Australia is presented at https://en.wikipedia.org/wiki/Category:Films_shot_in_ Australia. Using examples of films from
E6.25 Job costing and pricing: interior decorating firm LO 6.7 Illusions is an interior decorating firm located in Adelaide. The following costs were incurred in the firm's contract to redecorate the local council offices: Direct material Professional labour $11200 24.000 The firm's budget for the
E6.26 LO 6.8 Job billing: interior decorating firm (continuation of Exercise E6.25) Refer to the information for Exercise E6.25. 1. Calculate the fee charged to redecorate the council offices, assuming that the firm uses a charge out rate of $360 per professional labour hour (which includes a
E6.27 LO 6.7 6.8 Job costing and billing: IT consulting firm Bairstow Consulting Ltd offers a range of IT consulting services. The company's service costing system estimates the cost of each consulting job by accumulating costs of the professional labour that works on the job plus a charge for
E6.28 LO 6.7 Job costing: car repair business Luxury Auto Repair Ltd is a car repair workshop specialising in the repair of luxury European motor vehicles. The company estimates the costs of repair services by recording the cost of labour used to complete the job and the cost of the spare parts
E6.29 LO 6.9 Process costing: airport check-ins Friendly Skies Ltd operates the check-in facilities at domestic and international terminals throughout Australia. During May the following costs were incurred as passengers were processed by the check- in department at Perth Airport: Costs:
E6.30 LO 6.9 Process costing: book order agency All Texts and Stationery Ltd (ATS) is a major provider of texts and stationery to secondary schools throughout Australia. Students submit their order to ATS through their school at the beginning of the year. All Texts and Stationery fills the order in
E6.31 LO 6.12 6.13 Flow of costs: travel agency and retailer In this chapter, the income statement of Adelaide Bank (Exhibit 6.13) is typical of many service firms' statements, in that operating profit (consisting of the difference between operating revenue and operating expenses) is separated from
P6.32 LO 6.2 Classifying costs; direct and indirect, variable and fixed, controllable and uncontrollable: retailer The MyStyle retail group owns the ConveniShop chain of discount department stores. The ConveniShop store in the Sydney CBD has several departments. Revenues and costs for each
P6.33 LO 6.3 Classifying costs by value chain and cost behaviour categories: financial planning firm WealthSmart is a medium-sized financial planning firm providing a range of investment advice. Apply the value chain and cost behaviour classifications provided to the costs listed below. (More than
P6.34 LO 6.2 6.4 Classifying costs; value chain; variable and fixed; controllable and uncontrollable; product cost: retailer MegaWare is a national retailer of hardware and garden products. Each store is organised into separate departments, such as timber, electrical tools, lighting and garden
P6.35 LO 6.7 Job costing: medical practice MedWise is a large medical practice in Sydney, owned by Dr Wiseman, a medical entrepreneur, and staffed by salaried doctors. Until recently the practice had been managed by Wiseman's son, John. However, Dr Wiseman became concerned about his son's financial
P6.36 LO 6.7 Job costing: consulting firm Kiwi Consulting Services provides consulting services throughout Australia and New Zealand. It uses a job costing system to accumulate the cost of client projects. Traceable costs are charged directly to individual clients; in contrast, other costs incurred
P6.37 LO 6.7 Job costing; future versus current costs: engineering firm MJA Engineers is a firm of consulting engineers. The business provides two main services: design and support services for civil engineering projects, such as the building of bridges and roads, and environmental assessments for
P6.38 Job costing and job billing: health resort LO 6.7 6.8 Greenlife is a health resort that offers a range of programs for health-conscious managers. Managers who participate are provided with a tailored program, consisting of a series of activities. A job costing system is used to calculate the
P6.39 LO 6.7 6.8 Service costing; department cost allocation: hospital Allied Care is a private hospital in country Victoria. The hospital is a not-for-profit organisation and currently bills its patients at $375 per day. This rate was set at the beginning of the year to cover the costs of running
P6.40 LO 6.9 Process costing: university enrolments Flagstaff University is exploring the possibility of outsourcing part or all of its enrolment function. This function involves three separate processes: (a) validation, where the new student's secondary school results are sighted and the
P6.41 LO 6.8 Estimating service costs; ethical issues: accounting firm Goggin and Partners is a chartered accounting firm specialising in income tax returns for medical practitioners. By specialising, the firm has been able to build up expertise in accounting for medical practices, and can charge
P6.42 LO 6.13 Estimating costs in a retail business Partmate Pty Ltd is a retail business that sells car parts to customers who maintain their own cars. The company began business on 1 January and the acquisition of the inventory of car parts during the year involved the following amounts: Purchase
C6.43 LO 6.7 Job costing; department overhead cost allocation: tour operator Asian Adventure Holidays offers a series of holiday packages aimed at families, seniors and corporate groups. The financial controller, Jack Tallis, is preparing for the annual board meeting and is concerned about the loss
C6.44 LO 6.7 6.8 Job costing using client cost sheet; fraud investigation: accounting firm Spicer and Rabbit is an accounting firm that specialises in fraud investigation. In May, Jackson McInnes, the general manager of Jazz Industries, approached John House, a partner of Spicer and Rabbit, to
C6.45 Process costing and hybrid costing: backpacker lodges LO 6.7 6.9 6.10 Cool Destinations Ltd owns a chain of backpacker lodges located throughout Australia. The company's profits have declined over the past year. In an attempt to isolate the causes of poor profit performance, the company has
2.1 Describe the components of traditional and modern management accounting systems.
2.2 Explain why management accountants focus particularly on costs.
2.3 Explain what is meant by different costs for different purposes.
2.4 Classify costs according to their behaviour-that is, as variable or fixed.
2.5 Classify costs as direct or indirect.
2.6 Classify costs as controllable or uncontrollable.
2.7 Classify costs according to the segments of the value chain.
2.8 Analyse costs using the classifications commonly used in manufacturing businesses.
2.9 Explain the different definitions of product cost used in external accounting reports and for decision making.
2.10 Describe the cost flows in a manufacturing business and prepare a schedule of cost of goods manufactured, a schedule of cost of goods sold and an income statement for a manufacturer.
2.1 Describe the key components of traditional management accounting systems. How do these differ from modern management accounting systems? LO 2.1
2.2 Using an example (other than one in the chapter), explain why management accounting systems pay so much attention to costs. LO 2.2
2.3 Give three examples of non-financial information that could be useful for the managers of Opera Australia In determining their yearly schedule. LO 2.2
2.4 Give four examples to illustrate how the managers in the head office of KPMG could use cost information for planning and controlling costs. LO 2.2, 2.3
2.5 What is meant by the phrase different costs for different purposes? LO 2.3
2.6 Traditional management accounting systems classify costs as fixed and variable. Define these terms and provide three examples of each for the Reject Shop. LO 2.4
2.7 When analysing cost behaviour, what do we mean by level of activity? LO 2.4
2.8 What are cost objects? Give four examples of cost objects from the Real Life features in the chapter to explain why managers might be interested in knowing their cost. LO 2.5
2.9 What is a direct cost? What is an Indirect cost? List three direct costs of the Department of Accounting at Monash University. List three indirect costs of the department. LO 2.5
2.10 Indicate whether each of the following costs is a direct cost or an indirect cost of a fine dining restaurant: (a) cost of food served; (b) chef's salary and fringe benefits; (c) cost of maintaining common areas in the multi-storey building where the restaurant is located; and (d) security
2.11 List three costs that are likely to be controllable by the chief executive officer (CEO) of Apple. List three costs that are likely to be uncontrollable by the CEO. LO 2.6
2.12 Describe each segment of the value chain and explain why information about costs in the various segments of the value chain can be useful to managers. LO 2.7
2.13 Refer to the value chain in Exhibit 2.4. Give two examples of costs for each segment of the value chain for AstraZeneca. Which of these costs would be included in an estimate of Inventory at the end of the year, as shown in the company's balance sheet? LO 2.7
2.14 Describe the three main components of product cost. Focusing on a Dell computer, provide examples of costs that would be classified under each of these three cost components. LO 2.8
2.15 What is the difference between the classifications of prime cost and conversion cost? What are these cost classifications each meant to highlight in terms of resources used in production activity or service delivery? LO 2.8
2.16 Why are product costs also called Inventoriable costs? LO 2.9
2.17 Distinguish between product and period costs and give three examples of each. LO 2.9
2.18 What is the most important difference between a manufacturing business and a service firm with regard to the classification of costs as product costs or period costs? LO 2.9
2.19 Outline the four major steps in the flow of costs through a manufacturing company. LO 2.10
2.20 In your own words, explain the difference between cost of goods manufactured and cost of goods sold. LO 2.10
E2.21 LO 2.5 2.6 Classifying costs of support department; direct, indirect, controllable and uncontrollable costs For each of the costs listed below, indicate whether it is: (a) a direct or indirect cost of the equipment maintenance department (b) at least partially controllable by the department
E2.22 Classifying product and period costs, variable and fixed costs, manufacturing costs For each of the costs listed below, indicate whether it is: LO 2.5 2.6 (a) a product or period cost (b) a variable or fixed cost (c) a manufacturing or non-manufacturing cost. You may wish to use the following
E2.23 LO 2.4 2.8 2.9 Classifying product and period costs, variable and fixed costs, manufacturing costs For each of the costs listed below, indicate whether it is: (a) a product or period cost (b) a variable or fixed cost (c) a manufacturing or non-manufacturing cost. You may wish to use the
E2.24 LO 2.7 Classifying costs; value chain: manufacturer Gelato Messina makes and sells a wide range of high quality gelato. Classify the costs listed below, using these value chain classifications: (a) research and development (b) design (c) supply (d) manufacturing (e) marketing (f) distribution
E2.25 LO 2.8 Idle time: manufacturer A warehouse assistant for an office furniture wholesaler worked a normal 35-hour week, but six hours were idle due to a small fire in the warehouse. The employee earns $27 per hour. Required 1. Calculate the employee's total wages for the week. 2. How much of
E2.26 LO 2.8 Overtime cost: manufacturer A machine operator in a textile factory earns $30 per hour, and $37.50 for each overtime hour. The operator worked 43 hours during the first week of May, instead of the normal working time of 38 hours. Required 1. Calculate the machine operator's total wages
E2.27 Cost of goods manufactured and sold LO 2.10 Case A Case B Case C Beginning inventory of finished goods $240000 ? $ 14000 Cost of goods manufactured during period 800000 $1920000 ? Ending inventory of finished goods 80000 320000 50000 Cost of goods sold ? 2000000 560000 Required 1. Determine
E2.28 LO 2.10 Cost of goods manufactured and sold Beginning inventory of finished goods Case i ? Cost of goods manufactured during period $628500 Case ii $108.000 855 000 Case lii Ending Inventory of finished goods Cost of goods sold 150000 607500 $ 21000 ? 72000 63000 ? 900000 Required 1.
E2.29 LO 2.10 Schedules of cost of goods manufactured and sold; income statement: manufacturer Matilda Surf Gear, a manufacturer of sports and beach wear, had the following inventory balances at the beginning and end of the year. Inventory classification Raw material Work in process Finished goods
E2.30 LO 2.10 Schedules of cost of goods manufactured and sold; income statement: manufacturer Bandwidth Company, a manufacturer of electronic components, had the following inventory balances at the beginning and end of the current year: Inventory account Raw material Work in process Finished goods
P2.31 LO 2.7 Classifying costs: manufacturer Wholly Donuts Ltd is a medium-sized doughnut manufacturer. Required 1. Apply value chain and other classifications to the costs listed below. (More than one classification may be appropriate for each cost item.) Value chain cost classifications: (a)
P2.32 LO 2.8 Product cost classification: manufacturer The following cost data for the current year relate to Heartstrings Pty Ltd, a greeting cards manufacturer: 2.9 Service department costs Direct labour: wages Direct labour: on-costs Indirect labour: on-costs On-costs for production supervisor
P2.33 LO 2.8 2.9 Classifying costs; product versus period; components of product cost Indicate, for each of the costs listed below, whether it is: (a) product cost (b) period cost (c) conversion cost (d) prime cost (e) direct material cost (f) direct labour cost (g) manufacturing overhead. More
P2.34 LO 2.8 Direct and indirect labour: manufacturer Sharpedge Cutlery manufactures kitchen knives. One of the employees, whose job is to cut out wooden knife handles, worked 46 hours during a week in January. The employee earns $24 per hour for a 40-hour week. For additional hours the employee is
P2.35 LO 2.10 Incomplete data; manufacturing costs Sales revenue Beginning inventory, raw material Ending inventory, raw material Purchases of raw material Direct materials used Direct labour Manufacturing overhead Total manufacturing costs Beginning inventory, work in process Ending inventory,
P2.36 LO 2.4 2.10 Cost of production, income statement, fixed and variable costs; forecasting: manufacturer Madigan Company commenced operations at the beginning of the current year. One of the company's products, a refrigeration element, sells for $185 per unit. Information related to the current
P2.37 LO 2.10 Inventory estimates, partial data: manufacturer On 12 April, after the close of business, Goldstein & Sons had a devastating fire that destroyed the firm's work in process and finished goods inventories. Fortunately, all raw materials escaped damage because materials owned by the firm
P2.38 LO 2.10 Schedules of cost of goods manufactured and sold; income statement The following data refer to Flintoff Fashions for the current year: Sales revenue Work in process inventory, 31 December Work in process inventory, 1 January Selling and administrative expenses Income tax expense
P2.39 LO 2.10 Schedules of cost of goods manufactured and sold; income statement The following data refer to Maximus Manufacturing Ltd for the current year: Sales revenue Raw material Inventory, 1 January Purchases of raw material Raw material inventory, 31 December Direct labour cost incurred
P2.40 LO 2.10 Interpreting the schedule of cost of goods manufactured Refer to the schedule of cost of goods manufactured prepared in Problem 2.39. Required 1. How much of the manufacturing costs incurred during the current year remain in work in process inventory on 31 December? 2. Suppose Maximus
Showing 3400 - 3500
of 4138
First
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
Step by Step Answers
Get 50% OFF
Claim Now
