Questions and Answers of Management And Cost Accounting

Granoline SA manufactures cereal products such as multi-grain porridge and breakfast cereals. It makes multi-grain porridge by blending barley, wheat and rye. Budgeted costs to produce 100,000 kg of
Rusti-Verres SNC sells two brands of wine glasses – Choc and Chic. Rusti-Verres provides the following information for sales in the month of June 2018:All variances are to be calculated in
A company sells three products: D, E and F. The market for the products dictates that the numbers of products sold are always in the ratio of 3D:4E:5F. Budgeted sales volumes and prices, and
Escuelas SA has two divisions. The Mining Division makes toldine, which is then transferred to the Metals Division. The toldine is further processed by the Metals Division and is sold to customers at
Ethics, transfer pricing (20 minutes) The Leipzig Division of Bohemia Industries makes two component parts, X23 and Y99. It supplies X23 to the Hanover Division to be used in the manufacture of car
Consider the following selected cost data for Schwarzmetal GmbH for 2019.• Budgeted manufacturing overhead .......................... €7 000,000• Budgeted machine-hours
Eldorado SA is a management consulting firm. Its job-costing system has a single direct-cost category (consulting labour) and a single indirect-cost pool (consulting support). Consulting support is
Idergard AB assembles residential homes. It uses a job-costing system with two direct-cost categories (direct materials and direct labour) and one indirect-cost pool (assembly support).
Budenmayer BV is a small machine shop that uses highly skilled labour and a job-costing system (using normal costing). The total debits and credits in certain accounts just before year-end are as
Europe Electronics SNC manufactures microchips in large quantities. Each microchip undergoes assembly and testing. The total assembly costs during January 2018 were: Direct materials used . . .
Euro-Medi Plc manufactures a wide range of medical instruments. Two testing instruments (101 and 201) are produced at its highly automated Limerick plant. Data for December 2018 are as
Flori-Dante Srl grows, processes, packages and sells three joint apple products: (a) sliced apples that are used in frozen pies, (b) apple sauce, and (c) apple juice. The apple peel, processed as
Claude Deux-Bussy is the owner and operator of Boissons Barbe-Bleue Sarl, a bulk soft-drink producer. A single production process yields two bulk soft drinks, Pelléas (the main product) and
Galinha-Esquina SA grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2018 is as follows:Joint costs of production in July
Miljø-Såpe AS produces two joint products, cooking oil and soap oil, from a single vegetable oil refining process. In July 2018, the joint costs of this process were NOK 2400,00,00. Separable
Define separable costs.
Duddon Ltd makes a product that has to pass through two manufacturing processes, I and II. All the material is input at the start of process I. No losses occur in process I but there is a normal loss
Le Roi du Plastique Sarl has two processes – extrusion and thermo assembly. Consider the June 2018 data for physical units in the thermo-assembly process of Le Roi du Plastique: opening work in
Telemark-Kjemi AS manufactures an industrial solvent in two departments – mixing and cooking. This question focuses on the Cooking Department. During June 2018, 90 tonnes of solvent were completed
Refer to the information in Exercise 4.17. Suppose that Telemark-Kjemi uses the FIFO method instead of the weighted-average method in all its departments. The only changes under the FIFO method are
Why should the accountant distinguish between transferred-in costs and additional direct material costs for a particular department?
‘Previous department costs are those incurred in the preceding accounting period.’ Do you agree? Explain.
Refer to the information in Exercise 4.17. Suppose Telemark-Kjemi determines standard costs of NKr 1050 per (equivalent) tonne of transferred-in costs, NOK 390 per (equivalent) tonne of direct
‘There’s no reason for me to get excited about the choice between the weighted-average and FIFO methods in my process-costing system. I have long-term contracts with my materials suppliers at
Euro-Défense is a manufacturer of military equipment. Its Tourcoing plant manufactures the Déca-Pite missile under contract to the French government and friendly countries. All Déca-Pites go
Do Exercise 4.20 using the FIFO method of process costing. Explain any difference between the cost of work completed and transferred out and cost of closing work in progress in the Assembly
Sligo Toys Ltd manufactures one type of wooden toy figure. It buys wood as its direct material for the Forming Department of its Ballinode plant. The toys are transferred to the Finishing Department,
1. Using the FIFO process-costing method, do the requirements of Exercise 4.24. The transferredin costs from the Forming Department for the April opening work in progress are €17,520. During April,
Germinal et Associés provides tax advice to multinational firms. Germinal charges clients for (a) direct professional time (at an hourly rate) and (b) support services (at 30% of the direct
Jyvaskyla Oy is a retail chain of supermarkets. For many years, it has used gross margin (selling price minus cost of goods sold) to guide it in deciding on which products to emphasise or de-
Distinguish among the three methods of allocating the costs of service departments to production departments.
How do cost–benefit considerations affect choices by a company about the allocation of indirect costs to products, services or customers?
George Mathenge is a well-known motivational speaker. The Europe Speaker’s Bureau (ESB) wants Mathenge to be the sole speaker at an all-day seminar. Mathenge’s agent offers ESB the choice of
What is a cost driver? Give one example for each area in the value chain.
Calculate cost of goods manufactured and cost of goods sold from the following account balances relating to 2018 (in € millions):Property tax on plant building
Howell Ltd has the following account balances (in millions):RequiredPrepare an income statement and a supporting schedule of cost of goods manufactured for the year ended 31 December 2018. For
What are the three major categories of the inventoriable costs of a manufactured product?
Define the following: direct materials costs, direct manufacturing labour costs, indirect manufacturing costs, prime costs and conversion costs.
A distraught employee, Guy Pirault-Manne, put a torch to a manufacturing plant on a blustery day, 26 February 2018. The resulting blaze completely destroyed the plant and its contents. Fortunately,
Overtoom International Nederland BV manufactures and sells metal shelving. It began operations on 1 January 2018. Costs incurred for 2018 (V stands for variable; F stands for fixed) are as
An auditor for the Inland Revenue is trying to reconstruct some partially destroyed records of two taxpayers. For each of the cases in the accompanying list, find the unknowns designated by letters A
Anne-Jorun Sørensen, an able electrical engineer, was informed that she was going to be promoted to assistant plant manager. Anne-Jorun was elated but uneasy. In particular, her knowledge of
The European Sports Management Group (ESMG) manages and promotes sporting events and sporting personalities. Its managers are currently examining the following reports and accounting statements:a.
Explain the meaning of cost management.
Boots, which operates a chain of pharmacies in the UK, incurs the following costs:a. Cost of redesigning blister packs to make drug containers more tamperproof.b. Cost of videos sent to doctors to
When explaining a motor vehicle market-share turnaround, a car manufacturer stated: ‘We listened to what our customers wanted and acted on what they said. Good things happen when you pay attention
In April 2018, Bérangère Saunier, editor of The Sporting News (SN), decides to reduce the price per newspaper from €0.70 in April 2018 to €0.50 starting 1 May 2018. Actual paid circulation in
WebNews.co.uk is an Internet company. It offers subscribers multiple online services ranging from an annotated TV guide to local-area information on restaurants and cinemas. It has two main revenue

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