Cost Accounting Using A Cost Management Approach 6th Edition Letricia Gayle Rayburn, Martin K. Gay - Solutions

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Price fluctuation is not an important criterion in fixing pricing methods.State whether the following statements are true or false:
When prices fluctuate widely, the method that will smooth out the effects of fluctuations is the weighted average method.State whether the following statements are true or false:
When material prices fluctuate widely, the method of pricing that gives absurd result is simple average price.State whether the following statements are true or false:
In standard price method, issue of materials is priced at a predetermined rate.State whether the following statements are true or false:
Differentiate between CA and FA.
What are the essential features of CA?
What are the factors to be considered before setting up a CA system?
Bring out the importance of CA.
What are the advantages of CA? State its limitations.
State the difference between cost and expense.
State the important objectives of CA.
Define CA.
What do you mean by costing?
Define the term cost.
Variable cost is controlled by(a) Production department (b) Selling department(c) Both a and b (d) None of the above
The fixed cost is controlled by(a) Management (b) External factors(c) Production department (d) None of the above
CA helps planning for future operation in such a way as to(a) Minimize the income (b) Maximize the profit(c) Maximize the cost (d) None of the above
Cost accounts should provide information, which enables the management to fix remunerative(a) Cost prices (b) Selling prices(c) Both a and b (d) None of these
CA can also provide information that may reduce(a) Overheads (b) Price(c) Both a and b (d) None of above
CA department should provide information about standard and(a) Ultimate performance (b) Unestimated performance(c) Actual performance (d) None of the above
Reduction of labour turnover and idle time help us to control(a) Material cost (b) Standard cost(c) Labour cost (d) None of above
Cost accountancy helps in the ascertainment of(a) Cost after hand (b) Cost beforehand(c) Cost in hand (d) None of above
Cost audit is a part of(a) Financial accountancy (b) Cost accountancy(c) Management accountancy (d) None of above
CA is not applicable to ______(a) Small business concern (b) Big business concern(c) Both a and b (d) None of above
CA is the oldest branch of accounting.true or false
CA is nothing but a post-mortem of past costs. true or false
CA will not be necessary if financial accounts provide the necessary analysis. true or false
CA is not needed if prices are beyond the control of the firm. true or false
CA helps in the ascertainment of cost beforehand. true or false
CA provides information for ascertaining the financial position as on a particular date. true or false
Cost audit is a part of cost accountancy. true or false
A prosperous business concern does not need a costing system. true or false
CA is a branch of FA. true or false
CA can be used only in a manufacturing concern. true or false
Present a table of production times showing the following columns for E. Condon Ltd, which produces up to 16 units while experiencing a 90 percent learning curve, the first unit requiring 1000 hours of production time:1. Units produced;2. Total production time (hours);3. Average production time per
Victoria-Yeeland Logistics (Victoria) is a logistics support business, which operates a fleet of lorries to deliver packages of goods on behalf of its customers within the country of Yeeland. Victoria collects packages from its customers’ manufacturing sites or from the customers’ port of
Divisionalized structures are normal in large firms, and occur even when centralized structures would be feasible.Requirements:(a) Explain and discuss the arguments for divisionalized structures in large firms.(b) Explain the costs and potential inefficiencies of a divisionalized structure.(c)
‘The major reason for introducing budgetary control and standard costing systems is to influence human behaviour and to motivate the managers to achieve the goals of the organization. However, the accounting literature provides many illustrations of accounting control systems that fail to give
‘Budgeting is too often looked on from a purely mechanistic viewpoint. The human factors in budgeting are more important than the accounting techniques. The success of a budgetary system depends on its acceptance by the company members who are affected by the budgets.’ Discuss the validity of
Explain the specific roles of planning, motivation and evaluation in a system of budgetary control.
The preparation of budgets is a lengthy process which requires great care if the ultimate master budget is to be useful for the purposes of management control within an organization.You are required:(a) To identify and to explain briefly the stages involved in the preparation of budgets identifying
Outline:(a) The objectives of budgetary planning and control systems;(b) The organization required for the preparation of a master budget.
Should material mix and yield variances be routinely calculated for all companies?
What does the sales mix variance capture and how does this information assist management?
(a) At a low level of analysis for sales variances, what variances would you compute?(b) What types of variances would these low detailed variances be decomposed into at higher levels of analysis?
What would you review in a company to determine the cause of a (a) mix variance and(b) yield variance?
Discuss any constraints you see in the substitutability that we assume when calculating sales mix and production mix variances.
Assume you are making a product that has two ingredients, oil and vinegar, which are substitutable. The recipe for one batch of 10 gallons is oil—S gallons @ $6 a gallon and vinegar—S gallons @ $10 a gallon. At the end of the month, you find the company made 500 gallons of finished products
Using the data in Question 6, determine the price and yield variances for each of the ingredients.
Assume a company makes a special vegetarian diet soup and all beans, carrots, celery, and onions cost the same per pound. Also, the company prides itself on having an across-the-board pay scale so all workers are paid the same per hour. How would this situation affect the company’s production mix
Assume a company has a planned mix of 5 units of Product X to 2 units of Product Y.The individual unit contribution margin for X is $6 and $13 for Y. What is the weighted-average budgeted contribution margin? How do you use the weightedaverage budgeted contribution margin in variance analysis?
For what types of operations would material mix and labor yield variances be appropriate?
Describe circumstances in which the overall sales mix variance would be unfavorable.
The First Company sells Products A and B whose sales prices are $6 and $12, respectively.The variable cost for Product A is $4 and $7 for Product B. Total fixed costs for the company are estimated at $30,000. Assume management plans to sell a total of 9,000 units with a planned mix of | unit of
Outline the characteristics of (a) Gantt chart techniques and (b) PERT.
Give the requirements for making a decision tree.
a. Why should the time value of future earnings be considered in decisions?b. How can the time value of future earnings be used in decision tree analysis?
What is meant by crashing the network and what is the differential crash cost of an activity?
What is the advantage of holding an activity manager responsible for a project time variance?
What is slack and how can management utilize it?
If an activity has a favorable spending variance, what does this indicate?
Define the roll-back concept; discuss how it is used in decision tree analysis.
Should management analyze time slippage on all activities?
Define the term critical path and explain why it is considered critical.
What is the expected activity time for each of the following, given these estimates?
Define linear programming. How are resources regarded in a linear programming model?
To use linear programming, what requirements must be satisfied?
Give three applications of linear programming.
Define the term objective function and give an example.
What are constraints in linear programming, and how do they affect the decision?
Give three examples of constraints encountered in business problems.
Contrast the two solution methods used with linear programming.
How is the area of feasible combinations determined? Where is the optimal solution located?
How is the slope of objective function lines determined and how is the optimum profit determined with their use?
Discuss the relationship between sensitivity analysis and shadow prices.
What is the major benefit of using models to represent real-world situations?
Describe a situation often encountered in business when a company’s overall profitability will be maximized if one segment will take a loss that will be more than made up in another segment.
Give some advantages and disadvantages of decentralization Ilik.
Discuss three dysfunctional consequences of accounting measurements. Be specific in your examples.
Define a segment and explain what factors should be studied in grouping segments.
Define residual income and discuss its use as a performance measurement.
a. What misleading inferences can be made if segment margin is expressed as a percentage of sales?b. When should segment margin be expressed as a percentage of asset employed or on a per hour basis?
Discuss ways the typical corporate manager is guilty of rewarding undesirable behavior.
a. Do you believe that idle assets should be included in the asset base when calculating ROI? Why or why not?b. How could the use of ROI encourage unprofitable behavior?
Do you believe that full costing has limited usefulness in evaluations of segments?Support your answer.
Discuss your views of the trend toward more extensive use of nonfinancial indicators.Include in your discussion some examples of nonfinancial measures.
Explain why you agree or disagree that short-term profits are no index of the ability of top management. Regardless whether you agree or disagree with this statement, indicate other indicators of productivity or profitability which reflect good management.
Management of Nan Mischke Company wishes to earn a 25 percent return on assets employed by all segments. Assets employed by the Northern Territory amount to $500,000, while fixed costs directly attributable to this product line amount to $86,000. The accountant for this territory informs you that
Luther, Inc.’s controller advocates segment reporting and argues the merits of management identifying and reporting significant aspects of the organization’s operations. Other members of the management team are not convinced that the effort involved is worth it.Required:a. Present arguments
Management of Herbert, Inc., set an objective of a 20 percent return on assets employed by all segments. The XRX product line employed assets totaling $800,000, while $75,000 fixed costs relate directly to this product line. Variable costs amount to $4 per unit.Required:a. Determine breakeven sales
Within a company, decentralization exists in various degrees, often reflecting the scope of the decision-making authority given to a particular segment manager. Under this classification scheme, the decentralized units are often referred to as investment centers, profit centers, or cost
Thompson Corporation has divided its organization into autonomous divisions. Each division is an investment center since it has responsibility and authority for purchases of assets as well as marketing, product development, and manufacturing. Senior corporate managers evaluate the performance of
Define transfer pricing and indicate when it is necessary to establish transfer prices.
Discuss three transfer pricing methods, indicating under what conditions each would be appropriate. State any variations of these methods.
Indicate the relationship between the degree of interdependence and diversification among company segments and the significance of the transfer pricing problem.
What effect does the use of transfer pricing information have on the pricing basis chosen?
With regard to both the segment and the overall company, how should the transfer pricing system motivate segment managers?
What is the impact of product life cycles on transfer prices?
Discuss some advantages and limitations of using full cost as the transfer price.
How can opportunity cost be used as the basis on which transfer prices are established?

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Cost Accounting Using A Cost Management Approach 6th Edition Letricia Gayle Rayburn, Martin K. Gay - Solutions

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