Cost Accounting A Managerial Emphasis 15th Global Edition Madhav Rajan, Srikant M. Datar, Charles T. Horngren - Solutions

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Give three examples of industries in which job costing is typically used.
Job Z115 is sold for R35 000. The job card indicates that the total cost of the job was R25 000. Give the appropriate general journal entry to record the sale and the transfer out of finished-goods control.
The _________ is normally used to record raw materials received from the supplier:a. Job cardb. Goods-received notec. Delivery noted. Stores requisition
Briefly describe what is meant by a job-costing system and explain how it differs from a process-costing system.
Africa Products Ltd has decided to change from an integrated to an interlocking accounting system. As their accounts assistant, you have been asked to change the records that you made using the information given in Question 5
You have been appointed as accounts assistant at Africa Products Ltd. Africa Products Ltd maintains an integrated accounting system. You were given the following information:seventy-five per cent of the purchases are on credit, 40 per cent of the sales are on cash and 30 per cent of the wages are
Use the same information as in Question 3, except for the following:Production 14 000 units and closing inventory 500 units.Requireda. Draw up a cost of production and sales statementb. Prepare a statement of financial performance
You are employed as a junior accountant at Milton Ltd. You received the following information concerning production:• Normal production: 14 400 units• Direct materials: 2 kg per unit @ R40• Direct labour: 3 hours per unit @ R30• Other direct manufacturing expenses: R20 per unit• Fixed
Use the information given below to choose the correct answer from the alternatives. There is only one correct answer.Africa Products Ltd currently uses an integrated accounting system. The company issued direct and indirect materials to production.• Which entry is made in its books for the direct
The following information is available from Milton Ltd:Direct material costs R12 000. The ratio between direct materials and direct labour is 3:2.The prime cost represents 50 per cent of the total manufacturing cost and 30 per cent of the manufacturing overheads are direct costs. The WIP at the
The following information was taken from the budgets and records of Lincks Manufacturers:The following budgeted details for manufacturing overheads were obtained for the current year:Required Allocate the overheads to Production Departments A and B by using the appropriate basis, and calculate
The following budgeted data for the current financial year is supplied:• Direct material R489 000• Direct labour R222 400• Overheads R589 000• Direct labour hours 1 112• Machine hours 650
Mbam’s accountant supplied the following information about production costs for the current financial year, which ended two weeks ago:• Direct materials R600 000• Direct labour R415 000• Production overheads R501 000 The accountant also supplied the following information about estimates for
Using the predetermined manufacturing overhead rates calculated in Question 2, calculate the total costs of:a. Job 401 if overheads are allocated on the basis of prime costs.b. Job 401 if overheads are allocated on the basis of direct labour hours.c. Job 402 if overheads are allocated on the basis
The following information was taken from the records of Sam Manufacturers, which produces three products.Budgeted data for the year is as follows:• Direct material costs R580 000• Direct labour costs R260 000• Manufacturing overheads R310 000• Direct labour hours 10 400• Machine hours 8
The following information was supplied by Suffield Manufacturing:• Budgeted overheads for the year R376 600• Actual overheads for the year R388 600• Budgeted machine hours for the year 28 000• Actual machine hours for the year 28 690a. Calculate the overhead absorption rate based on machine
When you calculate the allocation of overheads, do you multiply the predetermined overhead rate by the actual activity level or by the budgeted activity level?
Calculate the predetermined budgeted overhead rate from the following:• Budgeted overheads for the year R150 000• Budgeted labour hours for the year 60 000 hours• Actual labour hours for the year 62 000 hours
Is the predetermined budgeted manufacturing overhead rate calculated by using actual or budgeted values?
What is the purpose of an overhead absorption rate?
When will over-absorbed overheads occur?
Multi-Bricks CC has provided you with the following information on employment conditions:No. of weeks in operation 52
Jona Philander’s time sheet for the week ending 15 August 2012 indicates a total of 49 working hours. Normal working hours are from Monday to Friday, 8:00 to 17:00, with a onehour lunch break. Jona’s time sheet showed that he also worked five hours on Saturday and three hours on Sunday that
Jumble Stationers print personalised invoice books for small businesses. On a typical day, 12 invoice books are prepared and printed. The details of the production cost incurred per day are as follows:
A company manufacturing garden pots uses two production processes. In process 1, all the raw materials are combined and moulded into a pot; in process 2 the pots are decorated and baked.
Bowie Manufacturers’ normal work week is Monday to Friday, eight hours per day.Saturdays are regarded as normal overtime, but Sundays and public holidays are regarded as special overtime.
Mrs Boyle has employment details for the year ended 31 December 2012 as follows:
GHL Manufacturers submits the following information on its employees’ remuneration per week:
Explain the following terms:a. Gross wagesb. Net wagesc. PAYEd. UIF
Peter Big runs a small accounting firm from home. He employs a secretary and an accounting clerk. The accounting clerk records the daily transactions of five of Peter’s clients using an accounting software program. The clerk prepares a weekly time sheet keeping record of the number of hours spent
Mahem CC produces garden pots from cement on order from garden nurseries. The company has four full-time employees; it also employs some part-time employees at times when large orders are placed. The employees’ job titles and job descriptions are provided in the table.Classify the labour tasks
LT Chemicals manufactures various products from chemical raw materials. Some of the chemicals that the company uses are hazardous and others have to be stored at temperatures below freezing. Most of the chemicals may have serious health-and-safety concerns for employees handling the chemicals.Write
Regi Limited has just received a letter from a supplier. The supplier is offering a 10 per cent discount on orders of 300 units or more of Regi’s major raw material. The following information pertains to the item:
ADH Limited is a chemical wholesaler. The company is currently assessing the most efficient number of units to order and trying to determine the reorder point for product DX1.
Advise a client who is launching a clothing store on the key activities in the inventorymanagement cycle, and illustrate some of the processes and procedures that his company should have in place to manage the process accordingly.
Briefly describe a JIT production system and give an example of an industry in which it is frequently used.
The purchasing manager wants to order 5 000 extra units above the normal order due to an expected increase of 15 per cent in the cost of the inventory over the next three months. There is enough space in the warehouse, but the 5 000 units are equivalent to about three months’normal sales. The
BJH Limited is considering its per unit holding costs for a specific product, as the company is considering increasing the average amount of inventory it holds by 2 000 units.Management believe that their incremental warehouse costs will be R200 000 per annum due to the larger amount of space they
A company’s demand for an item of inventory is 100 000 units per annum. The incremental order costs are R1,50 per unit and the holding costs are R2,75 per unit. Calculate the EOQ of this item.
Briefly discuss the difference between strategic and speculative inventory. Give examples of each.
Describe using an example the steps of the inventory-management cycle.
Give an example of an inventory-holding cost.
Briefly define normal inventory.
Using the information given in question 2, what is the technical inventory of the retailer?a. 50b. 60c. 65d. 75
If a retail business has 50 items in the warehouse, 10 in transit from a supplier (which have been paid for) and 15 items on consignment with another retailer, the economic inventory of the store is:a. 50b. 60c. 65d. 75
____________ inventory is defined as the amount of inventory that needs to be held to ensure that production can continue:a. Strategicb. Speculativec. Safetyd. Retail
Progress Electrical Appliances (PEA) purchases television parts from Japan, which the company assembles and sells locally. During the second quarter, PEA’s production information was as follows:
Arcade Games is an entity that sells and rents out games to entertainment centres. The company is not VAT registered. Arcade Games purchased 10 Car Racing Pro arcade games, all of which were sold. The costs incurred in the purchase and sale of the games were as follows:
As the raw-materials store manager for MM Manufacturers, you have received and checked the following bin cards for the three raw materials your company uses:
As the production manager of Elegance Manufacturing Jewellers, you have been asked to calculate the selling price of a necklace for a client. The jeweller has estimated the time taken to manufacture the necklace and the raw materials required. You have prepared the following summary:Overheads are
Painpharm is a pharmacy that maintains its inventory records using the periodic system.Assume the company measures inventory on the FIFO basis. On 1 June 2013, the opening inventory for Granpain, an over-the-counter painkiller, was 20 units at a cost of R24 per unit.Painpharm is not VAT
Calculate the cost of manufacturing a chair using the following information for a furniture manufacturer:
A company uses the weighted average cost basis to calculate the unit costs of a product over a 12-month period. Calculate the weighted average cost of Product JR42, where the following transactions took place during the period:
Briefly describe the FIFO method of stock valuation.
Briefly describe the differences between the periodic and perpetual stock methods.
Briefly describe the four types of inventory and give an example of each.
Discuss the calculation of the costs of a garden-service business, indicating the process of allocating costs to cost objectives. The manager of the business defines each client as a separate cost objective. Also briefly discuss whether the manager’s definition of the cost objectives appears
Classify the following costs as direct or indirect costs for a building contractor who is building a house for a client. Briefly justify your classifications.• Bricks purchased for the house• Cement purchased for the house• The wage paid to a painter who was hired to work on this specific
Classify the following costs as material costs, labour costs or overhead costs for a manufacturer of security gates:• The supervisor’s salary• Cost of metal purchased• Electricity• Cost of paint• Welders’ salaries
You are advising a client who has a clothing business. Explain the concepts of materials, work in process and finished goods to her, illustrating your explanations with examples from her business.
Give examples of the direct costs incurred by an accounting firm.
Differentiate between retail inventory and materials.
Define a prime cost and illustrate with an example of the prime costs of a jewellery manufacturer.
Define an indirect cost and give two examples of indirect costs from two industries.
Give two examples of non-manufacturing overheads incurred by a large computermanufacturing company.
Define a cost objective and illustrate it by means of a relevant example in the manufacturing environment and an example in the service environment.
What term describes a system where costs are allocated to a manufacturing process in which large numbers of homogeneous products are produced?
Briefly define the term ‘income’.
Briefly define the term ‘cost’.
In a clothing store, which of the following types of inventory are most likely to be found:a. Raw materialsb. Work in processc. Retail inventoryd. Finished goods
_________ can be described as the direct and manufacturing overhead costs incurred in the production process:a. Conversion costsb. Sunk costsc. Non-allocated overhead costsd. Fixed costs
Briefly describe how cost-accounting information can positively and negatively impact on the attitudes of managers.
Discuss why there is a need for cost and management accounting.
‘There are no set rules for management accountants like there are for financial accountants.’Discuss whether this means that a cost accountant may act without regard for conventions and ethics. Justify your answer.
What are the key roles that managerial accounting plays in an entity?
List three major differences between financial accounting, and cost and management accounting.
Briefly describe the process of managing an organisation.
Recognize the human aspects of budgeting and explain them.
-42 Activity-based costing, activity-based management, merchandising. Main Street Books and Café(MSBC) is a large city bookstore that sells books and music CDs and has a café. MSBC operates at capacity and allocates selling, general, and administration (S, G & A) costs to each product line using
-41 ABC, implementation, ethics. (CMA, adapted) Plum Electronics, a division of Berry Corporation, manufactures two large-screen television models: the Mammoth, which has been produced since 2010 and sells for $990, and the Maximum, a newer model introduced in early 2012 that sells for $1,254.
-40 Unused capacity, activity-based costing, activity-based management. Whitewater Adventures manufactures two models of kayaks, Basic and Deluxe, using a combination of machining and hand finishing. Machine setup costs are driven by the number of setups. Indirect manufacturing labor costs increase
-39 Unused capacity, activity-based costing, activity-based management. Zarson’s Netballs is a manufacturer of high-quality basketballs and volleyballs. Setup costs are driven by the number of batches.Equipment and maintenance costs increase with the number of machine-hours, and lease rent is
-38 ABC, health care. Crosstown Health Center runs two programs: drug addict rehabilitation and aftercare (counseling and support of patients after release from a mental hospital). The center’s budget for 2014 follows.Professional salaries:â•… 4 physicians * $150,000 $600,000â•… 12
-37 Choosing cost drivers, activity-based costing, activity-based management. Pastel Bags (PB) is a designer of high-quality backpacks and purses. Each design is made in small batches. Each spring, PB comes out with new designs for the backpack and for the purse. The company uses these designs for
-36 Activity-based costing, merchandising. Pharmahelp, Inc., a distributor of special pharmaceutical products, operates at capacity and has three main market segments:a. General supermarket chainsb. Drugstore chainsc. Mom-and-pop single-store pharmacies Rick Flair, the new controller of Pharmahelp,
-35 Department and activity-cost rates, service sector. Raynham’s Radiology Center (RRC) performs X-rays, ultrasounds, computer tomography (CT) scans, and magnetic resonance imaging (MRI). RRC has developed a reputation as a top radiology center in the state. RRC has achieved this status because
-34 First-stage allocation, activity-based costing, service sector. LawnCare USA provides lawn care and landscaping services to commercial clients. LawnCare USA uses activity-based costing to bid on jobs and to evaluate their profitability. LawnCare USA reports the following annual costs:Wages and
-33 First-stage allocation, activity-based costing, manufacturing sector. Thurgood Devices uses activity-based costing to allocate overhead costs to customer orders for pricing purposes. Many customer orders are won through competitive bidding. Direct material and direct manufacturing labor costs
-32 Job costing with multiple direct-cost categories, multiple indirect-cost pools, law firm (continuation of 5-30 and 5-31). Bradley has two classifications of professional staff: partners and associates. Harrington asks his assistant to examine the relative use of partners and associates on the
-31 Job costing with multiple direct-cost categories, single indirect-cost pool, law firm (continuation of 5-30). Harrington asks his assistant to collect details on those costs included in the $25,000 indirect-cost pool that can be traced to each individual job. After analysis, Bradley is able to
-30 Job costing with single direct-cost category, single indirect-cost pool, law firm. Bradley Associates is a recently formed law partnership. Emmit Harrington, the managing partner of Bradley Associates, has just finished a tense phone call with Martin Omar, president of Campa Coal. Omar strongly
-29 ABC, product costing at banks, cross-subsidization. United Savings Bank (USB) is examining the profitability of its Premier Account, a combined savings and checking account. Depositors receive a 7% annual interest rate on their average deposit. USB earns an interest rate spread of 3% (the
-28 Activity-based costing. The job costing system at Sheri’s Custom Framing has five indirect cost pools(purchasing, material handling, machine maintenance, product inspection, and packaging). The company is in the process of bidding on two jobs: Job 215, an order of 15 intricate personalized
-27 ABC, activity area cost-driver rates, product cross-subsidization. Intex Potatoes (IP) operates at capacity and processes potatoes into potato cuts at its highly automated Pocatello plant. It sells potatoes to the retail consumer market and to the institutional market, which includes hospitals,
-26 ABC, wholesale, customer profitability. Ramirez Wholesalers operates at capacity and sells furniture items to four department-store chains (customers). Mr. Ramirez commented, “We apply ABC to determine product-line profitability. The same ideas apply to customer profitability, and we should
-25 ABC, retail product-line profitability. Henderson Supermarkets (HS) operates at capacity and decides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen foods. It identifies four activities and their activity cost rates as follows:Ordering $102 per
-24 Activity-based costing, manufacturing. Fancy Doors, Inc., produces two types of doors, interior and exterior. The company’s simple costing system has two direct cost categories (materials and labor) and one indirect cost pool. The simple costing system allocates indirect costs on the basis of
-23 Activity-based costing, service company. Speediprint Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as standard jobs or special jobs. Speediprint’s simple job-costing system has two
-22 Department costing, service company. CKM is an architectural firm that designs and builds buildings.It prices each job on a cost plus 20% basis. Overhead costs in 2014 are $4,011,780. CKM’s simple costing system allocates overhead costs to its jobs based on number of jobs. There were three
-21 ABC, process costing. Parker Company produces mathematical and financial calculators and operates at capacity. Data related to the two products are presented here:Mathematical Financial Annual production in units â•‡â•‡50,000 â•‡ 100,000 Direct material costs $150,000 $300,000

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Cost Accounting A Managerial Emphasis 15th Global Edition Madhav Rajan, Srikant M. Datar, Charles T. Horngren - Solutions

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