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managerial accounting 12th
Managerial Accounting The Cornerstone Of Business Decision Making 9th Edition Maryanne Mowen, Don Hansen, Dan Heitger - Solutions
The key difference between residual income and EVA is that EVAa. uses the actual cost of capital for the company rather than a minimum required cost of capital.b. uses the minimum required cost of capital for a company rather than the actual percentage cost of capital.c. is a ratio rather than an
If sales and average operating assets for Year 2 are identical to their values in Year 1, yet operating income is higher, Year 2 turnover (compared with Year 1 turnover) willa. decrease.b. increase.c. stay the same.d. The direction of change in turnover cannot be determined by this information.
11-5 If sales and average operating assets for Year 2 are identical to their values in Year 1, yet operating income is higher, Year 2 return on investment (compared with Year 1 ROI) willa. decrease.b. increase.c. stay the same.d. The direction of change in ROI cannot be determined by this
11-4 Clariday Company has been tracking data on sales, costs, and investment for several years. They are analyzing the data to determine whether there are any trends in sales and costs that may be expected to continue into the next year. This is an example of using data analysis in which of the
11-3 A responsibility center in which a manager is responsible only for costs is a(n)a. investment center.b. revenue center.c. profit center.d. cost center.
11-2 Which of the following is not a reason for decentralizing?a. Training and motivating managersb. Unmasking inefficiencies in subdivisions of an overall profitable companyc. Allowing top management to focus on strategic decision-makingd. Allowing top management to make all key operating
The practice of delegating authority to division-level managers by top management isa. decentralization.b. good business practice.c. centralization.d. autonomy.e. never done in business today.
The Components Division produces a part that is used by the Goods Division. The cost of manufacturing the part follows:Direct materials $10 Direct labor 2 Variable overhead 3 Fixed overhead* 5 Total cost $20 Other costs incurred by the Components Division are as follows:Fixed selling and
El Suezo Inc. had sales of $5,000,000, cost of goods sold of $3,500,000, and selling and administrative expense of $500,000 for its most recent year of operations. El Suezo faces a tax rate of 40%. Also, El Suezo employed $2,000,000 of debt capital and $4,000,000 of equity capital in generating its
Flip Flop Politics Inc. had gross margin of $550,000 and selling and administrative expense of $300,000 last year. Also, Flip Flop began last year with $1,400,000 of operating assets and ended the year with $1,100,000 of operating assets.Required:Calculate return on investment for Flip Flop
How to calculate manufacturing cycle efficiency?
How to compute cycle time and velocity?
How to calculate transfer price?
How to calculate economic value added?
How to calculate residual income?
How to calculate average operating assets, margin, turnover, and return on investment?
A manufacturing cell could produce a maximum of 6,000 units per week using 2,000 productive hours. Last week, it produced 5,000 units. What is the theoretical cycle time? Actual cycle time?
A manufacturing cell could produce a maximum of 6,000 units per week using 2,000 productive hours. Last week, it produced 5,000 units. What is the processing time? Nonprocessing time? MCE?
A company provided the following information:Maximum units produced in a quarter (3-month period): 200,000 units Actual units produced in a quarter: 160,000 units Productive hours in one quarter: 40,000 hours Actual cycle time = 15 minutes Theoretical cycle time = 12 minutes Required:1. Calculate
Reasons for decentralization do not include which of the following?a Ease of gathering and using local information b Enhanced competition and exposing segments to market forces c Training and motivating managers d Focusing of central management on strategic planning and decision-making e All of the
Think about summer jobs that you and your friends have held. To what extent did you or your friends work in a centralized or decentralized decision-making environment?
Lorale Company, a producer of recreational vehicles, recently decided to begin producing a major subassembly for jet skis. The subassembly would be used by Lorale’s jet ski plants and also would be sold to other producers. The decision was made to lease two large buildings in two different
Pat James, the purchasing agent for a local plant of the Oakden Electronics Division, was considering the possible purchase of a component from a new supplier. The component’s purchase price, $0.90, compared favorably with the standard price of $1.10. Given the quantity that would be purchased,
Paul Golding and his wife, Nancy, established Crunchy Chips in 1960. Since its inception, the company has established distribution channels in 11 western states, with production facilities in Utah, New Mexico, and Colorado. In 1980, Paul’s son, Edward, took control of the business. Very soon, it
Shumaker Company manufactures a line of high-top basketball shoes. At the beginning of the year, the following plans for production and costs were revealed:Pairs of shoes to be produced and sold 55,000 Standard cost per unit:Direct materials $15 Direct labor 12 VOH 6 FOH 3 Total unit cost $36
Lynwood Company produces surge protectors. To help control costs, Lynwood employs a standard costing system and uses a flexible budget to predict overhead costs at various levels of activity.For the most recent year, Lynwood used a standard overhead rate of $18 per direct labor hour.The rate was
Extrim Company produces monitors. Extrim’s plant in San Antonio uses a standard costing system. The standard costing system relies on direct labor hours to assign overhead costs to production.The direct labor standard indicates that 4 direct labor hours should be used for every monitor produced.
The Lubbock plant of Morril’s Small Motor Division produces a major subassembly for a 6.0 horsepower motor for lawn mowers. The plant uses a standard costing system for production costing and control. The standard cost sheet for the subassembly follows:Direct materials (6.0 lbs. @ $5.00) $30.00
Moleno Company produces a single product and uses a standard cost system. The normal production volume is 120,000 units; each unit requires 5 direct labor hours at standard. Overhead is applied on the basis of direct labor hours. The budgeted overhead for the coming year is as follows:FOH
The Lubbock plant of Morril’s Small Motor Division produces a major subassembly for a 6.0 horsepower motor for lawnmowers. The plant uses a standard costing system for production costing and control. The standard cost sheet for the subassembly follows:Direct materials (6.0 lbs. @ $5) $30.00
Plasta Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles.The following standards for producing one case of bottles have been established:Direct materials (4 lbs. @ $1.10) $ 4.40 Direct labor (1.25 hrs. @ $16.00) 20.00 Standard prime cost $24.40 During December,
Movil Company manufactures a plastic toy cell phone. The following standards have been established for the toy’s materials and labor inputs:The purchasing agent located a new source of slightly higher-quality plastic, and this material was used during the first week in July. Also, a new
The management of Golding Company has determined that the cost to investigate a variance produced by its standard cost system ranges from $2,000 to $3,000. If a problem is discovered, the average benefit from taking corrective action usually outweighs the cost of investigation.Past experience from
Buenolorl Company produces a well-known cologne. The standard manufacturing cost of the cologne is described by the following standard cost sheet:Direct materials:Liquids (4.5 oz. @ $0.40) $1.80 Bottles (1 @ $0.05) 0.05 Direct labor (0.2 hr. @ $15.00) 3.00 Variable overhead (0.2 hr. @ $5.00) 1.00
The maternity wing of the city hospital has two types of patients: normal and cesarean. The standard quantities of labor and materials per delivery for this year are:Normal Cesarean Direct materials (lbs.) 9.0 21.0 Nursing labor (hrs.) 2.5 5.0 The standard price paid per pound of direct materials
Mantenga Company provides routine maintenance services for heavy moving and transportation vehicles. Although the vehicles vary, the maintenance services provided follow a fairly standard pattern. Recently, a potential customer has approached the company, requesting a new maintenance service for a
Tom Belford and Tony Sorrentino own a small business devoted to kitchen and bath granite installations.Recently, building contractors have insisted on up-front bid prices for a house rather than the cost-plus system that Tom and Tony had been using. They worry because natural flaws in the granite
Basuras Waste Disposal Company has a long-term contract with several large cities to collect garbage and trash from residential customers. To facilitate the collection, Basuras places a large plastic container with each household. Because of wear and tear, growth, and other factors, Basuras places
Cabanarama Inc. designs and manufactures easy-to-set-up beach cabanas that families can set up for picnicking, protection from the sun, and so on. The cabanas come in a kit that includes canvas, lacing, and aluminum support poles. Cabanarama has expanded rapidly from a 2-person operation to one
Anker Company had the data below for its most recent year, ended December 31:Required:Prepare a performance report that shows the variances on an item-by-item basis. Actual costs: Indirect labor Variable overhead standards: $36,000 Indirect labor Supplies $3,800 Supplies 0.15 hr. @ $24.00 0.15 hr.
Last year, Gladner Company had planned to produce 140,000 units. However, 143,000 units were actually produced. The company uses direct labor hours to assign overhead to products.Each unit requires 0.9 standard hours of labor for completion. The fixed overhead rate was $11 per direct labor hour,
Zepol Company is planning to produce 600,000 power drills for the coming year. The company uses direct labor hours to assign overhead to products. Each drill requires 0.75 standard hours of labor for completion. The total budgeted overhead was $1,777,500. The total fixed overhead budgeted for the
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products:Direct materials (4 lbs. @ $2.80) $11.20 Direct labor (2 hrs. @ $18.00) 36.00 FOH (2 hrs. @ $5.20) 10.40 VOH (2 hrs. @ $0.70) 1.40 Standard cost per unit $59.00 Lopez computes its
Exercise 10-58 Fixed Overhead Variances Refer to the information for Rostand Inc.. Assume that the actual fixed overhead was$403,400. Budgeted fixed overhead was $400,000, based on practical capacity of 32,000 direct labor hours.Rostand Inc. operates a delivery service for over 70 restaurants. The
Refer to the information for Rostand Inc..Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on
Escuchar Products, a producer of DVD players, has established a labor standard for its product—direct labor: 2 hrs at $9.65 per hour. During January, Escuchar produced 12,800 DVD players. The actual direct labor used was 25,040 hours at a total cost of $245,392.Required:1. Compute the labor rate
Exercise 10-55 (Appendix 10A) Materials Variances, Journal Entries Esteban Products produces instructional aids, including white boards, which use colored markers instead of chalk. These are particularly popular for conference rooms in educational institutions and executive offices of large
Exercise 10-54 (Appendix 10A) Journal Entries Refer to the information for Divertido Company.Divertido Company produces single-colored T-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of
Refer to the information for Divertido Company.Divertido Company produces single-colored T-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following
Jackie Iverson was furious. She was about ready to fire Tom Rich, her purchasing agent. Just a month ago, she had given him a salary increase and a bonus for his performance. She had been especially pleased with his ability to meet or beat the price standards. But now, she found out that it was
At the beginning of the year, Craig Company had the following standard cost sheet for one of its plastic products:Direct materials (5 lbs. @ $4.00) $20.00 Direct labor (2 hrs. @ $15.00) 30.00 Standard prime cost per unit $50.00 The actual results for the year are as follows:a. Units produced:
Rueda Company produces wheels for bicycles. During the year, 1,100,000 wheels were produced.The actual labor used was 540,000 hours at $15.50 per hour. Rueda has the following unit labor standard: 0.5 hour at $15.00.Required:1. Compute the labor rate variance.2. Compute the labor efficiency
Jugo Company produces apple juice sold in gallons. Recently, the company adopted the following material standard for 1 gallon of its apple juice:Direct materials 128 oz. @ $0.04 = $5.12 During the first week of operation, the company experienced the following results:a. Gallon units produced:
Refer to the information for Cinturon Corporation on the previous page.Required:1. Break down the total variance for labor into a rate variance and an efficiency variance using the columnar and formula approaches.2. Conceptual Connection As part of the investigation of the unfavorable variances,
Refer to the information for Cinturon Corporation on the previous page.Required:1. Break down the total variance for materials into a price variance and a usage variance using the columnar and formula approaches.2. Conceptual Connection Suppose the Boise plant manager investigates the materials
Refer to the information for Cinturon Corporation above.Required:1. Compute the costs of leather and direct labor that should be incurred for the production of 92,000 leather belts.2. Compute the total budget variances for materials and labor.3. Conceptual Connection Would you consider these
Sommers Company uses the following rule to determine whether materials usage variances should be investigated: A materials usage variance will be investigated anytime the amount exceeds the lesser of $12,000 or 10% of the standard cost. Reports for the past 5 weeks provided the following
Stillwater Designs rebuilds defective units of its S12L7 Kicker speaker model. During the year, Stillwater rebuilt 15,000 units. Materials and labor standards for performing the repairs are as follows:Direct materials (1 recon kit @ $160) $160.00 Direct materials (1 cabinet @ $55) 55.00 Direct
Corey Company provided the following information:Standard fixed overhead rate (SFOR) per direct labor hour $10.00 Actual fixed overhead $425,000 Budgeted fixed overhead $500,000 Actual production in units 8,500 Standard hours allowed for actual units produced (SH) 42,500 Required:1. Using the
Bulger Company provided the following data:Standard fixed overhead rate (SFOR) $8 per direct labor hour Actual fixed overhead costs $985,300 Standard hours allowed per unit 6 hours Actual production 20,000 units Required:1. Calculate the standard hours allowed for actual production.2. Calculate the
Potter Company provided the following information:Standard variable overhead rate (SVOR) per direct labor hour $5.00 Actual variable overhead costs:Inspection $162,000 Power $220,600 Actual direct labor hours worked (AH) 77,000 Actual production in units 25,000 Standard hours (SH) allowed for
Aretha Company provided the following information:Standard variable overhead rate (SVOR) per direct labor hour $4.70 Actual variable overhead costs $335,750 Actual direct labor hours worked (AH) 69,200 Actual production in units 14,000 Standard hours (SH) allowed for actual units produced 70,000
Hashimoto Company showed the following information for the year:Standard variable overhead rate (SVOR) per direct labor hour $4.00 Standard hours (SH) allowed per unit 4 Actual production in units 20,000 Actual variable overhead costs $328,000 Actual direct labor hours 81,500 Required:1. Calculate
Brief Exercise 10-37 Total Labor Variance Refer to the information for Lata Inc..Lata Inc. produces aluminum cans. Each can has a standard labor requirement of 0.04 hour. During the month of May, 500,000 cans were produced using 19,000 labor hours @$15.50. The standard wage rate is $15.00 per
Brief Exercise 10-36 Materials Variances Refer to the information for Joven Inc..Joven Inc. produces plastic bottles. Production of 16-ounce bottles has a standard unit quantity of 0.50 ounce of plastic per bottle. During the month of June, 360,000 bottles were produced using 185,000 ounces of
Brief Exercise 10-35 Total Materials Variance Refer to the information for Joven Inc..Joven Inc. produces plastic bottles. Production of 16-ounce bottles has a standard unit quantity of 0.50 ounce of plastic per bottle. During the month of June, 360,000 bottles were produced using 185,000 ounces of
During the last 6 weeks, the actual costs of labor for Solsana Company were as follows:Week 1 $38,500 Week 4 $45,600 Week 2 $40,000 Week 5 $48,000 Week 3 $42,000 Week 6 $51,000 The standard materials cost for each week was $40,000 with an allowable deviation of ±5,000.Required:Plot the actual
Sabrosa Company produces chocolate. Each pound of chocolate requires 400 cocoa beans (the unit quantity standard) and 0.12 labor hour (the unit labor standard). During the year, 700,000 pounds of chocolate were produced.Required:1. Calculate the number of cocoa beans allowed for the actual
Brief Exercise 10-32 Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches Branch Company provided the following information:Standard fixed overhead rate (SFOR) per direct labor hour $5.00 Actual fixed overhead $305,000 BFOH $300,000 Actual production in units 16,000
Brief Exercise 10-31 Total Fixed Overhead Variance Bradshaw Company provided the following data:Standard fixed overhead rate (SFOR) $5 per direct labor hour Actual fixed overhead costs $301,680 Standard hours allowed per unit 4 hours Actual production 15,000 units Required:1. Calculate the standard
Brief Exercise 10-30 Performance Report for Variable Variances Humo Company provided the following information:Standard variable overhead rate (SVOR) per direct labor hour $4.07 Actual variable overhead costs:Inspection $123,300 Power $104,600 Actual direct labor hours worked (AH) 61,200 Actual
Brief Exercise 10-29 Variable Overhead Spending and Efficiency Variances, Columnar and Formula Approaches Rath Company provided the following information:Standard variable overhead rate (SVOR) per direct labor hour $3.75 Actual variable overhead costs $222,816 Actual direct labor hours worked (AH)
Brief Exercise 10-28 Total Variable Overhead Variance Rath Company showed the following information for the year:Standard variable overhead rate (SVOR) per direct labor hour $3.75 Standard hours (SH) allowed per unit 4 Actual production in units 15,000 Actual variable overhead costs $222,816 Actual
Brief Exercise 10-27 Labor Rate and Efficiency Variances Refer to the information above for Tico Inc..Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.03 hour. During the month of April, 900,000 bottles were produced using 25,200 labor hours @ $15.00. The
Brief Exercise 10-26 Total Labor Variance Refer to the information for Tico Inc..Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.03 hour. During the month of April, 900,000 bottles were produced using 25,200 labor hours @ $15.00. The standard wage rate is
Brief Exercise 10-25 Materials Variances Refer to the information for Krumple Inc..Krumple Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.7 ounces of aluminum per can. During the month of April, 450,000 cans were produced using 1,875,000 ounces of
Refer to the information for Krumple Inc..Krumple Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.7 ounces of aluminum per can. During the month of April, 450,000 cans were produced using 1,875,000 ounces of aluminum. The actual cost of aluminum was $0.10
During the last 6 weeks, the actual costs of materials for Brennen Company were as follows:Week 1 $57,600 Week 4 $68,400 Week 2 $60,000 Week 5 $69,000 Week 3 $63,000 Week 6 $69,500 The standard materials cost for each week was $60,000 with an allowable deviation of ±6,000.Required:Plot the actual
Miel Company produces ready-to-cook oatmeal. Each carton of oatmeal requires 16 ounces of rolled oats per carton (the unit quantity standard) and 0.04 labor hour (the unit labor standard).During the year, 960,000 cartons of oatmeal were produced.Required:1. Calculate the total amount of oats
10-21 An unfavorable volume variance can occur becausea. too much finished goods inventory was held.b. the company overproduced.c. the actual output was less than expected or practical capacity.d. the actual output was greater than expected or practical capacity.e. All of these.
10-20 A lean accounting manufacturing firm would most likely use which of the following?a. static price and quantity standards.b. kaizen costing.c. the previous year’s per unit quantity and price per unit.d. a ten percent reduction in last year’s standard quantity per unit and price.e. None of
The total fixed overhead variance isa. the difference between actual and applied fixed overhead costs.b. the difference between budgeted and applied fixed overhead costs.c. the difference between budgeted fixed and variable overhead costs.d. the difference between actual and budgeted fixed overhead
10-18 The total variable overhead variance can be expressed as the sum ofa. the underapplied variable overhead and the spending variance.b. the efficiency variance and the overapplied variable overhead.c. the spending, efficiency, and volume variances.d. the spending and efficiency variances.e.
10-17 A variable overhead spending variance can occur becausea. prices for individual overhead items have increased.b. prices for individual overhead items have decreased.c. more of an individual overhead item was used than expected.d. less of an individual overhead item was used than expected.e.
10-16 The total variable overhead variance is the difference betweena. the budgeted variable overhead and the actual variable overhead.b. the actual variable overhead and the applied variable overhead.c. the budgeted variable overhead and the applied variable overhead.d. the applied variable
10-15 (Appendix 10A) Which of the following is true concerning labor variances that are not material in amount?a. They are closed to Cost of Goods Sold.b. They are prorated among Work in Process, Finished Goods, and Cost of Goods Sold.c. They are prorated among Materials, Work in Process, Finished
10-14 (Appendix 10A) Which of the following items describes practices surrounding the recording of variances?a. All inventories are typically carried at standard.b. Unfavorable variances appear as debits.c. Favorable variances appear as credits.d. Immaterial variances are typically closed to Cost
10-13 Responsibility for the labor efficiency variance typically is assigned toa. labor unions.b. personnel.c. engineering.d. production.e. outside trainers.
10-12 Responsibility for the labor rate variance typically is assigned toa. production.b. labor markets.c. personnel.d. labor unions.e. engineering.
Responsibility for the materials usage variance is usually assigned toa. the chief executive officer (CEO).b. marketing.c. purchasing.d. personnel.e. production.
10-10 The materials price variance is usually computeda. when goods are finished.b. when materials are issued to production.c. when materials are purchased.d. after suppliers are paid.e. None of these.
10-9 Responsibility for the materials price variance typically belongs toa. production.b. purchasing.c. marketing.d. personnel.e. the chief executive officer (CEO).
10-8 Investigating variances from standard isa. always done.b. done if the variance is inside an acceptable range.c. not done if the variance is expected to recur.d. done if the variance is outside the control limits.e. None of these.
10-7 The standard direct labor hours allowed is computed asa. Unit Labor Standard × Actual Output.b. Unit Labor Standard × Practical Output.c. Unit Labor Standard × Standard Output.d. Unit Labor Standard × Normal Output.e. Unit Labor Standard × Theoretical Output.
10-6 The standard quantity of materials allowed is computed asa. Unit Quantity Standard × Standard Output.b. Unit Quantity Standard × Normal Output.c. Unit Quantity Standard × Practical Output.d. Unit Quantity Standard × Actual Output.e. None of these.
10-5 The standard cost per unit is an example of the following data analytics type:a. preliminary.b. diagnostic.c. predictive.d. descriptive.e. prescriptive.
10-4 The underlying details for the standard cost per unit are provided ina. the standard work-in-process account.b. the standard production budget.c. the standard cost sheet.d. the balance sheet.e. None of these.
An ideal standard is one thata. uses only historical experience.b. relies on maximum efficiency.c. can be achieved under efficient operating conditions.d. makes allowances for normal breakdowns, interruptions, less than perfect skill, and so on.e. None of these.
10-2 A currently attainable standard is one thata. relies on maximum efficiency.b. uses only historical experience.c. is based on ideal operating conditions.d. can be easily achieved.e. None of these.
Standards set by engineering studiesa. can determine the most efficient way of operating.b. can provide rigorous guidelines.c. may not be achievable by operating personnel.d. often do not allow operating personnel to have much input.e. All of these.
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