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managerial accounting 8th
Managerial Accounting Creating Value In A Dynamic Business Environment Mass Market Paperback Jan 01 2013 Hilton Platt 10th Edition David Platt Ronald W Hilton - Solutions
How does activity-based budgeting explain the logic of budgeting?
What is meant by the term operational budgets? List three operational budgets that would be prepared by Cook County Hospitalin Chicago.
Give an example of how general economic trends would affect sales forecasting in the airline industry.
Draw a flowchart similar to the one in Exhibit 9–1 for a service station. The service station provides automotive maintenance services in addition to selling gasoline and related products.
Explain what a master budget is, and list five of its parts.
Use an example to explain how a budget could be used to allocate resources in a university.
Explain how a budget facilitates communication and coordination.
Discuss the behavioral issues in budgeting.
Describe a typical organization’s process of budget administration.
Discuss the role of assumptions and predictions in budgeting.
Prepare the additional master budget schedules required by a manufacturing firm.
Prepare each of the budget schedules that make up the master budget in a nonmanufacturing firm, and that exist in manufacturing budgets as well.
Explain the concept of activity-based budgeting and the logic it brings to the budgeting process.
Describe the similarities and differences in the operational budgets prepared by manufacturers, service-industry firms, merchandisers, and nonprofit organizations.
List and explain five purposes of budgeting.
Explain the relationship between financial planning and analysis and the master budget.
for Huron Chalk Company. Selected information from Huron’s year-end balance sheets for its first two years of operation is as follows:Required:1. Why is the year 1 ending balance in finished-goods inventory higher if absorption costing is used than if variable costing is used?2. Why is the year 2
Refer to the information given in Case
Refer to the information given in the preceding case for Huron Chalk Compan y .Required:1. Reconcile Huron’s operating income reported under absorption and variable costing, during each year, by comparing the following two amounts on each income statement:• Cost of goods sold• Fixed cost
Huron Chalk Company manufactures sidewalk chalk which it sells online by the box at $25 per unit.Huron uses an actual costing system, which means that the actual costs of direct material, direct labor, and manufacturing overhead are entered into work-in-process inventory. The actual application
As a group, take a walking tour of your campus and the surrounding community. Make a list of all of the environmental costs of which you see evidence.Required: Make a presentation to the class about your findings. List and categorize the environmental costs you noted for either your college or for
News Technology, Inc., manufactures computerized laser printing equipment used by newspaper publishers throughout North America. In recent years, the company’s market share has been eroded by stiff competition from Asian and European competitors. Price and product quality are the two key areas in
Industrial Technologies, Inc. (ITI), produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average selling price of $30,000, whereas no. 172 typically sells for approximately $27,500. The company is very concerned about
Great Outdoze, Inc., manufactures high-quality sleeping bags, which sell for $130 each. The variable costs of production are as follows:Direct material
Ozarks Lighting Company had operating income for the first 10 months of the current year of $300,000.One hundred thousand units were manufactured during this period, and 100,000 units were sold. Fixed manufacturing overhead was $3,000,000 over the 10-month period (i.e., $300,000 per month). There
Adelphia Corporation, which uses absorption costing, just completed its first year of operations. Planned and actual production equaled 10,000 units, and sales totaled 9,600 units at $216 per unit. Cost data for the year are as follows:Direct material (per unit)
Outback, Ltd., manufactures tactical LED flashlights in Melbourne, Australia. The firm uses an absorption-costing system for internal reporting purposes; however, the company is considering using variable costing. Data regarding planned and actual operations for 20x4 follow:Budgeted Costs Per Unit
Skinny Dippers, Inc., produces nonfat frozen yogurt which it sells to restaurants and ice cream shops.The product is sold in 10-gallon containers, which have the following price and variable costs.Sales price
Cincinnati Cylinder Company began operations on January 1 to produce pneumatic cylinders used in a variety of machines. It used an absorption costing system with a planned production volume of 100,000 units. During its first year of operations, 100,000 units were produced and there were no fixed
Chenango Can Company manufactures metal cans used in the food-processing industry. A case of cans sells for $25. The variable costs of production for one case of cans are as follows:Direct material
Visit the website of Interface, Inc., at http://www.interfaceglobal.com. Read about its efforts toward sustainable development by clicking on the “Sustainability” link.Required: What is Interface’s product? Describe the company’s efforts toward sustainable development.
The following costs were incurred by Akasaka Metals Company to maintain the quality of its products.( yen is the national currency of Japan.)1. Operating an X-ray machine to detect faulty welds, 99,000 yen 2. Repairs of products sold last year, 103,000 yen 3. Cost of rewelding faulty joints, 19,000
List three observable and three hidden quality costs that could occur in the airline industry related to the quality of service provided.
Information taken from Ticonderoga Paper Company’s records for the most recent year is as follows:Direct material used ............................................................................................................................... $203,000 Direct labor
Pinellas Pillow Company’s planned production for the year just ended was 10,000 units. This production level was achieved, but only 9,000 units were sold. Other data follows:Direct material used
Visit the website for one of the following companies, or a different company of your choosing.Coca-Cola www.cocacola.com Bridgestone www.bridgestonetire.com Motorola www.motorola.com/us/consumers/home Casio www.casio.com Toyota www.toyota.com Xerox Corporation www.xerox.com Required: Read about the
Sea Star Company manufactures diving masks with a variable cost of $12.50. The masks sell for $17.00.Budgeted fixed manufacturing overhead for the most recent year was $396,000. Actual production was equal to planned production.Required: Under each of the following conditions, state ( a ) whether
Altoona Valve Company’s planned production for the year just ended was 20,000 units. This production level was achieved, and 21,000 units were sold. Other data follow:Direct material used .......................................................................................................
Refer to the data given in the preceding exercise for Dolphin Company.Required:1. Prepare a cost-volume-profit graph for the company. (Scale the vertical axis in millions of dollars.)2. Calculate Dolphin Company’s break-even point in units, and show the break-even point on the CVP graph.3.
Dolphin Company manufactures two-person sailboats with a variable cost of $1,000. The sailboats sell for $1,750 each. Budgeted fixed manufacturing overhead for the most recent year was $11,000,000.Planned and actual production for the year were the same.Required: Under each of the following
Explain three strategies of environmental cost management.
Define the following types of environmental costs:private, social, visible, hidden, monitoring, abatement, and both on-site and off-site remediation.
Briefly explain the purpose of a cause-and-effect (or fishbone) diagram.
“An ounce of prevention is worth a pound of cure.”Interpret this old adage in light of Exhibit 8–6 .
What is meant by a product’s grade, as a characteristic of quality? Give an example in the service industry.
Distinguish between a product’s quality of design and its quality of conformance.
Explain the difference between observable and hidden quality costs.
List and define four types of product quality costs.
Explain how the accounting definition of an asset is related to the choice between absorption and variable costing.
Which is more consistent with cost-volume-profit analysis, variable costing or absorption costing? Why?
Why do proponents of variable costing prefer variable costing when making pricing decisions?
Why do proponents of absorption costing argue that absorption costing is preferable as the basis for pricing decisions?
Will variable and absorption costing result in significantly different income measures in a JIT setting? Why?
Explain why some management accountants believe that absorption costing may provide an incentive for managers to overproduce inventory.
Why do many managers prefer variable costing over absorption costing?
When inventory increases, will absorption-costing or variable-costing income be greater? Why?
The term direct costing is a misnomer. Variable costing is a better term for the product-costing method. Do you agree or disagree? Why?
Timing is the key in distinguishing between absorption and variable costing. Explain this statement.
Briefly explain the difference between absorption costing and variable costing.
Understand the different types of environmental costs, and discuss the management of these costs.
Discuss two contrasting views of the optimal level of product quality.
Prepare a quality-cost report.
Evaluate absorption and variable costing.
Explain the implications of absorption and variable costing for cost-volume-profit analysis.
Reconcile reported income under absorption and variable costing.
Prepare an income statement under variable costing.
Prepare an income statement under absorption costing.
Explain the accounting treatment of fixed manufacturing overhead under absorption and variable costing.
Lake Champlain Sporting Goods Company, a wholesale supply company, engages i ndependent sales agents to market the company’s products throughout New York and Ontario. These agents currently receive a commission of 20 percent of sales, but they are demanding an increase to 25 percent of sales made
Susquehanna Medical Center operates a general hospital in northeastern Pennsylvania. The m edical center also rents space and beds to separately owned entities rendering specialized services, such as Pediatrics and Psychiatric Care. Susquehanna charges each separate entity for common services, such
Columbus C a nopy Company (CCC) manufactures and sells adjustable canopies that attach to motor homes and trailers. The market covers both new units as well as replacement canopies. CCC developed its 20x4 business plan based on the assumption that canopies would sell at a price of $800 each. The
Seattle Telecom, Inc. manufactures telecommunications equipment. The company has always b een production oriented and sells its products through agents. Agents are paid a commission of 15 percent of the selling price. Seattle Telecom’s budgeted income statement for 20x5 follows:After the profit
Great Northern Ski Company r e cently expanded its manufacturing capacity. The firm will now be able to produce up to 15,000 pairs of cross-country skis of either the mountaineering model or the touring model. The sales department assures management that it can sell between 9,000 and 13,000 units
The Asian D ivision of Worldwide Reference Corporation produces a pocket dictionary containing popular phrases in six Asian languages. Annual budget data for the coming year follow. Projected sales are 100,000 books.Sales
Toledo Tool Company (TTC) manufactures a line of electric garden tools that are s old in general hardware stores. The company’s controller, Will Fulton, has just received the sales forecast for the coming year for TTC’s three products: hedge clippers, line trimmers, and leaf blowers. TTC has
Central Pennsylvania Limestone Company produces thin limestone sheets used for cosmetic facing o n buildings. The following income statement represents the operating results for the year just ended. The company had sales of 1,800 tons during the year. The manufacturing capacity of the firm’s
Refer to t he original data given for Saturn Game Company in the preceding problem. An activity-based costing study has revealed that Saturn’s $300,000 of fixed costs include the following components:Setup (40 setups at $800 per setup)
Saturn Game C ompany manufactures computer games. Last year Saturn sold 25,000 games at $50 each.Total costs amounted to $1,050,000 of which $300,000 were considered fixed.In an attempt to improve its product, the company is considering replacing a component part that has a cost of $5 with a new
Zodiac C ompany has decided to introduce a new product, which can be manufactured by either a computerassisted manufacturing system or a labor-intensive production system. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are
PneumoTech, I nc. is studying the addition of a new valve to its product line. The valve would be used by manufacturers of pneumatic equipment. The company anticipates starting with a relatively low sales volume and then boosting demand over the next several years. A new salesperson must be hired
SkiCo, Inc., manufactures ski boots. The company’s projected income for the coming year, based on sales of 160,000 units, is as follows:Sales .....................................................................................................................................................
Hollywood Stars, Inc., owns and operates a nationwide chain of movie theaters. T he chain’s 450 properties vary from low-volume, small-town, single-screen theaters to high-volume, urban, multiscreen theaters. The firm’s management is considering installing popcorn machines, which would allow
Phoenix-based CompTronics manufactures audio speakers for desktop computers. T he following data relate to the period just ended when the company produced and sold 42,000 speaker sets:Sales
Premier C orporation sells two models of home ice cream makers, Mister Ice Cream and Cold King. Current sales total 60,000 units, consisting of 21,000 Mister Ice Cream units and 39,000 Cold King units.Selling price and variable cost information follows.Mister Ice Cream Cold King Selling price
Boundaries, a chain of retail stores, sells books and music CDs. Condensed monthly i ncome data are presented in the following table for November 20x4. (Ignore income taxes.)Downtown Store Mall Store Total Sales
Dillon, Jones, and Kline, Ltd. is studying the acquisition of two electrical component i nsertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow.Model A:Variable costs, $8.00 per unit Annual fixed costs, $1,971,200 Model B:Variable costs, $6.40 per
Detroit D isk, Inc. is a retailer for digital video disks. The projected net income for the current year is$600,000 based on a sales volume of 400,000 video disks. Detroit Disk has been selling the disks for$24 each. The variable costs consist of the $15 unit purchase price of the disks and a
Surreal S ound, Inc., manufactures and sells compact disks. Price and cost data are as follows:Selling price per unit (package of two CDs) ................................................................................................. $ 25.00 Variable costs per unit:Direct material
ScholarPak Company produced and sold 70,000 backpacks during the year just ended at an average price of $30 per unit. Variable manufacturing costs were $12 per unit, and variable marketing costs were$6 per unit sold. Fixed costs amounted to $540,000 for manufacturing and $216,000 for
Power Grid Engineering Associates, Inc., provides consulting services to commercial e lectric utilities. The consulting firm’s contribution-margin ratio is 25 percent, and its annual fixed expenses are$200,000. The firm’s income-tax rate is 40 percent.Required:1. Calculate the firm’s
Refer to the income statement given in the preceding exercise. Prepare a new contribution i ncome statement for the La Jolla Inn in each of the following independent situations. (Ignore income taxes.)1. The hotel’s volume of activity increases by 25 percent, and fixed expenses increase by 50
A contribution income statement for the La Jolla Inn is shown below. ( Ignore income taxes.)Revenue ............................................................................................................................................... $1,500,000 Less: Variable Expenses
Brad’s Bicycle Shop sells 21-speed bicycles. For purposes of a cost-volume-profit analysis, t he shop owner has divided sales into two categories, as follows:Product Type Sales Price Invoice Cost Sales Commission High-quality ......................................................................
Use the Internet to a ccess the website of one of these airlines, or a different airline of your choosing.American Airlines www.americanair.com British Airways www.british-airways.com Delta Air Lines www.delta-air.com Qantas Airways www.qantas.com Southwest Airlines www.southwestair.com Required:
Pacific R im Publications, Inc., specializes in reference books that keep abreast of political and economic issues in the Pacific Rim countries. The results of the company’s operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore
Rosario C ompany, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery. The firm’s fixed costs are 2,000,000 p per year. The variable cost of each component is 1,000 p, and the components are sold for 1,500 p each. The company sold 7,000 components during
Refe r to the data given in the preceding exercise. (Ignore income taxes.)Required:1. Prepare a fully labeled profit-volume graph for the Dallas Armadillos.2. What is the safety margin for the baseball franchise if the team plays a 10-game season and the team owner expects the stadium to be 45
The Dallas Armadillos, a minor-league baseball team, play their weekly games in a small stadium just outside Dallas. The stadium holds 6,000 people, and tickets sell for $20 each. The franchise owner estimates that the team’s annual fixed expenses are $360,000, and the variable expense per ticket
University Pizza delivers pizzas to the dormitories and apartments near a major state u niversity. The company’s annual fixed expenses are $54,000. The sales price of a pizza is $10, and it costs the company$6 to make and deliver each pizza. (In the following requirements, ignore income
Explain briefly how activity-based costing (ABC)affects cost-volume-profit analysis.
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