Managerial Accounting 6th Edition Pierre L. Titard - Solutions

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Determine the level of sales needed to achieve a desired target profit.
Determine the break-even point.
Compute the margin of safety and explain its significance.
Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Compute the break-even point for a multiproduct company and explain the effects of shifts in the sales mix on contribution margin and the break-even p oint.
Explain how variable costing differs from absorption costing and compute unit product costs under each method.
Prepare income statements using both variable and absorption costing.
Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ.
Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions.
Understand activity-based costing and how it differs from a traditional costing system.
Assign costs to cost pools using a first-stage allocation.
Compute activity rates for cost pools.
Use activity-based costing to compute product and customer margins.
(Appendix 7A) Prepare an action analysis report using activity-based costing data and interpret the report.
(Appendix 7B) Use activitybased costing techniques to compute unit product costs for external r eports.
Prepare a sales budget, including a schedule of expected cash collections.
Prepare a production budget.
Prepare a direct materials budget, including a schedule of expected cash disbursements for purchases of materials.
Prepare a direct labor budget.
Prepare a manufacturing overhead budget.
Prepare a selling and administrative expense budget.
Prepare a cash budget.
Prepare a budgeted income statement.
Prepare a budgeted balance sheet.
Prepare a flexible budget.
Prepare a report showing activity variances.
Prepare a report showing revenue and spending variances.
Prepare a performance report that combines activity variances and revenue and spending variances.
Prepare a flexible budget with more than one cost driver.
Understand common errors made in preparing performance reports based on budgets and actual results.
Compute the direct materials quantity and price variances and explain their significance.
Compute the direct labor efficiency and rate variances and explain their significance.
Compute the variable manufacturing overhead efficiency and rate variances and explain their significance.
( Appendix 10A ) Compute and interpret the fixed overhead volume and budget variances.
( Appendix 10B ) Prepare journal entries to record standard costs and variances.
Identify relevant and irrelevant costs and benefits in a decision.
Prepare an analysis showing whether a product line or other business segment should be added or dropped.
Prepare a make or buy analysis.
Determine the value of obtaining more of the constrained resource.
Prepare an analysis showing whether joint products should be sold at the split-off point or processed further.
Evaluate the acceptability of an investment project using the net present value method.
Evaluate the acceptability of an investment project using the internal rate of return method.
Evaluate an investment project that has uncertain cash flows.
Rank investment projects in order of preference.
Determine the payback period for an investment.
Compute the simple rate of return for an investment.
( Appendix 13A ) Understand present value concepts and the use of present value tables.
( Appendix 13C ) Include income taxes in a capital budgeting analysis.
Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Compute free cash flow.
(Appendix 14A) Use the direct method to determine the net cash provided by operating activities.
Prepare and interpret financial statements in comparative and common-size form.
Compute and interpret financial ratios that would be useful to a common stockholder.
Compute and interpret financial ratios that would be useful to a short-term creditor.
Compute and interpret financial ratios that would be useful to a long-term creditor.
Compute the profit-maximizing price of a product or service using the price elasticity of demand and variable cost.
Compute the target cost for a new product or service.
Distinguish between the terms cost and expense.
How can it be said that all expenses are costs, but not all costs are expenses?
Why does management need to know anything about cost behavior?
Assume that, in October, management plans for an electricity expense of $400 in November. The actual expense in November turns out to be $550. How can the expense be controlled when it already has been incurred?
Why should management be concerned with separating a mixed cost into its fixed and variable elements?
Define the following cost behavior patterns:a. Variable cost.b. Fixed cost.c. Step-variable cost.d. Mixed cost.
An individual was heard to say, "I don't know why they call it step-variable; it looks more like step- fixed to me." Comment.
If fixed costs do not change, how can they be controlled?
"The term discretionary cost implies that the cost can be incurred or sot incurred, based on the judgment of management: therefore, a discretionary cost is an optional cost." Comment on the validity of this statement.
Name the three methods that can be used to separate a mixed cost into its fixed and variable elements.
How can a scatter chart be used?
What is the primary disadvantage in using a scatter chart to separate a mixed cost into its fixed and variable elements?
What is the primary disadvantage in using the high-low points method to separate a mixed cost into its fixed and variable elements?
Which is the best method for separating a mixed cost into its fixed and variable elements? Why?
The scatter charts for Deluxe Delivery Service (Exhibits 2-6 and 2-7) show that number of miles is the more appropriate activity to use as the cost driver. Why might you have expected this to be true?
Cost Behavior Identification. Select the statement below that correctly describes the following grap Total Cost Activitya. The graph represents a fixed cost.b. An increase in activity reduces total cost.c. An increase in activity reduces unit cost.d. The graph represents a variable cost.
Understanding Fixed Costs. Consider the following information: Number of Units Produced Fixed Cost 0-25,000 $35,000 25,001-50,000 65,000 50,001-75,000 85,000 75,001-100,000 95,000a. If 60,000 units are produced, what is the amount of fixed cost?b. What is the relevant range for a fixed cost of
Cost Behavior Identification. Identify the cost behavior patterns illustrated by the following graphs: LEE B
Distinguishing Fixed Costs. Identify the following fixed costs as either committed or discretionary:a. Salary of the vice-president for manufacturing.b. TV commercials for a new product.c. Depreciation-on an office building.d. Salary of one researcher on a staff of 100 researchers.e. Repairs and
Scatter Chart Selection. Which of the following scatter charts is the appropriate one to use in determining the base assumed to cause the variable element of the mixed cost?22 High-Low Points Method. A company has determined the high and low points of yearly activity and cost for one of its mixed
High-Low Points Method. Refer to Exercise 2-22. Assume that the solution was $5,000 p and $4 per hour. The company expects next year's activity to be 120,000 hours.a. Determine next year's expected total cost for the company.b. Draw a graph that represents the cost determined in part (a). per month
High-Low Points Method. Sam's Supermarket considers electricity a mixed cost. By using a scatter chart, Sam has determined that there is a relationship between electricity expense and the number of hours per month the store is open. During the past year, electricity expense totaled $3,600 in the
High-Low Points Method. Refer to Exercise 2-24. Assume that the solution was $800 per month and $6 per hour. Sam expects to be open a total of 5.000 hours in the upcoming year.a. Determine next year's expected electricity expense.b. Draw a graph that represents next year's expected electricity
High-Low Points Method. Last year, total operating expenses for Batsnip, Inc., were $440,000 in February, when sales were $600,000, the lowest for the year, and $1 million in December, when sales were $2 million, the highest for the year. Determine the following:a. Variable operating expenses as a
High-Low Points Method. Burney's. Inc.. has analyzed its repair and maintenance costs for its machinery for the past year. Data for each quarter is as follows: Total Tolal Quarter Hours Cost 1st 3,000 $14,000 2nd 5,000 24,000 3rd 7,000 31,000 4th 2,000 11,000 Use the high-low points method to
Least Squares Method (Appendix). Refer to Exercise 2-27. Use the least squares method to determine the variable rate and the fixed cost per quarter for the firm's repair and maintenance costs. (Round the variable rate to the nearest cent.) PROBLEM:
High-Low Points Method. E-Z Rider Mower Company has been analyzing its past experience with one of its mixed costs. Results for the past two years are as follows: 20x4, by Quarter Total Number of Mowers Produced Total Cast 1st 50,000 $ 450,000 2nd 35,000 340.000 3rd 20,000 200.000 4th 15,000
Based on the data for 20x4 and 20x5, use the high-low points method to determine the expected fixed cost per quarter and the variable rate per unit produced for 20x6.b. If the company expects to produce 180,000 mowers in 20x6, what is the total expected cost?c. Assume that the data for the fourth
Least Squares Method (Appendix). Refer to Problem 2-29. Required: Use the least squares method to determine the expected fixed cost per quarter and the variable rate per unit produced. (Round the variable rate to the nearest cent.)
Scatter Chart Selection and High-Low Points Method. Big Burst Balloon Company frequently must hire temporary secretarial help and also pay overtime wages to its full-time secretaries. Management believes that the need for additional secretarial help is based on either total sales or the total
Least Squares Method (Appendix). Refer to Problem 2-31. Required: Use the least squares method to determine the fixed and variable elements of total secretarial expense. Use only the more appropriate activity for these calculations. (Romd the variable rate to the nearest hundredth of a percent.)
Least Squares Method (Appendix). Refer to Exhibit 2-5.a. Using the number of deliveries as the activity, use the least squares method to determine the fixed and variable elements of total repairs and maintenance expense. (Round the variable rate to the nearest tenth of a cent.)b. Why does your
Scatter Chart Selection and High-Low Points Method. Merciful Arms Hospital installed a new body scanner last year. In trying to estimate the expected cost of operating and maintaining the scanner in the current year, the hospital's controller has been reviewing cost and use data for each of the
The controller feels confident that the cost of operating the scanner is a mixed cost. Required:a. Prepare two scatter charts to determine which activity-number of patients or number of hours used-is the appropriate cost driver for the variable element of the total cost.b. Using the appropriate
High-Low Points Method. Last year's operating expenses for Sizzlin Sales Company are shown below: Salaries. Sales commissions Repairs and maintenance Power Supplies $100,000 50,000 61,800 36,000 18,600 In trying to predict costs for the current year, the controller has determined that salaries and
Least Squares Method (Appendix). Refer to Problem 2-36. Required:a. Use the least squares method to determine fixed and variable elements of repairs and maintenance expense and supplies expense. (Round the variable rate to the nearest tenth of a cent.)b. Assume the firm expects to sell 250,000
High-Low Points and Least Squares Methods (Appendix). The controller at Telbur Company has analyzed data that relate to material handling costs and tons of material handled for the last six months. These data are shown below: Month Total Tons in thousands Total Cost in thousands Janu 10 $110
Cost Behavior Identification. The controller for Krispy Cereal Company has been analyzing the cost behavior of several of the company's costs, as described below.a. The company puts a toy that costs 7 cents in each box of cereal. Sales are not expected to exceed 50,000 boxes a month.b. The firm
What is the difference between inventory for a merchandising firm and inventory for a manufacturing firm?
What is the difference between cost of goods sold for a merchandising firm and cost of goods sold for a manufacturing firm?
What is cost accounting?4.What is the difference between direct materials and indirect materials?
Give an example of each. What is the difference between direct labor and indirect labor?

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Managerial Accounting 6th Edition Pierre L. Titard - Solutions

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