BYP 10-4 REAL-WORLD FOCUS
costs is primarily fixed.
(b) Static budgeting seems to be most appropriate for Computer Associates
BYP 10-5 REAL-WORLD FOCUS
(a) The two most common pain points are (1) dealing with other managers
forecasts.
(c) The most common amount of time for the budgeting process is 4 to
8 weeks.
(d) The most commonly defined range of acceptable tolerance levels was
(e) Severe consequences were defined as: Compensation is affected or
other sanctions applied, the manager receives a formal reprimand, or
BYP 10-6 COMMUNICATION ACTIVITY
(a) Fred Bedner should be able to control all the variable costs and the
fixed costs of supervision (but not his portion) and inspection.
department manager.
(b) The total variable cost per unit is $25 ($50,000 ÷ 2,000). The total cost
(c) FLEMING COMPANY
Production Department
Manufacturing Overhead Flexible Budget Report
For the Month Ended
Difference
Variable costs
Indirect materials ($11)
Indirect labor ($6)
Maintenance expense ($5)
Manufacturing
supplies ($3)
Total variable ($25)
Budget at
1,500 units
$16,500
9,000
7,500
4,500
37,500
Actual at
1,500 units
$22,500
13,500
8,200
5,000
49,200
Favorable F
Unfavorable U
$ 6,000 U
4,500 U
700 U
500 U
11,700 U
BYP 10-6 (Continued)
FLEMING COMPANY
Production Department
Manufacturing Overhead Responsibility Report
For the Month Ended
Difference
Controllable Cost
Budget
Actual
Favorable F
Unfavorable U
Indirect materials
Indirect labor
Maintenance expense
Manufacturing supplies
Supervision*
Inspection costs
Total
$16,500
9,000
7,500
4,500
7,000
1,000
$45,500
$22,500
13,500
8,200
5,000
8,400
1,200
$58,800
$ 6,000 U
4,500 U
700 U
500 U
1,400 U
200 U
$13,300 U
To: Mr. Fred Bedner, Production Manager
From: , Vice President of Production
Your performance in controlling costs that are your responsibility was
very disappointing in the month of XXXXX. As indicated in the accom-
panying responsibility report, total costs were $13,300 over budget.
BYP 10-6 (Continued)
as soon as possible.
I think we need to talk about ways to implement more effective cost
BYP 10-7 ETHICS CASE
(a) The stakeholders in this ethical situation are:
The customers who buy the product.
The owners or stockholders.
(b) Pressure to perform is a frequently identified cause for unethical
conduct. Employees are more prone to engage in unethical conduct
when unreasonable demands are made upon them. Rather than lose
and bend the rules.
(c) The company might maintain open lines of communication with its em-
ployees to better know the pressures of its managers. By “keeping in
touch,” the company may avoid making unreasonable demands on its
managers and employees. The company might also develop a company
to meet the objectives.
BYP 10-8 ALL ABOUT YOU
envelopes. Next, decide how often to fill the envelopes and determine
the amount to put in each envelope. If you continually run out of
(b) Answers will vary by student.
BYP 10-9 CONSIDERING YOUR COSTS AND BENEFITS
In general, in past years it has usually been considered prudent to
purchase a home rather than to rent. As noted, over time, home prices have
alternative to purchasing. In the scenario described, there is considerable
uncertainty surrounding this individual’s life. Purchasing a home is a huge
decision, with very high transactions costs. It is often suggested that,
because of the high transactions costs, you should not purchase a home