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323
MBA 10–4, Concluded
c. The Friday–Monday phenomenon is likely related to the workforce, but the
same cannot be said about the larger increasing trend over the four weeks. It
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CASES
Case 10–1
Although Beth may appear to have technically complied with company policy, her
computation of the cost of the lumber is unethical. The Statement of Ethical Con-
Case 10–2
The objectives of managerial accounting and financial accounting are different;
therefore, the vice president’s statement is incomplete. In one sense, the state-
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Case 10–3
1. Ashley’s bill has a number of points that should be considered. Some of the
points, with the appropriate argument, are identified below.
a. The trip back to the shop resulted in a $95 labor charge. Ashley should
argue that the whole hour should not be billed. The hour is the result of
b. The overtime premium should not have been charged to Ashley. What if
Ashley was the first appointment in the morning? If so, then there would
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Case 10–3, Concluded
2.
Cost Direct Materials Direct Labor Overhead
Circuit board X
Case 10–4
1. The engineer is concerned that direct labor is not related to overhead con-
sumption because direct labor is a small part of the cost structure. Apparent-
2. Since each direct labor hour now has $3,000 of factory overhead attached to
it, small mistakes in the direct labor time estimates can have a large impact
3. The engineer’s concern is valid. The company should consider replacing its
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Case 10–5
Note to Instructors: Consider having the teams compete for the most examples.
Copy and Graphics Shop
Direct Direct Selling
Cost Materials Labor Overhead Expense
Paper .............................................. X
Graphic designer wages .............. X
Manager salary .............................. X
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Case 10–5, Concluded
Take-Out Pizza Restaurant
Direct Direct Selling
Cost Materials Labor Overhead Expense
Ingredients ................................. X
Cook wages ................................ X
Manager salary .......................... X
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Case 10–6
Tyra Chastain’s claim that the inventory doesn’t cost the company anything is
likely not true. At the very minimum, inventory requires working capital to be
used. The financing cost associated with the working capital represents a cost to
