Archives: Solution Manual

1. An account is a form designed to record changes in a particular asset, liability, owner’s equity, revenue, or expense. A ledger is a group of related accounts. 2. The terms debit and credit may signify either an increase or […]

Score: Key Code: Instructions Answers are entered in the cells with gray backgrounds. An asterisk (*) will appear to the right of an incorrect entry. In the general ledger accounts, only normal balance columns will be graded. For correct grading […]

CHAPTER 1 Introduction to Accounting and Business Prob. 1–3A (Concluded) 4. (Optional) Cash flows from operating activities: Cash received from customers $110,000 Deduct cash payments for expenses and payments to creditors* 112,400 RELIANCE FINANCIAL SERVICES Statement of Cash Flows For […]

14 Chapter 1 Introduction to Accounting and Business OBJECTIVE 4 Describe and illustrate how business transactions can be recorded in terms of the resulting change in the basic elements of the accounting equation. SYNOPSIS Using a sample company called NetSolutions, […]

20–16 Problem 20.23 (Concluded) 4. EOQ = 2DP / C = ( ) 3$/10$000,362 = 000,240 = 490 (batch size, rounded) This further reduction in setup time and cost reduces the batch size even more. As the setup time is […]

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 20 INVENTORY MANAGEMENT: ECONOMIC ORDER QUANTITY, JIT, AND THE THEORY OF CONSTRAINTS DISCUSSION […]

tive maintenance, total quality control (strives for zero defects), and building the right kind of relationship with suppliers. d. Unreliable production processes are addressed by total quality management. As fewer and fewer defective units are produced, there is less and […]

CHAPTER 20 INVENTORY MANAGEMENT: ECONOMIC ORDER QUANTITY, JIT, AND THE THEORY OF CONSTRAINTS Inventory represents a significant investment of capital for most companies. Inventory management is fundamental to establishing a long-term competitive advantage. The focus of this chapter is how […]

Ex 20-7 Name: 1) Enter the appropriate amounts in cells E9, G9, I9, and G10. EOQ = 2DP C EOQ = x x EOQ = 2) Enter the appropriate amounts in cells C21, C22, and G22. Ordering cost is Number […]

19–17 Problem 19.24 (Concluded) 4. Most of the factors mentioned can be quantified. Furthermore, they should be included in the analysis. All direct and indirect costs as well as costs of in- tangible factors should be included; otherwise, it is […]

19-1 CHAPTER 19 CAPITAL INVESTMENT DISCUSSION QUESTIONS 1. Independent projects are such that the acceptance of one does not preclude the ac- ceptance of another. With mutually exclusive projects, however, acceptance of one pre- cludes the acceptance of others. 2. […]

CHAPTER 19 Capital Investment COLLABORATIVE LEARNING EXERCISE SOLUTION 1. Peter’s suggestion is unethical. The guidelines for capital projects are in place to help en- sure sound decisions. Falsifying data to bypass the guidelines shows a lack of integrity. 2. Laura […]

CHAPTER 19 CAPITAL INVESTMENT Capital investment decisions are concerned with the acquisition of long-term assets and usually involve a significant outlay of funds. This chapter covers the basic capital budgeting models and decision making. Taxes and inflation are considered later […]

Ex 19-15 Name: Enter the appropriate amounts in the shaded cells in columns E and G. 1) Payback period = Investment / Annual net cash flow Payback period = / = Enter the appropriate amounts in the shaded cells in […]

18–19 PROBLEMS Problem 18.26 Chain store costs: Small retail store costs: Sales salaries …………. $ 110,000 Sales support ……………… $ 328,000 Delivery cost* …………. 51,000 Delivery cost** …………….. 142,800 Total ………………….. $ 161,000 Total ………………………. $ 470,800 Number of units […]

18-1 CHAPTER 18 PRICING AND PROFITABILITY ANALYSIS DISCUSSION QUESTIONS 1. Price elasticity of demand is measured by the percentage change in quantity divided by the percentage change in price. If de- mand is relatively elastic, a price change of X […]

production (55) 0 0 0 0 0 0 0 Rebates** (10) 0 0 0 0 0 0 0 Advertising (25) (50) (20) (20) (20) (20) (20) 0 Commission (3) (9) (16) (18) (18) (18) (9) 0 Profit (loss) $ (29) […]

CHAPTER 18 PRICING AND PROFITABILITY ANALYSIS What is profit? How do we measure it? Many considerations factor into the determination of price. In this chapter, the authors focus on the measurement of cost, price, and revenues. Economic factors, legal considerations, […]

Ex 18-18 Name: Enter the appropriate amount in the shaded cells in column C. 1) Direct material Direct labor Machine time Variable overhead Administrative costs Total 2) Full-cost criteria and max. allow. return price: Relevant costs (above) Fixed overhead Subtotal […]

17–16 Exercise 17.16 1. Number of lawns for LStar = 5 months × 2 weeks × 20 houses = 200 lawn mowings over the five months Accept Reject Revenue ($20 × 200 lawn mowings) …………. $ 4,000 $0 Payments to […]

17-1 CHAPTER 17 ACTIVITY RESOURCE USAGE MODEL AND TACTICAL DECISION MAKING DISCUSSION QUESTIONS 1. Tactical decision making is choosing among alternatives with an immediate or limited end in mind. 2. Tactical decisions should support the overall strategic objectives of an […]

importance of her job and her department. Additional outsourcing would decrease the relative value of production and increase the relative value of purchasing. James is obligated by standard I-1 to “maintain an appropriate level of professional competence by ongoing development […]

CHAPTER 17 ACTIVITY RESOURCE USAGE MODEL AND TACTICAL DECISION MAKING Tactical decision making consists of choosing among alternatives with an immediate or limited end in view. Tactical decisions can be short term or small scale in nature but must be […]

Ex 17-9 Name: Enter the appropriate amount in the shaded cells. 1) Make Buy Direct materials $2,508,000 $0 Direct labor 539,000 0 =$3,213,650 /55,000 =$58.43 2) Lowest Maximum price = total cost / Units Variable overhead 151,250 0 Fixed overhead […]

16–18 Exercise 16.25 1. Bread Sweet Rolls Total Sales …………………………………… $600,000 $300,000 $900,000 Less: Variable cost ………………. 390,000 186,000 576,000 Contribution margin ………… $210,000 $114,000 $324,000 Less: Fixed costs ………………… 185,000 Operating income ……………. $139,000 2. Contribution margin ratio = […]

16-1 CHAPTER 16 COST-VOLUME-PROFIT ANALYSIS DISCUSSION QUESTIONS 1. CVP analysis allows managers to focus on prices, volume, costs, profits, and sales mix. Many different “what–if” questions can be asked to assess the effect on profits of changes in key variables. […]

R2 = 0.510 c. Overhead = $1,264 + $4.73 machine hours + $89.42 setups R2 = 0.962 The multiple regression equation is best. It has the highest R2, the signs on the variables make sense, and both independent variables are […]

CHAPTER 16 COST-VOLUME-PROFIT ANALYSIS Cost-volume-profit (CVP) analysis can be used to illustrate how managers use accounting data for planning and decision making. Students who enjoy solving puzzles will probably enjoy the discussion of CVP. A more complete analysis of the […]

Ex 16-8 Name: Enter the appropriate amount in the shaded cells in columns C and E. Variable 1) Contribution margin = Price – costs = – = 2) Fixed Contribution Break-even in units = costs / margin = / = […]

Exercise 15.16 1. Productivity profiles: Base Yeara Current Yearb Materials productivity ratio ……….. 0.75 1.00 Labor productivity ratio …………….. 3.00 2.00 aMaterials: 900,000/1,200,000; Labor: 900,000/300,000 bMaterials: 1,080,000/1,080,000; Labor: 1,080,000/540,000 2. Income statements: Base Year Current Year Sales …………………. $13,500,000 $16,200,000 […]

CHAPTER 15 LEAN ACCOUNTING AND PRODUCTIVITY MEASUREMENT DISCUSSION QUESTIONS 1. Lean manufacturing is an approach de- signed to eliminate waste and maximize customer value. It is characterized by deliv- ering the right product, in the right quantity, with the right […]

($12  150,000) …………………….. (1,800.000) Machine hours: ($12  75,000) ………………………. (900,000) ($12  37,500) ………………………. (450,000) Gross profit ……………………………………… $ 1,200,000 $ 750,000 Setting A provides the greatest increase. Materials ………… 0.40 1.00 0.50 Equipment………. 1.67 1.00 2.00 Setting […]

3. Discuss and define productive efficiency and partial productivity measurement. 2. Lean Accounting (LO 2) 1. Precisely specify value by each particular product. 3. Make value flow without interruption. © 2015 Cengage Learning. All Rights Reserved. May not be scanned, […]

Ex 15-16 Name: Enter the appropriate amounts in the shaded cells in columns C, F, H, L, and N. 1) Profile: / Base Year Materials / = Labor / = Current Year Materials / = Labor / = 2) Base […]

14–54 Problem 14.39 (Concluded) 5. Iona Company Long-Range Performance Report For the Years Ended December 31, 2015 and 2020 Actual Long-Range Costs Target 2015a Costsb Variance Prevention costs: Fixed: Quality planning ………….. $ 150,000 $ 0 $ 150,000 U Quality […]

14–41 Problem 14.34 (Concluded) 4. The company should increase prevention and appraisal costs. The additional amounts spent on these programs will be recouped with additional savings from a resulting decrease in failure costs. 5. Quality costs: $15,000,000 × 2.5% = […]

14–21 Exercise 14.14 (Concluded) 5. Gainsharing provides a strong incentive for managers to improve quality and reduce quality costs. Gainsharing is a good idea, provided the incentive sys- tem is carefully designed. The bonus must be truly based on quality […]

14-1 CHAPTER 14 QUALITY AND ENVIRONMENTAL COST MANAGEMENT DISCUSSION QUESTIONS 1. Quality of design is a function of the product’s specifications, whereas quality of conformance is a measure of how a product meets its specifications. 2. All quality costs are […]

CHAPTER 14 Quality and Environmental Cost Management COLLABORATIVE LEARNING EXERCISE SOLUTION 1. Trend in Hazardous Waste 50,000 48,000 46,000 40,000 0 10,000 20,000 30,000 40,000 2010 2011 2012 2013 Year Tons of Waste 50,000 60,000 2. Hazardous Waste for 2010 […]

CHAPTER 14 QUALITY AND ENVIRONMENTAL COST MANAGEMENT As discussed in Chapter 13, improving process quality and quality of products and services is a fundamental strategic objective that is part of any well-designed Balanced Scorecard. Improving quality can increase profitability in […]

Ex 14-10 Name: Use the pull-down list on each cell to select the appropriate quality cost. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Ex […]

13–14 PROBLEMS Problem 13.20 MEMO TO: Carson Wellington FROM: Emily Sorensen RE: Comparison of Activity- and Strategic-Based Responsibility Accounting DATE: July 14, 2014 As requested, I am providing, in advance, a list of some of the most important similarities and […]

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 13 THE BALANCED SCORECARD: STRATEGIC-BASED CONTROL DISCUSSION QUESTIONS 1. A strategic-based responsibility accounting […]

strategic-based system, rewards are linked to four perspectives and over multiple measures within each perspective. The amount of compensation that goes to each per- spective is a function of the emphasis the organization wishes to place on each perspec- tive. […]

CHAPTER 13 THE BALANCED SCORECARD: STRATEGIC-BASED CONTROL The Balanced Scorecard is a strategic management system that translates the vision and strategy of an organization into operational objectives and measures. The Balanced Scorecard is compatible with activity-based responsibility accounting because it […]

Ex 13-9 Name: Enter the appropriate numbers in the shaded cells in columns G and I. 1) Velocity = Capacity Production hours Velocity (theoretical) = = Velocity (actual) = = Cycle time = Minutes per hour laptops per hour Cycle […]

12–17 PROBLEMS Problem 12.23 1. An activity driver measures the amount of an activity consumed by a cost object. It is a measure of activity output. Activity drivers are used to assign activity costs to cost objects. On the other […]

12-1 CHAPTER 12 ACTIVITY-BASED MANAGEMENT DISCUSSION QUESTIONS 1. The two dimensions are the cost dimension and the process dimension. The cost dimen- sion is concerned with accurate assignment of costs to cost objects, such as products and customers. Activity-based costing […]

efficiency variance. Howard’s behavior is unethical. Howard (and perhaps others) is de- liberately subverting the organization’s legitimate and ethical objective of providing a high-quality product used in the manufacture of an airplane—in exchange for a favorable performance rating and, presumably, […]

CHAPTER 12 ACTIVITY- BASED MANAGEMENT Many firms that operate in today’s rapidly changing environment must not only know what it currently costs to do things, but they must continually re-examine why and how they do things. Continuous improvement involves improving […]