Archives: Solution Manual

Ex 12-13 Name: Enter the appropriate numbers in the shaded cells in columns B, D, F, H, K, and M. 1) Fixed activity rate = SP SP = Cost Capacity, orders SP = = Enter the appropriate numbers in the […]

Problem 11.29 1. Target cost = Target price – Target profit = $130 – $15 = $115 per unit The projected cost is $122 [$120 + ($100,000/50,000 units)], so the target is not met. The projected total life-cycle profit is […]

Exercise 11.18 (Concluded) 2. Basic: $228,000/45,000 = $5.07* per unit Advanced: $720,000/24,000 = $30 per unit The JIT cost is more accurate because it has more costs that can be assigned using direct tracing. *Rounded to the nearest cent. 3. […]

CHAPTER 11 STRATEGIC COST MANAGEMENT DISCUSSION QUESTIONS 1. A competitive advantage is providing better customer value for the same or lower cost or equivalent value for lower cost. The cost management system must provide infor- mation that helps identify strategies […]

Ex 8-16 Name: Enter the appropriate amounts in the shaded cells in columns D, F, H, and J. 1) Quarter 1 Berring Company Sales Budget Quarter 2 Quarter 3 Quarter 4 Berring Company Production Budget Quarter 1 Quarter 2 Quarter […]

Ex 7-18 Name: Enter the appropriate amounts in the shaded cells in columns I and K. 1) Cost Driver Information Dept. A Dept B. Total Year 1 Actual direct labor hours Cost allocation ratios Year 2 Actual direct labor hours […]

Ex 6-11 Name: 1) Select the appropriate accounts from the pull-down menus in the shaded cells in columns B and C. Enter the appropriate amounts in the shaded cells in columns I and J. 2) Enter the appropriate amounts in […]

Ex 5-16 Name: Overhead Control Work in process Beg. Bal. – – 1) a) b) c) d) e) f) g) 2. a. Materials b. Work-in-Process c. Overhead d. Finished Goods Record the journal entries below. Use the pull-down lists to […]

Ex 4-21 Name: Enter the appropriate amounts in the shaded cell in columns D, F, H, and J. 1) Activity Cost x Usage Model X Model Y Setting up equipment Model X x Model Y x Ordering Materials Model X […]

Ex 3-17 Name: Enter the data in columns C and E below. When you have entered all data points, the scattergraph to the right and below will be correct. Radiology Total Month Tests Cost January 2800 133500 February 2600 135060 […]

Ex 2-15 Name: Enter the appropriate amounts in the shaded cells in columns E and F. 1) LEMANS COMPANY Statement of Cost of Goods Manufactured For the Month of June Direct materials Direct materials beginning inventory Add: Purchases Materials available […]

Problem 9.33 (Continued) 4. Fixed overhead variances: Variable overhead variances: Note: SH = (0.1 × 35,000) + (0.15 × 70,000) = 14,000 = $40 × 14,800 = $592,000 = $40 × 14,000 = $560,000 Spending Variance $15,500 U Efficiency Variance […]

Exercise 9.23 Exercise 9.24 b. Variable overhead spending variance = ($8 × 25) − ($10 × 25) = $50 F Exercise 9.25 c. Volume Variance = $65,000 − ($5 × 12,000) = $5,000 U Exercise 9.26 d. Materials Quantity Variance […]

9-1 CHAPTER 9 STANDARD COSTING: A FUNCTIONAL-BASED CONTROL APPROACH DISCUSSION QUESTIONS 1. Standard costs are essentially budgeted amounts on a per-unit basis. Unit standards serve as inputs in building budgets. 2. The quantity decision is determining how much input should […]

they may become frustrated and lower their performance as a consequence. Many firms elect to use currently attainable standards in lieu of ideal standards. The standard suggested by the presi- dent is a good starting point. If experience indicates that […]

CHAPTER 9 STANDARD COSTING: A FUNCTIONAL-BASED CONTROL APPROACH The responsibilities of management include planning, controlling, and decision making. Chapter 8 discussed static and flexible budgeting, which have a significant impact on the functions of planning and controlling. Flexible budget variances […]

Problem 8.37 (Continued) Accounts receivable for August 31 is computed as follows: Given accounts payable, the total assets must equal $569,750 ($81,000 + $220,000 + $268,750). Cash is computed as the difference between total as- sets and all other assets […]

Exercise 8.24 Del Spencer’s Men’s Clothing Store Schedule of Cash Receipts For the months of August and September August September (0.9)(0.14)($45,000)(1.03) ………… 5,840 August: [(0.9 × 0.15) × $56,000] …………… 7,560 [(0.9 × 0.65) × $56,000] …………… 32,760 September: [(0.9 […]

8-1 CHAPTER 8 BUDGETING FOR PLANNING AND CONTROL DISCUSSION QUESTIONS 1. Budgets are the quantitative expressions of plans. Budgets are used to translate the goals and strategies of an organization into operational terms. 2. Control is the process of setting […]

© 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. Credit sales ($500,000 × 0.85 × 0.30) ………………………………………………………. 127,500 Cash received in March from […]

CHAPTER 8 BUDGETING FOR PLANNING AND CONTROL Budgeting is one topic that most students can relate to since they are involved with their own personal budgets. Failure to plan, either formally or informally, can lead to financial disaster. Careful planning […]

© 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. Exercise 7.20 1. Allocation ratios: Pesticide Liquid Fertilizer Square feet ………………. 0.4667 0.5333 Machine […]

7-1 CHAPTER 7 ALLOCATING COSTS OF SUPPORT DEPARTMENTS AND JOINT PRODUCTS DISCUSSION QUESTIONS 1. Stage one assigns service costs to produc- ing departments. Costs are assigned using factors that reflect the consumption of the services by each producing department. Stage […]

(0.3333 × $340,000) …………….. $ 113,322 Power: (0.5556 × $200,000) …………….. 111,120 (0.4444 × $200,000) …………….. 88,880 Direct costs………………………………. 75,000 55,000 $ 412,798 $ 257,202 Cooking ($10.32 × 2) …………………………………. 20.64 Packaging and freezing ($8.57 × 0.5) …………… 4.29 Total […]

CHAPTER 7 ALLOCATING COSTS OF SUPPORT DEPARTMENTS AND JOINT PRODUCTS Allocation of support center costs is an important topic for product costing. In recent years, the issue of accurate product costing has assumed considerable importance. Managers need to be fully […]

6-38 Problem 6.38 (Concluded) Costs accounted for: Transferred Ending Work Out in Process Total Goods transferred out (198,000 × $0.1090) ………………………. $21,582 — $21,582 Ending work in process: Transferred in (6,000 × $0.0766) ……. — $460* 460* Direct materials (6,000 […]

© 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. CPA-TYPE EXERCISES Exercise 6.26 a. (the only difference between the two is how beginning […]

6-1 CHAPTER 6 PROCESS COSTING DISCUSSION QUESTIONS 1. A process is a series of activities (opera- tions) that are linked to perform a certain ob- jective. For example, the bottling process of a pain medication manufacturer consists of four linked […]

credit his profession. Finally, Stoney has an ethical obligation to communicate information fairly and objectively, disclosing all information that would be needed for the loan officer to fairly assess the merits of the company’s request for a loan. Clearly, Stoney […]

CHAPTER 6 PROCESS COSTING Process costing exposes students to a different method of collecting costs for products. The material in this chapter is generally difficult for students because of the amount of detail. LEARNING OBJECTIVES After studying Chapter 6, students […]

5-16 Exercise 5.19 1. a. Materials ………………………………………………… 113,300 Accounts Payable ……………………………….. 113,300 b. Work in Process …………………………..………… 82,500 Overhead Control …………………………………… 8,800 Materials …………………………………………….. 91,300 c. Work in Process …………………………………….. 67,000 Overhead Control …………………………………… 18,750 Wages Payable …………………………………… 85,750 d. […]

5-1 CHAPTER 5 PRODUCT AND SERVICE COSTING: JOB-ORDER SYSTEM DISCUSSION QUESTIONS 1. Cost measurement is the process of deter- mining the dollar amounts of direct materi- als, direct labor, and overhead that should be assigned to production. Cost accumula- tion […]

5. Explain how activity-based costing is applied to job-order costing. 4. Job-Order Costing: Specific Cost Flow Description (LO 4) © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, […]

MTC4-1 MAKING THE CONNECTION: INTEGRATIVE EXERCISE PART 4: CHAPTERS 16–20 1. The following are the steps of the tactical decision-making model outlined in Chapter 17. Step 1. Recognize and define the problem. Sabrina defined the problem as a need to […]

4-33 Problem 4.32 (Continued) 2. Activities Cost Driver Activity Rate Setup Runs $240,000/300 = $800/run Machine Machine hours $1,750,000/185,000 = $9.46*/MHr Receiving Receiving orders $2,100,000/1,400 = $1,500/order Engineering Engineering hours $2,000,000/10,000 = $200/eng. hr. Materials handling Material moves $900,000/900 = […]

© 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. Exercise 4.21 1. Activity rates: Setting up equipment = $126,000/150 = $840 per setup […]

4-1 CHAPTER 4 ACTIVITY-BASED COSTING DISCUSSION QUESTIONS 1. A predetermined overhead rate is simply an estimate of the overhead used per unit of driver. It is calculated using budgeted over- head and budgeted levels of the associated driver. Predetermined rates […]

Less shipping and warehousing ……………………….. 292.68 Profit ………………………………………………………. $ 209.32 Original profit per ton: Selling price ………………………………………………….. $ 2,500.00 Less manufacturing costs ……………………………….. 1,998.00 Shipping cost per shipping item = $9,200,000/380,000 = $24.21* per shipping item Shipping ($24.21  7) […]

3. Provide a detailed description of activity-based product costing. 2. Limitations of Plantwide and Departmental Rates (LO 2) © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in […]

Customer Increase market share Market share Increase customer Satisfaction index from satisfaction survey Minimize use of Types and quantities virgin materials Minimize release of Pounds of toxic waste Decrease time for Cycle time product development Decrease time to market Time […]

© 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. Problem 3.35 (Concluded) 4. Regression output from spreadsheet, leaving out the first quarter observation […]

© 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. Exercise 3.23 (Concluded) 3. Cumulative Cumulative Cumulative Time Number Average Time Total Time: for […]

3-1 CHAPTER 3 COST BEHAVIOR DISCUSSION QUESTIONS 1. Knowledge of cost behavior allows a man- ager to assess changes in costs that result from changes in activity. This allows a man- ager to assess the effects of choices that change […]

CHAPTER 3 COST BEHAVIOR Chapter 3 provides the basics of cost behavior, focusing on expanded definitions of fixed and variable costs and introducing the concept of mixed costs. Methods of separating mixed costs into fixed and variable elements are presented […]

No. 2 common 1,875,000 0.25 225,000 No. 3 common 1,125,000 0.15 135,000 Totals 7,500,000 1.00 $900,000 *Percentage × $900,000 Unit cost: Firsts and seconds $0.12 ($180,000/1,500,000) No. 1 common 0.12 ($360,000/3,000,000) No. 2 common 0.12 ($225,000/1,875,000) No. 3 common 0.12 […]

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CHAPTER 2 BASIC COST MANAGEMENT CONCEPTS DISCUSSION QUESTIONS 1. An accounting information system is a sys- tem consisting of interrelated manual and computer parts, using processes such as collecting, recording, classifying, summariz- ing, analyzing, and managing data to pro- vide […]

3. Define tangible and intangible products, and explain why there are different product cost definitions. 1. A Systems Framework (LO 1) 3. Product and Service Costs (LO 3) © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied […]

Method I $15.00 $22.00 $28.00 Method II* 10.50 15.40 19.60 There may be, and very likely is, very little R&D function in the Cable Service Division. Thus, this first unit cost could satisfy both value-chain and operat- ing cost definitions. […]

1-1 CHAPTER 1 INTRODUCTION TO COST MANAGEMENT DISCUSSION QUESTIONS 1. Cost management is concerned with assign- ing costs and using information for planning, controlling, continuous improvement, and decision making. It encompasses cost accounting and management accounting but has a broader […]