Archives: Solution Manual

11–56 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 11-51 (CONTINUED) VARIABLE-OVERHEAD SPENDING AND EFFICIENCY VARIANCES (Hours = Direct-Labor Hours) Actual Hours (AQ) Actual Rate (AVR) Actual […]

11–41 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 11-45 (CONTINUED) bTotal standard overhead rate = variable overhead rate + fixed overhead rate = $7.50 + $21.00 […]

Chapter 11 – Flexible Budgeting and Analysis of Overhead Costs SOLUTIONS TO PROBLEMS PROBLEM 11-35 (45 MINUTES) PROJECTED VARIABLE OVERHEAD VARIABLE-OVERHEAD SPENDING AND EFFICIENCY VARIANCES (Hours = Direct-Labor Hours) Actual Hours (AQ) Actual Rate (AVR) Actual Hours (AQ) Standard Rate […]

Chapter 11 – Flexible Budgeting and Analysis of Overhead Costs CHAPTER 11 Flexible Budgeting and Analysis of Overhead Costs ANSWERS TO REVIEW QUESTIONS 11-1 A static budget is based on only one level of activity. A flexible budget allows for […]

DATA INPUT Containers (cases) of frozen food produced 725 Actual costs: Variable overhead 5,500$ Fixed overhead 13,000 Actual labor cost 4,000 direct-labor hours 75,600 Actual material cost 15,000 pounds purchased and used 33,000 Standard costs per case: Direct labor 5 […]

Fixed overhead 270,000 Fixed general and administrative 180,000 450,000 Operating income 183,600$ Revenue 1,728,000$ 1,728,000$ –$ Variable costs Direct material 480,000$ 432,000$ 48,000$ U Direct labor 288,000 316,800 (28,800) F Deduct: Total variable costs 1,170,000$ 1,094,400$ 75,600$ U Contribution margin […]

DATA INPUT Actual output 13,500 cases Actual variable overhead (Actual VOH) 607,500$ Actual fixed overhead (actual FOH) 183,000$ Actual machine time 60,750 machine hours Standard variable-overhead rate 9.00$ per machine hour Standard quantity of machine hours 4 hours per case […]

7. Explain how an activity-based flexible budget differs from a conventional flexible budget. 9. Compute and interpret the sales-price and sales-volume variances (Appendix B). Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written […]

Problem 11-44 Student Name: Class: 1. Citing the benefits of flexible budgeting, explain why Susan Porter would propose using flexible budgeting in this situation. 2. Flexible Budget Actual Variance Advertising * * * * Staff salaries * * Sales salariesa* […]

Problem 11-42 Student Name: _________________ Class:_________________________ Lakemaster Company Flexibile Budget For the Month of June Revenue * Deduct: Variable costs: Direct material * Direct labor * Variable overhead * Variable selling * Total variable costs * Contribution margin * Deduct: […]

10–41 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 10-46 (50 MINUTES) 1. a. Direct-labor rate variance = (AH  AR) – (AH  SR) = (36,500 […]

10–21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 10-35 (15 MINUTES) Direct Material Initial Mix Unit Cost Standard Material Cost Nyclyn …………………………………………………………… 12 kg R$ 4.35 […]

DATA INPUT Standard Standard Direct-Labor Direct-Labor Hours Rate per Hour Allowed, Given April Output Labor Class III 24.00$ 1,000 Labor Class II 21.00 1,000 Labor Class I 15.00 1,000 Actual Actual Direct-Labor Direct-Labor Rate per Hour Hours Labor Class III […]

DATA INPUT Control valves manufactured in March: 15,600 units Actual costs: Direct labor 80,200 hr. at 10.95$ Direct material purchased 50,000 lb. at 5.20$ Direct material used 46,200 lb. Standard prime costs: Direct material 3 lbs. at 5.00$ per lb […]

DATA INPUT Quantity 0.25 hour Quantity 4 kilograms Rate 12.00$ per hour Price 0.60$ per kilogram Actual data: Material purchases 240,000 kilograms Price 0.62$ per kilogram Actual costs incurred in the production of: 50,000 units were as follows: Direct labor: […]

9. Prepare journal entries to record and close out cost variances (appendix). Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 3. Compute and interpret the direct-material price and […]

Case 10-49 Student Name: Class: 1. Standard cost of lots N42, N43, and N44: METRO FASHIONS, INC. Standard Total Quantity Cost per Standard Lot (boxes) Box Cost N42 * * * N43 * * * N44 * * * Standard […]

Problem 10-47 Student Name: Class: 1. McCartney Company Standard Cost Schedule: Direct Material Construction Finishing Department Department Standard quantity: Direct material and parts in finished product: Veneered wood *lbs. – set(s) Bridge and strings *lbs. *set(s) Allowance for normal waste […]

Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. interested outside parties to have confidence in the organization’s financial reports. Internal controls over financial reporting include a range of […]

such as unloading and inspection.) (b) Holding costs: The cost incurred in keeping inventory on hand for some period of time. (Examples include the costs of storage space such as a warehouse, depreciation, security, insurance, forgone interest on working capital […]

now will be equal to a $161.10 cash flow at the end of five years. If the $100 received now is invested for five years at 10%, it will accumulate to $161.10 at the end of five years. Copyright © […]

2. Understand the differences between the economic-order-quantity and just-in– time approaches to inventory management. Appendix III – Inventory Management III-1 APPENDIX III INVENTORY MANAGEMENT Learning Objectives 1. Calculate the economic order quantity (EOQ) using the EOQ decision model. Copyright © […]

Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Appendix II – Compound Interest and the Concept of Present Value II-1 APPENDIX II COMPOUND INTEREST AND THE CONCEPT OF […]

Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Appendix I – The Sarbanes-Oxley Act, Internal Controls, and Management Accounting AppI-1 APPENDIX I THE SARBANES-OXLEY ACT, INTERNAL CONTROLS, AND […]

9-40 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 9-42 (CONTINUED) 4. Cash disbursements budget: 20×1 January February March First Quarter Inventory purchases: Cash payments for purchases […]

9-21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 9-33 (CONTINUED) 3. Since the 20×1 usage of Islin is 200,000 gallons, the firm’s raw-material purchases budget (in […]

Chapter 09 – Financial Planning and Analysis: The Master Budget 9-1 CHAPTER 9 Financial Planning and Analysis: The Master Budget ANSWERS TO REVIEW QUESTIONS 9-1 A budget facilitates communication and coordination by making each manager throughout the organization aware of […]

DATA INPUT July 5,000 desk-and-chair sets August 6,000 desk-and-chair sets September 7,500 desk-and-chair sets Each desk-and chair set requires: 10 board feet of pine planks 1.5 hours of direct labor Costs for material: 0.60$ per board foot 21.00$ per hour […]

DATA INPUT Total annual office visits 48,000 1/2 Hour appointments 80% Average rate for 1/2-hour visits 60$ 1 Hour appointments 20% Average rate for 1-hour visits 105$ Revenue collected during month when services are rendered 90% Revenue collected the month […]

DATA INPUT Budgeted Sales on Account: Collection Schedule: June 122,500$ In month of sale 70 % July 150,000 In 1st month after sale 15 % August 175,000 In 2nd month after sale 10 % September 200,000 In 3rd month after […]

4. Explain the concept of activity-based budgeting and the logic it brings to the budgeting process. 6. Prepare the additional master budget schedules required by a manufacturing firm. 8. Describe a typical organization’s process of budget administration. Copyright © 2014 […]

Case 09-48 Student Name: Class: PHOTO ARTISTRY COMPANY Master Budget 1. Sales Budget: 20×4 20×5 4th 1st 2nd 3rd 4th Entire Quarter Quarter Quarter Quarter Quarter Year S frame unit sales x S sales price S frame sales revenue L […]

Problem 09-39 Student Name: Class: EDGEWORTH BOX CORPORATION Master Budget 1. Sales Budget: Box C Box P Total Sales (in units) * * Sales price per unit * Sales revenue * 2. Production Budget (in units): Box C Box P […]

8-34 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 8-40 (40 MINUTES) 1. The factors that should be present for an organization’s quality program to be successful […]

8-21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 8-34 (45 MINUTES) 1. To compute fixed overhead per unit: Predetermined fixed overhead rate = production budgeted overhead […]

Chapter 08 – Variable Costing and the Costs of Quality and Sustainability 8-1 CHAPTER 8 Variable Costing and the Costs of Quality and Sustainability ANSWERS TO REVIEW QUESTIONS 8-1 Under absorption costing, fixed manufacturing-overhead costs are assigned to units of […]

DATA INPUT Planned Production (units) 10,000 Actual Production (units) 10,000 Sales (unit) 9,600 Sales Price (per unit) 216$ Cost Data Direct Material (per unit) 36$ Conversion Costs: Direct Labor 135,000$ Variable Manufacturing Overhead 195,000$ Fixed Manufacturing Overhead 660,000$ Selling and […]

DATA INPUT Sales Price 30$ Direct Material 10$ Direct Labor 4$ Variable Overhead 6$ Budgeted Fixed Overhead 600,000$ Actual Production (containers) 150,000 Units Sold 125,000 Selling & Administrative Expenses Fixed $100,000 (for the year) Variable $2 (per container sold) SOLUTION […]

7. Prepare a quality-cost report. 9. Understand the different types of environmental costs and discuss management of environmental costs. Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter […]

Case 8-42 Student:_________________________________ Class:___________________________________ DATA INPUT Year 1 Year 2 Sales Price * * Production Costs: Variable Manufacturing Costs * * Fixed Manufacturing Overhead * * Selling & Administrative Costs Variable * * Fixed * * Actual Production (containers) * […]

Problem 8-34 Student:_________________________________ Class:___________________________________ SOLUTION 1. Predetermined fixed overhead rate (per unit) * per unit Standard Cost per unit Direct Material * Direct Labor * Variable Overhead * Standard cost per unit under variable costing * Fixed overhead per unit […]

7-53 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 7-51 (35 MINUTES) 1. .34 $120.00 $79.20 $120.00 ratio margin onContributi = − = 2. Number of units […]

7-41 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 7-46 (35 MINUTES) 1. units 15,000 $20 $300,000 margin oncontributiunit costs fixed units) (inpoint even–Break unit per $20 […]

7-21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 7-36 (30 MINUTES) 1. Break-even point in units, using the equation approach: $24X – ($15 + $3)X – […]

Chapter 07 – Cost-Volume-Profit Analysis 7-1 CHAPTER 7 Cost-Volume-Profit Analysis ANSWERS TO REVIEW QUESTIONS 7-1 a. In the contribution-margin approach, the break-even point in units is calculated using the following formula: margin oncontributiunit b. In the equation approach, the following […]

DATA INPUT Units sold 100,000 Sales 2,000,000$ Costs: Fixed Variable Direct material –$ 600,000$ Direct labor – 400,000 Manufacturing overhead 200,000 300,000 Selling and administrative 220,000 100,000 Total costs 420,000$ 1,400,000$ 1,820,000 Budgeted operating income 180,000$ Tax rate 40% SOLUTION […]

DATA INPUT Mall Store Downtown Store Total Sales 360,000$ 240,000$ 600,000$ Less: Variable expenses 252,000 96,000 348,000 Contribution margin 108,000$ 144,000$ 252,000$ Less: Fixed expenses 120,000 60,000 180,000 Operating income (12,000)$ 84,000$ 72,000$ Closing of mall store: 10% decrease in […]

DATA INPUT Current Year’s Net Income 600,000$ Current Year’s Sales Volume 400,000 Sales price per DVD 24$ Variable cost per unit purchase price 15$ Handling cost per unit 3$ Annual fixed costs 1,800,000$ Expected increase in unit purchase price 30% […]

7. Prepare and interpret a contribution income statement. 9. Understand the implications of activity-based costing for CVP analysis. 11. Understand the effect of income taxes on CVP analysis (appendix). Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or […]

Case 07-54 Student Name: Class: 1. SUSQUEHANNA MEDICAL CENTER Break-Even Point in Patient Days: Pediatrics For the Year Ended June 30, 20×6 Total fixed costs: Medical center charges * Supervising nurses * Nurses * Aids * Total fixed costs * […]