Archives: Solution Manual
978-0077733773 Chapter 14 Solution Manual Part 6
Q P SP AP SQ AQ [(AP − SP) × (AQ − SQ)] SQ × (AP – SP) SP × (AQ SQ) Chapter 14 – Operational Performance Measurement: Sales, Direct-Cost Variances, and The Role of Nonfinancial Performance Measures 14-45 (continued) […]
978-0077733773 Chapter 14 Solution Manual Part 5
Chapter 14 – Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures 14-42 JIT and Process Cycle Time Efficiency (PCE) (45-50 minutes) 1. The terms “value-added” and “non-value-added” are defined from the perspective of the customer […]
978-0077733773 Chapter 14 Solution Manual Part 4
Chapter 14 – Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures 14-37 Standard Costing and Journal Entries (40 minutes) 1. Materials Inventory (6,000 gals. × $10.00/gal.) 60,000 Materials Purchase-Price Variance 2,700 2. WIP Inventory (2,500 […]
978-0077733773 Chapter 14 Solution Manual Part 3
Chapter 14 – Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures 14-30 Flexible Budget and Operating-Income Variances (40 minutes) 1. Budget data: a. Flexible budget for 20,000 units Sales 20,000 × $4.50 = $90,000 Variable […]
978-0077733773 Chapter 14 Solution Manual Part 2
Chapter 14 – Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures 14-24 Master (Static) Budget Variance and Components (45 minutes) 1. Actual operating income = actual sales revenue actual variable costs actual 2. […]
978-0077733773 Chapter 14 Solution Manual Part 1
Chapter 14 – Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures CHAPTER 14: OPERATIONAL PERFORMANCE MEASUREMENT: SALES, DIRECT– COST VARIANCES, AND THE ROLE OF NONFINANCIAL PERFORMANCE MEASURES QUESTIONS 14-1 A master budget represents forecasted operating […]
978-0077733773 Chapter 14 Lecture Note
Chapter 14 – Operational Performance Measurement: Sales, Direct Cost Variances, and the Role of Nonfinancial Performance Indicators Chapter 14 Operational Performance Measurement: Sales, Direct Cost Variances, and the Role of Nonfinancial Performance Indicators Learning Objectives LO 14-1 Explain the essence […]
978-0077733773 Chapter 14 Cases Part 2
Chapter 14 – Operational Performance Measurement: Sales, Direct Cost Variances, and the Role of Nonfinancial Performance Measures Reading 14-5: Larry Grasso, “Are ABC and RCA Accounting Systems Compatible with Lean Management?,” Management Accounting Quarterly, Vol. 7, No. 1 (Fall 2005), […]
978-0077733773 Chapter 14 Cases Part 1
Chapter 14 – Operational Performance Measurement: Sales, Direct Cost Variances, and the Role of Nonfinancial Performance Measures Chapter 14 Operational Performance Measurement: Sales, Direct Cost Variances, and the Role of Nonfinancial Performance Measures Teaching Notes for Case Case 14-1: Pet […]
978-0077733773 Chapter 13 Solution Manual Part 5
Chapter 13 – Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing 13-48 Life-Cycle Costing; Ethics (25 min) 1. Kate Stephen’s analysis based on the prepared report fails to consider the very significant amount […]
978-0077733773 Chapter 13 Solution Manual Part 4
Chapter 13 – Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing 13-45 (continued) at times (as for tables in this case) can be sold from inventory. 13-46 Theory of Constraints (30 min) With […]
978-0077733773 Chapter 13 Solution Manual Part 3
Chapter 13 – Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing 13-39 (continued -1) b. Morrow appears to compete in what Robin Cooper calls the “confrontation” strategy (When Lean Enterprises Collide, Harvard Business […]
978-0077733773 Chapter 13 Solution Manual Part 2
Chapter 13 – Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing 3. The airfare costs are the largest component of cost and this category could have room for improvement. By further negotiating group […]
978-0077733773 Chapter 13 Solution Manual Part 1
Chapter 13 – Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing CHAPTER 13: Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing QUESTIONS 13-1 Target costing is […]
978-0077733773 Chapter 13 Lecture Note
Chapter 13 – Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing Chapter 13 Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing Learning Objectives 1. Explain how […]
978-0077733773 Chapter 13 Cases Part 2
Chapter 13 – Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing Let’s discuss the elements of the target costing model and how these elements are developed. At this point in the discussion I […]
978-0077733773 Chapter 13 Cases Part 1
Chapter 13 – Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing Chapter 13 Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing Teaching Notes for Cases 13-1. […]
978-0077733773 Chapter 12 Solution Manual Part 12
Chapter 12 – Strategy and the Analysis of Capital Investments 12-61 Research Assignment, Strategy (45 Minutes) This assignment pertains to the following article: Thomas L. Barton and John B. MacArthur, “The New Hue of Green for the Management Accountant,” Strategic […]
978-0077733773 Chapter 12 Solution Manual Part 11
Chapter 12 – Strategy and the Analysis of Capital Investments SUM = $ 159,900 $ 115,833 12-58 (Continued-2) Alternatively: a) For 8%: ($14,545 × 10.935) + (0.116 × $7,273) = $159,900 b) For 12%: ($14,545 × 7.943) + (0.042 × […]
978-0077733773 Chapter 12 Solution Manual Part 10
Chapter 12 – Strategy and the Analysis of Capital Investments 12-56 Sensitivity Analysis; Equipment-Replacement Decision (45-60 minutes) 1. The maximum amount of annual variable operating expenses, pre-tax, that would make this an attractive investment from a present-value standpoint = $99,206 […]
978-0077733773 Chapter 12 Solution Manual Part 9
Chapter 12 – Strategy and the Analysis of Capital Investments 12-54 (Continued–1) 2. The following spreadsheet excerpt contains the PV of each alternative: Sample Calculation: Cell D111 = after-tax cash operating cost ($48,000 = (8,000 machine hours × $10/machine hour) […]
978-0077733773 Chapter 12 Solution Manual Part 8
Chapter 12 – Strategy and the Analysis of Capital Investments 12-73 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 12 – Strategy and the Analysis of Capital […]
978-0077733773 Chapter 12 Solution Manual Part 7
Chapter 12 – Strategy and the Analysis of Capital Investments 12-49 (Continued-4) 5. Modified internal rate of return (MIRR): A summary table for Problem12-49 appears below. 12-63 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without […]
978-0077733773 Chapter 12 Solution Manual Part 6
Chapter 12 – Strategy and the Analysis of Capital Investments 12-48 Basic Capital-Budgeting Techniques; Uneven Net Cash Inflows with Taxes and MACRS; Spreadsheet Application (60-75 minutes) 1. Unadjusted Payback Period: as shown by the above schedule, the payback period is […]
978-0077733773 Chapter 12 Solution Manual Part 5
Chapter 12 – Strategy and the Analysis of Capital Investments 12-44 (Continued-1) PV factor Year CF PV CF Net investment outlay 1.000 0 ($480,000) ($480,000 ) After-tax cash inflow 0.909 1 $208,000 $189,072 After-tax cash inflow 0.826 2 $208,000 $171,808 […]
978-0077733773 Chapter 12 Solution Manual Part 4
Chapter 12 – Strategy and the Analysis of Capital Investments 12-39 (Continued) Step 2: Complete the following “Goal Seek” dialog box: Step 3: Results 4. Many firms raise the discount rate in evaluating a particular capital investment in view of […]
978-0077733773 Chapter 12 Solution Manual Part 3
Chapter 12 – Strategy and the Analysis of Capital Investments 12-34 Determining Cash Flows; Basic Capital Budgeting (15 minutes) 1. The after-tax cash flow from disposal of the old machinery = after-tax gain on sale = ($1,800 – $0) × […]
978-0077733773 Chapter 12 Solution Manual Part 2
Chapter 12 – Strategy and the Analysis of Capital Investments EXERCISES 12-28 Determining Relevant Cash Flows: Asset-Purchase Decision (25 minutes) 1. Net cash outflow, project initiation (time period 0): Cost of new machine $2,500,000 2. Annual after-tax cash inflow (time […]
978-0077733773 Chapter 12 Solution Manual Part 1
Chapter 12 – Strategy and the Analysis of Capital Investments CHAPTER 12: STRATEGY AND THE ANALYSIS OF CAPITAL INVESTMENTS QUESTIONS 12-1 Capital-budgeting decisions: (a) are long-term in nature (i.e., they affect profitability and cash flows for many years into the […]
978-0077733773 Chapter 12 Lecture Note Part 2
Chapter 12 – Strategy and the Analysis of Capital Investments Effects of cash flows include direct and indirect (tax) effects. Direct effects include cash receipts, cash payments, or cash commitments. Indirect or tax effects are changes in income-tax payments precipitated […]
978-0077733773 Chapter 12 Lecture Note Part 1
Chapter 12 – Strategy and the Analysis of Capital Investments Chapter 12 Strategy and the Analysis of Capital Investments Learning Objectives LO 12-1Explain the strategic role of capital-investment analysis LO 12-2Describe how accountants can add value to the capital-budgeting process […]
978-0077733773 Chapter 12 Cases Part 5
Chapter 12 – Strategy and the Analysis of Capital Investments asset, additional net working capital required) 5. Financing (cost of equity capital; income tax rate, t) 6. Operating costs (both variable (supplies) and fixed (personnel, utilities, insurance, etc.) In this […]
978-0077733773 Chapter 12 Cases Part 4
Chapter 12 – Strategy and the Analysis of Capital Investments Reading 12-2: How ABC Was Used in Capital Budgeting This article presents a case study on the difference that ABC makes on the investment decision of a new project. A […]
978-0077733773 Chapter 12 Cases Part 3
Chapter 12 – Strategy and the Analysis of Capital Investments 12-21 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 12 – Strategy and the Analysis of Capital […]
978-0077733773 Chapter 12 Cases Part 2
Chapter 12 – Strategy and the Analysis of Capital Investments 2. Perform a detailed financial analysis of the Park Hill Acres superstore option assuming the Webster Street store remains open. In your analysis include your judgments and rationale for dealing […]
978-0077733773 Chapter 12 Cases Part 1
Chapter 12 – Strategy and the Analysis of Capital Investments Chapter 12 Strategy and the Analysis of Capital Investments Teaching Notes for Cases 12-1: Floating Investments (Source: Paul Rouse and Leigh Houghton, “Instructional Case: Floating Investments,” Journal of Accounting Education, […]
978-0077733773 Chapter 11 Solution Manual Part 10
11-47 Profitability Analysis (45-50 min) 1. First, calculate the contribution margin per unit for traffic and commercial paint. The first step is to determine the unit cost of latex, as follows: The per-unit contribution margins are then determined as follows: […]
978-0077733773 Chapter 11 Solution Manual Part 9
11-44 (continued-1) 2. The net first-year cost savings from closing the plant are estimated as $7,200 (in thousands), as follows: The depreciation amounts are not relevant to the decision because they represent portions of sunk costs that are being Corporate […]
978-0077733773 Chapter 11 Solution Manual Part 8
11-46 (Continued-1) $4.000 $27,435 $27,389 $4.250 $28,087 $27,944 $4.500 $28,739 $28,500 Based on the above analysis and graph, we see that for these two alternatives (gas-powered vs. hybrid model), and 60,000 miles total usage over a four-year period, the lifetime […]
978-0077733773 Chapter 11 Solution Manual Part 7
11-39 (continued-2) and long-term pricing strategy to make sure it is consistent with long-term strategy with established profit targets. Hillside should evaluate the effectiveness of its advertising and promotional efforts. Are the targeted customers being reached? Since the products have […]
978-0077733773 Chapter 11 Solution Manual Part 6
11-36 Make or Buy (45-60 min) 1. Since the per-unit contribution margin for manufactured fans ($24) is higher than for purchased fans ($12), the company should manufacture as many fans as possible (15,000), and purchase the remainder (5,000) from Harris […]
978-0077733773 Chapter 11 Solution Manual Part 5
11-33 Special Order (45-60 min) 1. In general, relevant cost equals the sum of out-of-pocket costs (variable + fixed), plus opportunity cost (if any). In the present case, these costs total $147,500, as follows: Out-of-Pocket Costs: Variable costs: Manufacturing cost […]
978-0077733773 Chapter 11 Solution Manual Part 4
11-30 (continued-5) Note that the products have the same per unit profit, but Flash has the higher contribution margin per unit, and Clash has the higher contribution per direct labor hour (DLH). Thus, Flash would be the more profitable product […]
978-0077733773 Chapter 11 Solution Manual Part 3
11-27 (Continued) Check: 4. The following strategic factors should be considered. What will be the effect on the firm’s image if T-2 is dropped? Will this result in an unfavorable reaction from key customers of T-1 and of other product […]
978-0077733773 Chapter 11 Solution Manual Part 2
11-22 (Continued) 4. Opportunity cost incurred if sales of 5,000 units to regular customers are lost by accepting the special sales order: Lost contribution margin, sales to regular customers: Selling price per unit = $20.00 Variable cost per unit: Direct […]
978-0077733773 Chapter 11 Solution Manual Part 1
CHAPTER 11: DECISION MAKING WITH A STRATEGIC EMPHASIS QUESTIONS 11-1 Relevant costs are costs to be incurred at some future time and differ for each option available to the decision maker. Relevant costs in replacing equipment would include the cost […]
978-0077733773 Chapter 11 Lecture Note
Chapter 11 – Decision Making with a Strategic Emphasis Chapter 11 Decision Making with a Strategic Emphasis Learning Objectives LO 11-1 Define the decision-making process and identify the types of cost information relevant for decision making. LO 11-2 Use relevant […]
978-0077733773 Chapter 11 Cases Part 4
Chapter 11 – Decision Making with a Strategic Emphasis Teaching Notes for Readings 11-28 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 11 – Decision Making with […]
978-0077733773 Chapter 11 Cases Part 3
Chapter 11 – Decision Making with a Strategic Emphasis For the vast majority of consumer products the Mass/Club channel will require the lowest trade margins followed by Grocery stores, and Convenience/Specialty stores. However, in the cola industry on-shelf pricing is […]
978-0077733773 Chapter 11 Cases Part 2
Chapter 11 – Decision Making with a Strategic Emphasis Purchased Manufactured Manufactured In-line Skates In-line Skates Snowboard Bindings Total Units 6,000 1,000 12,000 Per Unit Total Per Unit Total Per Unit Total Selling price $98 $588,000 $98 $98,000 $60 $720,000 […]