Top PDF Cost Accounting, Chapter 14 11ch14

Cost Accounting, Chapter 14 11ch14

Cost Accounting, Chapter 14 11ch14

Market-Size Variance Example Market-Size Variance Example Market-size variance Actual market size in units – Budgeted market size in units Budgeted market share Budgeted contribution[r]

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Test Bank Cost Accounting 6e by Raiborn and Kinney  14 chapter

Test Bank Cost Accounting 6e by Raiborn and Kinney 14 chapter

6. Riordan Corporation is interested in purchasing a state-of-the-art widget machine for its manufacturing plant. The new machine has been designed to basically eliminate all errors and defects in the widget- making production process. The new machine will cost $150,000, and have a salvage value of $70,000 at the end of its seven-year useful life. Riordan has determined that cash inflows for years 1 through 7 will be as follows: $32,000; $57,000; $15,000; $28,000; $16,000; $10,000, and $15,000, respectively. Maintenance will be required in years 3 and 6 at $10,000 and $7,000 respectively. Riordan uses a discount rate of 11 percent and wants projects to have a payback period of no longer than five years.
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Cost Management Accounting & Control, Chapter 14

Cost Management Accounting & Control, Chapter 14

31 Defining, Measuring, and Controlling Environmental Costs • Environmental costs: costs that are incurred because poor environmental quality exists or may exist • Damage – Direc[r]

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Test Bank Cost Accounting 14E by Horngren  7 chapter

Test Bank Cost Accounting 14E by Horngren 7 chapter

14) The textbook discusses three levels of variances, Level 0, Level 1, Level 2, and Level 3. Briefly explain the meaning of each of those levels and provide an example of a variance at each of those levels. Answer: A Level 0 variance is simply the difference between actual operating income and planned operating income in the static budget.

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Cost Accounting, Chapter 1 11ch01

Cost Accounting, Chapter 1 11ch01

Budget Actual Variance Revenues $59,000 $60,000 $1,000 F Cost of goods sold 42,000 43,400 1,400 U Wages 6,700 7,000 300 U General 1,300 900 400 F Fixed costs 5,000 5,000 0 Operating income $ 4,000 $ 3,700 $ 300 U

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Test Bank Cost Accounting 14E by Horngren  21 chapter

Test Bank Cost Accounting 14E by Horngren 21 chapter

Answer: Using accrual accounting to evaluate the performance of a manager may create conflicts with using discounted cash flow (DCF) methods for capital budgeting because frequently a project using a DCF method will not report strong operating income results in the early years of the project under accrual accounting. If this is the case, a manager might be tempted not to use DCF methods even though the decisions based on them might be in the best interests of the company over the long run. The conflict can be reduced by evaluating managers on a project-by-project basis and by looking at their ability to achieve the amounts and timing of forecasted cash flows.
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Test Bank Cost Accounting 14E by Horngren  16 chapter

Test Bank Cost Accounting 14E by Horngren 16 chapter

28) Silver Company uses one raw material, silver ore, for all of its products. It spends considerable time getting the silver from the ore before it starts the actual processing of the finished products, rings, lockets, etc. Traditionally, the company made one product at a time and charged the product with all costs of production, from ore to final inspection. However, in recent months, the cost accounting reports have been somewhat disturbing to management. It seems that some of the finished products are costing more than they should, even to the point of approaching their retail value. It has been noted by the accounting manager that this problem began when the company started buying ore from different parts of the world, some of which require difficult extraction methods.
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Test Bank Cost Accounting 14E by Horngren  8 chapter

Test Bank Cost Accounting 14E by Horngren 8 chapter

30) McKenna Company manufactured 1,000 units during April with a total overhead budget of $12,400. However, while manufacturing the 1,000 units the microcomputer that contained the month's cost information broke down. With the computer out of commission, the accountant has been unable to complete the variance analysis report. The information missing from the report is lettered in the following set of data:

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Addthis ch01

Addthis ch01

Chapter 1-3 Financial Accounting and Accounting Financial Accounting and Accounting Standards Standards Financial Accounting and Accounting Financial Accounting and Accounting [r]

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Test Bank Cost Accounting 6e by Raiborn and Kinney  2 chapter

Test Bank Cost Accounting 6e by Raiborn and Kinney 2 chapter

a. Work in Process Inventory and a credit to Finished Goods Inventory. b. Finished Goods Inventory and a credit to Cost of Goods Sold. c. Cost of Goods Sold and a credit to Finished Goods Inventory. d. Finished Goods Inventory and a credit to Work in Process Inventory.

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Test Bank Cost Accounting 6e by Raiborn and Kinney  6 chapter

Test Bank Cost Accounting 6e by Raiborn and Kinney 6 chapter

The assignment of costs in a process costing system first involves determining total production costs. These costs are then assigned to units completed and transferred out during the period and to the units in Work in Process Inventory at the end of the period. To assign costs, the cost per equivalent unit must be established using either the FIFO or weighted average method. The cost per EUP is then multiplied by the number of equivalent units in the component being costed. Transferred-out costs using the weighted average method are computed as the number of units transferred times the total price per equivalent unit. When using FIFO, transferred-out units are computed as follows: the costs in beginning WIP are added to the current period costs to complete the units which sums to the total cost of beginning WIP; the units started and completed are priced at current period costs; the total of the costs of beginning inventory and units started and completed are then transferred out.
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Test Bank Cost Accounting 14E by Horngren  11 chapter

Test Bank Cost Accounting 14E by Horngren 11 chapter

18) Pat, a Pizzeria manager, replaced the convection oven just six months ago. Today, Turbo Ovens Manufacturing announced the availability of a new convection oven that cooks more quickly with lower operating expenses. Pat is considering the purchase of this faster, lower-operating cost convection oven to replace the existing one they recently purchased. Selected information about the two ovens is given below:

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Cost Accounting, Chapter 2 11ch02

Cost Accounting, Chapter 2 11ch02

Relevant Range Example Relevant Range Example Assume that fixed leasing costs are $94,500 for a year and that they remain the same for a certain volume range 1,000 to 5,000 bicycles...[r]

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Cost Accounting, Chapter 12 11ch12

Cost Accounting, Chapter 12 11ch12

Time Horizon of Pricing Decisions Time Horizon of Pricing Decisions Short-run decisions have a time horizon of less than a year:  pricing a one-time-only special order  adjustin[r]

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Cost Accounting, Chapter 3 11ch03

Cost Accounting, Chapter 3 11ch03

Cost-Volume-Profit Assumptions and Terminology Cost-Volume-Profit Assumptions and Terminology Operating income = Total revenues from operations – Cost of goods sold and operating cos[r]

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Cost Accounting, Chapter 4 11ch04

Cost Accounting, Chapter 4 11ch04

Variations of Normal Costing Variations of Normal Costing Home Health budget includes the following: Total direct labor costs: $400,000 Total indirect costs: $96,000... Variations of [r]

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Cost Accounting, Chapter 5 11ch05

Cost Accounting, Chapter 5 11ch05

ABC and Department Indirect-Cost Rates ABC and Department Indirect-Cost Rates Many companies have evolved their costing system from using a single cost pool to using separate indirect-[r]

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Cost Accounting, Chapter 6 11ch06

Cost Accounting, Chapter 6 11ch06

Ending Inventory Budget Ending Inventory Budget Cost per finished unit: Materials $ 4 Labor 21 Variable manufacturing overhead 24 Fixed manufacturing overhead 5* Total $54... Ending[r]

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Cost Accounting, Chapter 7 11ch07

Cost Accounting, Chapter 7 11ch07

Steps in Developing Flexible Budgets Steps in Developing Flexible Budgets Step 1: Determine budgeted selling price, variable cost per unit, and budgeted fixed cost... Steps in Devel[r]

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Cost Accounting, Chapter 8 11ch08

Cost Accounting, Chapter 8 11ch08

Integrated Analysis Integrated Analysis Actual manufacturing overhead incurred: Variable manufacturing overhead $244,775 Fixed manufacturing overhead 300,000 Total $544,775 Overhead [r]

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