You are employed by Maddie's Corp. an Accounting Firm based in Houston . The firm has recently been asked by a client, a medium-sized manufacturing company in California to provide advice and recommendations to improve the company's existing costing system. The CEO of the manufacturing company is keen to implement standard costing. Requirement: Draft a report for your client that: a. b. Outlines the purposes of standard costing Explains the operating mechanisms of the standard costing system I

You are employed by Maddie's Corp. an Accounting Firm based in Houston . The firm has recently been asked by a client, a medium-sized manufacturing company in California to provide advice and recommendations to improve the company's existing costing system. The CEO of the manufacturing company is keen to implement standard costing. Requirement: Draft a report for your client that: a. b. Outlines the purposes of standard costing Explains the operating mechanisms of the standard costing system I

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mel Gibbeson has recently graduated from a business school and has joined the family business as anaccountant. At the first management meeting with production, marketing and sales, a great deal oftime was spent discussing the unit cost of products.Required: What kinds of decisions can managers make using the unit cost information?( explain briefly your answer) (use your own words to avoid plagirism)
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,200 + $0.17 per machine-hour $38,700 +$1.50 per machine-hour $0.70 per machine-hour $94,300 +$1.10 per machine-hour $68,100 Actual Cost in March $ 21,570 $ 64,000 $ 14,500 $ 118,300 $ 69,800 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company originally planned to work 21,000 machine-hours during March. Required: 1. Calculate…
Determine whether each of the following companies is best suited for a job order cost system or a process costing system, or both. Explain why a. Delillo Construction Co. b. Dell Computer Co. (the big computer manufacturer in Texas) c. BP Gasoline Refinery d. Buzzeo & Co. CPAs (an accounting firm)
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,800 +$0.17 per machine-hour $38,500 +$1.50 per machine-hour $0.40 per machine-hour $94, 300 +$1.20 per machine-hour $67,800 Actual Cost in March $ 22,170 $ 63,800 $ 8,200 $ 120,400 $ 69,500 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company originally planned to work 21,000 machine-hours during March. Required: 1. Calculate…
PICO Ltd is a manufacturer of picnic tables of varying sizes. It is considering switching to the ABC system. As its management accountant, identify two (2) potential activity-based costing pools for PICO Ltd and their appropriate cost drivers?
Garrell Corporation is conducting a time-driven activity-based costing study in its Customer Support Department. The company has provided the following data to aid in that study: Time-driven activity rate (cost per unit of activity) Activity cost pool: Receiving Calls Resolving Issues Settling Disputes Cost Object Data: Number of calls received Number of issues resolved Number of disputes settled Customer P 31 17 1 $5.46 $8.58 $13.26 Customer Q 21 10 Required: Using time-driven activity-based costing, determine the total Customer Support Department cost assigned to cach customer.
Metroid Electric manufactures power distribution equipment for commercial customers, such as hospitals and manufacturers. Activity-based costing was used to determine customer profitability. Customer service activities were assigned to individual customers, using the following assumed customer service activities, activity base, and activity rate: Customer Service Activity Activity Base Activity Rate Bid preparation Number of bid requests $420 per request Shipment Number of shipments $90 per shipment Support standard items Number of standard items ordered $30 per std. item Support nonstandard items Number of nonstandard items ordered $180 per nonstd. item Assume that the company had the following gross profit information for three representative customers: Customer 1 Customer 2 Customer 3 Revenues $130,000 $210,000 $180,000 Cost of goods sold (81,900) (113,400) (90,000) Gross profit $48,100 $96,600 $90,000 Gross profit…
Purposes of cost allocation. Mary Martin recently started a job as an administrative assistant in the cost accounting department of Needham Manufacturing. New to the area of cost accounting, Mary is puzzled by the fact that one of Needham’s manufactured products, SR670, has a different cost depending on who asks for it. When the marketing department requested the cost of SR670 in order to determine pricing for the new catalog, Mary was told to report one amount, but when a request came in the very next day from the nancialreporting department for the cost of SR670, she was told to report a very different cost. Mary runs a report using Needham’s cost accounting system, which produces the following cost elements for one unit of SR670:
How does activity-based costing differ from traditional costing systems? Can you please create a brief outline by identifying 1 or 2 examples of a restaurant using an ABC system at a customer level, group level, service level, and facility level? PLEASE BE ORIGINAL IN YOUR ANSWER.
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March: Actual Cost in March $20,680 $ 64,500 $ 9,400 Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,800 + $0.13 per machine-hour $38,700 + $2.00 per machine-hour $0.60 per machine-hour $94,300+ $1.40 per machine-hour $67,500 $ 117,600 $ 69,200 During March, the company worked 14,000 machine-hours and produced 8,000 units. The company originally planned to work 16,000 machine-hours during March. Required: 1. Calculate…
Alter's Home Center (AHC) sells renovation and remodeling products to both contractors and individual home owners. One of the services AHC offers is delivery of the purchased products to the customer's work site. Because not all customers take advantage of the delivery service option, ACH adds 10 percent to the cost of the products purchased to cover the delivery cost. A business intern spent the summer at ACH. The intern's assignment was to analyze the delivery service and recommend a better way to charge customers for using it. The intern, who had studied activity-based costing, identified the following activities and the data related to them: Activity Picking order Delivering order Handling complaints Total delivery cost Total order value (before delivery charge) Number of orders Cost Driver Number of items Number of orders Number of complaints The intern selected two customers, who were frequent customers, to use as an illustration of the system: Wagner Remodeling and Burlington…
What are the major differences between job-order costing and process costing systems? Give an example of a well-known company that might use job costing, and an example of a well-known company that might use process costing. Explain why you have chosen the companies that you did, and do not choose companies upon which your classmates have already commented. Participate in follow-up discussion by commenting on your classmates’ choices of companies.