COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Textbook Question
Chapter 1, Problem 1.17E
Value chain and classification of costs, computer company. Dell Computer incurs the following costs:
- a. Utility costs for the plant assembling the Latitude computer line of products
- b. Distribution costs for shipping the Latitude line of products to a retail chain
- c. Payment to David Newbury Designs for design of the XPS 2-in-1 laptop
- d. Salary of computer scientist working on the next generation of servers
- e. Cost of Dell employees’ visit to a major customer to demonstrate Dell’s ability to interconnect with other computers
- f. Purchase of competitors’ products for testing against potential Dell products
- g. Payment to business magazine for running Dell advertisements
- h. Cost of FedEx courier service to deliver drugs to hospitals
Classify each of the cost items (a–h) as one of the business functions of the value chain shown in Figure 1-2 (page 5).
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Value chain and classification of costs, computer company. Dell Computer incurs the following costs:a. Utility costs for the plant assembling the Latitude computer line of productsb. Distribution costs for shipping the Latitude line of products to a retail chainc. Payment to David Newbury Designs for design of the XPS 2-in-1 laptopd. Salary of computer scientist working on the next generation of serverse. Cost of Dell employees’ visit to a major customer to demonstrate Dell’s ability to interconnect withother computersf. Purchase of competitors’ products for testing against potential Dell productsg. Payment to business magazine for running Dell advertisementsh. Cost of cartridges purchased from outside supplier to be used with Dell printers
Classify Costs
Cromwell Furniture Company manufactures sofas for distribution to several major retail chains. The following costs are incurred in the production and sale of sofas:
Required:
Classify the costs as either fixed costs, variable costs, or mixed cost.
a. Fabric for sofa coverings
b. Wood for framing the sofas
c. Legal fees paid to attorneys in defense of the company in a patent infringement suit, $25,000 plus $160 per hour
d. Salary of production supervisor
e. Cartons used to ship sofas
f. Rent on experimental equipment, $50 for every sofa produced
g. Straight-line depreciation on factory equipment
h. Rental costs of warehouse, $30,000 per month
i. Property taxes on property, plant, and equipment
j. Insurance premiums on property, plant, and equipment, $25,000 per year plus $25 per $25,000 of insured value over $16,000,000
k. Springs
l. Consulting fee of $120,000 paid to efficiency specialists
m. Electricity…
Muscat Pharmaceutical Manufacturing Company (Muscat Pharma) is a company devoted to manufacturing and exporting of veterinary medicine
and veterinary products. Mr. Mazin is the accounts manager of the company, who spent his valuable time and effort in providing half-yearly
accounting reports to the suppliers of the company. This is an example of
O a. Monitoring Cost
O b. Residual Cost
O c Bonding Cost
O d. Indirect Agency Cost
Chapter 1 Solutions
COST ACCOUNTING
Ch. 1 - How does management accounting differ from...Ch. 1 - Management accounting should not fit the...Ch. 1 - How can a management accountant help formulate...Ch. 1 - Describe the business functions in the value...Ch. 1 - Explain the term supply chain and its importance...Ch. 1 - Management accounting deals only with costs. Do...Ch. 1 - How can management accountants help improve...Ch. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - What three guidelines help management accountants...
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Prob. 1.15QCh. 1 - Which of the following is not a primary function...Ch. 1 - Value chain and classification of costs, computer...Ch. 1 - Prob. 1.18ECh. 1 - Value chain and classification of costs, fast-food...Ch. 1 - Key success factors. Dominion Consulting has...Ch. 1 - Key success factors. Vargas Construction Company...Ch. 1 - Planning and control decisions. Gregor Company...Ch. 1 - Planning and control decisions. Gavin Adams is the...Ch. 1 - Prob. 1.24ECh. 1 - Five-step decision-making process, service firm....Ch. 1 - Professional ethics and reporting division...Ch. 1 - Professional ethics and reporting division...Ch. 1 - Planning and control decisions, Internet company....Ch. 1 - Prob. 1.29PCh. 1 - Prob. 1.30PCh. 1 - Management accounting guidelines. For each of the...Ch. 1 - Prob. 1.32PCh. 1 - Prob. 1.33PCh. 1 - Budgeting, ethics, pharmaceutical company. Chris...Ch. 1 - Professional ethics and end-of-year actions. Linda...Ch. 1 - Professional ethics and end-of-year actions....Ch. 1 - Ethical challenges, global company environmental...
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