COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Textbook Question
Chapter 1, Problem 1.22E
Planning and control decisions. Gregor Company makes and sells brooms and mops. It takes the following actions, not necessarily in the order given. For each action (a–e), state whether it is a planning decision or a control decision.
- a. Gregor asks its advertising team to develop fresh advertisements to market its newest product.
- b. Gregor calculates customer satisfaction scores after introducing its newest product.
- c. Gregor compares costs it actually incurred with costs it expected to incur for the production of the new product.
- d. Gregor’s design team proposes a new product to compete directly with the Swiffer.
- e. Gregor estimates the costs it will incur to distribute 30,000 units of the new product in the first quarter of next fiscal year.
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Students have asked these similar questions
Value chain classifications Match each of the following cost items with the value
chain business function where you would expect the cost to be incurred:
Cost Item
Answer
Business Function
a. Research and development
b. Design
c. Production
d. Marketing
e. Distribution
t Customer service
1. Labor time to repair products under warranty
2. TV commercial spots
3. Labor costs of filling customer orders
4. Testing of competitor's product
5. Direct manufacturing labor costs
6. Development of order tracking system for
the Internet
7. Printing cost of new product brochures
8. Hours spent designing childproof bottles
9. Training costs for representatives to staff
the customer call center
10. Installation of robotics equipment in
manufacturing plant
Assume that ABC Company planned to conduct the market survey to know the opinions of the customers on the price they wants to pay based on the functionality and quality of the products of the company. After knowing the price they took some control measures to achieve the desired profit. Being the accounting specialization student, explain the costing method followed by the ABC Company to get required profit.
Directions: For each situation, select one option you think will help increase profit. Put the letter of your
choice in the blank. Below each answer, write your rationale. When you have finished, ask
your instructor for a copy of the answer guide to verify your responses.
A. Avoid extra payroll expenses.
B. Get the best rates on advertising.
C. Change the product you provide.
D. Use resources wisely.
E. Beat the competition.
F. Get the best rates on supplier purchases.
G. Eliminate some free services.
H. Increase worker e
iciency.
_1. A shop that sells fine glassware offers gift wrapping at no extra cost.
Rationale:
2. Two stores sell the same video game at the same price.
Rationale:
3. There are 12 places to buy the yarn needed for a knitting factory.
Rationale:
4. Employees at a printing company do not have a system for completing their tasks quickly
and accurately.
Rationale:
5. At a sign-making company, the extra metal is discarded.
Rationale:
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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