Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 1, Problem 1.27E
Professional ethics and reporting division performance. Hannah Gilpin is the controller of Blakemore Auto Glass, a division of Eastern Glass and Window. Blakemore replaces and installs windshields. Her division has been under pressure to improve its divisional operating income Currently divisions of Eastern Glass are allocated corporate
- 1. Describe Gilpin’s ethical dilemma.
Required
- 2. What should Gilpin do if Myers gives her a direct order to reclassify the costs?
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[The following information applies to the questions displayed below.]
Arctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department
has its own manager. Each responsibility performance report includes only those costs that the department manager can
control: direct materials, direct labor, supplies used, and utilities.
Budget
For Year Ended December 31
Direct materials
Direct labor
Department manager salaries
Supplies used
Utilities
Rent
Totals
Controllable Costs
Direct materials
Direct labor
Supplies used
Utilities
Totals
Responsibility Accounting Performance Report-
Manager, Snowmobile Department
For Year Ended December 31
$
Snowmobile
$ 21,520
12,400
6,300
5,500
560
7,700
$ 53,980
Budgeted
Prepare a responsibility accounting performance report for the snowmobile department. (Under budget amounts should be indicated
by a minus sign.)
0 $
ATV
$ 29,500
22,500
7,200
Actual
1,100
740
8,300
$ 69,340
0 $
Actual
Snowmobile
$ 21,420
12,860…
Advanced Coding is a software development company that sells specialized practice management software to large professional services firms. Management has decided to analyze
certain costs related to sales to determine per-customer profitability and to plan for future sales efforts. These costs include sales commissions and overhead related to the corporate jet
expenses. They have determined that $200,000 of overhead costs related to the corporate jet should be assigned to individual customers.
Sales representatives are paid a commission of 5% on Gross Profit (sales less costs to develop the software). In relation to overhead costs, the sales staff used the corporate jet at a cost of
$1,000 per hour for trips to customers as follows:
Customer #1:
50 hours
Customer #2:
43 hours
Customer #3:
15 hours
Customer #4:
8 hours
Customer #5:
10 hours
Gross profit per customer is as follows:
Customer #1:
$340,000
Customer #2:
$240,000
Customer #3:
$60,000
Customer #4:
$80,000
Customer #5:
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Required information
[The following information applies to the questions displayed below.]
Arctica manufactures snowmobiles and ATVs. These products are made in different departments, and each
department has its own manager. Each responsibility performance report includes only those costs that the
department manager can control: direct materials, direct labor, supplies used, and utilities.
Budget
For Year Ended December 31
Direct materials
Direct labor
Department manager salaries
Supplies used
Utilities
Rent
Totals
Responsibility Accounting Performance Report
Manager, ATV Department
For Year Ended December 31
Controllable Costs
Snowmobile
$ 19,990
10,900
4,800
3,850
410
6,200
$ 46,150
Budgeted
$
Prepare a responsibility accounting performance report for the ATV department. (Under budget amounts should be indicated
minus sign.)
19,990 $
10,200 x
3,850 x
6,500 X
Actual
19,920
11,210
Direct materials
Direct labor
Supplies used
Utilities
Totals
$
40,540
$
60
*Red text indicates no response…
Chapter 1 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
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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- Best Practices, Inc., is a management consulting firm. Its Corporate Division advises private firms on the adoption and use of cost management systems. Government Division consults with state and local governments. Government Division has a client that is interested in implementing an activity-based costing system in its public works department. The division’s head approached the head of Corporate Division about using one of its associates. Corporate Division charges clients $645 per hour for associate services, the same rate other consulting companies charge. The Government Division head complained that it could hire its own associate at an estimated variable cost of $245 per hour, which is what Corporate pays its associates. Suppose that Government Division will charge the client interested in implementing an activity-based costing system by the hour based on cost plus a fixed fee, where the cost is primarily the consultant’s hourly pay. Assume also that Government Division cannot…arrow_forwardArctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report includes only those costs that the department manager can control: direct materials, direct labor, supplies used, and utilities. Budget Actual For Year Ended December 31 Direct materials Direct labor Department manager salaries Snowmobile $ 19,610 10,500 ATV $ 27,600 Snowmobile $ 19,520 ATV $ 28,930 4,400 20,600 5,300 10,770 21,350 4,500 Supplies used Utilities Rent 3,410 370 5,800 910 550 6,400 3,270 340 5,400 4,500 940 510 6,400 Totals $ 44,090 $ 61,360 $ 43,800 $ 62,630 Exercise 24-1 (Algo) Responsibility accounting performance report LO P1 Prepare a responsibility accounting performance report for the snowmobile department. Note: Under budget amounts should be indicated by a minus sign. Responsibility Accounting Performance Report Controllable Costs Manager, Snowmobile Department For Year Ended December 31…arrow_forwardArctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report only includes those costs that the particular department manager can control: raw materials, wages, supplies used, and equipment depreciation. Raw materials Employee wages Dept. manager salary Supplies used Depreciation-Equip. Utilities Rent Totals Snowmobile $21, 190 Controllable Costs: Raw materials Employee wages Supplies used Depreciation-Equipment Totals 12,100 6,000 5,170 7,700 530 7,400 710 8,000 $60,090 $82,280 Budget ATV $29, 200 22,200 6,900 1,070 14,200 Prepare a responsibility accounting report for the ATV department. (Under budget amounts should be Indicated by a minus sign.) Responsibility Accounting Performance Report Dept. Manager, ATV Department Budgeted Amount Combined $ 50,390 34,300 12,900 6,240 21,900 1,240 15,400 $142,370 For the Year Actual Amount Actual ATV Combined $30,690 $ 51,810 12,530…arrow_forward
- Required information [The following information applies to the questions displayed below.] Arctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report includes only those costs that the department manager can control: direct materials, direct labor, supplies used, and utilities. For Year Ended December 31 Direct materials Direct labor Department manager salaries Supplies used Utilities Rent Totals Controllable Costs Direct materials Direct labor Supplies used Utilities Budgeted Snowmobile $ 19,500 10,400 Prepare a responsibility accounting performance report for the ATV department. Note: Under budget amounts should be indicated by a minus sign. Responsibility Accounting Performance Report Manager, ATV Department For Year Ended December 31 10,400 3,300 360 Budget 4,300 3,300 360 5,700 $ 43,560 $ Actual ATV 27,500 20,500 5,200 900 540 6,300 $ 60,940 19,420 $ 10,660 3,170 330arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardRequired information [The following information applies to the questions displayed below.] Arctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report includes only those costs that the department manager can control: direct materials, direct labor, supplies used, and utilities. Budget A For Year Ended December 31 Snowmobile ATV Direct materials Direct labor Department manager salaries Supplies used Utilities Rent Totals $ 20,700 11,600 $ 28,700 Snowmobile $ 20,620 21,700 11,980 5,500 6,400 4,620 1,020 480 6,900 660 7,500 $,600 4,370 450 6,500 $ 49,800 $ 65,980 $ 49,520 Prepare a responsibility accounting performance report for the snowmobile department. Note: Under budget amounts should be indicated by a minus sign. Responsibility Accounting Performance Report Manager, Snowmobile Department For Year Ended December 31 Totals Controllable Costs Budgeted Actual Over (Under)…arrow_forward
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- ! Required information [The following information applies to the questions displayed below.] Totals Arctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report includes only those costs that the department manager can control: direct materials, direct labor, supplies used, and utilities. Budget For Year Ended December 31 Direct materials Direct labor Department manager salaries Supplies used Utilities Rent Totals Snowmobile $ 19,880 10,800 4,700 3,740 400 6,100 $ 45,620 Prepare a responsibility accounting performance report for the ATV department. Note: Under budget amounts should be indicated by a minus sign. Responsibility Accounting Performance Report Manager, ATV Department For Year Ended December 31 Budgeted Controllable Costs ATV $ 27,900 20,900 5,600 940 580 6,700 $ 62,620 Actual Over (Under) Budget Actual Snowmobile $ 19,820 11,100 4,800 3,570 370 5,700 $ 45,360 ATV…arrow_forwardArctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report only includes those costs that the particular department manager can control: raw materials, wages, supplies used, and equipment depreciation. Raw materials Employee wages Dept. manager salary Supplies used Depreciation-Equip. Utilities Rent Totals Snowmobile $20,590 11,500 5,400 Controllable Costs Raw materials Employee wages Supplies used Depreciation Equipment Totals Budget ATV Combined Snowmobile $20,520 11,870 5,500 4,270 7,100 440 6,400 $56,100 $28,600 21,600 6,300 2,000 13,600 $ 49,190 33,100 11,700 6,510 20,700 1,120 14,200 4,510 7,108 470 650 6,800 7,400 $56,370 $80,150 $136,520 Budgeted Amount Prepare a responsibility accounting report for the snowmobile department. (Under budget amounts should be Indicated by a minus sign.) Responsibility Accounting Performance Report Dept. Manager, Snowmobile Department…arrow_forwardWithin a company is a (micro)economy that is monitored by the accounting procedures. In terms of the accounts, the various departments "produce" costs, some of which are internal and some of which are direct costs. This problem shows how an open Leontief model can be used to determine departmental costs. The sales department of an auto dealership charges 10% of its total monthly costs to the service department, and the service department charges 20% of its total monthly costs to the sales department. During a given month, the direct costs are $88,200 for sales and $29,400 for service. Find the total costs (in dollars) of each department. (Round your answers to the nearest whole number.) sales department $ service department $arrow_forward
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