Fundamentals of Cost Accounting
6th Edition
ISBN: 9781260708783
Author: LANEN, William
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 1, Problem 28E
Accounting Systems
Ford Motor Company manufactures cars and trucks. Managers at assembly plants must make many decisions, and for this they use cost accounting information.
Required
For each of the following managers, identify a decision that he or she might make for which cost accounting data would be useful:
- a. Plant manager
- b. Purchasing manager
- c. Quality supervisor
- d. Personnel manager
- e. Maintenance supervisor
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Students have asked these similar questions
Match each of the following cost items with the value chain business function where you would expect the cost to be incurred:
Cost Item
1. Purchase of raw materials
2. Advertising
3. Salary of research scientists
4. Delivery expenses
5. Reengineering of product assembly process
6. Replacement labor expense for warranty repairs
7. Manufacturing supplies
8. Sales salaries
9. Purchase of CAD (computer-aided design) software
10. Salary of website manager
Business Function
The following situations describe decision scenarios that could use managerial accounting information:1. The manager of High Times Restaurant wants to determine the price to charge for various lunch plates.2. By evaluating the cost of leftover materials, the plant manager of a precision tool facility wants to determine how effectively the plant is being run.3. The division controller of West Coast Supplies needs to determine the cost of products left in inventory.4. The manager of the Maintenance Department of a large manufacturing company wants to plan next year’s anticipated expenditures.For each situation, discuss how managerial accounting information could be used.
Concepts and Terminology
From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences:
Sentence
a. An example of factory overhead is
b. Direct materials costs combined with direct labor costs are called
c. Long-term plans are called
d. Advertising costs are usually viewed as
plans.
costs.
costs.
e. The management process by which management monitors operations by comparing actual and expected results is
f. The plant manager's salary would be considered
to the product.
g. The salaries of factory supervisors are normally considered a
cost.
Chapter 1 Solutions
Fundamentals of Cost Accounting
Ch. 1 - Explain why it is important to consider the...Ch. 1 - Explain the differences between financial...Ch. 1 - Place the letter of the appropriate accounting...Ch. 1 - Distinguish among the value chain, the supply...Ch. 1 - Who are the customers of cost accounting?Ch. 1 - How can cost accounting information together with...Ch. 1 - Prob. 7RQCh. 1 - Does the passage of Sarbanes-Oxley mean that codes...Ch. 1 - Prob. 9CADQCh. 1 - Prob. 10CADQ
Ch. 1 - Prob. 11CADQCh. 1 - Its not the job of accounting to determine...Ch. 1 - Prob. 13CADQCh. 1 - How would cost accounting information help...Ch. 1 - Airlines are well known for using complex pricing...Ch. 1 - Hostess Brands makes a variety of baked goods just...Ch. 1 - What potential conflicts might arise between...Ch. 1 - Refer to the Business Application discussion of...Ch. 1 - Prob. 19CADQCh. 1 - Why does a cost accountant need to be familiar...Ch. 1 - Will studying cost accounting increase the chances...Ch. 1 - Prob. 22CADQCh. 1 - Value Chain and Classification of Costs Apple...Ch. 1 - Pfizer Inc., a pharmaceutical firm, incurs many...Ch. 1 - Tesla, Inc., incurs many types of costs in its...Ch. 1 - Prob. 26ECh. 1 - Accounting Systems McDonalds is a major company in...Ch. 1 - Accounting Systems Ford Motor Company manufactures...Ch. 1 - Cost Data for Managerial Purposes As an analyst at...Ch. 1 - Prob. 30ECh. 1 - Prob. 31ECh. 1 - Refer to the information in Exercise 1-31. The...Ch. 1 - Refer to Exhibit 1.5, which shows budgeted versus...Ch. 1 - Trends in Cost Accounting Required For each cost...Ch. 1 - Prob. 35ECh. 1 - Prob. 36ECh. 1 - Refer to the information in Exercise 1-32. Jon...Ch. 1 - Prob. 38PCh. 1 - Cost Data for Managerial Purposes Imperial Devices...Ch. 1 - Cost Data for Managerial Purposes You have been...Ch. 1 - Prob. 41PCh. 1 - Cost Data for Managerial Purposes Campus Package...Ch. 1 - Cost Data for Managerial Purposes KC Services...Ch. 1 - Cost Data for Managerial Purposes B-You is a...Ch. 1 - Cost Data for Managerial Purposes Toms Tax...Ch. 1 - Gilman’s Café is a popular restaurant in a local...Ch. 1 - Prob. 47PCh. 1 - Prob. 48PCh. 1 - Refer to Exhibit 1.5, which shows budgeted versus...Ch. 1 - Cost Data for Managerial PurposesFinding Unknowns...Ch. 1 - Prob. 51PCh. 1 - Prob. 52PCh. 1 - Prob. 53ICCh. 1 - Miller Cereals is a small milling company that...Ch. 1 - Before Miller Cereals can introduce the new...Ch. 1 - The following story is true except that all names...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- In a team of two or three students, interview the manager/owner of a local business. In this interview, ask the manager/owner the following questions: A. Does the business collect and use cost information to make decisions? B. Does it have a specialist in cost estimation who works with this cost data? If not, who is responsible for the collection of cost information? Be as specific as possible. C. What type of cost information does the business collect and how is each type of information used? D. How important does the owner/manager believe cost information is to the success of the business? Then, write a report to the instructor summarizing the results of the interview. Content of the memo must include date of the interview, the name and title of the person interviewed, name and location of the business, type of business (service, merchandising, manufacturing) and brief description of the goods/services provided by the business, and responses to questions A-D.arrow_forwarddarrow_forwardBrown Brothers is debating the use of direct labour cost or direct labour hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the year ended December 31, 20x7. Estimated manufacturing overheads Actual manufacturing overhead costs Estimated direct labour cost Actual direct labour cost $359,600 $340,000 $449,500 $441,000 248,000 242,000 Estimated direct labour hours Actual direct labour hours Manufacturing overhead applied based on direct labour cost is? O a. $352,800 O b. $359,600 O c. $360,000 O d. $348,480arrow_forward
- Clipboard S Voice Sensitivity Editor systems are designed to provide information to decision makers in the organization with the information they need to accomplish this goal. Therefore, the designers of the cost accounting need to understand how value is created in the organization to design systems for their organiz d-None of these is true. Styles 2-Who are the consumers of cost accounting? a-The customers of cost accounting are managers, from plant managers to the CEO. b-The customers of cost accounting are the employees. c-The customers of cost accounting are consumer groups. d-None of these. 3-The four questions of the critical thinking framework are: 1) What are the relevant question decisions do I need to make)? 2) What are the data relevant to the analysis and where do I fi What are the appropriate tools for analyzing data?, and 4) How can I effectively and persuas communicate the results of my analysis?arrow_forwardDefine Job order costing system and provide one example of a business using this system. The subject is Managerial Accounting.arrow_forwardA plant manager who supervises workers manufacturing products, plans for production, and ensures product quality is what kind of manager? Group of answer choices a) Operations b) Top c) Human Resources d) Leadershiparrow_forward
- Ali's accounting work normally has more focus on future perspective, has be timely and involves preparing segment reports. Ali is most likely to be a: Select one: O a. A managerial accountant O b. A financial accountant O C. A human resource manager O d. A marketing manager O e. A cost accountant Manufacturing overhead: Select one: O a. includes all selling costs. b. includes indirect materials, indirect materials, indirect labor, and factory depreciation. O c.is a pool of direct production costs that must somehow be attached to each unit manufactured. O d. should not be assigned to individual jobs because it bears no obvious relationship to them. O e. is easily traced to jobs.arrow_forwardThe following situations describe decision scenarios that could use managerial accounting information: The manager of High Times Restaurant wishes to determine the price to charge for various lunch plates. By evaluating the cost of leftover materials, the plant manager of a precision tool facility wishes to determine how effectively the plant is being run. The division controller of West Coast Supplies needs to determine the cost of products left in inventory. The manager of the Maintenance Department of a large manufacturing company wishes to plan next year’s anticipated expenditures. For each situation, discuss how managerial accounting information could be used. b) What are the major differences between managerial accounting and financial accounting?arrow_forwardValue 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 plantarrow_forward
- A schedule of the cost of finished goods manufactured is a helpful tool in determining the per-unit cost of manufac-tured products. Explain several ways in which information about per-unit manufacturing costs is used by ( a ) manage-ment accountants and ( b ) financial accountants.arrow_forwardDescribe and illustrate a job order cost accounting systems for service businesses.arrow_forwardA manufacturer reports three activities: assembling components into products; product design; and sales order processing. Determine whether each of the following cost drivers relates to assembly, design, or order processing. Cost Driver 1. Direct labor hours to assemble components 2. Number of design changes 3. Number of components assembled 4. Number of design hours 5. Number of shipments made 6. Number of sales orders processed Activityarrow_forward
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