EBK CORNERSTONES OF COST MANAGEMENT
3rd Edition
ISBN: 8220100474972
Author: MOWEN
Publisher: CENGAGE L
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Textbook Question
Chapter 2, Problem 30P
The following items are associated with a traditional cost
- a. Usage of direct materials
- b. Direct materials cost assigned to products using direct tracing
- c. Direct labor cost incurrence
- d. Direct labor cost assigned to products using direct tracing
- e. Setup cost incurrence
- f. Setup cost assigned using number of setups as the activity driver
- g. Setup cost assigned using direct labor hours as the activity driver
- h. Cost accounting personnel
- i. Submission of a bid, using product cost plus 25 percent
- j. Purchasing cost incurrence
- k. Purchasing cost assigned to products using direct labor hours as the activity driver
- l. Purchasing cost assigned to products using number of orders as the activity driver
- m. Materials handling cost incurrence
- n. Materials handling cost assigned using the number of moves as the activity driver
- o. Materials handling cost assigned using direct labor hours as the activity driver
- p. Computer
- q. Costing out of products
- r. Decision to continue making a part rather than buying it
- s. Printer
- t. Customer service cost incurred
- u. Customer service cost assigned to products using number of complaints as the activity driver
- v. Report detailing individual product costs
- w. Commission cost
- x. Commission cost assigned to products using units sold as the activity driver
- y. Plant
depreciation - z. Plant depreciation assigned to products using direct labor hours
Required:
- 1. For each cost system, classify the relevant items into one of the following categories:
- a. Interrelated parts
- b. Processes
- c. Objectives
- d. Inputs
- e. Outputs
- f. User actions
- 2. Explain the choices that differ between the two systems. Which system will provide the best support for the user actions? Explain.
- 3. Draw an operational model that illustrates each cost accounting system—with the items that belong to the system used as examples for each component of the model.
- 4. Based on the operational models, comment on the relative costs and benefits of the two systems. Which system should be chosen?
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Chapter 2 Solutions
EBK CORNERSTONES OF COST MANAGEMENT
Ch. 2 - What is an accounting information system?Ch. 2 - What is the difference between a financial...Ch. 2 - What are the objectives of a cost management...Ch. 2 - Define and explain the two major subsystems of the...Ch. 2 - What is a cost object? Give some examples.Ch. 2 - Prob. 6DQCh. 2 - What is a direct cost? An indirect cost?Ch. 2 - Prob. 8DQCh. 2 - What is allocation?Ch. 2 - Explain how driver tracing works.
Ch. 2 - What is a tangible product?Ch. 2 - Prob. 12DQCh. 2 - Give three examples of product cost definitions....Ch. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Pietro Frozen Foods, Inc., produces frozen pizzas....Ch. 2 - For next year, Pietro predicts that 50,000 units...Ch. 2 - Pietro expects to produce 50,000 units and sell...Ch. 2 - Refer to Cornerstone Exercises 2.2 and 2.3. Next...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Prob. 9ECh. 2 - The following items are associated with a cost...Ch. 2 - Nizam Company produces speaker cabinets. Recently,...Ch. 2 - Three possible product cost definitions were...Ch. 2 - Wyandotte Company provided the following...Ch. 2 - For each of the following independent situations,...Ch. 2 - LeMans Company produces specialty papers at its...Ch. 2 - Kildeer Company makes easels for artists. During...Ch. 2 - Anglin Company, a manufacturing firm, has supplied...Ch. 2 - Lakeesha Barnett owns and operates a package...Ch. 2 - Millennium Pharmaceuticals, Inc. (MPI), designs...Ch. 2 - Jazon Manufacturing produces two different models...Ch. 2 - Ellerson Company provided the following...Ch. 2 - Prob. 22ECh. 2 - Prob. 23ECh. 2 - Prob. 24ECh. 2 - Prob. 25ECh. 2 - Prob. 26ECh. 2 - Selected information concerning the operations of...Ch. 2 - Brody Company makes industrial cleaning solvents....Ch. 2 - Wright Plastic Products is a small company that...Ch. 2 - The following items are associated with a...Ch. 2 - The actions listed next are associated with either...Ch. 2 - Spencer Company produced 200,000 cases of sports...Ch. 2 - Prob. 33PCh. 2 - Mason, Durant, and Westbrook (MDW) is a tax...Ch. 2 - Orman Company produces neon-colored covers for...Ch. 2 - High drug costs are often in the news. Consumer...
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