Managerial Accounting: Creating Value in a Dynamic Business Environment
11th Edition
ISBN: 9781259569562
Author: Ronald W Hilton Proffesor Prof, David Platt
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 35P
For each of the cost items described below, choose the graph (see below) that best represents it.
- 1. The salary costs of the shift supervisors at a truck depot. Each shift is eight hours. The depot operates with one, two, or three shifts at various times of the year.
- 2. The salaries of the security personnel at a factory. The security guards are on duty around the clock.
- 3. The wages of table-service personnel in a restaurant. The employees are part-time workers, who can be called upon for as little as two hours at a time.
- 4. The cost of electricity during peak-demand periods is based on the following schedule.
The price schedule is designed to discourage overuse of electricity during periods of peak demand.
- 5. The cost of sheet metal used to manufacture automobiles.
- 6. The cost of utilities at a university. For low student enrollments, utility costs increase with enrollment, but at a decreasing rate. For large student enrollments, utility costs increase at an increasing rate.
- 7. The cost of online back-up storage at a rate of $2.50 per gigabyte, up to 50 gigabytes, beyond which storage is unlimited, at no additional cost.
- 8. The cost of the nursing staff in a hospital. The staff always has a minimum of nine nurses on duty. Additional nurses are used depending on the number of patients in the hospital. The hospital administrator estimates that this additional nursing staff costs approximately $195 per patient per day.
- 9. The cost of chartering a private airplane. The cost is $390 per hour for the first three hours of a flight. Then the charge drops to $280 per hour.
- 10. Under a licensing agreement with a South American import/export company, your firm has begun shipping machine tools to several countries. The terms of the agreement call for an annual licensing fee of $100,000 to be paid to the South American import company if total exports are under $5,000,000. For sales in excess of $5,000,000, an additional licensing fee of 10 percent of sales is due.
- 11. Your winery exports wine to several Pacific Rim countries. In one nation, you must pay a tariff for every case of wine brought into the country. The tariff schedule is the following:
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What follows are a number of resources that are used by a manufacturer of futons. Assume thatthe output measure or cost driver is the number of futons produced. All direct labor is paid on an hourly basis, and hours worked can be easily changed by management. All other factoryworkers are salaried.a. Power to operate a drill (to drill holes in the wooden frames of the futons)b. Cloth to cover the futon mattressc. Salary of the factory receptionistd. Cost of food and decorations for the annual Fourth of July party for all factory employeese. Fuel for a forklift used to move materials in a factoryf. Depreciation on the factoryg. Depreciation on a forklift used to move partially completed goodsh. Wages paid to workers who assemble the futon framei. Wages paid to workers who maintain the factory equipmentj. Cloth rags used to wipe the excess stain off the wooden framesRequired:Classify the resource costs as variable or fixed.
i). How cost accounting is useful where financial accounting could not be answered. Give any
example to support your answer.
ii) A furniture manufacturing firm with the designing beds and related item. Books of accounts
show different amounts of Material „FOH ,Work in process at different dates of time. Once the
material with amount 34,000 dollar is credit. How you interpret this with other accounts. What is
the stage of company in job order costing. Give some examples of job order costing.
iii) How cost accounting is useful for external user as Government ,and customer etc,
Support your answer by an example.
iv) The optimal quantity order to reduce the overall cost is usually stated as EOQ. why it is
related to one time order? How carrying and ordering cost is related to each other?
v) Identify the flow of cost in manufacturing firm step by step and how it is related to prime
cost and conversion cost?
Darnell Poston, owner of Poston Manufacturing, Inc., wants to determine the cost behavior oflabor and overhead. Darnell pays his workers a salary; during busy times, everyone works to getthe orders out. Temps (temporary workers hired through an agency) may be hired to pack and
prepare completed orders for shipment. During slower times, Darnell catches up on bookkeep-ing and administrative tasks while the salaried workers do preventive maintenance, clean the
lines and building, etc. Temps are not hired during slow times. Darnell found that workers’ sal-aries, temp agency payments, rentals, utilities, and plant and equipment depreciation are the
largest dollar accounts. He believes that workers’ salaries and plant and equipment depreciationare fixed, temp agency payments are associated with the number of orders (since temp workers are used to pack and prepare completed orders for shipment), and electricity is associated with the number of machine hours. When the number of different parts…
Chapter 6 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 6 - Describe the importance of cost behavior patterns...Ch. 6 - Define the following terms, and explain the...Ch. 6 - Suggest an appropriate activity base (or cost...Ch. 6 - Draw a simple graph of each of the following types...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Explain why a manufacturers cost of supervising...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Prob. 8RQCh. 6 - Indicate which of the following descriptions is...Ch. 6 - Prob. 10RQ
Ch. 6 - What is meant by a learning curve? Explain its...Ch. 6 - Suggest an appropriate independent variable to use...Ch. 6 - What is an outlier? List some possible causes of...Ch. 6 - Explain the cost estimation problem caused by...Ch. 6 - Describe the visual-fit method of cost estimation....Ch. 6 - What is the chief drawback of the high-low method...Ch. 6 - Explain the meaning of the term least squares in...Ch. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - List several possible cost drivers that could be...Ch. 6 - Prob. 21RQCh. 6 - Prob. 22ECh. 6 - The behavior of the annual maintenance and repair...Ch. 6 - WMEJ is an independent television station run by a...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - The Iowa City Veterinary Laboratory performs a...Ch. 6 - Chillicothe Meat Company produces one of the best...Ch. 6 - Rio Bus Tours has incurred the following bus...Ch. 6 - Prob. 31ECh. 6 - Prob. 32ECh. 6 - Prob. 33ECh. 6 - Gator Beach Marts, a chain of convenience grocery...Ch. 6 - For each of the cost items described below, choose...Ch. 6 - The following selected data were taken from the...Ch. 6 - Antioch Extraction, which mines ore in Montana,...Ch. 6 - Nations Capital Fitness, Inc. operates a chain of...Ch. 6 - The Allegheny School of Music has hired you as a...Ch. 6 - Prob. 40PCh. 6 - (Note: Instructors who wish to cover all three...Ch. 6 - Refer to the original data in the preceding...Ch. 6 - Shortly after being hired as an analyst with...Ch. 6 - The controller of Chittenango Chain Company...Ch. 6 - Dana Rand owns a catering company that prepares...Ch. 6 - Madison County Airport handles several daily...Ch. 6 - Earth and Artistry, Inc. provides commercial...Ch. 6 - Prob. 48CCh. 6 - Refer to the data and accompanying information in...
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