15th Edition

ISBN: 9780078025631

Author: Ray H Garrison, Eric Noreen, Peter C. Brewer Professor

Publisher: McGraw-Hill Education

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Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

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Textbook Question

Chapter 7, Problem 3AE

The Excel worksheet form that appears below is to be used to recreate the Renew Problem pertaining to Ferris Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form.

You should proceed to the requirements below only after completing your worksheet.

Required:

3. Using the data you entered in part (2), change the percentage of selling and administrative overhead attributable to processing orders from 45% to 30% and the percentage attributable to supporting customers from 25% to 40%. That portion of the worksheet should look like this:

	Assembling	Processing	Supporting	Other
	Units	Orders	Customers
Manufacturing overhead	50%	35%	5%	10%
Selling and administrative overhead....	10%	30%	40%	20%
Total activity	1,000	250	100
	units	orders	customers

Relative to the results from part (2), what has happened to the customer margin under activity-based costing? Why?

Relative to the results from part (2), what has happened to the product margin under the traditional cost system? Why?

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Chapter 7, Problem 2AE

Chapter 7, Problem 1F15

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Jorgansen Lighting, Incorporated, manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports to shareholders, creditors, and the government. The company has provided the following data: Inventories: Beginning (units) Ending (units) Variable costing operating income Year 1 Year 2 Year 3 310 260 260 290 290 350 $ 1,091,400 $ 1,043,400 $ 1,007,400 The company's fixed manufacturing overhead per unit was constant at $670 for all three years. Required: 1. Determine each year's absorption costing operating income. Note: Enter any losses or deductions as a negative value. Reconciliation of Variable Costing and Absorption Costing Operating Incomes Year 1 Year 2 Year 3 Variable costing operating income Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing operating income

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Chapter 7 Solutions

Managerial Accounting

Ch. 7.A - EXERCISE 7A-1 Preparing an Action Analysis Report...Ch. 7.A - Prob. 2E Ch. 7.A - Prob. 3E Ch. 7.A - Prob. 4E Ch. 7.A - Prob. 5E Ch. 7 - Prob. 1Q Ch. 7 - Prob. 2Q Ch. 7 - Prob. 3Q Ch. 7 - What are unit-level, batch-level, product-level,...Ch. 7 - What types of costs should not be assigned to...

Ch. 7 - What are the two stages off allocation in...Ch. 7 - Why is the first stage of the allocation process...Ch. 7 - When activity-based costing is used, why do...Ch. 7 - Prob. 9Q Ch. 7 - Why is the form of activity-based costing...Ch. 7 - The Excel worksheet form that appears below is to...Ch. 7 - Prob. 2AE Ch. 7 - The Excel worksheet form that appears below is to...Ch. 7 - Prob. 1F15 Ch. 7 - Prob. 2F15 Ch. 7 - Prob. 3F15 Ch. 7 - Prob. 4F15 Ch. 7 - Prob. 5F15 Ch. 7 - Prob. 6F15 Ch. 7 - Prob. 7F15 Ch. 7 - Prob. 8F15 Ch. 7 - Prob. 9F15 Ch. 7 - Prob. 10F15 Ch. 7 - Prob. 11F15 Ch. 7 - Prob. 12F15 Ch. 7 - Prob. 13F15 Ch. 7 - Prob. 14F15 Ch. 7 - Prob. 15F15 Ch. 7 - Prob. 1E Ch. 7 - Prob. 2E Ch. 7 - Prob. 3E Ch. 7 - Prob. 4E Ch. 7 - Prob. 5E Ch. 7 - Prob. 6E Ch. 7 - EXERCISE 7-7 First-Stage Allocations LO7-2 The...Ch. 7 - Prob. 8E Ch. 7 - Prob. 9E Ch. 7 - Prob. 10E Ch. 7 - Prob. 11E Ch. 7 - Prob. 12E Ch. 7 - EXERCISE 7-13 Computing ABC Product Costs LO7-3,...Ch. 7 - Prob. 14E Ch. 7 - Prob. 15E Ch. 7 - Prob. 16P Ch. 7 - Prob. 17P Ch. 7 - Prob. 18P Ch. 7 - Prob. 19P Ch. 7 - PROBLEM 7-20 Evaluating the Profitability of...

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