Bundle: Managerial Accounting, 14th + Cengagenowv2, 1 Term Printed Access Card
14th Edition
ISBN: 9781337499989
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 8, Problem 1TIF
Ethics in action
Dash Riprock is a cost analyst with Safe Insurance Company. Safe is applying standards to its claims payment operations. Claims payment is a repetitive operation that could be evaluated with standards. Dash used time and motion studies to identify an ideal standard of 36 claims processed per hour. The Claims Processing Department manager, Henry Tudor, has rejected this standard and has argued that the standard should be 30 claims processed per hour. Henry and Dash were unable to agree, so they decided to discuss this matter openly at a joint meeting with the Vice President of Operations, who would make a final decision. Prior to the meeting, Dash wrote the following memo to the Vice President:
To: Anne Boleyn, Vice President of Operations
From: Dash Riprock
Re: Standards in the Claims Processing Department
As you know, Henry and I are scheduled to meet with you to discuss our disagreement about the appropriate standards for the Claims Processing Department. I have conducted time and motion studies and have determined that the ideal standard is 36 claims processed per hour. Henry argues that 30 claims processed per hour would be more appropriate. I believe he is trying to “pad” the budget with some slack. I’m not sure what he is trying to get away with, but I believe a tight standard will drive efficiency up in his area. I hope you will agree when we meet with you next week.
Discuss the ethical and professional issues in this situation.
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Jessminder Hotels
The operations vice president of Jessminder Hotels has been interested in investigating the efficiency of the hotel's operations. She has been particularly concerned about the costs of handling routine check ins and would like to compare these costs at the hote'l various loocations. If the locations with the most efficient operations cam be identified, their methods can be studied and then replicated elsewhere. While the hotel maintains good records of wages and other costs, there has been no attempt to show how those costs are related to the various services. The operations VP has asked for an activity-based costing study of hotel operations. In particular, she would like to know the cost of check in, check out, and the costs of other customer interactions.
The San Francisco Hotel has submitted the following cost data for last year:
Totals
Front desk wages
200,000
Assistant manager salary
105,000
General manager salary
150,000
Total cost
455,000…
Classifying Costs of Quality
Paul Miller, controller of Meta Medical, has reviewed the costs of quality records for the
past years. Meta Medical provides calibration and maintenance services for
sophisticated medical equipment in the Midwest. Training, testing, and service calls are
major costs that seem to grow each year. Miller is trying to measure possible ways to
reducing the total costs of quality as part of a review of all processes and activities
within the firm. He assembled the following costs:
Parts warranty, including replacement labor
92,000
Emergency trips to service client machines
86,000
Rental of substitute equipment to cover client downtime
43,000
Training of repair technicians (time and travel)
196,000
Inspection of finished repairs
45,000
Testing and certifications of calibration equipment
15,000
Development of client testing processes and diagnostics
31,500
Miller is aware of two contracts that were cancelled this past year because of client
complaints about poor…
Chapter 8 Solutions
Bundle: Managerial Accounting, 14th + Cengagenowv2, 1 Term Printed Access Card
Ch. 8 - What are the basic objectives in the use of...Ch. 8 - What is meant by reporting by the principle of...Ch. 8 - What are the two variances between the actual cost...Ch. 8 - The materials cost variance report for Nickols...Ch. 8 - A. What are the two variances between the actual...Ch. 8 - Prob. 6DQCh. 8 - Would the use of standards be appropriate in a...Ch. 8 - A. Describe the two variances between the actual...Ch. 8 - If variances are recorded in the accounts at the...Ch. 8 - Prob. 10DQ
Ch. 8 - Direct materials variances Bellingham Company...Ch. 8 - Direct labor variances Bellingham Company produces...Ch. 8 - Factory overhead controllable variance Bellingham...Ch. 8 - Factory overhead volume variance Bellingham...Ch. 8 - Standard cost journal entries Bellingham Company...Ch. 8 - Prob. 6BECh. 8 - Prob. 7BECh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Standard direct materials cost per unit from...Ch. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Direct materials and direct labor variances At the...Ch. 8 - Flexible overhead budget Leno Manufacturing...Ch. 8 - Prob. 14ECh. 8 - Factory overhead cost variances The following data...Ch. 8 - Prob. 16ECh. 8 - Prob. 17ECh. 8 - Factory overhead cost variance report Tannin...Ch. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - Prob. 23ECh. 8 - Prob. 1PACh. 8 - Flexible budgeting and variance analysis I Love My...Ch. 8 - Direct materials, direct labor, and factory...Ch. 8 - Factory overhead cost variance report Tiger...Ch. 8 - CodeHead Software Inc. does software development....Ch. 8 - Direct materials and direct labor variance...Ch. 8 - Flexible budgeting and variance analysis Im Really...Ch. 8 - Direct materials, direct labor, and factory...Ch. 8 - Factory overhead cost variance report Feeling...Ch. 8 - Prob. 5PBCh. 8 - Prob. 5CPCh. 8 - Prob. 1ADMCh. 8 - Prob. 2ADMCh. 8 - Prob. 3ADMCh. 8 - Ethics in action Dash Riprock is a cost analyst...Ch. 8 - Prob. 3TIF
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