Question: Differentiate between the management accounting

> Victoria’s Closet mass-produces luxurious sleepwear for women. Consider the following data for the flannel nightgown department for the month of January. All direct materials are added at the beginning of production in the department, a

> Benton Industries began the year with 15 000 units in department 3 beginning WIP. These units were one-third complete, with $40 470 transferred-in cost for prior departments’ work and $14 322 for department 3 conversion costs. During the year, 93 000 add

> Fran Markus is in the cost accounting group at Boats Galore, a large manufacturing company that produces customised boats and yachts. The company sometimes experiences quality problems with its fibreglass raw material, causing flawed areas in boat hulls.

> 'Our costs are out of control, our accounting system is screwed up, or both!' screamed the sales manager. 'We are simply non-competitive on a great many of the jobs we bid on. Just last week we lost a customer when a competitor underbid us by 25 per cent

> Flexible Manufacturers produces small batches of customised products. The accounting system is set up to allocate plant overhead to each job using the following production cost pools and overhead allocation rates Actual resources used for job 75: The

> Spencer and Church is a CPA entity engaged in local practice. Some selected items from its chart of accounts are listed below. Required For each account, indicate whether the account represents a fixed, variable or mixed cost for the operations of the l

> The Eastern Seaboard Company uses an estimated rate for allocating factory overhead to job orders based on machine hours for the machining department and on a direct labour cost basis for the finishing department. The company budgeted the following for l

> You are helping a friend, Jonah, set up a new accounting system for a small start-up construction company. He specialises in custom, energy efficient homes that are built on a cost-plus basis. Cost-plus means that his customers pay a fixed percentage abo

> Dapper Dan Draperies manufactures and installs custom-ordered draperies. Required (a) For all drapes, occasionally the sewing equipment malfunctions and the drape must be reworked. Explain how to account for the cost of rework when it is needed. (b) Exp

> A family member asked you to review the accounting system used for Hanna’s, a custom stained glass manufacturing business. The owner currently uses a software package to keep track of her bank account, but she does not produce financial statements. The o

> Required (a) (i) Explain how the budgeting process helps top managers articulate decisions about the use of resources. (ii) Explain how a budget identifies the resources available to individual departments within an organisation. (b) (i) Explain why th

> You are the accountant for Wok and Egg Roll Express. Following are assumptions about sales for the coming month. Wok offers three basic meals: noodle bowls, egg rolls, and rice bowls. Each meal can be prepared with several different meats or with vegetab

> The accountant at Fighting Kites has always prepared a budget that is calculated using only one estimated volume of sales. He has asked you to help him set up a spreadsheet that can be used for sensitivity analysis in the budgeting process. This year it

> Central Coast Public Clinic is a free outpatient clinic for public assistance patients. Among other services, the clinic provides visiting nurses for elderly patients in their homes. A homemaker who cleans and performs other household tasks accompanies e

> Patricia sighed and briefly closed her eyes. She was frustrated with the reconciliation she was working on. She was sure that she was missing something, but she could not determine what it was. And she felt the clock ticking. Patricia knew that the time

> The Red Bean Company processes and distributes beans. The beans are packed in 500 gram-plastic bags and sold to grocery chains for $0.50 each in boxes of 100 bags. During March the entity anticipates selling 16 000 boxes (sales in February we

> Yummy Yoghurt sells yoghurt cones in a variety of natural flavours. Data for a recent month follow: (a) Categorise each cost as fixed or variable. (b) Create a cost function. Revenue Cost of ingredients Rent Store attendant salary Profit $4500 1000

> Point Piper prepares monthly cash budgets. Provided below is a set of relevant data extracted from existing reports, and the sub-budgets for the two months of September and October. All sales are on credit. Collections from debtors normally have the fo

> The Fairyland Children’s Centre is a community-based, not-for-profit childcare service. A committee of management oversees its operations, with the elected members being parents of children attending the centre. The centre is licensed t

> Refer to the Paige’s Fashion House case in self-study problem 1. Paige ensures that members of her staff regularly attend international fashion shows (for design ideas) as well as become involved in Australian fashion shows. While these

> The Dancing Goat is a small coffee operation with ten cafés located around Melbourne. Each has a manager and up to five full-time employees to cover the 7.30 am to 4.30 pm, Monday to Saturday opening hours. Logan, the owner, employs a total

> Green Building Group specialises in a range of construction services including design services, shop and office fiitouts, and recently developed environmental consulting services for architects and local government. Summarised statement of profit or loss

> ‘I’m really not sure our information systems are as well placed as they could be to help us drive our performance. The industry data and my own observations suggest we need to do better in this regard. I really want to be ready when the market and the ec

> Cowmilka is a dairy products producer. Its logistics cost centre has 65 employees and a fleet of 25 milk tankers. It is a cross-functional cost centre with administrative staff (customer service and order processors), mechanics and tanker drivers. Tanker

> Toddler Toy Company sells baby dolls, teddy bears, and toy cars. The managers established a preliminary budget using the following assumptions. They would now like to evaluate the sensitivity of budgeted results to different sets of assumptions. Requir

> Trang Nguyen owns Trang’s Stained Glass in Sydney. The business produces and sells three different types of stained glass windows: small, medium, and large. Trang has two full-time employees who work regular schedules to cut glass and assemble the window

> The Elder Clinic, a not-for-profit entity, provides limited medical services to low-income elderly patients. The manager’s summary report for the past four months of operations is reproduced here. The clinic receives an operating sub

> The following is the description of a cost: total fixed costs are $50 000 per month and the variable cost per unit is $10 when production is under 1000 units. The variable cost drops to $9 per unit after the first 1000 units are produced. Required (a) W

> Jasmine Krishnan has been taking entrepreneurship courses as part of her business degree. She developed a plan to start a travel agency specialising in semester break trips for students. She learned how to develop CVP analysis in her cost accounting clas

> Joe Davies is thinking about starting a company to produce carved wooden clocks. He loves making the clocks. He sees it as an opportunity to be his own boss, making a living doing what he likes best. Joe paid $300 for the plans for the first clock, and h

> Ersatz manufactures a single product. The following income statement shows two different levels of activity, which are assumed to be within Ersatz’s relevant range. You may want to use a spreadsheet to perform calculations. Required (

> A neighbour asked for your help preparing a grant for a not-for-profit after-school art program that would benefit primary school children in the neighbourhood. He wants to charge low fees for most children, but also offer some scholarships for low-incom

> Dreamtime produces two products: regular boomerangs and premium boomerangs. Last month 1200 units of regular and 2400 units of premium were produced and sold. Average prices and costs per unit for the month are displayed here. Product line fixed costs

> Francesca would like to lease a coffee cart in Melbourne. The lease is $800 per month and a city license to sell food and beverages costs $20 per month. The lessor of the stand has shown Francesca records indicating that gross revenues average $32 per ho

> Oysters Away picks, shucks and packs oysters and then sells them wholesale to fine restaurants across the state. The income statement for last year follows: Pickers, shuckers and packers are employed on an hourly basis and can be laid off whenever nece

> The following information for Pet Palace, a large retail store that sells pet-related merchandise, was recorded for the first quarter. The store tracks merchandise according to product type. The category ‘Other’ includ

> In recent years, slow response times and frequent repairs have plagued Jetson Engineering’s computer system. The cause was a substantial increase in computer-aided design work that pushed the system beyond its intended capacity. Bob Wilson, the productio

> The Gleason Company, a division of a large international company, has prepared estimated costs for next year that can be traced to each department as follows. Management would like to know the estimated total allocated product cost per unit. These cost

> Suppose that the following are activities conducted by Microsoft Corporation. A. Comparing the timeliness of development steps of a new release of Windows with the timeline that was laid out to guide development. B. Developing a timeline for the release

> Danish Hospital recently installed a RAP Scanner, which is a diagnostic tool used both in suspected cancer cases and for detecting certain birth defects while the foetus is still in the womb. The scanner is leased for $5000 per month, and a full-time ope

> In comprehensive example 6 (Middletown Children’s Clinic), we did not perform direct or step-down methods for the dual-rate costs. Following are the allocation bases for these costs. The support cost data are in comprehensive example 6.

> Space Products manufactures commercial and military satellites. Under its government contracts, the company is permitted to allocate administrative and other costs to its military division. These costs are then reimbursed by the government department. Go

> You are an accountant for the Department of Defence. The government is considering a change of rules for the allocation of research and development costs. The government is asking contractors to submit a list of potential cost pools and allocation bases

> Your brother is a physician and has decided to start a home health care agency. The government will reimburse treatment costs for about half of the patients under a new government-sponsored health insurance program for low-income residents. Your brother

> Categorisation of support costs Suppose a charitable organisation called Food on Wheels provides meals for low-income individuals who are unable to leave their homes. To support its services, it solicits contributions from individuals and businesses. Fo

> Prime Personal Trainers is a personal training service in Bankstown for people who want to work out at home. Prime offers two different types of services: Setup and Continuous Improvement. Setup services consist of several home visits by a personal train

> Refer to question 3.41 above. Required (a) Draw a diagram of the costing system currently used by Hawk and Eagle Co. (b) Draw a diagram to show the proposed changes to the costing system under each of the three methods outlined. (c) Briefly comment on

> Hawk and Eagle Co., a law firm, had the following costs last year: The following costs were included in overhead: The firm recently improved its ability to document and trace costs to individual cases. Revised bookkeeping procedures now allow the fir

> Vines Company is a manufacturer of women’s and men’s swimsuits. The company uses a dual-rate system to allocate support costs. Last year’s support departments’ fixed and variable cos

> Software Solutions is a family-owned business that has been in operation for more than 15 years. The board of directors is comprised of mainly family members, plus a few professionals such as an accountant and lawyer. Regina is a staff accountant who has

> Refer to the data and requirements of problem 2.23. Required (a) Perform multiple regression using all three cost drivers. Compare the adjusted R-squares and cost functions for the multiple regression with the results of simple regressions for each pote

> Laura Mills is the controller of Peer Jets International, a manufacturer of small corporate jets. She has undertaken a project to study the behaviour of overhead cost. She has assembled factory overhead data for the last 30 months from the company’s manu

> Polar Bear Ski Wear is a shop that sells skiwear at a ski resort. Its cost accountant developed the following scatter plot for the cost of electricity for lights, heating and cooling against retail sales revenue. Required (a) In a business such as reta

> The Leyland Hospital Café has been reporting losses in past months. In July, for example, the loss was $5000. The café purchases prepared food directly from Hospital Food Services. This charge varies proportionately with the n

> Susan looked at her long-distance telephone bill with dismay. After leaving her job last year to become a self-employed consultant, her long-distance charges had grown considerably. She had not changed long-distance plans for years, partly because she ha

> The following scatter plot and simple regression results used revenue as a potential cost driver for research and development costs. Required (a) Discuss whether the scatter plot suggests that revenue is a cost driver for research and development cost

> Following are sales and administrative cost data for Big Jack Burgers for four months: Administrative cost is a mixed cost, and sales is a potential cost driver. Required (a) Using the high-low method, create a cost function for administrative costs.

> Mernda Health Care Centre recently began to offer day surgery procedures. The Centre was not experienced in the costing of such services and, as a temporary measure, the subsidised patientday charge was set at $100. This charge was similar to other provi

> Wentworth Ltd sold 100 000 1 litre bottles of mineral water last year at $4 per unit and made a profit of $50 000. This year the costs for Wentworth Ltd remained the same, it sold 120 000 units at the same price, and made a profit of $80 000. Required (

> Classify the following reports as internal or external. (a) Operating budget (b) Credit reports (c) Financial statements (d) Capital budget (e) Tax returns (f) Analysis of product mix

> Smeyer Industries is a large entity with more than 40 departments, each employing 35 to 100 people. Recent experience suggests that the cost function used to estimate overhead in department IP-14 is no longer appropriate. The current function was develop

> Suppose you have the responsibility of creating a cost function for the costs of an internet service provider’s help line. Required (a) What is the cost object? Identify where you might obtain information about past costs for the cost object. (b) Identi

> The Elder Clinic, a not-for-profit entity, provides limited medical services to low-income elderly patients. The manager’s summary report for the past four months of operations is reproduced here. The clinic receives an operating sub

> Suppose we need to predict the cost of maintenance for Brush Valley High School for the upcoming school year. From the school district records we gather weekly data about costs and volumes for two potential cost drivers: labour hours used in the maintena

> The Woolworths Group has a goal of having customers put the company first across all their brands. To achieve this the Group has identified five priorities. 1. Building a customer and store-led culture and team. 2. Generating sustainable sales momentum i

> Traditionally, government organisations have tended to operate in silos, focusing on their own objectives and managing and protecting their own budgets. Recently, however, faced with seemingly intractable economic, social and environmental problems, many

> Using figure 1.5 as an example, develop an internal value chain for an airline such as Virgin Australia. Figure 1.5: FIGURE 1.5 Sample organisational value chain for a winery Primary activities Research and development • wine varieties • production

> Australian fashion designer Sean Ashby commenced his men’s swimwear and clothing business aussieBum in 2001. A keen swimmer and surfer, he was unable to find a good pair of men’s cossies and used his life savings of $20 000 to make a series of prototypes

> Frank owns a caravan and loves to visit national parks with his family. However, the family only takes two one-week trips in the caravan each year. Frank’s wife would rather stay in motels than the caravan. She presented him with the fo

> Janet Baker is deciding where to live during her second year at university. During her first year, she lived in the university residence college. Recently, her friend Rachel asked her to share an off-campus flat for the upcoming school year. Janet likes

> Some activities add value to an organisation, while others do not. Required Determine whether each of the following activities is likely to be value-added or non-value-added, and explain your choice. (a) Inspection activities (b) Moving materials to wor

> Explain the value chain and list ways that value chain analysis benefits organisations.

> The Steelcase Workplace Index studied the types of work-related activities that Americans did while on vacation in the summer. Among other things, 40% read work-related material. Thirty-four percent checked in with the boss. Respondents to the study were

> A telephone survey conducted by the Maritz Marketing Research company found that 43% of Americans expect to save more money next year than they saved last year. Forty-five percent of those surveyed plan to reduce debt next year. Of those who expect to sa

> A few years ago, a survey commissioned by The World Almanac and Maturity News service reported that 51% of the respondents did not believe the Social Security system will be secure in 20 years. Of the respondents who were age 45 or older, 70% believed th

> In a certain city, 30% of the families have a MasterCard, 20% have an American Express card, and 25% have a Visa card. Eight percent of the families have both a MasterCard and an American Express card. Twelve percent have both a Visa card and a MasterCar

> An Adweek Media/Harris Poll revealed that 44% of U.S. adults in the 18–34 years’ category think that “Made in America” ads boost sales. A different Harris Interactive poll showed that 78% of U.S. adults in the 18–34 years’ category use social media onlin

> The U.S. Bureau of Labor Statistics publishes data on the benefits offered by small companies to their employees. Only 42% offer retirement plans while 61% offer life insurance. Suppose 33% offer both retirement plans and life insurance as benefits. If a

> Purchasing Survey asked purchasing professionals what sales traits impressed them most in a sales representative. Seventy-eight percent selected “thoroughness.” Forty percent responded “knowledge of your own product.” The purchasing professionals were al

> The following joint probability table contains a breakdown on the age and gender of U.S. physicians in a recent year, as reported by the American Medical Association. a) What is the probability that one randomly selected physician is 35â€&#14

> Use the values in the cross-tabulation table to solve the equations given. a) P(F ∩ A) = __________ b) P(A|B) = ___________ c) P(B) = _____________ d) P(E ∩ F) = __________ e) P(D|B) = ___________ f) P(B|D) = ________

> Use the values in the cross-tabulation table to solve the equations given. a) P(E) = _____________ b) P(B ∪ D) = __________ c) P(A ∩ E) = __________ d) P(B|E) = ___________ e) P(A ∪ B) = __________ f

> A list of the top 10 manufacturing companies in the United States according to Industry Week along with their total revenue in $ billions follows. Compute the median, Q3, P20, P60, P80, and P93 on these data. Company ___________ Revenue ($ billion) Exxon

> Suppose 70% of all companies are classified as small companies and the rest as large companies. Suppose further, 82% of large companies provide training to employees, but only 18% of small companies provide training. A company is randomly selected withou

> In a small town, two lawn companies fertilize lawns during the summer. Tri-State Lawn Service has 72% of the market. Thirty percent of the lawns fertilized by Tri-State could be rated as very healthy one month after service. Greenchem has the other 28% o

> Alex, Alicia, and Juan fill orders in a fast-food restaurant. Alex incorrectly fills 20% of the orders he takes. Alicia incorrectly fills 12% of the orders she takes. Juan incorrectly fills 5% of the orders he takes. Alex fills 30% of all orders, Alicia

> In a manufacturing plant, machine A produces 10% of a certain product, machine B produces 40% of this product, and machine C produces 50% of this product. Five percent of machine A products are defective, 12% of machine B products are defective, and 8% o

> In a study undertaken by Catalyst, 43% of women senior executives agreed or strongly agreed that a lack of role models was a barrier to their career development. In addition, 46% agreed or strongly agreed that gender-based stereotypes were barriers to th

> According to a survey of restaurant owners in the United States by MustHaveMenus, 77% of restaurant owners believe that they need to use social media as a marketing tool. A different survey by the National Restaurant owners revealed that 80% of restauran

> With the advent of online ordering, shipping has become more important to consumers. One survey showed that 80% of online consumers want same-day shipping. Another study showed that 24% of online consumers are shopping lovers who enjoy buying and purchas

> A national survey of small-business owners was conducted to determine the challenges for growth for their businesses. The top challenge, selected by 46% of the small-business owners, was the economy. A close second was finding qualified workers (37%). Su

> In a recent year, business failures in the United States numbered 83,384, according to Dun & Bradstreet. The construction industry accounted for 10,867 of these business failures. The South Atlantic states accounted for 8,010 of the business failures. Su

> The results of a survey asking, “Do you have a calculator and/or a computer in your home?” follow. Is the variable “calculator” independent of the variable “comput

> The following list shows the 15 largest banks in the world by assets according to Standard and Poor’s. Compute the median and the mean assets from this group. Which of these two measures do you think is most appropriate for summarizing these data and why

> Use the values in the joint probability table to solve the equations given. a) P(C|A) = __________ b) P(B|D) = __________ c) P(A|B) = __________ CD A-36-44 B.11.09

> Use the values in the cross-tabulation table to solve the equations given. a) P(G|A) = __________ b) P(B|F) = __________ c) P(C|E) = __________ d) P(E|G) = __________ EFG A 15 12 8 B11 17 19 C 21 32 27 D18 13 12

> A nationwide CareerBuilder survey was conducted regarding the job hunting experience. From the survey, it was learned that 26% of workers have had a bad experience as a job applicant. Eighty-two percent of workers expect to hear back from a company when

> A study by Becker Associates, a San Diego travel consultant, found that 30% of the traveling public said that their flight selections are influenced by perceptions of airline safety. Thirty-nine percent of the traveling public wants to know the age of th

> According to a report released by the National Center for Health Statistics, 51% of U.S. households has only cell phones (no land line). According to the FCC, nearly 70% of the U.S. households have high-speed Internet. Suppose of the U.S. households havi

> A study by Peter D. Hart Research Associates for the Nasdaq Stock Market revealed that 43% of all American adults are stockholders. In addition, the study determined that 75% of all American adult stockholders have some college education. Suppose 37% of