Question: Hartford Company manufactures five products in a

> Brodie Ltd has undertaken its budget planning for the coming accounting period. Budget item …………….................................………….Budget data Sales …………………………………………………. 60 000 units; selling price $120 Cost of inventory …………. Direct materials: 2 kil

> Middleton Services is preparing a master budget for the coming year. At present senior management are reviewing the inventory policies. Which budgets would be affected by policies concerning the level of inventories? Why?

> Discuss the potential issues arising for an entity if it takes a budgetary approach in which budgetary data are imposed on business unit managers by the CEO. Contrast this with an approach whereby the budgetary data are developed in a more participatory

> Golden Arbours intends to start business on the first day of January. Production plans for its first four months of operations are as follows. January ………………………………… 10 000 units February ………………………………. 25 000 units March ………………………………….. 35 000 units April

> Glenvale Furniture has projected sales of its product for the next six months as follows. January ……………………………….. 80 units February ……………………………... 180 units March …………………………………. 200 units April ……………………………………... 160 units May ………………………………………… 60 units Jun

> Hobby Gardens is a garden design and landscaping business. At 30 June 2021, it has a bank balance of $52 500. Provided below are estimates for receipts and payments for the three months ending 30 September 2021. Required (a) Prepare a monthly cash budge

> Garden Sculptures presents the following data relating to the expected operations for the months of January to March 2021. Required (a) Prepare a cash budget on a monthly basis for the three months ending March 2021. The cash balance at 31 December 2020

> Explain the difference between mixed and variable costs. Provide examples of each.

> Lavender Plantations Pty Limited produces and sells two types of lavender-based products: soaps and candles. Peta Mitchell, the manager, is implementing a new marketing strategy in 2022. Actual sales in 2021 are as follows. Due to the change in sales st

> Budget Travel plans to commence operations on 1 July 2021. The following data and estimates relate to the three months ending 30 September 2021. Required (a) Prepare a monthly cash budget for the three months ending 30 September 2021. (b) The actual num

> Twilight Enterprises has provided the following estimates relating to the first quarter of 2021. Cash sales ……………………………………………………………. $ 88 960 Credit sales ……………………………………………………………. 167 624 Receipts from accounts receivable …………………………… 130 840 Cash payment

> Watson Company makes specially designed coffee mugs. The entity has developed a website and is trying to switch customer behaviour to this medium. Sales for each quarter of 2020 are as follows. Quarter ending 31 March ……………………………… $234 000 30 June ………………

> One of the downsides of using a participative style of budgeting is the possibility of ‘budgetary slack’. Explain whether you consider the strengths of a participative style of budgeting outweigh the problems associated with budgetary slack.

> During late 2019, Ski Lifters commenced a new business in the Alpine region to rent ski gear to tourists. A budget has been prepared for the coming financial year. Prepare a brief report to management on how the budget can be used as a control device to

> Ski Lifters is a business that provides a chairlift for tourists in the Alpine region. The peak season is in winter, with the low season during the summer months. Sales are high during the ski season and then taper off once the season closes. Explain why

> From the following data for Starlight Enterprises, calculate the receipts from accounts receivable for June, July and August of 2021. Credit sales are normally settled according to the following pattern: 70 per cent in the month following sale and 25 pe

> From the following data for Fantastic Sales, calculate the receipts from accounts receivable for September, October and November of 2021. Credit sales are normally settled according to the following pattern: 20 per cent in the month of the sale, 50 per

> Arthur Thomson Lawyers operates in the local neighbourhood and has six solicitors who work on client briefs. For the coming year, each solicitor is budgeted to work 2400 billable hours. The main areas of law work that Arthur Thomson Lawyers specialises i

> The financial controller of Seats R Us has established indirect cost pools and cost drivers for the coming year as follows. The sales team has received an order for 1500 seats and produced them. The order requires the following. Machine set-ups â&

> Explain the meaning of the term ‘budgetary slack’.

> Discuss the typical role of the accountant in the budget process.

> Explain the difference between planning and control.

> Explain the similarities and differences between the cash budget and the statement of cash flows discussed in the statement of cash flows chapter.

> An organisation is currently operating at full capacity. Should it accept a request for a special order based on variable costs plus 40 per cent? Explain.

> When is it necessary to calculate the contribution margin per limiting factor?

> Cost drivers can be based on either volume or activity. Provide an example of each.

> Explain market-based pricing and give an example that shows how prices would be determined using this method.

> Explain cost-based pricing and give an example that shows how prices would be determined using this method.

> Discuss the importance of selecting an appropriate cost driver in the cost allocation process.

> Explain the difference between a full product cost and an inventoriable product cost.

> Explain the difference between a direct cost and an indirect cost.

> Regional Animal Services is located in rural Queensland and treats farm animals and domestic pets. Providing veterinary care to farm animals requires travel to the individual farms in the area, while veterinary care to domestic pets is usually conducted

> What is a cost object? Give three examples.

> Aluminium Industries manufactures two products: Delta and Gamma. Both products are produced on the same assembly lines and packaged with 20 units of product per package. The predicted sales are 320 000 packs of Delta and 400 000 packs of Gamma. The budge

> Transrapid is a magnetically levitated train that connects Shanghai to its Pudong International Airport at a speed of 268 miles per hour. Engineers developed a system with trains departing every 15 to 20 minutes. Suppose Transrapid asked you to research

> ‘Fixed costs are always irrelevant in decision making.’ Discuss.

> Just Windows manufactures two product ranges: the standard range and the special range. During July, 300 standard windows and 50 special windows were manufactured and indirect production costs of $73 000 were incurred. An analysis of indirect costs revea

> Winton Produce package and distribute three grades of animal feed. The material cost per tonne and estimated annual sales for each of the products are as follows. The indirect cost of operating the machinery used to package all three products is $40 000

> Richards Manufacturing estimates the following activity for the coming year. • Expected production 20 000 units • Expected direct labour hours 20 000 hours • Expected manufacturing overhead $200 000. Manufacturing overhead is allocated on the basis of di

> Mercy Hospital uses a costing system to determine the cost of patients who have surgery. The hospital uses a budgeted indirect cost rate for allocating indirect costs to patient stays. In March, the operating theatre had a budgeted allocation base of 100

> A housekeeping support department budgets its costs at $20 000 per month plus $18 per hour. The estimated and actual hours for November provided by the housekeeping support department to three operating departments are as follows. Required (a) Draw a di

> During 2022, Lavender Plantations Pty Ltd continued to grow. The manager decided to add detergents to its existing range of soap and candles. The management accountant, Nick Gee, expressed concern regarding the accuracy of the product costing system now

> Refer to exercise 11.20. Benson Manufacturing’s total direct labour cost was $470 000 (2350 hours × $100 per hour). There was no direct labour cost variance. In exercise 11.20 Benson Manufacturing estimates the following activity for the coming year. •

> Benson Manufacturing estimates the following activity for the coming year. • Expected production 23 000 units • Expected direct labour hours 1750 hours • Expected manufacturing overhead $92 000. Manufacturing overhead is allocated on the basis of direct

> Megan Mitchell has recently graduated from a business school and joined the family business as an accountant. At the first management meeting with production, marketing and sales, a great deal of time is spent discussing the unit cost of products. What k

> Fruits on High Ltd uses three activity cost pools to assign costs to customers in order to assess customer profitability. Each activity cost pool has a unique cost driver to apply indirect costs to customers. Required Calculate the activity cost rate fo

> What are avoidable costs and why are they important in decision making?

> The Skin Care Company has one product line that is unprofitable. What circumstances might cause the entity’s overall profit to be lower if the unprofitable product line was eliminated?

> Refer to exercise 11.15. For each activity, name a cost driver that might be used to assign activity costs to products. In exercise 11.15 Hartford Company manufactures five products in a single production facility. The company uses activity cost pools t

> Michelle’s Tax Services has two departments, tax and audit. The tax department has two product lines, business returns and individual returns. A list of costs and three cost objects from Michelle’s Tax Services are sho

> Assess the benefits to an entity of using a costing system.

> Identify two factors that influence pricing decisions.

> Discuss the allocation process for indirect costs.

> Briefly outline four pricing practices that are illegal in Australia.

> Refresh Company produces plunge pools. Currently, the company uses internally manufactured pumps to power water jets. Refresh Company has found that 40 per cent of the pumps failed within their 12-month warranty period, causing huge warranty costs. Becau

> You are the adviser to a junior achievement group in a local high school. You need to help the group make a decision about fees that must be paid to sell gardening tools at the Home and Garden Show. The group sells a set of tools for $20. The manufacturi

> How may an opportunity cost be relevant in an outsourcing decision?

> Barloo Company is a software producer and sales company. Currently, it pays all sales staff on a fixed base salary. Recently, management have been considering switching sales staff across to an incentive-based reward system. Barloo’s ch

> Continuing the example in 10.59, the other option Katy is exploring is to offer a wider product range including two other specialist bikes: adult mountain bikes and adult road bikes. From her investigations, she realises this is a highly competitive part

> Katy Davis has had a passion for cycling for years. She has decided to explore turning her passion into a business. She has spent the last few months exploring the industry and collecting information to facilitate decisions about the focus of the busines

> Leonardo Company has the capacity to manufacture 250 000 units annually of its only product. The following information is available. Selling price …………………………………………………………….. $130 per unit Variable manufacturing costs ……………………………………… $60 per unit Fixed man

> McDonald Services offers three core accounting and bookkeeping services. After a cost behavior study, the following profitability analysis has been prepared. The management of McDonald Services estimate that the total fees mix (52% : 28% : 20%) is gener

> The statement of profit or loss for Nambour Industries for 2019 is as follows. Cost behaviour seems to follow this pattern: all of the cost of sales is considered variable; 50 per cent of the total marketing and distribution costs are variable; and 40 p

> Tropical Processing is a single-product entity and provides the following summary data relating to its product for 2020. Selling price per unit ……………&acir

> Wynham Stereos produces and sells speakers and CD players. The following information about the costs related to the systems has been collected. Wynham Stereos normally produces 25 000 of these systems per year. The managers have recently received an off

> The management of York Company have asked for your assistance in deciding whether to continue manufacturing a part or buy it from an outside supplier. The part, called Beta B, is a component of York’s finished product. Analysis of the accounting records

> Soft Pearl Company incurs the following costs to produce 50 000 light switches for floor lamps in 2020. Direct materials ………………………………………….. $200 000 Direct labour ………………………………………………… 300 000 Variable manufacturing overhead …………………… 160 000 Fixed manufact

> Under what circumstances can calculating the contribution margin ratio to perform break-even analysis be useful?

> Juices R Us sells bottles of freshly squeezed juice to small convenience stores throughout Melbourne. Its latest statement of profit or loss for the last 12 months is as follows. Required (a) Calculate the contribution margin per juice bottle. (b) Calcu

> 13. Three elements (the service organization, the contact personnel and the customer) interact in the service encounter triad shown below. Which position represents the customer? 14. Employee empowered service companies have committed to all but one of

> 1. A customer who is interested in the self-service option would find which of the following dimensions of service most important? a. Risk involvement b. Customer's control of the situation c. Amount of time involved d. Efficiency of the service process

> 12. A service blueprint with a large number of intricate steps is considered to have a a. High degree of divergence. b. Low degree of complexity. c. High degree of complexity. d. Low degree of divergence. 13. The new service development process cycle con

> 1. Which of the following is not a characteristic of a production-line approach to provide a service? a. Division of labor b. Substitution of technology for people c. Standardization of the process and service provided d. High employee autonomy in task e

> 12. Services can create barriers to entry by __________ a. Using economies of scale. b. Creating switching costs. c. Using databases and information technology. d. All of the above. 13. Which of the following is an example of the competitive use of infor

> 11. Which one of the following attributes is not considered in the selection of a project manager? a. Credibility. b. Originality. c. Sensitivity. d. Ability to handle stress. 12. The four sequential stages of team development include all but one of the

> 1. Which of the following is not true about a critical path in a project network with certain activity times? a. Activities on the critical path have the least slack. b. The longest activity in the project must lie on the critical path. c. There can be s

> 11. The elimination of paper-based documents between organizatins is made possible by: a. ERP. b. EDI. c. MRP. d. POS. 12. Service level influences _______ and ________. a. Reorder point, safety stock b. Reorder point, backorder quantity c. Safety stock

> 1. Which one of the following is not a role that inventories play in a distribution system? a. Decoupling b. Speculative c. Anticipative d. Cyclical 2. In the design of an inventory system all but one of the following is considered: a. Type of customer

> 11. All of the following are forecasting models, except: a. Subjective. b. Objective. c. Causal. d. Time series. 12. Demand for hotel services will require the use of which one of the following forecasting models: a. Subjective and causal. b. Subjective

> 1. Long-term forecasts do not deal with predictions for: a. New services. b. Changes in mix of services. c. Overtime or temporary labor requirements. d. Process technology. 2. Subjective forecasting models are best characterized by: a. The use of experts

> 11. The cost of service capacity is determined by a. The number of customers waiting. b. The total number of customers. c. Waiting time. d. The number of servers on duty.* 12. Queuing models can help explain all but one of the following: a. Predicting re

> 1. A queuing system is said to be in a transient condition when: a. Its parameters change with time. b. Its parameters remain constant. c. It is still under the influence of the initial state.* d. It grows beyond bound. 2. The A/B/C notation classifies q

> 11. Which queue configuration permits opportunities for division of labor and service differentiation? a. Multiple queue b. Single queue c. Take a number d. Self-serve 12. One advantage of the multiple queue compared to a single queue is that multiple qu

> 1. The calling population is termed finite when: a. There is restriction on the maximum number in the queue. b. Only a limited number of people may use the facility in any given period. c. The interarrival time is not very large. d. There is no queue di

> 14. Which one of the following is not a characteristic of firms using yield management? a. Ability to segment their market b. Perishable inventory c. Variable capacity d. Product sold in advance 15. Which one of the following is not an example of the dif

> 1. The strategy of segmenting demand is feasible only when: a. Demand is not from a homogeneous source. b. Demand is cyclic and predictable. c. Arrivals for service are random. d. Making appointments is impossible. 2. The purpose of differential pricing

> 11. Global service strategies include all but one of the following: a. Exporting services b. Following your customers c. Beating-the-clock d. Service offshoring 12. Mayo Clinic is a service firm that would fall under which of the following categories: a.

> 14. Which among the following strategies is used by fast-food restaurants to reduce costs? a. Increase advertising via the Internet. b. Allowing the customer to play an active part in the service process. c. Increase prices. d. Increasing menu items to

> 1. Which of the following is not one of the major considerations in planning multinational operations? a. Cultural transferability b. Technological compatibility c. Network development d. Host government policy 2. Multinational expansion by a service fir

> 14. Which of the following service providers likely would be involved in a single-level bi-directional service supply relationship? a. Pharmacy b. Professor c. Garage d. Mortgage company 15. All but one of the following is a managerial implication of bi-

> 1. The physical goods supply chain contains all but one of the following elements: a. Competitor. b. Distributor. c. Retailer. d. Customer. 2. The impact of the production element on physical goods supply chain management was _____ before and _____ after

> 11. In the Huff retail location model, the value of ( estimates ______________ a. Amount of travel time to reach a service facility. b. The importance of convenience in attracting customers. c. The importance of travel time in attracting customers. d. Th

> 1. A strategy that can be used by urban retailers to locate multiple sites close to each other in high-density areas despite the potential for cannibalization is called a. Competitive clustering. b. Marketing intermediaries. c. Saturation marketing. d. S

> 1. Data Envelopment Analysis (DEA) is a method for: a. Measuring a firm's quality performance by comparing it with other companies that are recognized as "best in class." b. Determining the feasibility of technological innovations in service operations.

> 11. Which quadrant in the matrix below represents attributes of a good service guarantee? No Conditions Many Conditions No Conditions Many Conditions  Complex Detailed (a) (b)  Clear Precise  (c) (d)   12. Which of the following is a strat

> 1. Which of the following dimensions of service quality is most important to customers? a. Empathy b. Assurance c. Reliability d. Tangibles 2. Which of the following is not an advantage of offering a service guarantee? a. It acts as a mechanism to differ

> 11. What defines the capacity of a service product layout? a. The activity requiring the most time per customer. b. The size of the queue. c. How tasks are allocated among servers. d. Ability of workers to change the process speed. 12. In the design of a

> 1. Which one of the following is not a major factor that could influence facility design? a. Objectives and nature of the service b. Flexibility in operations c. Availability of land d. Site location 2. A product layout would facilitate the concept of: a

> 1. The service package consists of five features. Which one of the features listed below is not included in the package? a. Explicit services b. Supporting facility c. Information d. Cost of service 2. The major input into a large public hospital from a

> 1. The corporate culture of a firm does not significantly influence the quality of the service it provides because the culture is internal and, therefore, not perceived by the customer. 2. Flexibility in meeting customer needs is the main reason that som