Module 3 Learning Activities and Solutions - 24W_ACC2233_473 Management Accounting I

Identify Activity Bases For a major university, select the activity base most appropriate for each cost listed below. An activity base may be used more than once or not used at all. Cost: Activity Base: 1.  Financial aid office salaries   2.  Office supplies   3.  Instructor salaries   4.  Housing personnel wages   5.  Employee wages for maintaining student records   6.  Admissions office salaries

CASE QUESTIONS AND ANSWERS1. Identify the services and/or programs to be included in thecost and profitability analysis. Infant childcareToddler childcarePre-K childcareRent - School districtRent - Head Start 2. Examine the costs listed in Table 2.a. Identify the direct costs associated with each serviceor program.Labor costs are the only direct costs associated withthe programs. Food costs would be direct costs tothe kitchen area but indirect to the end services.b. Which costs would be organization- or facility-sustainingcosts? Provide an argument for or against assigningthese costs to services or programs. The costs that would be considered to be organizationsustaining costs include depreciation, buildinginsurance, and interest expense on the mortgage debt.Both ACDC and the tenants use the facility and,thus, should participate in the costs associated withacquiring the space. 3. Identify the broad activity categories and create cost poolsby assigning the costs from Table 2 to the…

Variable Costing Income Statement for a Service Company The actual and planned data for Underwater University for the Fall term were as follows: Enrollment Tuition per credit hour Credit hours Registration, records, and marketing costs per enrolled student Revenue Variable costs: Registration, records, and marketing costs $ Instructional costs Total variable costs Instructional costs per credi ur Depreciation on classrooms and equipment Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. Contribution margin Depreciation on classrooms and equipment Operating income $ Actual $ 4,500 Prepare a variable costing income statement showing the contribution margin and operating income for the Fall term. Underwater University Variable Costing Income Statement For the Fall Term $ $120 60,450 $275 $64 $825,600

Which of the following will give you the most accurate allocation between a cost's fixed component and variable component? a. Examination of a students’ registration forms for miscellaneous fees and tuition fees b. Use of the least squares method to allocate the cost of electricity c. Dividing the total cost on the water bill among the different departments based on direct labor hours d. Dividing the total cost of the postpaid plan using the high-low method

TechPro offers instructional courses in e-commerce website design. The company holds classes in a building that it owns. Identify each of TechPro’s costs below as (a) variable or fixed and (b) direct or indirect by selecting the appropriate dropdowns. Assume the cost object is an individual class.               Variable or Fixed Direct or Indirect 1. Instructional manuals for students     2. Advertising Fixed Indirect 3. Salesperson salary     4. Sales commissions     5. Computer printer ink     6. Depreciation on classroom building

Variable Costing Income Statement for a Service Company The actual and planned data for Broadwater Institute & Technical School for the Fall term were as follows: Actual Planned Enrollment Tuition per credit hour Credit hours Line Item Description Revenue Variable costs Registration, records, and marketing costs Registration, records, and marketing costs per enrolled student Instructional costs per credit hour Depreciation on classrooms and equipment $1,875,000 $1,875,000 Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. Prepare a variable costing income statement showing the contribution margin and operating income for the Fall term Broadwater Institute & Technical School Variable Costing Income Statement For the Fall Term Instructional costs Total variable costs Contribution margin Depreciation on classrooms and equipment Operating income Amount 9.200.000 ✓…

The following terms are used to describe various economic characteristics of costs.a. Opportunity costb. Out-of-pocket costc. Sunk costd. Differential coste. Marginal costf. Average costRequired: Choose one of the terms listed above to characterize each of the amounts described below.1. The cost of feeding 500 children in a public school cafeteria is $800 per day, or $1.60 per child per day. What economic term describes this $1.60 cost?2. The cost of including one extra child in a day-care center.3. The cost of merchandise inventory purchased two years ago, which is now obsolete.4. The management of a high-rise office building uses 2,500 square feet of space in the building for its own management functions. This space could be rented for $250,000. What economic term describes this $250,000 in lost rental revenue?5. The cost of building an automated assembly line in a factory is $800,000. The cost of building a manually operated assembly line is $375,000. What economic term is used to…

The camp provides all food as well as materials for all craft classes and the toys to be assembled. One cabin can accommodate up to 10 children, and one camp counselor is assigned to each cabin. Three camp managers are on-site regardless of the number of campers enrolled. Following is the cost information for Camp Rainbow's operations last summer: Week 1 2 3 4 5 6 7 8 Number of Cost to Run Camp $10,010 Campers 138 94 162 116 124 132 152 168 8,280 11,360 Required 4 Required 5 9,870 9,030 Required: 4. Using the high-low method, calculate Camp Rainbow's total fixed operating costs and variable operating cost per child. 5. Using the high-low method results, calculate the camp's expected operating cost if 152 children attend a session. 11,890 12,110 12,720 Complete this question by entering your answers in the tabs below. Fixed Cost Variable Cost per Child Using the high-low method, calculate Camp Rainbow's total fixed operating costs and variable operating cost per child. (Round your…

Variable Costing Income Statement for a Service Company The actual and planned data for Broadwater Institute & Technical School for the Fall term were as follows: Actual Enrollment Tuition per credit hour Credit hours Line Item Description Revenue Variable costs: Registration, records, and marketing costs Instructional costs. Registration, records, and marketing costs per enrolled student Instructional costs per credit hour Depreciation on classrooms and equipment $1,875,000 Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. Total variable costs Contribution margin Depreciation on classrooms and equipment Operating income 5,000 $115 80,000 $300 $45 Prepare a variable costing income statement showing the contribution margin and operating income for the Fall term. Broadwater Institute & Technical School Variable Costing Income Statement For the Fall Term Amount…

Mementos Academy is assessing whether to outsource its student enrolment processes. The general process followed by staff in the enrolment office is to first validate students’ prior academic record (e.g., secondary school results) and send an offer of enrolment, provide degree advice and enter students’ study program details into the student record system, and collect fees.   The following table shows the costs associated with these three processes: Cost Validation Student records Fees collection Staff salaries          70,400     43,900     39,700 Data processing            9,200     32,500        7,900 Telephone            1,700        4,600        3,000 Postage                   -          1,500        4,000 Consumables            3,700     45,900     11,800 Electricity            1,600        3,100        3,000 Equipment depreciation          12,200     35,800     31,900 Insurance…

Apple offers device service and repair through its AppleCare program, Assumed data follow. Direct labor rate Non-baterials-related overhead Materials-related overhead Target profit margin (on both conversion and direct materials) Required: 1. Compute time charge per hour of direct labor (in $). 2. Compute materials markup per dollar of direct material cost (in %). 3. Use time and materials pricing to compute the price for a local college. Apple estimates the obligation to this college will require 1,000 direct labor hours and $35,000 of direct materials cost. 1. Time charge per hour of direct labor 2. Materials markup 3. Time and materials price $40 per direct labor hour $10 per direct labor hour 4 of direct materials cost 40% per hour %

Question 8 Identify Activity Bases For a major university, select the activity base most appropriate for each cost listed below. An activity base may be used more than once or not used at all. Cost: Activity Base: 1.  Instructor salaries   2.  Admissions office salaries   3.  Student records office salaries   4.  Financial aid office salaries   5.  Housing personnel wages   6.  Office supplies

company You are a management accountant of EON and Brothers Ltd., a manufacturing that produces two products simultaneously in one of their production plants. You are asked to produce a management report on costing techniques. This company follows a traditional approach to costing and absorbs production overhead using machine hours. The company's policy is to add a 50% markup on the unit cost to obtain the selling price. The relevant information is given below: EON and Brothers Ltd. produces two similar products called Alfa and Beta. Total Overheads = £155,000 Machine Hours = 58980 hrs Product Alfa Beta Production Units 2,580 5,100 Material Cost per unit £31 £51 Labour Cost per unit £21 £17 Machine Hours per unit 11 16 After discussing with all the important people of the production plant you have allocated the overhead costs as mentioned below: % Overheads Set up Costs 30 Inspections 40 Materials Handling 30 Cost Pools are as mentioned below: Alfa Beta Total Setups 400 65 465…

Essential College Supplies ​(ECS​) is a store on the campus on a large Midwestern university. The store has both an apparel section​ (t-shirts with the school​ logo) and a convenience section. ECS reports revenues for the apparel section separately from the convenience section.   Requirement Classify each cost item ​(​A-H​) as​ follows: a. Direct or indirect​ (D or​ I) costs of the total number of​ t-shirts sold. b. Variable or fixed​ (V or​ F) costs of how the total costs of the apparel section change as the total number of​ t-shirts sold changes.​ (If in​ doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of​ t-shirts sold.)   Requirement a. Classify each cost item ​(​A-H​) as direct or indirect​ (D or​ I) costs of the total number of​ t-shirts sold.   Cost Item D or I A. Annual fee for licensing the school logo   B. Cost of store manager's salary   C.…

Direct Method Seattle Western University has provided the following data to be used in its service department cost allocations: Required: Using the direct method, allocate the costs of the service departments to the two operating departments. Allocate the Administration cost on the basis of student credit-hours and the Facility Services cost on the basis of space occupied.

Classifying Costs as Product or Period Costs Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its growth. The bank requires financial statements before approving the loan. Required: Classify each cost listed below as either a product cost or a period cost for the purpose of preparing financial statements for the bank. 1. Depreciation on salespersons’ cars. 2. Rent on equipment used in the factory. 3. Lubricants used for machine maintenance. 4. Salaries of personnel who work in the finished goods warehouse. 5. Soap and paper towels used by factory workers at the end of a shift. 6. Factory supervisors’ salaries. 7. Heat, water, and power consumed in the factory. 8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.) 9.…

Problem 6 Listed below are several costs incurred by the loan department of J P Morgan and Chase Bank. For each cost, indicate which of the following classification best describe the cost. More than one classification may apply to the same cost item. Cost classification Controllable by the loan department Uncontrollable by the loan department Direct cost of the loan department Indirect cost of the loan department а. b. C. d. е. Differential cost Marginal cost g. Opportunity cost f. h. Sunk cost i. Out-of-pocket cost Cost items Salary of the loan department manager Salary of a loan department clerk Cost of office supplies used in the loan department Cost of the department's personal computer purchased by the department manager last year. Cost of general advertising by the bank, which is allocated to the loan department. Revenue that the loan department would have generated for the bank if a branch loan office had been located downtown instead of in the next province. Difference in the…

Course Objectives:   Compute sales units given operating income, selling price and variable cost per unit. Prepare a contribution margin income statement, clearly showing contribution Use CVP analysis to compute breakeven point and margin of safety Analyze the impact which changes in sales volume and total fixed costs will have on the breakeven point, margin of safety and operating income Explain the impact of errors such as the omission of fixed on the decision making process.   Darius Manufacturing Company manufactures and sells parts for various musical gadgets. The business earned Operating Income of $420,000 in 2018, when selling price per unit was $200 and the president of Darius is under pressure to increase operating income in 2019 and is therefore considering the implementation of strategies geared at increasing revenues. Data for variable cost per unit and total fixed costs were as follows: Variable expenses per unit:             Direct Material $20…

Identify a particular support function of a college (the library, for example). Discuss possible allocation bases that might be used to allocate costs in the function to programs (degrees) or students.

-f The cost of printer paper on a college campus would be a direct cost to the college but would need to be allocated as an indirect cost to O A. departments. O B. schools. O C. individual student instruction. O D. buildings.

Obj. 5, 6 EX 20-22 Variable costing income statement and contribution margin analysis for a service company n The actual and planned data for Underwater University for the Fall term were as follows: Actual Planned Enrollment 4,500 4,125 Tuition per credit hour $120 $135 Credit hours 60,450 43,200 Registration, records, and marketing cost per enrolled student $275 $275 Instructional costs per credit hour Depreciation on classrooms and equipment $64 $60 $825,600 $825,600

The Chapter 6 Form worksheet is to be used to create your own worksheet version of the Review Problem in the text.   2. Change all of the numbers in the data area of your worksheet so that it looks like this:   If your formulas are correct, you should get the correct answers to the following questions.   (a) What is the net operating income (loss) in Year 1 under absorption costing?     (b) What is the net operating income (loss) in Year 2 under absorption costing?     (c) What is the net operating income (loss) in Year 1 under variable costing?   (d) What is the net operating income (loss) in Year 2 under variable costing?    (e) The net operating income (loss) under absorption costing is less than the net operating income (loss) under variable costing in Year 2 because: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.…

Define direct costs and indirect costs and prepare a list of three direct and three indirect costs for the Accounting Department at your university.

ACC5200/Summer21/Chapter 7: Homework Problems 1. Customer profitability analysis Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 8%. For example, if a hospital buys supplies from Worley that had cost Worley $100 to buy from manufacturers, Worley would charge the hospital $108 to purchase these supplies. For years, Worley believed that the 8% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown below: Total Activity 4,000 deliveries Total Cost Activity Cost Pool (Activity Measure) Customer deliveries (Number of…

Question: Classify each cost as being variable or fixed 1.      The cost of X-ray film used in the radiology lab at Virginia Mason Hospital in Seattle a.      Variable cost b.      Fixed cost   2.      The cost of advertising a rock concert in New York City a.      Variable cost b.      Fixed cost   3.      The cost of renting retail space for a McDonald's restaurant in Hong Kong a.      Variable cost b.      Fixed cost   4.      The electrical cost of running a roller coaster at Magic Mountain a.      Variable cost b.      Fixed cost   5.      Property taxes paid by your local cinema theater a.      Variable cost b.      Fixed cost   6.      The cost of sales commissions paid to salespersons at a Nordstrom store a.      Variable cost b.      Fixed cost   7.      Property insurance on a Coca Cola bottling plant a.      Variable cost b.      Fixed cost   8.      The costs of synthetic materials used to make a particular model of running shoe a.      Variable cost b.      Fixed cost…