Value chain classifications Match each of the following cost items with the value chain business function where you would expect the cost to be incurred:
Q: Contribution margin ratio definition and how is useful in planning business operations?
A: Solution:- Contribution margin ratio definition as follows:-
Q: Prepare a contribution format income statement segmented by product lines.
A: Income statement:- Income statement is the statement that shows the company a clarity in how much…
Q: Search about how technique is efficient Analysis at the account level to estimate cost.
A: technique is efficient Analysis at the account level to estimate cost.
Q: Define and give examples of the following terms: cost pool, cost object, and cost allocation (or…
A: Responsibility accounting: Responsibility refers to the several concepts and tools used by managers…
Q: Classify each of TechPro's costs below as direct or indirect.
A: Direct Costs Direct costs are the expenses that are directly involved in producing a product and…
Q: When assigning indirect costs to a cost object, an ideal cost-allocation base measures ________. A)…
A: A measure of input or output that defines the amount of cost to be allocated to a specific cost…
Q: Give detail definition on operational cost and explain in detail how the operational cost is…
A: Introduction:- The following definition of operational cost as follows under:- Operating costs are…
Q: . What are the three principle objectives of cost accounting system?
A: Cost accounting system is a system in which all the costs related to manufacturing, selliing the…
Q: Cost is being classified in a varity of ways, what benefits can be acquired out of this…
A: Classification by the management in their decision making is significant to help management in the…
Q: Explain how a scatter graph is used to identify and measure cost behavior.
A: A Scatter graph is a graphical tool that plots activity level on the x-axis and matches total cost…
Q: b. Classification of costs may be based on the information needs of management and their nature.…
A: Cost- Cost states all types of cost related to manufacturing of goods, operations of business, etc.…
Q: Define and explain the cost management information system's two major subsystems.
A: Cost management information system refers to the system which is related with the manufacturing the…
Q: Explain why knowledge of cost behavior is useful in product performance evaluation.
A: Definition: Product performance: Product performance indicates how well the product is flourishing…
Q: Distinguish between a cost center, a profit center, and an investment center
A: Definition: Responsibility center: A department or unit of a corporation where the management…
Q: What is the meaning of contribution margin ratio? How is this ratio useful in planning…
A:
Q: Give four examples of firms you believe would be significant users of cost management informationand…
A: Cost management information: Cost management information contains financial information regarding…
Q: In Cost accounting the main emphasis is on ?
A: Cost accounting is the classification, documentation, and appropriate distribution of expenditure…
Q: Which of the following statements best describes a profit center?a. The responsibility for combining…
A: The profit center affects the major profit decisions of the authority that includes the choosing…
Q: Classify the following activities as part of the identifying (I), recording (R), or communicating…
A: Accounting: Accounting is a system, or a process of collecting and organizing economic…
Q: Cost classifications used for preparing financial statements Include: Multiple Choice Product cost…
A: Answer : Concept : Product cost is the cost that can be directly associated with the product and…
Q: The design and use of strategic cost management systems are oriented around the application of three…
A: Strategic cost management is defined as the cost management which is a procedure for decreasing the…
Q: Define and give examples of the following terms: cost center, revenue center, profit center, and…
A: Responsibility center: It refers to that unit of the organization for which a separate executive is…
Q: explain the cost management information system's two major subsystems
A: The cost management information system's primary goal is to generate outputs for internal users. To…
Q: cost
A: A standard fee accounting gadget works with the aid of using monitoring uncooked substances as they…
Q: Name a firm or organization you know of that you are reasonably sure uses cost management andexplain…
A: Cost Management: Cost management involves the development and use of cost management information…
Q: Evaluate cost factors influencing a company's decision.
A: Cost factor is the factor or an element which is related to unit of product for which some amount of…
Q: A direct cost is a cost that is classified by Traceability Behaviour Controllability…
A: Following is the answer to the given question
Q: are measures of activities that require the use of resources and thereby cause costs Value Chain…
A: Solution: Cost drivers are measure of activities that requires the use of resources and thereby…
Q: Describe the earned value management terms.
A: Introduction: The concept of earned value management is an important tool both for the manager…
Q: Describe accounting and presentation for research and development and similar costs.
A: Definition: Research and development cost: These are the cost that is incurred on the research…
Q: Choose the most appropriate answer(s): Calculation of product cost, gathering information for…
A: SOLUTION- EXPLANATION- COST ACCOUNTING IS AN ACCOUNTING METHOD THAT AIMS TO CAPTURE A COMPANY'S…
Q: Describe three different ways in which managers determine cost behavior, which do you think is most…
A: Cost behavior analysis: It is the investigation of how certain expenses carry on in a business.…
Q: Classify the following activities as per value chain analysis: 1.Communication, pricing and channel…
A: Value chain analysis are classified in two types of activities namely primary and secondary…
Q: Describe how product cost informationis used by managers to identify cost improvement opportunities?
A: Product Cost: The phrase "product cost" is an accounting word that refers to the overall expenses…
Q: Distinguish between a profit center and an investment center. Draw a diagram illustrating the…
A:
Q: Which of the following is a correct statement? Check only those that are correct. Choose All That…
A: Cost tracing refers to the process of matching a cost with the product which is being produced.…
Q: Define the terms Cost Costing Cost Accounting
A: The Question has covered the various Concept related to the costing. The Detailed Explanation of…
Q: Define and explain the two major subsystems of the cost management information system.
A: The Cost Accounting Information System (CAIS) is a monetary accounting system that calculates the…
Q: Evaluate this using the principles of management and cost accounting.
A: Principles of Management and Cost Accounting The basic principles which are evolved in the…
Q: Explain the concept of a product family and its relationship to value stream accounting.
A: Product family is the grouping of same kind of product and services which go through the same…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Walsh & Coggins, a professional accounting firm, collects cost information about the services they provide to their clients. Describe the types of cost data they would collect and explain the importance of analyzing this cost data.Consider the following list of scorecard measures: a. Product profitability b. Ratings from customer surveys c. Number of patents pending d. Strategic job coverage ratio e. Revenue per employee f. Quality costs g. Percentage of market h. Employee turnover percentages i. First-pass yields j. On-time delivery percentage k. Percentage of revenues from new sources l. Economic value added Required: Classify each measure according to the following: perspective, financial or nonfinancial, subjective or objective, and external or internal. When the perspective is process, identify which type of process: innovation, operations, or post-sales service.Classify each of the following performance measures into the balanced scorecard perspective to which it relates: financial perspective, internal operations perspective, learning and growth perspective, or customer perspective. A. Employee satisfaction surveys B. Units of waste per production process, uniformity of products and inventory control C. Number of energy-efficient bulbs replaced D. Management training course certificates awarded E. Divisional profit F. Number of customer referrals
- In a team of two or three students, interview the manager/owner of a local business. In this interview, ask the manager/owner the following questions: A. Does the business collect and use cost information to make decisions? B. Does it have a specialist in cost estimation who works with this cost data? If not, who is responsible for the collection of cost information? Be as specific as possible. C. What type of cost information does the business collect and how is each type of information used? D. How important does the owner/manager believe cost information is to the success of the business? Then, write a report to the instructor summarizing the results of the interview. Content of the memo must include date of the interview, the name and title of the person interviewed, name and location of the business, type of business (service, merchandising, manufacturing) and brief description of the goods/services provided by the business, and responses to questions A-D.The second stage of customer-based activity-based costing entails the assignment of: a. resource costs to sales departments. b. resources costs to distribution channels. c. customer-related activity costs to products. d. customer-related activity costs to customers.For each of the activities listed, choose the manufacturing concept that applies: (i) just-in-time inventory, (ii) continuous improvement, or (iii) total quality management. A company receives inventory daily based on customer orders. Manufacturing factories have been arranged in such a fashion to reduce inefficiencies. Companies organize customer focus groups in order to look at customer needs and expectations. The entire production process is standardized and written down with procedures. Each customer receives a survey of satisfaction with their product. All orders are complete and shipped within three business days.
- What type of costing system do most service businesses use, and why do they use it?Assign the customer-related activity costs to each customer type using activity rates. Now calculate the profitability of each customer category. As a manager, how would you use this information? Emery Company sells small machine parts to heavy equipment manufacturers for an average price of 1.05 per part. There are two types of customers: those who place small, frequent orders and those who place larger, less frequent orders. Each time an order is placed and processed, a setup is required. Scheduling is also needed to coordinate the many different orders that come in and place demands on the plants manufacturing resources. Emery also inspects a sample of the products each time a batch is produced to ensure that the customers specifications have been met Inspection takes essentially the same time regardless of the type of part being produced. Emerys Cost Accounting Department has provided the following budgeted data for customer-related activities and costs (the amounts expected for the coming year): Required: 1. Assign the customer-related activity costs to each category of customers in proportion to the sales revenue earned by each customer type. Calculate the profitability of each customer type. Discuss the problems with this measure of customer profitability.Aaron McKinney is a cost accountant for Majik Systems Inc. Martin Dodd, Vice President of Marketing, has asked Aaron to meet with representatives of Majik Systems major competitor to discuss product cost data. Martin indicates that the sharing of these data will enable Majik Systems to determine a fair and equitable price for its products. Would it be ethical for Aaron to attend the meeting and share the relevant cost data? Explain your answer.
- Appliance Apps has the following costs associated with its production and sale of devices that allow appliances to receive commands from cell phones. Prepare an income statement under both the absorption and variable costing methods along with a reconciliation between the two statements.What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to the products, calculate the overhead application rate for each cost pool, identify the cost pools assign the costs to the products, identify the cost drivers, calculate the overhead application rate for each cost pool, identify the cost pools identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products identify the cost pools, identify the cost drivers, calculate the overhead application rate for each cost pool, assign the costs to the productsFor each of the following situations, two scenarios are described, labeled A and B. Choose which scenario is descriptive of a setting corresponding to activity-based responsibility accounting and which is descriptive of financial-based responsibility accounting. Provide a brief commentary on the differences between the two systems for each situation, addressing the possible advantages of the activity-based view over the financial-based view. Situation 1 A: The purchasing manager, receiving manager, and accounts payable manager are given joint responsibility for procurement. The charges given to the group of managers are to reduce costs of acquiring materials, decrease the time required to obtain materials from outside suppliers, and reduce the number of purchasing mistakes (e.g., wrong type of materials or the wrong quantities ordered). B: The plant manager commended the manager of the Grinding Department for increasing his departments machine utilization ratesand doing so without exceeding the departments budget. The plant manager then asked other department managers to make an effort to obtain similar efficiency improvements. Situation 2 A: Delivery mistakes had been reduced by 70 percent, saving over 40,000 per year. Furthermore, delivery time to customers had been cut by two days. According to company policy, the team responsible for the savings was given a bonus equal to 25 percent of the savings attributable to improving delivery quality. Company policy also provided a salary increase of 1 percent for every day saved in delivery time. B: Bill Johnson, manager of the Product Development Department, was pleased with his departments performance on the last quarters projects. They had managed to complete all projects under budget, virtually assuring Bill of a fat bonus, just in time to help with this years Christmas purchases. Situation 3 A: Harvey, dont worry about the fact that your department is producing at only 70 percent capacity. Increasing your output would simply pile up inventory in front of the next production department. That would be costly for the organization as a whole. Sometimes, one department must reduce its performance so that the performance of the entire organization can improve. B: Susan, I am concerned about the fact that your departments performance measures have really dropped over the past quarter. Labor usage variances are unfavorable, and I also see that your machine utilization rates are down. Now, I know you are not a bottleneck department, but I get a lot of flack when my managers efficiency ratings drop. Situation 4 A: Colby was muttering to himself. He had just received last quarters budgetary performance report. Once again, he had managed to spend more than budgeted for both materials and labor. The real question now was how to improve his performance for the next quarter. B: Great! Cycle time had been reduced and, at the same time, the number of defective products had been cut by 35 percent. Cutting the number of defects reduced production costs by more than planned. Trends were favorable for all three performance measures. Situation 5 A: Cambry was furious. An across-the-board budget cut! How can they expect me to provide the computer services required on less money? Management is convinced that costs are out of control, but I would like to know whereat least in my department! B: After a careful study of the Accounts Payable Department, it was discovered that 80 percent of an accounts payable clerks time was spent resolving discrepancies between the purchase order, receiving document, and the suppliers invoice. Other activities such as recording and preparing checks consumed only 20 percent of a clerks time. A redesign of the procurement process eliminated virtually all discrepancies and produced significant cost savings. Situation 6 A: Five years ago, the management of Breeann Products commissioned an outside engineering consulting firm to conduct a time-and-motion study so that labor efficiency standards could be developed and used in production. These labor efficiency standards are still in use today and are viewed by management as an important indicator of productive efficiency. B: Janet was quite satisfied with this quarters labor performance. When compared with the same quarter of last year, labor productivity had increased by 23 percent. Most of the increase was due to a new assembly approach suggested by production line workers. She was also pleased to see that materials productivity had increased. The increase in materials productivity was attributed to reducing scrap because of improved quality. Situation 7 A: The system converts materials into products, not people at work stations. Therefore, process efficiency is more important than labor efficiencybut we also must pay particular attention to those who use the products we produce, whether inside or outside the firm. B: I was quite happy to see a revenue increase of 15 percent over last year, especially when the budget called for a 10 percent increase. However, after reading the recent copy of our trade journal, I now wonder whether we are doing so well. I found out that the market expanded by 30 percent, and our leading competitor increased its sales by 40 percent.