COST ACCOUNTING PLUS NEW MYACCOUNTING L
16th Edition
ISBN: 9780134476353
Author: Horngren
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 10, Problem 10.45P
1.
To determine
To explain: the relationship between the cumulative average directs labor hour and cumulative output and verifies that
2.
To determine
regression line by using the given data and show the economical plausibility, goodness of F and slope of the regression line
3.
To determine
the estimate slope coefficient
4.
To determine
To explain: the confidence of her over the new cost estimation
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Valencia Products makes automobile radar detectors and assembles two models: LaserStop and SpeedBuster. Both models use the same electronic components. After reviewing the components required and the profit for each model, the
firm found the following linear optimization model for profit, where L is the number of LaserStop models produced and S is the number of SpeedBuster models produced. Implement the linear optimization model on a spreadsheet and use
Solver to find an optimal solution. Interpret the optimal solution, identify the binding constraints, and verify the values of the slack variables.
Maximize Profit 123 L+ 137 S
18 L+11 S≤ 5000
6L+8S≤4500
L≥0 and S≥0
(Availability of component A)
(Availability of component B)
Implement the linear optimization model and find an optimal solution. Interpret the optimal solution.
The optimal solution is to produce LaserStop models and SpeedBuster models. This solution gives the
(Type integers or decimals rounded to two decimal places as…
Which of the following statements is true regarding regression analysis?
Question 8 options:
Regression analysis considers all of the data points for determining the line that best fits the data so it is usually less accurate than the high-low method.
Regression analysis helps generate a statistic, called the R-square, which tells how well the line fits the data points.
Regression analysis can only be used by manufacturing companies to predict costs.
All of the above are true.
Your team is conducting a CVP analysis for a new product. Different sales projections have different incomes. One member suggests picking numbers yielding favorable income because any estimate is “as good as any other.” Another member suggests dropping unfavorable data points for cost estimation. What do you do?
Chapter 10 Solutions
COST ACCOUNTING PLUS NEW MYACCOUNTING L
Ch. 10 - What two assumptions are frequently made when...Ch. 10 - Describe three alternative linear cost functions.Ch. 10 - What is the difference between a linear and a...Ch. 10 - High correlation between two variables means that...Ch. 10 - Name four approaches to estimating a cost...Ch. 10 - Describe the conference method for estimating a...Ch. 10 - Describe the account analysis method for...Ch. 10 - List the six steps in estimating a cost function...Ch. 10 - When using the high-low method, should you base...Ch. 10 - Describe three criteria for evaluating cost...
Ch. 10 - Define learning curve. Outline two models that can...Ch. 10 - Discuss four frequently encountered problems when...Ch. 10 - Prob. 10.13QCh. 10 - All the independent variables in a cost function...Ch. 10 - Multicollinearity exists when the dependent...Ch. 10 - HL Co. uses the high-low method to derive a total...Ch. 10 - A firm uses simple linear regression to forecast...Ch. 10 - In regression analysis, the coefficient of...Ch. 10 - A regression equation is set up, where the...Ch. 10 - What would be the approximate value of the...Ch. 10 - Estimating a cost function. The controller of the...Ch. 10 - Identifying variable-, fixed-, and mixed-cost...Ch. 10 - Various cost-behavior patterns. (CPA, adapted)....Ch. 10 - Matching graphs with descriptions of cost and...Ch. 10 - Account analysis, high-low. Stein Corporation...Ch. 10 - Account analysis method. Gower, Inc., a...Ch. 10 - Prob. 10.27ECh. 10 - Estimating a cost function, high-low method. Lacy...Ch. 10 - Linear cost approximation. Dr. Young, of Young and...Ch. 10 - Cost-volume-profit and regression analysis....Ch. 10 - Regression analysis, service company. (CMA,...Ch. 10 - High-low, regression. May Blackwell is the new...Ch. 10 - Learning curve, cumulative average-time learning...Ch. 10 - Learning curve, incremental unit-time learning...Ch. 10 - High-low method. Wayne Mueller financial analyst...Ch. 10 - High-low method and regression analysis. Market...Ch. 10 - High-low method; regression analysis. (CIMA,...Ch. 10 - Regression, activity-based costing, choosing cost...Ch. 10 - Interpreting regression results. Spirit...Ch. 10 - Cost estimation, cumulative average-time learning...Ch. 10 - Cost estimation, incremental unit-time learning...Ch. 10 - Regression; choosing among models. Apollo Hospital...Ch. 10 - Multiple regression (continuation of 10-42). After...Ch. 10 - Cost estimation. Hankuk Electronics started...Ch. 10 - Prob. 10.45PCh. 10 - Interpreting regression results, matching time...Ch. 10 - Purchasing department cost drivers, activity-based...Ch. 10 - Purchasing department cost drivers, multiple...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Auflegger, Inc., manufactures a product that experiences the following activities (and times): Required: 1. Compute the MCE for this product. 2. A study lists the following root causes of the inefficiencies: poor quality components from suppliers, lack of skilled workers, and plant layout. Suggest a possible cost reduction strategy, expressed as a series of if-then statements that will reduce MCE and lower costs. Finally, prepare a strategy map that illustrates the causal paths. In preparing the map, use only three perspectives: learning and growth, process, and financial. 3. Is MCE a lag or a lead measure? If and when MCE acts as a lag measure, what lead measures would affect it?arrow_forwardA firm has recently added a new product to their offerings. Manufacturing reports that production is going smoothly and factory workers are becoming familiar with the manufacture of this product. All expectations are that the current rate of learning will continue and the manufacture of future units will be more efficient (i.e., take less time). The following shown table shows the results for the first two units produced. The firm has an order for two additional units. Assuming the pattern of learning curve continues (same rate): Solve, a. At what rate is learning occurring? b. How long will it take to produce the fourth unit? c. If the labor rate is $15 per hour, what is the cumulative average labor cost per unit for the first four units produced?arrow_forwardValencia Products make automobile radar detectors and assembles two models: LaserStop and SpeedBuster. Both models use the same electronic components. After reviewing the components required and the profit for each model, the firm found the following linear optimization model for profit, where x is the number of LaserStop models produced and y is the number of SpeedBuster models produced. Graph the constraints and identify the feasible region. Then identify each of the corner points and show how increasing the objective function value identifies the optimal solution. Maximize Profit=124x+138y 19x+12y ≤ 3000 6x + 7y ≤2500 x≥0 and y≥0 OB. 800- Ay 800- Q Q 408 406 G 50 65 x 400 800 O C. 800 400 O D. Ay 800- Q 400 800 Identify the vertices of the given feasible region. (0, 0), (0, 250), (157.89, 0) (Type an ordered pair, using integers or decimals rounded to two decimal places as needed. Use a comma to separate answers as needed.) The optimal solution is to produce LaserStop models and…arrow_forward
- Burger Office Equipment produces two types of desks, standard and deluxe. Deluxe desks have oak tops and more expensive hardware and require additional time for finishing and polishing. After reviewing the hardware and labor required along with the profit for each model, Burger Office Equipment found the following linear optimization model for profit, where S is the number of standard desks produced and D is the number of deluxe desks produced. Implement the linear optimization model on a spreadsheet and use Solver to find an optimal solution. Interpret the optimal solution, identify the binding constraints, and verify the values of the slack variables. Maximize Profit=240 S+350 D 65 S+45 D≤6000 20 D≤ 800 (Availability of pine) 9 S+18 D≤500 S≥0 and D≥0 (Availability of oak) (Availability of labor) Implement the linear optimization model and find an optimal solution. Interpret the optimal solution. The optimal solution is to produce standard desks and deluxe desks. This solution gives…arrow_forwardClarke, Inc. manufactures door panels. Suppose Clarke, Inc. is considering spending the following amounts on a new total quality management (TQM) program: View the spending amounts. Clarke, Inc. expects the new program would save costs through the following: View the savings amounts. Requirements 1. Classify each cost as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost. 2. Should Clarke, Inc. implement the new quality program? Give your reason. Requirement 1. Classify each cost as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost. Type of Cost Strength-testing one item from each batch of panels Training employees in TQM Training suppliers in TQM Identifying suppliers who commit to on-time delivery of perfect-quality materials Lost profits from lost sales due to disappointed customers Rework and spoilage Inspection of raw materials Warranty costs Savings Avoid lost profits from lost sales due to…arrow_forwardAs a start-up company, Oriole Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Sharon is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Sharon is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. (b) Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs to these…arrow_forward
- As a start-up company, Blue Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Laura is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Laura is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. $53,750 $406,000 $20,000 87.5% Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint…arrow_forwardWe can get a sense of how model output responds to changes in inputs from sensitivity analyses. Some argue that we might draw very different conclusions when using different boundaries, especially when model output is a non-linear function of inputs. For example, we compute the net present value (NPV) of a business with a 10% discount rate. We can choose +/- 1% for our sensitivity analysis, or +/-5% for our analysis. For this reason, some argue that one can manipulate sensitivity analysis to support one’s prior. What do you think of this comment?arrow_forwarda) CVP analysis help managers to take better decision. Justify with real life scenario. (b)Paste Corporation has established new plant for the production of new product called “Diazinon”. There are two different manufacturing methods available to produce Diazinon. Either by using a process or an order base method. The assembling technique won't influence the quality or deals of the item. The evaluated manufacturing expenses of the two strategies are as per the following: Process base Order base Variable manufacturing cost per unit..................... Rs14.00 Rs.17.60 Fixed manufacturing cost per year ......................Rs. 2,440,000 Rs. 1,320,000 The organization's statistical surveying office has suggested an initial selling cost of Rs.35 per unit for Diazinon. The yearly fixed selling and admin costs…arrow_forward
- Balanced scorecard, social performance. Comtex Company provides cable and Internet services in the greater Boston area. There are many competitors that provide similar services. Comtex believes that the key to nancial success is to offer a quality service at the lowest cost. Comtex currently spends a signicant amount of hours on installation and postinstallation support. This is one area that the company has targeted for cost reduction. Comtex’s balanced scorecard for 2017 follows.arrow_forward4. Suppose that MSI is operating at full capacity. To accept the special order, it would have to reduce production of the history program.Compute the special order price at which MSI would be indifferent between accepting or rejecting the special order MSI has been approached by a fourth-grade teacher from Portland about the possibility of creating a specially designed game thatwould be customized for her classroom and environment. The teacher would like an educational game to correspond to her classroomcoverage of the history of the Pacific Northwest, and the state of Oregon in particular. MSI has not sold its products directly to teachersor school systems in the past, but its Marketing Department identified that possibility during a recent meeting.The teacher has offered to buy 2,000 copies of the CD at a price of $6.00 each. MSI could easily modify one of its existing educationalprograms about U.S. history to accommodate the request. The modifications would cost approximately…arrow_forward3. The sales manager of Alpha Electronics submitted a proposal to increase its production of digital watches. As part of the data presented, he reported the total additional cost required for the propose increase in production. The increase in total cost is known as c. Opportunity cost. d. Relevant cost. a. Controllable cost. e. None of these. b. Incremental cost. 4. An increase or decrease in cost between alternatives is called a. Variable cost. b. Sunk cost. c. Differential cost. d. Controllable cost. e. None of these.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY