MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Chapter 10, Problem 3PSA
To determine
Concept introduction:
Decision making plays an important role in the management. The decisions taken by managers are called managerial decisions. Managerial Decisions are decisions taken by managers for the operations of a firm. These decisions include setting target growth rates, hiring or firing employees, and deciding what products to sell. Manager’s decisions are taken on the basis of quantitative as well as the qualitative measures. The managerial decision includes the decisions like make or buy, accept or reject new offers, sell or further process etc. These decisions are taken on the basis of relevant costs.
Relevant costs are the costs that are relevant for any decision making. Relevant costs are helpful for take managerial decisions like make or buy, accept or reject new offers, sell or further process etc.
Two basic types of the relevant costs are as follows:
- Out-of-pocket costs
- Opportunity costs
Requirement 1:
To indicate:
The decision for the given proposal using the analysis.
To determine
Concept introduction:
Decision making plays an important role in the management. The decisions taken by managers are called managerial decisions. Managerial Decisions are decisions taken by managers for the operations of a firm. These decisions include setting target growth rates, hiring or firing employees, and deciding what products to sell. Manager’s decisions are taken on the basis of quantitative as well as the qualitative measures. The managerial decision includes the decisions like make or buy, accept or reject new offers, sell or further process etc. These decisions are taken on the basis of relevant costs.
Relevant costs are the costs that are relevant for any decision making. Relevant costs are helpful for take managerial decisions like make or buy, accept or reject new offers, sell or further process etc.
Two basic types of the relevant costs are as follows:
- Out-of-pocket costs
- Opportunity costs
Requirement 2:
To indicate:
The non financial factors to be considered for decision making.
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The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are
Actual
Material price per pound of direct material
Quantity of material in pound per unit of product
Actual production untis of product
BDMOV (AQ SQ) for Actual Production x SP
C DMCV DMPV + DMOV
Actual cost per unit of product (AC)
Standard costs per unit of product (SC)
$8.00
Alternate formula to compute DMCV=
(Actual cost-standard cost) per unit x # of units
065
3,000
Required:
Compute the followings variances and indicate if they are favorable (F) or unfavorable (UF)
A. Direct material Price variance (DMPV)
B. Direct matenal Quantity variance (DMQV)
C. Total Direct material Cost variance (DMCV)
Solution:
A.DMPV = (AP-SP) x AQ for Actual Production
Standard
Variance $ For UF
($1,462 50) F
($5,250.00) F
AQ
$8.75 SQ
0.45
($6.712 50) F
1950
1350
Acronyms:
AP Actual price per unit of Material
SP Standard price per unit of Material
AQ-Actual quantity of Material for Actual…
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses.
There are two models - one mainly used for fine eyewear (F-32) and another for
lenses used in binoculars, cameras, and similar equipment (B-13).
The manufacturing cost of each unit is calculated using activity-based costing, using
the following manufacturing cost pools:
Cost Pools
Materials handling
Manufacturing
supervision
Assembly
Machine setup
Inspection and testing
Allocation Base
Number of parts
Hours of machine
time
Number of parts
Each setup
Logged hours
Costing Rate
$2.40 Per
part
$
$
14.8per
$ 3.30 Per
part
$
Ohour
56.5 Per
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0
45.5per
Ohour
19.5per
Packaging
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$
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Monroe Materials processes a purchased material, PM-20, and produces three outputs, Alpha, Beta, and Gamma. In February, the
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Sales Value
per Unit
Alpha
Beta
31,000
$ 9.60
24,800
Gamma
6,200
18.00
80.00
Required:
Assign costs to Alpha, Beta, and Gamma for February using the net realizable value method.
Product
Cost Assigned
Alpha
Beta
Gamma
Total
S
0
Chapter 10 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
Ch. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 1DQCh. 10 - Is nonfinancial information ever useful in...Ch. 10 - What is a relevant cost? Identify the two types of...Ch. 10 - Prob. 4DQCh. 10 - Prob. 5DQ
Ch. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - Prob. 3QSCh. 10 - Prob. 4QSCh. 10 - Prob. 5QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Signal mistakenly produced 1,000 defective cell...Ch. 10 - Prob. 10QSCh. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Rory Company has a machine with a book value of...Ch. 10 - Fill in each of the blanks below with the correct...Ch. 10 - Prob. 2ECh. 10 - Goshford Company produces a single product and has...Ch. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Suresh Co. expects its five departments to yield...Ch. 10 - Exercise 23-11 Sales mix A1 Childress Company...Ch. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 1PSACh. 10 - Calla Company produces skateboards that sell for...Ch. 10 - Prob. 3PSACh. 10 - Prob. 4PSACh. 10 - Prob. 5PSACh. 10 - Elegant Decor Companys management is trying to...Ch. 10 - Prob. 1PSBCh. 10 - Prob. 2PSBCh. 10 - Prob. 3PSBCh. 10 - Prob. 4PSBCh. 10 - Prob. 5PSBCh. 10 - Esme Companys management is trying to decide...Ch. 10 - Prob. 10SPCh. 10 - Apple currently chooses to buy (mainly from...Ch. 10 - Prob. 3BTNCh. 10 - Assume that you work for Greebles Department...Ch. 10 - Prob. 5BTNCh. 10 - Prob. 6BTNCh. 10 - Prob. 7BTNCh. 10 - Prob. 8BTNCh. 10 - Prob. 9BTN
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