EBK CORNERSTONES OF COST MANAGEMENT
3rd Edition
ISBN: 9781305147102
Author: MOWEN
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 14, Problem 21E
1.
To determine
Prepare an environmental cost report.
2.
To determine
Illustrate the relative distribution percentages for each environmental coat category and comment on the distribution.
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Houstin Partners provides management consulting services to government and corporate clients. Houstin has two support
departments-administrative services (AS) and information systems (IS)-and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first
quarter of 2017, Houstin's cost records indicate the following:
E (Click the icon to view the cost records.)
Read the requirements.
.....
intermediary calculations and round your final answers
balances.)
Data table
SUPPORT
OPERATING
AS
IS
GOVT
CORP
Total
Budgeted overhead costs before any
interdepartment cost allocations
Support work supplied by AS
(budgeted head count)
Support work supplied by IS
(budgeted computer time)
$
390,000 $ 2,100,000 $ 7,500,000 $ 12,420,000 $ 22,410,000
25%
45%
30%
100%
10%
36%
54%
100%
Requirements
Print
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1. Allocate the two support departments' costs to the two operating departments
using the following methods:
а.
Direct method
b.
Step-down method (Allocate AS…
Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support
departments administrative services (AS) and information systems (IS) and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2020,
Phoenix's cost records indicate the following:
(Click the icon to view the cost records.)
Read the requirements.
Requirement 1a. Allocate the two support departments' costs to the two operating departments using the direct method. (Do not round intermediary calculations and round your final answers to the nearest whole
dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.)
Operating Departments
Support Departments
AS
GOVT
CORP
Direct Method
Budgeted overhead costs
before interdepartment cost allocations
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Allocation of IS costs
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Nation’s Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firm’s controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm’s equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y = a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: (image below)
Required:1. Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation’s Capital Fitness, Inc. Express the cost behavior pattern in equation form.2. Using your answer to requirement (1), what is the variable component of the maintenance cost?3. Compute the predicted maintenance cost at 590 hours of activity.4. Compute the variable cost per hour and the fixed cost per hour at 600 hours of activity. Explain why the fixed cost per hour could be…
Chapter 14 Solutions
EBK CORNERSTONES OF COST MANAGEMENT
Ch. 14 - What is the difference between quality of design...Ch. 14 - Why are quality costs the costs of doing things...Ch. 14 - Prob. 3DQCh. 14 - Describe the Taguchi quality loss function, and...Ch. 14 - Identify and discuss the four kinds of quality...Ch. 14 - Explain why external failure costs can be more...Ch. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Describe the three types of quality performance...Ch. 14 - Prob. 10DQ
Ch. 14 - If a firms annual sales are 200 million, what...Ch. 14 - Explain why it is important for a manager to...Ch. 14 - Prob. 13DQCh. 14 - Explain why the Accounting Department should be...Ch. 14 - Prob. 15DQCh. 14 - What is ecoefficiency?Ch. 14 - Prob. 17DQCh. 14 - Prob. 18DQCh. 14 - Prob. 19DQCh. 14 - What are the four categories of environmental...Ch. 14 - Prob. 21DQCh. 14 - What does full environmental costing mean? Full...Ch. 14 - What information is communicated by the unit...Ch. 14 - Prob. 1CECh. 14 - Prob. 2CECh. 14 - Prob. 3CECh. 14 - Prob. 4CECh. 14 - Prob. 5CECh. 14 - Pinter Company had the following environmental...Ch. 14 - Rachel Boyce, president of a company that...Ch. 14 - Quality attributes such as performance and...Ch. 14 - Stahman, Inc., estimates its hidden external...Ch. 14 - Prob. 10ECh. 14 - Abernathy, Inc., produces two different generators...Ch. 14 - Prob. 12ECh. 14 - Gagnon Company reported the following sales and...Ch. 14 - Prob. 14ECh. 14 - Javier Company has sales of 8 million and quality...Ch. 14 - Prob. 16ECh. 14 - Prob. 17ECh. 14 - Prob. 18ECh. 14 - Achieving sustainable development will likely...Ch. 14 - Classify the following environmental activities as...Ch. 14 - Prob. 21ECh. 14 - Prob. 22ECh. 14 - Coyle Pharmaceuticals produces two organic...Ch. 14 - Prob. 24ECh. 14 - Which of the following quality costs is an...Ch. 14 - Which of the following would be a hidden quality...Ch. 14 - Using the Taguchi quality loss function, an...Ch. 14 - Environmental costs are those costs incurred...Ch. 14 - Two products, Product A and Product B, are...Ch. 14 - Prob. 30PCh. 14 - Panguitch Company manufactures a component for...Ch. 14 - Gaston Company manufactures furniture. One of its...Ch. 14 - Classify the following quality costs as...Ch. 14 - Prob. 34PCh. 14 - Recently, Ulrich Company received a report from an...Ch. 14 - Prob. 36PCh. 14 - Prob. 37PCh. 14 - Prob. 38PCh. 14 - Prob. 39PCh. 14 - Prob. 40PCh. 14 - The following items are listed in an environmental...Ch. 14 - Prob. 42PCh. 14 - Prob. 43PCh. 14 - Prob. 44P
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- Pintura Company implemented a quality improvement program and tracked the following for the five years: By cost category as a percentage of sales for the same period of time: Required: 1. Prepare a bar graph that reveals the trend in quality cost as a percentage of sales (time on the horizontal axis and percentages on the vertical). Comment on the message of the graph. 2. Prepare a bar graph for each cost category as a percentage of sales. What does this graph tell you?arrow_forwardRoss Company implemented a quality improvement program and tracked the following for the five years: By cost category as a percentage of sales for the same period of time: Required: 1. Prepare a bar graph that reveals the trend in quality cost as a percentage of sales (time on the horizontal axis and percentages on the vertical). Comment on the message of the graph. 2. Prepare a bar graph for each cost category as a percentage of sales. What does this graph tell you? 3. What if management would like to have the trend in relative distribution of quality costs? Express this as a bar graph and comment on its significance.arrow_forwardNation's Capital Fitness, Incorporated, operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y= a + bx, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Month January February March April May June July August September October November December Total Average Hours of Maintenance Service 560 480 280 470 350 460 320 430 490 380 350 340 4,910 409 Maintenance cost Maintenance Costs $ 5,110 4,240 2,730 4,300 3,030 4, 120 3,000 3,590 4,000 3,220 3,170 3,070 $ 43,580 $ 3,632 PR 6-38 (Algo) Part 3 Compute the predicted maintenance cost... 3. Compute the predicted maintenance cost at 670 hours of activity. Answer is complete but not entirely correct. $ 49,192 Xarrow_forward
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