Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
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Chapter 5, Problem 4E
To determine
Select the activity base that would be most appropriate for each of the given costs.
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Students have asked these similar questions
King's Appliance Shop operates retail stores that sell appliances. The cost objects are the individual sales
of a given type of appliance and sales support. In July, the following costs were recorded for
refrigerators:
Professional sales staff
commissions
Amortization on office space
Selling supplies
Office staff expenses
Customer relations
Training expenses
Utilities
$84,000
4,000
6,400
24,800
8,600
6,000
1,400
Required:
a. Which of the costs will be subject to direct cost tracing?
b. What is the total cost for refrigerators?
c. What is the total cost of the Sales Support for refrigerators?
Match each of the following cost items with the value chain business function where you would expect the cost to be incurred:
Cost Item
1. Labor time to repair products under warranty
2. Radio commercials
3. Labor costs of delivering customer orders
4. Testing of competitor's product
5. Direct manufacturing labor costs
6. Development of order tracking system for online sales
7. Design cost of new product brochures
8. Hours spent designing childproof bottles
9. Training costs for representatives to staff the customer call center
10. Installation of robotics equipment in manufacturing plant
Business Function
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.…
Chapter 5 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
Ch. 5 - Describe how total variable costs and unit...Ch. 5 - Which of the following costs would be classified...Ch. 5 - Describe how total fixed costs and unit fixed...Ch. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - What does operating leverage measure, and how is...
Ch. 5 - Prob. 1BECh. 5 - Prob. 2BECh. 5 - Prob. 3BECh. 5 - Prob. 4BECh. 5 - Prob. 5BECh. 5 - Prob. 6BECh. 5 - Prob. 7BECh. 5 - Classify Costs Following is a list of various...Ch. 5 - Identify cost graphs The following cost graphs...Ch. 5 - Identify activity bases For a major university,...Ch. 5 - Prob. 4ECh. 5 - Identify fixed and variable costs Intuit Inc....Ch. 5 - Prob. 6ECh. 5 - High-low method Ziegler Inc. has decided to use...Ch. 5 - Prob. 8ECh. 5 - Contribution margin ratio Young Company budgets...Ch. 5 - Prob. 10ECh. 5 - Prob. 11ECh. 5 - Prob. 12ECh. 5 - Prob. 13ECh. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Prob. 19ECh. 5 - Prob. 20ECh. 5 - Prob. 21ECh. 5 - Prob. 22ECh. 5 - Prob. 23ECh. 5 - Prob. 24ECh. 5 - Prob. 25ECh. 5 - Classify costs Seymour Clothing Co. manufactures a...Ch. 5 - Prob. 2PACh. 5 - Prob. 3PACh. 5 - Prob. 4PACh. 5 - Prob. 5PACh. 5 - Contribution margin, break-even sales,...Ch. 5 - Classify costs Cromwell Furniture Company...Ch. 5 - Prob. 2PBCh. 5 - Prob. 3PBCh. 5 - Prob. 4PBCh. 5 - Prob. 5PBCh. 5 - Contribution margin, break-even sales,...Ch. 5 - Prob. 1ADMCh. 5 - Prob. 2ADMCh. 5 - Prob. 3ADMCh. 5 - Prob. 1TIFCh. 5 - Prob. 3TIF
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