Managerial Accounting (Custom Package)
4th Edition
ISBN: 9781323485880
Author: Braun
Publisher: PEARSON
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Question
Chapter 8, Problem 8.54ACT
1.
To determine
To explain: The qualitative reasons behind discontinuance of product GS.
2.
To determine
To explain: The factors that would be relevant to a restaurant that is considering whether to make its own dinner rolls or to purchase dinner rolls from a local bakery.
3.
To determine
That how would outsourcing change a company’s cost structure.
To conclude: The change in cost structure help or harm a company’s competitive position by outsourcing.
4.
To determine
To explain: Opportunity cost and list possible opportunity costs associated with a make-or-buy decision.
5.
To determine
To explain: The undesirable result that can arise from allocating common fixed costs to product lines.
6.
To determine
The reason that could make a manager be justified in ignoring fixed costs when making a decision about a special order.
To explain: The situation when would fixed costs be relevant when making a decision about a special order
7.
To determine
The difference between segment margin and contribution margin.
To explain: The condition when segment margin and contribution margin is used.
8.
To determine
To explain: That if joint costs affect a sell as is or process further decision with reasons.
9.
To determine
That how “make-or-buy” concepts be applied to decisions at a service organization.
To explain: The types of make-or-buy decisions that might a service organization face.
10.
To determine
The constraints for company O, which builds outdoor furniture using a variety of woods and plastics.
To explain: At least four possible constraints at company O.
11.
To determine
To explain: The carbon offset and carbon footprint. Interest of company in selling carbon offset.
12.
To determine
To explain: The quantitative and qualitative factors for outsourcing its services.
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To emphasize that any decision encompasses qualitative, as well as quantitative, factors, answer one or the following questions:
1.A diversified food company is considering the closing of its Condiment Division. What qualitative factors should be considered before discontinuing a division or product line?
2.An automobile manufacturer has decided to allow outside suppliers to bid on all parts necessary to make its vehicles. What qualitative factors should be considered by management in deciding whether or not to turn over the production of a part to an outside supplier?
3.What are the qualitative factors you might consider when determining whether or not to replace your car?
A local coffee shop has two major product lines—drinks and pastries. If the manager allocates common costs on any objective basis discussed in this chapter, the drinks are profitable, but the pastries are not. The manager is concerned that the supervisor at corporate headquarters will drop the pastries. The manager is concerned because a relative, who is struggling to make a go of a new business, supplies pastries to the coffee shop. The manager, therefore, decides to allocate all common costs to the drinks because “Drinks can afford to absorb these costs until we get the pastries line on its feet.” After assigning all common costs to drinks, both the drinks and pastries product lines appear to be marginally profitable. Consequently, corporate headquarters decides to continue the pastries line.
Required
How would you recommend the manager allocate the common costs between drinks and pastries?
You are the assistant manager and have been working with the manager on the allocation…
A local coffee shop has two major product lines—drinks and pastries. If the manager allocates common costs on any objective basis discussed in this chapter, the drinks are profitable, but the pastries are not. The manager is concerned that the supervisor at corporate headquarters will drop the pastries. The manager is concerned because a relative, who is struggling to make a go of a new business, supplies pastries to the coffee shop. The manager, therefore, decides to allocate all common costs to the drinks because “Drinks can afford to absorb these costs until we get the pastries line on its feet.” After assigning all common costs to drinks, both the drinks and pastries product lines appear to be marginally profitable. Consequently, corporate headquarters decides to continue the pastries line.
What can we do to boost pastry sales?
Chapter 8 Solutions
Managerial Accounting (Custom Package)
Ch. 8 - Prob. 1QCCh. 8 - Prob. 2QCCh. 8 - Prob. 4QCCh. 8 - Prob. 3QCCh. 8 - Prob. 5QCCh. 8 - Prob. 6QCCh. 8 - 7. (Learning Objective 4) A segment margin is...Ch. 8 - Prob. 8QCCh. 8 - Prob. 9QCCh. 8 - Prob. 10QC
Ch. 8 - Determine relevance of information (Learning...Ch. 8 - Prob. 8.3SECh. 8 - Prob. 8.4SECh. 8 - Prob. 8.2SECh. 8 - Prob. 8.5SECh. 8 - Prob. 8.6SECh. 8 - Prob. 8.7SECh. 8 - Prob. 8.8SECh. 8 - Prob. 8.9SECh. 8 - Prob. 8.10SECh. 8 - Prob. 8.11SECh. 8 - Prob. 8.12SECh. 8 - Prob. 8.13SECh. 8 - Prob. 8.14SECh. 8 - Prob. 8.15SECh. 8 - Prob. 8.16AECh. 8 - Prob. 8.18AECh. 8 - Prob. 8.20AECh. 8 - Prob. 8.17AECh. 8 - Prob. 8.19AECh. 8 - Prob. 8.21AECh. 8 - Prob. 8.22AECh. 8 - Prob. 8.23AECh. 8 - Prob. 8.24AECh. 8 - Prob. 8.25AECh. 8 - Prob. 8.26AECh. 8 - Prob. 8.27AECh. 8 - Prob. 8.28AECh. 8 - Prob. 8.29BECh. 8 - Prob. 8.31BECh. 8 - Prob. 8.33BECh. 8 - Prob. 8.30BECh. 8 - Prob. 8.32BECh. 8 - Prob. 8.34BECh. 8 - Prob. 8.35BECh. 8 - Prob. 8.36BECh. 8 - Prob. 8.37BECh. 8 - Prob. 8.38BECh. 8 - Prob. 8.39BECh. 8 - Prob. 8.40BECh. 8 - Prob. 8.41BECh. 8 - Prob. 8.43APCh. 8 - Prob. 8.42APCh. 8 - Prob. 8.44APCh. 8 - Prob. 8.45APCh. 8 - Prob. 8.46APCh. 8 - Prob. 8.47APCh. 8 - Prob. 8.49BPCh. 8 - Prob. 8.48BPCh. 8 - Prob. 8.50BPCh. 8 - Prob. 8.51BPCh. 8 - Prob. 8.52BPCh. 8 - Prob. 8.53BPCh. 8 - Prob. 8.54ACTCh. 8 - Outsourcing Decision at a Real Company Go to the...Ch. 8 - Prob. 8.56ACTCh. 8 - Prob. 8.57ACT
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