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ACCT 349 ENTIRE COURSE

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ACCT 349 ENTIRE COURSE

 

 

ACCT 349 Week 1 Assignment Ethics Case BYP 1-6

 

Ethics Case BYP 1-6

(a) Who are the stakeholders in this situation?

  1. b) What are the ethical issues involved in this situation?

 

 

ACCT 349 Week 1 Homework 8-4, 8-6, 8-8, 8-9, 8-13, 8-22

 

 

ACCT 349 Week 1 Quiz

 

 

  1. (TCO 10) Which of the following statements is true about overhead cost variance analysis using activity-based costing?
  2. (TCO 10) Sebastian Company, which manufactures electrical switches, uses a standard cost system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours and are shown below:

Variable overhead (5 hours at $12 per direct manufacturing labor hour)

$ 60

Fixed overhead (5 hours at $15 per direct manufacturing labor hour,
based on capacity of 200,000 direct manufacturing labor hours per month) 

75

Total overhead per switch

$ 135


The following information is available for the month of December:

46,000 switches were produced, although 40,000 switches were scheduled to be produced.

225,000 direct manufacturing labor hours were worked at a total cost of $5,625,000.

Variable manufacturing overhead costs were $2,750,000.

Fixed manufacturing overhead costs were $3,050,000.

The total variable manufacturing overhead variance was

  1. (TCO 10) Sebastian Company, which manufactures electrical switches, uses a standard cost system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours and are shown below:

Variable overhead (5 hours at $12 per direct manufacturing labor hour)

$ 60

Fixed overhead (5 hours at $15 per direct manufacturing labor hour,
based on capacity of 200,000 direct manufacturing labor hours per month) 

75

Total overhead per switch

$ 135


The following information is available for the month of December:

46,000 switches were produced, although 40,000 switches were scheduled to be produced.

225,000 direct manufacturing labor hours were worked at a total cost of $5,625,000.

Variable manufacturing overhead costs were $2,750,000.

Fixed manufacturing overhead costs were $3,050,000.

The fixed manufacturing overhead spending variance for December was

  1. (TCO 10) The following information is for Pappillon Corporation’s variable manufacturing overhead costs last month: favorable flexible-budget variance of $3,000, unfavorable efficiency variance of $2,500. The spending variance is
  2. (TCO 10) Budgeted overhead costs rates can be expressed as an amount per unit of output or per unit of input

 

 

ACCT 349 Week 2 Assignment Chapter 14

 

 

Complete the Statement

1.In a ______ cost pool, all of the costs in the cost pool have the same or a similar cause-and-effect or benefits-received relationship with the cost-allocation base.

2.The reduction in selling price below list selling price in order to encourage customers to purchase more is called a __________

3.A ______________categorizes costs related to customers into different cost pools on the basis of different types of cost drivers (or cost-allocation bases) or different degrees of difficulty in determining cause- and-effect or benefits-received relationships.

4.A _________ unit is a hypothetical unit with weights based on the mix of individual units.

5.The sales-volume variance subdivides into which two variances?_______________

6.The direct materials (DM) efficiency variance subdivides into which two variances?_________________

True / False

  1. One of the four purposes of cost allocation is to measure income and assets for reporting to external parties.
  2. The fairness criterion is superior to other criteria used for guiding cost- allocation decisions when the purpose of the allocation is either to provide information for economic decisions or to motivate managers and other employees.
  3. When the degree of homogeneity is greater among costs, more cost pools are required to explain accurately the differences in how products use the resources of a company.
  4. Customer-profitability analysis often shows that a small percentage of customers accounts for a large percentage of the company’s operating income.
  5. In the customer cost hierarchy, delivery cost for a customer order is a customer-sustaining cost.
  6. An unfavorable sales-mix variance arises for an individual product when its actual sales-mix percentage is less than its budgeted sales-mix percentage.
  7. When multiple inputs of direct materials can be combined in varying proportions within specified limits, they are called substitutable inputs.
  8. An unfavorable direct materials mix variance for an individual type of direct material arises when its actual mix percentage is less than its budgeted mix percentage.

 

 

ACCT 349 Week 2 Quiz

 

 

  1. (TCO 6) Homogeneity is used to
  2. (TCO 6) Information about price discounting can be useful in analyzing revenues of customers if
  3. (TCO 5) Natural Nutrients Bakery of Southfield produces three flavors of cat morsels that have budgeted and actual sales data for a bag of a dozen of its cat morsels as follows for December 20XX.

 

Budgeted Data

Actual Data

 

Tuna

ChikBits

ChezNips

Tuna

ChikBits

ChezNips

Bags

7,200

4,800

4,000

10,800

3,600

7,200

CM per bag

$2.50

$4.00

$5.00

$2.00

$3.00

$7.50

Cont. Margin

$18,000

$19,200

$20,000

$21,600

$10,800

$54,000

Total Contribution Margin 

 

 

$57,200

 

 

$86,400


According to company forecasts, it was budgeting to earn a 25% market share in total units (bags) of specialty prepared cat treats sold in December 20XX in Southfield. Reliable industry sources indicate that the total number of bags of cat treats sold for December 20XX in Southfield was 72,000.

The sales-quantity variance for December 20XX for Natural Nutrients Bakery is

  1. (TCO 6) Natural Nutrients Bakery of Southfield produces three flavors of cat morsels that have budgeted and actual sales data for a bag of a dozen of its cat morsels as follows for December 20XX.

 

Budgeted Data

Actual Data

 

Tuna

ChikBits

ChezNips

Tuna

ChikBits

ChezNips

Bags

7,200

4,800

4,000

10,800

3,600

7,200

CM per bag

$2.50

$4.00

$5.00

$2.00

$3.00

$7.50

Cont. Margin

$18,000

$19,200

$20,000

$21,600

$10,800

$54,000

Total Contribution Margin 

 

 

$57,200

 

 

$86,400


According to company forecasts, it was budgeting to earn a 25% market share in total units (bags) of specialty prepared cat treats sold in December 20XX in Southfield. Reliable industry sources indicate that the total number of bags of cat treats sold for December 200X in Southfield was 72,000.

The market-share variance for December 20XX for Natural Nutrients Bakery is

  1. (TCO 6) Fulbrite Fashions sells a line of women’s dresses. Fulbrite’s performance report for November is shown below. The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income.

 

Actual

Budget

Dresses sold

5,000

6,000

Sales

$235,000

$300,000

Variable costs

(145,000)

(180,000)

Contribution margin

$ 90,000

$120,000

Fixed costs

(84,000)

(80,000)

Operating income

$ 6,000

$ 40,000

The effect of the sales quantity variance on Fulbrite’s contribution margin for November is

 

 

ACCT 349 Week 3 Quiz

 

  1. (TCO 1) A mixed cost function has a constant component of $20,000. If the total cost is $60,000 and the independent variable has the value 200, what is the slope coefficient?
  2. (TCO 1) Companies that take advantage of quantity discounts in purchasing their materials have
  3. (TCO 3) The best opportunity for cost reduction is
  4. (TCO 3) Each month, Haddock Company has $275,000 total manufacturing costs (20% fixed) and $125,000 distribution and marketing costs (36% fixed). Haddock’s monthly sales are $500,000. The markup percentage on variable costs to arrive at the existing (target) selling price is
  5. (TCO 3) Which of these do antitrust laws on pricing not cover?

 

 

ACCT 349 Week 7 Assignment Chapter 22 and 23

 

Chapter 22: Management Control Systems, Transfer Pricing, and Multinational Considerations

Review Questions and Exercises

1.A means of gathering and using information to aid and coordinate the planning and control decisions throughout the organization and to guide the behavior of its managers and other employees is called a _________

2._________ exists when individuals and groups work toward achieving the organization’s goals—that is, managers working in their own perceived best interest take actions that align with the overall goals of top management.

3.The desire to attain a selected goal combined with the resulting pursuit of that goal is called _______

4.___________ is the freedom for managers at lower levels of an organization to make decisions.

5.____________refers to the degree of freedom to make decisions.

6.____________________ arises when the benefit of a decision to a subunit is more than offset by the costs or loss of benefit to the organization as a whole.

7.Products transferred between subunits of a company are called________________

8.What four criteria help in choosing a transfer price?___________________

9.In many situations, a general guideline formula has proven to be a helpful first step in setting a minimum transfer price. This minimum transfer price is equal to the sum of which two per-unit costs? ___________________________

 

Multiple Choice

1.(CMA adapted) Which of the following is decentralization least likely to accomplish?

a.Provide a pool of management talent

b.Shorten decision time

c.Heighten goal congruence

d.Increase motivation of subunit managers

2.(CPA) Brent Co. has intracompany service transfers from Division Core, a cost center, to Division Pro, a profit center. Under stable economic conditions, which of the following transfer prices is likely to be most conducive to evaluating whether both divisions have met their responsibilities?

a.Actual cost

b.Standard variable cost

c.Actual cost plus a markup

d.Negotiated price

3.Designing the transfer-pricing system is most difficult in organizations that are:

a.Highly decentralized with many interdependencies among subunits

b.Highly centralized with many interdependencies among subunits

c.Highly decentralized with few interdependencies among subunits

d.Highly centralized with few interdependencies among subunits

4.(CMA) Parkside Inc. has several divisions that operate as decentralized profit centers. Parkside’s Entertainment Division manufactures video arcade equipment using the products of two of Parkside’s other divisions. The Plastics Division manufactures plastic components; one type is made exclusively for the Entertainment Division, while other less complex components are sold to external markets. The products of the Video Cards Division are sold in a competitive market, but one video card model is also used by the Entertainment Division. The actual manufacturing cost per unit of the Entertainment Division is as follows:

 

Plastics Components

Video Cards

Direct materials used

$1.25

$2.40

Direct manufacturing labor

2.35

3.00

Variable overhead

1.00

1.50

Fixed overhead

0.40

2.25

Total cost per unit

$5.00

$9.15

The Plastics Division sells its commercial products at full cost plus a 25% markup based on cost and believes the proprietary plastic component made for the Entertainment Division would sell for $6.25 per unit on the open market. The market price of the video card used by the Entertainment Division is $10.98 per unit.

Assuming the Video Cards Division has no unused capacity, a transfer price to the Entertainment Division of $9.15 per unit will:

a.Allow evaluation of both divisions on a competitive basis

b.Satisfy the Video Cards Division`s profit desire by allowing recovery of opportunity costs

c.Not motivate the Entertainment Division and will cause mediocre performance.

d.Provide no incentive for the Video Cards Division to control or reduce costs

e.Encourage the Entertainment Division to purchase video cards from an external source.

5.Use the information in question 4 but assume the Entertainment Division is able to purchase a large quantity of video cards from an external supplier at $8.70 per unit. The Video Cards Division, having unused capacity, agrees to lower the transfer price to $8.70 per unit. This action will:

a.Optimize the profit goals of the Entertainment Division while subverting the profit goals of Parkside Inc.

b.Provide no profit incentive for the Video Cards Division.

c.Subvert the profit goals of the Video Cards Division while optimizing the profit goals of the Entertainment Division.

d.cause mediocre performance in the Video Cards Division because opportunity costs increase

e.Optimize the overall profit goals of Parkside Inc.

6.Use the information in question 4 and assume the Plastics Division has unused capacity and negotiates a transfer price of $5.60 per plastic component with the Entertainment Division. This price will:

a.Cause the Plastics Division to reduce the number of commercial plastic components it manufactures.

b.Motivate both divisions

c.Encourage the Entertainment Division to seek an external supplier for plastic components

d.Not motivate the Plastics Division, causing mediocre performance.

e.satisfy the Plastics Division’s profit desire by allowing recovery of opportunity costs

7.(CPA adapted) Mar Company has two decentralized divisions, X and Y. Division X has been purchasing certain component parts from Division Y at $75 per unit. Because Division Y plans to raise the price to $100 per unit, Division X desires to purchase these parts from external suppliers for $75 per unit. The following information is available:

Y`s variable cost per unit

$70

Y`s annual fixed costs

$15,000

Y`s annual production of these parts for X

1,000 units

If Division X buys from an external supplier, the facilities Division Y uses to manufacture these parts will be idle. Assuming g Division Y’s fixed costs cannot be avoided, what is the result if Mar requires Division X to buy from Division Y at a transfer price of $100 per unit?

Chapter 23: Performance Measurement, Compensation, and Multinational Considerations.

Review Questions and Exercises

1.Designing accounting-based performance measure for an organization subunit requires three steps. Step 1 is to choose performance measures that _____________ financial goals.

2.In the formula to calculate residual income, the required rate of return multiplied by investment is called the ________ cost of the investment.

3.__________cost is the cost of purchasing an asset today identical to the one currently held, or the cost of purchasing an asset that provides services like the one currently held if an identical asset cannot be purchased.

4.An important consideration in designing compensation arrangements is the trade-off between creating incentives to get the manager to work hard and imposing ______ on the manager.

  1. _________ describes situations in which an employee prefers to exert less effort (or report distorted information) compared to the effort (or accurate information) desired by the owner, because the employee’s effort (or validity of the reported information) cannot be accurately monitored and enforced.

6.Name the four levers of control _________________

 

Multiple Choice

1.Roma Bottling Co. has an investment of $3,000,000, an income-to-revenues ratio of 4%, and an ROI of 12%. Its revenues are:

Income = 12% × $3,000,000 = $360,000

Revenues = $360,000 ÷ 0.04 = $9,000,000

a.$360,000

b.$9,000,000

c.$1,440,000

d.$12,000,000

2.Using the information in question 1, the revenues-to-investment ratio is:

$9,000,000 ÷ $3,000,000 = 3 times

a.5 times

b.4 times

c.3 times

d.2 times

3.(CMA adapted) A company`s ROI increases if:

To answer this question, use assumed amounts. Suppose the present ROI is 20% as follows:

Income x Revenues = ROI

Revenues Investment

$100,000 - $90,000 x $100,000 = 20%

$100,000 $50,000

 

a.Revenues increase by the same dollar amount that costs and total assets increase

b.Revenues remain the same, and costs are reduced by the same dollar amount that total assets increase

c.Revenues and costs increase by the same dollar amount that costs increase

d.Revenues and costs increase by the same percentage that total assets increase

e.None of the above

4.For the fiscal year just ended, Fletcher Inc. has an RI of $180,000 and operating income of $500,000. If the required rate of return is 16%, the amount of investment is:

Imputed interest cost = $500,000 − $180,000 = $320,000

Investment = $320,000 ÷ 0.16 = $2,000,000

a.$320,000

b.$3,125,000

c.$8,000,000

d.$2,000,000

e.None of the above

5.Using the information in question 4, ROI is:

$500,000 ÷ $2,000,000 = 25%

 

a.5%

b.10%

c.15%

d.20%

e.None of the above

6.(CPA) Marsh Inc. has an incentive compensation plan under which its president is paid a bonus equal to 10% of Marsh’s income after deducting the bonus but before deducting income taxes. For the year ended December 2010, Marsh’s income was $110,000 before deducting the bonus and income taxes. Marsh had income taxes of $40,000 in 2010. How much bonus should Marsh pay its president for 2010?

Let B = Bonus

B = ($110,000 – B) x 0.10

B = $11,000 - 0.10B

1.10B = $11,000

B = $11,000/1.10 = $10,000

The income taxes of $40,000 should not be used in computing the bonus.

a.$0

b.$7,000

c.$10,000

d.$11,000

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