Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 4.4GBP
3
To determine
Concept introduction:
Managerial Decision:
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.
The mutually beneficial transfer price.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Cost Relationships The following costs are for Optical View Inc., a contact lens manufacturer:
Required
Calculate and graph total costs, the total variable cost, and total fixed cost.
For each level of output calculate the per-unit total cost, per-unit variable cost, and per-unit fixed cost.
Using the results from requirement 2, graph the per-unit total cost, per-unit variable cost, and per-unit fixed cost, and discuss the behavior of the per-unit costs over the given output levels.
Theory of constraints, throughput margin, relevant costs. The Denver Corporation manufactures ling cabinets in two operations: machining and nishing. It provides the following information:
You have been asked by management to classify the costs associated with the start-up of this new product line. Using the cost information provided below, classify each cost under the appropriate heading according to the chart provided below. Note that some costs may be classified under more than one heading. For example, a cost may be a fixed cost and a period cost.
Name of cost
Variable Cost
Fixed Cost
Direct Materials
Direct Labor
Factory Overhead
Period Cost
Prime Cost
Conversion Cost
Carlson “New Product” Cost Information
Cost
Amount
Cost Type
Depreciation on Building (annual)
$ 10,000
Direct Labor Cost (per unit)
$ 75
Direct Materials Cost (per unit)
$ 60
Factory Utilities (per unit)
$ 8
Indirect Materials (per unit)
$ 4
Interest on Investments (annual)
$3,000
Machinery Rental (monthly)
$ 6,000
Marketing (annual)
$ 35,000
Rent from Tenant (annual)
$40,000…
Chapter 10 Solutions
Managerial Accounting
Ch. 10 - Explain how centralized and decentralized...Ch. 10 - Why does decentralization create the need for...Ch. 10 - What is the controllability principle and why is...Ch. 10 - Prob. 4QCh. 10 - Prob. 5QCh. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - Prob. 8QCh. 10 - Return on investment may be separated into two...Ch. 10 - Prob. 10Q
Ch. 10 - Prob. 11QCh. 10 - Prob. 12QCh. 10 - Prob. 13QCh. 10 - Prob. 14QCh. 10 - Prob. 15QCh. 10 - Prob. 16QCh. 10 - Prob. 17QCh. 10 - Why must a company consider its incentive and...Ch. 10 - Prob. 19QCh. 10 - Prob. 20QCh. 10 - Prob. 21QCh. 10 - Prob. 22QCh. 10 - Prob. 23QCh. 10 - Prob. 24QCh. 10 - Prob. 25QCh. 10 - What are negotiated transfer prices? Explain two...Ch. 10 - Sally Thorne is a profit center manager for ABC...Ch. 10 - Prob. 2MCCh. 10 - Which of the following statements is true? a. A...Ch. 10 - Prob. 4MCCh. 10 - Prob. 5MCCh. 10 - Prob. 6MCCh. 10 - Prob. 7MCCh. 10 - Prob. 8MCCh. 10 - Which of the following is not a component of the...Ch. 10 - Prob. 10MCCh. 10 - Using Terms to Complete Sentences about...Ch. 10 - Prob. 2MECh. 10 - Prob. 3MECh. 10 - Applying Balanced Scorecard to Real World Company...Ch. 10 - Applying Balanced Scorecard to Online Company...Ch. 10 - Prob. 6MECh. 10 - Prob. 7MECh. 10 - Prob. 8MECh. 10 - Prob. 9MECh. 10 - Prob. 10MECh. 10 - Prob. 11MECh. 10 - Prob. 12MECh. 10 - Prob. 13MECh. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Calculating Return on Investment, Residual Income,...Ch. 10 - Prob. 6ECh. 10 - Evaluating Managerial Performance Using Return on...Ch. 10 - Evaluating Managerial Performance Using Return on...Ch. 10 - Prob. 9ECh. 10 - Determining the Impact of Various Transactions on...Ch. 10 - Determining Different Types of Responsibility...Ch. 10 - Prob. 14ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Matching Measures of Performance with the Correct...Ch. 10 - Determining Minimum, Maximum, Negotiated Transfer...Ch. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Calculating Return on Investment, Residual Income,...Ch. 10 - Prob. 1.2GAPCh. 10 - Calculating Unknowns, Predicting Relationship...Ch. 10 - Calculating Unknowns, Predicting Relationship...Ch. 10 - Prob. 2.3GAPCh. 10 - Prob. 2.4GAPCh. 10 - Prob. 2.5GAPCh. 10 - Prob. 2.6GAPCh. 10 - Prob. 3.1GAPCh. 10 - Prob. 3.2GAPCh. 10 - Prob. 3.3GAPCh. 10 - Prob. 3.4GAPCh. 10 - Prob. 3.5GAPCh. 10 - Prob. 3.6GAPCh. 10 - Prob. 4.1GAPCh. 10 - Prob. 4.2GAPCh. 10 - Prob. 4.3GAPCh. 10 - Prob. 4.4GAPCh. 10 - Prob. 4.5GAPCh. 10 - Prob. 5.1GAPCh. 10 - Prob. 5.2GAPCh. 10 - Prob. 5.3GAPCh. 10 - Prob. 5.4GAPCh. 10 - Prob. 6GAPCh. 10 - Prob. 1.1GBPCh. 10 - Prob. 1.2GBPCh. 10 - Prob. 2.1GBPCh. 10 - Prob. 2.2GBPCh. 10 - Prob. 2.3GBPCh. 10 - Prob. 2.4GBPCh. 10 - Prob. 2.5GBPCh. 10 - Prob. 2.6GBPCh. 10 - Prob. 3.1GBPCh. 10 - Prob. 3.2GBPCh. 10 - Prob. 3.3GBPCh. 10 - Prob. 3.4GBPCh. 10 - Prob. 3.5GBPCh. 10 - Prob. 3.6GBPCh. 10 - Prob. 4.1GBPCh. 10 - Prob. 4.2GBPCh. 10 - Prob. 4.3GBPCh. 10 - Prob. 4.4GBPCh. 10 - Prob. 4.5GBPCh. 10 - Prob. 5.1GBPCh. 10 - Prob. 5.2GBPCh. 10 - Prob. 5.3GBPCh. 10 - Prob. 5.4GBPCh. 10 - Prob. 6GBP
Knowledge Booster
Similar questions
- Accounting ABC manufactures wreaths according to customer specifications and ships them to customers using a logistics organization such as FedEx. Which two terms below describe the cost of shipping these wreaths? a. Variable cost and Period cost b. Fixed cost and Period cost c. Variable cost and Product cost d. Fixed cost and Product costarrow_forwardcompany You are a management accountant of EON and Brothers Ltd., a manufacturing that produces two products simultaneously in one of their production plants. You are asked to produce a management report on costing techniques. This company follows a traditional approach to costing and absorbs production overhead using machine hours. The company's policy is to add a 50% markup on the unit cost to obtain the selling price. The relevant information is given below: EON and Brothers Ltd. produces two similar products called Alfa and Beta. Total Overheads = £155,000 Machine Hours = 58980 hrs Product Alfa Beta Production Units 2,580 5,100 Material Cost per unit £31 £51 Labour Cost per unit £21 £17 Machine Hours per unit 11 16 After discussing with all the important people of the production plant you have allocated the overhead costs as mentioned below: % Overheads Set up Costs 30 Inspections 40 Materials Handling 30 Cost Pools are as mentioned below: Alfa Beta Total Setups 400 65 465…arrow_forwardTransfer pricing, utilization of capacity. (J. Patell, adapted) Sierra Inc. consists of a semiconductor division and a processcontrol division, each of which operates as an independent prot center. The semiconductor division employs craftsmen who produce two different electronic components: the new highperformance Xcel-chip and an older product called the Dcel-chip. These products have the following cost characteristics:arrow_forward
- Course Objectives: Compute sales units given operating income, selling price and variable cost per unit. Prepare a contribution margin income statement, clearly showing contribution Use CVP analysis to compute breakeven point and margin of safety Analyze the impact which changes in sales volume and total fixed costs will have on the breakeven point, margin of safety and operating income Explain the impact of errors such as the omission of fixed on the decision making process. Darius Manufacturing Company manufactures and sells parts for various musical gadgets. The business earned Operating Income of $420,000 in 2018, when selling price per unit was $200 and the president of Darius is under pressure to increase operating income in 2019 and is therefore considering the implementation of strategies geared at increasing revenues. Data for variable cost per unit and total fixed costs were as follows: Variable expenses per unit: Direct Material $20…arrow_forwardWhich of these costs would be the most difficult to estimate when you know exactly how many units will be produced? Group of answer choices rent insurance utilities materials used in the productarrow_forwardell Computer incurs the following costs: LOADING... (Click the icon to view the costs.) Requirement Classify each of the cost items (a-h) into one of the business functions of the value chain. Cost Item Value Chain Business Function a. Utility costs for the plant assembling the Latitude computer line of products b. Distribution costs for shipping the Latitude line of products to a retail chain c. Payment to David Newbury Designs for design of the XPS 2-in-1 laptop d. Salary of computer scientist working on the next generation of servers e. Cost of Dell employees' visit to a major customer to demonstrate Dell'sarrow_forward
- Using High-Low to Calculate Fixed Cost, Calculate theVariable Rate, and Construct a Cost FunctionRefer to the information for Speedy Pete’s above. Speedy Pete’s controller wants to calculate thefixed and variable costs associated with its cutting-edge delivery service.Required:Using the high-low method, calculate the fixed cost of deliveries, calculate the variable rate perdelivery, and construct the cost formula for total delivery costarrow_forward4) Design ABC system for EON and Brothers (discuss steps) 5) What are the Costs per unit of Alfa and Beta under traditional and ABC costing systems?What would be the prices of Alpha and Beta traditional and ABC costing systems? Comparethe costs and prices calculated in the two systems (Calculations should be shown in theappendix) and for analysis 6) Discuss your recommendation on the viability of ABC for EON and Brothers Ltd., given thefinancial director's concerns.arrow_forward(Management Accounting) In make-or-buy decisions for a part for a product, relevant costs include ________. A) some variable costs of making the part B) all variable costs of making the part C) fixed costs that can be avoided in the future if the part is purchased D) B and Carrow_forward
- Transfer-pricing methods, goal congruence. Calgary Lumber has a raw lumber division and a nished lumber division. The variable costs are as follows:arrow_forwardElectan Company produces two types of printers. The company uses ABC, and all activity drivers are duration drivers. Electan Company is considering using DBC and has gathered the following data to help with its decision. A. Activities with duration drivers: B. Activities with consumption ratios and costs: C. Products with cycle time and practical capacity: Required: 1. Using cycle time and practical capacity for each product, calculate the total time for all primary activities. Comment on the relationship to ABC. 2. Calculate the overhead rate that DBC uses to assign costs. Comment on the relationship to a unit-based plantwide overhead rate. 3. Use the overhead rate calculated in Requirement 2 to calculate (a) the overhead cost per unit for each product, and (b) the total overhead assigned to each product. How does this compare to the ABC assignments shown in Part B of the Information set? 4. What if the units actually produced were 10,000 for Printer A and 18,000 for Printer B. Using DBC, calculate the cost of unused capacity.arrow_forwardManagement of Green Peak Tea Company has asked you, the controller, to develop a transfer pricing system for the company. The Brewing Department of the company sells all of its product to the Bottling Department of the company. Thus the Brewing Departments sales become the Bottling Departments cost of goods sold. In order to determine an optimal transfer pricing system, management would like you to demonstrate what an income statement would look like under a cost, market, and negotiated transfer pricing structure. These various transfer prices are listed as follows. Prepare an income statement for each of the transfer prices by filling in the missing numbers in the provided income statement based on each transfer price (thus four different income statements) and calculate the operating income/loss percentage. Prepare a brief summary of the results.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning