Fundamentals of Cost Accounting
5th Edition
ISBN: 9781259565403
Author: William N. Lanen Professor, Shannon Anderson Associate Professor, Michael W Maher
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 29E
a.
To determine
Evaluate the performance of D and M based on the performance measures the company uses.
b.
To determine
Provide recommendations for changes, if any are required.
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The following situations describe decision scenarios that could use managerial accounting information:1. The manager of High Times Restaurant wants to determine the price to charge for various lunch plates.2. By evaluating the cost of leftover materials, the plant manager of a precision tool facility wants to determine how effectively the plant is being run.3. The division controller of West Coast Supplies needs to determine the cost of products left in inventory.4. The manager of the Maintenance Department of a large manufacturing company wants to plan next year’s anticipated expenditures.For each situation, discuss how managerial accounting information could be used.
The following situations describe decision scenarios that could use managerial accounting information:
The manager of High Times Restaurant wishes to determine the price to charge for various lunch plates.
By evaluating the cost of leftover materials, the plant manager of a precision tool facility wishes to determine how effectively the plant is being run.
The division controller of West Coast Supplies needs to determine the cost of products left in inventory.
The manager of the Maintenance Department of a large manufacturing company wishes to plan next year’s anticipated expenditures. For each situation, discuss how managerial accounting information could be used.
b) What are the major differences between managerial accounting and financial accounting?
A large company sells a range of electrical, clothing, and homeware products through a chain of department stores. The main administration functions are provided from the company’s head office. Each department store has its own warehouse which receives goods that are delivered from a central distribution centre. The company currently measures profitability by product group for each store using an absorption costing system. All overhead costs are charged to product groups based on sales revenue. Overhead costs account for approximately one-third of total costs and the directors are concerned about the arbitrary nature of the current method used to charge these costs to product groups. A consultant has been appointed to analyse the activities that are undertaken in the department stores and to establish an activity-based costing system. The consultant has identified the following data for the latest period for each of the product groups for the X town store in the image below:
(a)…
Chapter 12 Solutions
Fundamentals of Cost Accounting
Ch. 12 - What does decentralization mean in the context of...Ch. 12 - Why is performance measurement an important...Ch. 12 - Prob. 3RQCh. 12 - What does dysfunctional decision making refer to?Ch. 12 - Prob. 5RQCh. 12 - What are the five basic kinds of decentralized...Ch. 12 - What is goal congruence? How is it different from...Ch. 12 - Prob. 8RQCh. 12 - What is relative performance evaluation?Ch. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - The management control system collects information...Ch. 12 - Salespeople are often paid a commission based on...Ch. 12 - Prob. 15CADQCh. 12 - Prob. 16CADQCh. 12 - On December 30, a manager determines that income...Ch. 12 - Prob. 18CADQCh. 12 - Prob. 19CADQCh. 12 - The manager of an operating department just...Ch. 12 - In the previous chapters, we considered different...Ch. 12 - A company has a bonus plan that states that...Ch. 12 - Prob. 23CADQCh. 12 - Prob. 24CADQCh. 12 - Prob. 25CADQCh. 12 - Prob. 26CADQCh. 12 - Prob. 27CADQCh. 12 - Prob. 28CADQCh. 12 - Prob. 29ECh. 12 - Evaluating Management Control SystemsEthical...Ch. 12 - Prob. 31ECh. 12 - Management Control Systems and Incentives A...Ch. 12 - Alternative Allocation Bases: Service Bartolo...Ch. 12 - Single versus Dual Rates Required Refer to data...Ch. 12 - Single versus Dual Rates: Ethical Considerations A...Ch. 12 - Single versus Dual Rates Using the data for the...Ch. 12 - Alternative Allocation Bases Thompson Aeronautics...Ch. 12 - Tone at the Top, Ethics Once upon a time, a major...Ch. 12 - Prob. 39ECh. 12 - Prob. 40ECh. 12 - Internal Controls Commonly in many organizations,...Ch. 12 - Evaluating Management Control Systems SPG Company...Ch. 12 - Analyze Performance Report for Decentralized...Ch. 12 - Divisional Performance Measurement: Behavioral...Ch. 12 - Cost Allocations: Comparison of Dual and Single...Ch. 12 - Cost Allocation for Travel Reimbursement Your...Ch. 12 - Incentives, Illegal Activities, and Ethics An...
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