Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Chapter 16, Problem 68P
Ethics and Standard Costs
Farmer Frank’s produces items from local farm products and distributes them to supermarkets. Over the years, price competition has become increasingly important, so Susan Kramer, the company’s controller, is planning to implement a
Required
Is Margaret’s behavior regarding the cost information she provided to Susan unethical? Explain your answer.
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Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home
delivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number of pizzas sold and the
number of deliveries made.
The pizzeria's cost formulas appear below:
Fixed Cost
per Month
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle.
Equipment depreciation
Rent
Miscellaneous
Pizzas
Deliveries
Revenue
Pizza ingredients.
Excee
Kitchen staff
n+ili+
Utilities
Delis
Delivery person
Delivery vehicle
Equipment depreciation.
Rent
Miscellaneous
$ 6,090
$ 700
Pizzas
Deliveries
Revenue
Expenses:
$ 720
$ 472
Pizza ingredients
Kitchen staff
$ 2,050
$ 820
In November, the pizzeria budgeted for 1,830 pizzas at an average selling price of $16 per pizza and for 230 deliveries.
Data concerning the pizzeria's actual results in November were as follows:
Actual
Results
1,930
210
520
$ 31,520
930
$ 8,830
$ 6,030
$930…
Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home
delivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number of pizzas sold and the
number of deliveries made.
The pizzeria's cost formulas appear below:
Fixed
Cost per
Month
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
Pizzas
Deliveries
Revenue
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
$ 5,910
$ 610
Miscellaneous
$ 630
$ 400
$ 1,870
$ 730
In November, the pizzeria budgeted for 1,560 pizzas at an average selling price of $15 per pizza and for 220 deliveries.
Data concerning the pizzeria's actual results in November appear below:
Actual
Results.
1,660
200
$ 25,450
$ 7,210
$ 5,850
$ 885
$ 620
$ 986
$ 400
Cost per
Pizza
$ 4.40
$ 1,870
$ 790
$ 0.30
Cost per
Delivery
$ 0.15
$ 3.10
$…
The Chocolate Baker specializes in chocolate baked goods. The firm has long assessed the profitability of a product line by comparing revenues to the cost of goods sold. However, Barry Love, the firm’s new accountant, wants to use an activity-based costing system that takes into consideration the cost of the delivery person. Listed below are activity and cost information relating to two of Chocolate Baker’s major products.
Muffins
Cheesecake
Revenue
$53,000
$46,000
Cost of goods sold
26,000
21,000
Delivery activity:
Number of deliveries
150
85
Average length of delivery
10 minutes
15 minutes
Cost per hour for delivery
$20.00
$20.00
Using activity-based costing, which one of the following statements is correct?
A. The cheesecakes are $75 more profitable.
B. The muffins have a higher profitability as a percentage of sales and therefore are more advantageous.
C. The muffins are $2,000 more…
Chapter 16 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 16 - What are the advantages of the contribution margin...Ch. 16 - How can a budget be used for performance...Ch. 16 - The flexible budget for coats it computed by...Ch. 16 - A flexible budget is: a. Appropriate for control...Ch. 16 - What is the standard cost sheet?Ch. 16 - What is the basic difference between a mailer...Ch. 16 - Standards and budgets are the same thing. True or...Ch. 16 - Actual direct materials costs differ from the...Ch. 16 - Fixed cost variances are computed differently from...Ch. 16 - What is the advantage of preparing the flexible...
Ch. 16 - What is the link between flexible budgeting and...Ch. 16 - Actual revenues are greater than budgeted for...Ch. 16 - Pick an organization you know, such as a school,...Ch. 16 - Give two reasons why dividing production cost...Ch. 16 - Prob. 15CADQCh. 16 - My firm has a wage contract with the union....Ch. 16 - Prob. 17CADQCh. 16 - The production volume variance should be charged...Ch. 16 - Prob. 19CADQCh. 16 - Prob. 20CADQCh. 16 - Flexible Budgeting The master budget at Western...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Refer to the data in...Ch. 16 - Flexible Budget Given the data shown in the...Ch. 16 - Fill in Amounts on Flexible Budget Graph Fill in...Ch. 16 - Flexible Budget Label (a) and (b) in the graph and...Ch. 16 - Prepare Flexible Budget Osage, Inc., manufactures...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Use the information from...Ch. 16 - Sales Activity Variance The following data are...Ch. 16 - Sales Activity Variance Selected data for October...Ch. 16 - Prob. 32ECh. 16 - Prob. 33ECh. 16 - Prob. 34ECh. 16 - Prob. 35ECh. 16 - Prob. 36ECh. 16 - Prob. 37ECh. 16 - Variable Cost Variances The following data reflect...Ch. 16 - Variable Cost Variances The records of Norton,...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - Fixed Cost Variances Information on Carney...Ch. 16 - Prob. 43ECh. 16 - Prob. 44ECh. 16 - Fixed Cost Variances Mint Company applies fixed...Ch. 16 - Prob. 46ECh. 16 - Prob. 47ECh. 16 - (Appendix used in requirement [c]) Comprehensive...Ch. 16 - Comprehensive Cost Variance Analysis NSF Lube is a...Ch. 16 - Overhead Variances Brice Corporation shows the...Ch. 16 - Solve for Master Budget Given Actual Results A new...Ch. 16 - Find Missing Data for Profit Variance Analysis...Ch. 16 - Find Data for Profit Variance Analysis Required...Ch. 16 - Prob. 54PCh. 16 - Prepare Flexible Budget Odessa, Inc., reports the...Ch. 16 - Prob. 56PCh. 16 - Prob. 57PCh. 16 - Prob. 58PCh. 16 - Prob. 59PCh. 16 - Prob. 60PCh. 16 - Direct Materials Information about direct...Ch. 16 - Prob. 62PCh. 16 - Prob. 63PCh. 16 - Prob. 64PCh. 16 - Overhead Cost and Variance Relationships...Ch. 16 - Prob. 66PCh. 16 - Prob. 67PCh. 16 - Ethics and Standard Costs Farmer Franks produces...Ch. 16 - Comprehensive Variance Problem The standard cost...Ch. 16 - Prob. 70PCh. 16 - Find Actual and Budget Amounts from Variances JW...Ch. 16 - Variance Computations with Missing Data The...Ch. 16 - Comprehensive Variance Problem Sweetwater Company...Ch. 16 - Prob. 74PCh. 16 - Prob. 75PCh. 16 - Keewee Company manufactures a single product for...
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