Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 17, Problem 16E
Refer to the data given in the preceding exercise.
Required:
- 1. Use the step-down method to allocate Hudson Community College’s service department costs to the Liberal Arts and Sciences departments.
- 2. Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: the budgeted costs of the Library and Computing Services are $590,000 and $280,000, respectively.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at$400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis)
Financial Analysis for Project Name
Created by:
Date:
Note: Change the inputs, shown in green below (i.e. interest rate, number of…
Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at $400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis)
What I have so far is attached
I need to make it so Pay back occurs in year 3 where there is positive cumulative benefits - costs.
Triad Children's Center (TCC), a non-profit organization, uses relevant cost analysis to determine whether new services are desirable. TCC is looking at adding a new educational program for grade school children who are having difficulty with their reading and math skills. The following relevant costs are expected if the program is accepted:
Costs (per year)
Program Director salary
$
39,000
Part-time Assistants
$
28,000
Variable cost per child
$
900
TCC estimates that a maximum of 40 children will participate in this program in the first year. If TCC decides to implement this program, funding will be received from the City Chamber of Commerce ($50,000) and a local Private University Endowment Fund ($35,000).
Calculate the expected surplus or deficit from operations given the above information.
Chapter 17 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Should actual or budgeted service department costs...Ch. 17 - Prob. 4RQCh. 17 - Why does dual cost allocation improve the...Ch. 17 - What potential behavioral problem can result when...Ch. 17 - Should actual or budgeted service department costs...Ch. 17 - Explain the difference between two-stage...Ch. 17 - Define the following terms: joint production...Ch. 17 - Prob. 10RQ
Ch. 17 - Describe the relative-sales-value method of joint...Ch. 17 - Define the term net realizable value, and explain...Ch. 17 - Are joint cost allocations useful? If they are,...Ch. 17 - For what purpose should the managerial accountant...Ch. 17 - Prob. 15ECh. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Tuscaloosa National Bank has two service...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Breakfasttime Cereal Company manufactures two...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Refer to the data given in Exercise 1720....Ch. 17 - Prob. 23ECh. 17 - Prob. 24PCh. 17 - Prob. 25PCh. 17 - Celestial Artistry Company is developing...Ch. 17 - Snake River Sawmill manufactures two lumber...Ch. 17 - Travelcraft Company manufactures a complete line...Ch. 17 - Biondi Industries is a manufacturer of chemicals...Ch. 17 - Berger Company manufactures products Delta, Kappa,...Ch. 17 - Prob. 31PCh. 17 - Lafayette Company manufactures two products out of...Ch. 17 - Refer to the data given in Problem 1726 for...Ch. 17 - Prob. 34PCh. 17 - Top Quality Fruit Company, based on Oahu, grows,...Ch. 17 - Prob. 36C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Professional University teaches a large range of undergraduate courses. It is interested in determining the cost equation for the facilities cost as a function of student credit hours so that it an more accurately budget its facilities costs as enrollment grows. Information for the high and low cost semesters and volumes for last 5 years appears below Semester Student Cresit Hours Facilities Cost Spring 2007 250,000 $500,000 Fall 2004 300,000 $530,000 Using the high low method, with student credit hours as the activity driver, wht is the equation for facilities cost (FC) as a function of student credit hours?arrow_forwardEstimate the amount of money needed to complete a software project based on the given values, assuming that the Budget at Completion is PHP 8000. 000 Actual Cost (AC) = PHP 4200.000 ( work cost) Earned Values (EV)=PHP 3800.000 (amount of work performed) a) Calculate the Cost Performance Index (CPI)? b) Find actual expenditure using Estimate At Completion (EAC). c) Evaluate how much more money needed to complete the project (Estimate To Complete-ETC).arrow_forwardPhoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments administrative services (AS) and information systems (IS) and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2020, Phoenix's cost records indicate the following: (Click the icon to view the cost records.) Read the requirements. Requirement 1a. Allocate the two support departments' costs to the two operating departments using the direct method. (Do not round intermediary calculations and round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Operating Departments Support Departments AS GOVT CORP Direct Method Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs Allocation of IS costs Total budgeted overhead of operating departments …………. IS Totalarrow_forward
- Princeton offers a large range of undergraduate courses. The University is interested in determining the cost equation for the facilities cost as a function of student credit hours so that it can more accurately budget its facilities costs as enrollment grows. Information for the high and low cost semesters and volumes for last 5 years appears below: Semester Spring 2016 Fall 2017 Student Credit Hours Facilities Cost 160,000 $750,000 140,000 $660,000 Using the high-low method, with student credit hours as the activity driver, what is the equation for facilities cost (FC) as a function of student credit hours? FC $4.50/ student credit hour O FC = $1.14 / student credit hour O FC $30,000+ $4.50/ student credit hour O FC $568,182 + $0.22 / student credit hour ◄ Previous MAR 18 tv C Next▸arrow_forwardA linear programming computer package is needed. The Westchester Chamber of Commerce periodically sponsors public service seminars and programs. Currently, promotional plans are under way for this year's program. Advertising alternatives include television, radio, and online. Audience estimates, costs, and maximum media usage limitations are as shown. Constraint Radio Audience per advertisement Online Cost per advertisement Maximum media usage Television Radio Budget Television Online Budget Total Audience 200,000 36,000 80,000 $2,000 Radio Online 10 To ensure a balanced use of advertising media, radio advertisements must not exceed 50% of the total number of advertisements authorized. In addition, television should account for at least 10% of the total number of advertisements authorized. (a) If the promotional budget is limited to $20,500, how many commercial messages should be run on each medium to maximize total audience contact? $300 20 $600 What is the allocation of the budget…arrow_forwardAtlantic University has eight schools, 350 faculty members, and 20,000 students. An analysis of the university's cost structure yielded the following annual cost estimates. The university-sustaining cost level is $20,000,000, which includes basic building costs and administrative salaries such as those of the president and the admissions officers. Committed costs at the university level increase, in the long run, by $20,000,000 for each new school added and by $1000 for each additional student enrolled. The School of Business is a school in Atlantic University. The school-sustaining cost level is $5,000,000. The area-sustaining cost level is $50,000. Committed costs in the School of Business increase, in the long run, by $200,000 for each faculty member added and by $500 for each unit of student capacity added. Planners at Atlantic University estimate that the total flexible costs per student amount to $600. (All the costs above are annual costs.) Each faculty member teaches five…arrow_forward
- The supervisor of capital budgeting for Le Vie Clinic has estimated the following cash flow of dollars for a proposed new clinical service. Please show your for letters a, b,c and d.arrow_forwardA project engineer is assigned to provide computer networking and internet access to an office building. After research, various equipment suppliers' two alternatives are detailed for further economic analysis. Alternative A is a wireless network with lower capital investment costs but higher operational costs. Alternative B is a wired network with low operational costs but higher equipment and installation costs. The costs associated with each of the two (2) alternatives are outlined below. Alternative A Wireless Network Alternative B Wired Network $50,000 $100,000 Design Equipment $50,000 $100,000 Installation $25,000 $100,000 0 Upgrades $25,000 per year Maintenance & Operation P25,000 per year $5,000 per year Salvage $10,000 6 years $5,000 9 years Service Life Using the information provided above, determine which alternative to recommend using PW analysis. Conduct the analysis twice, once for the least common multiple of the service lives and once using a five-year study period.…arrow_forwardLutheran Regional Hospital uses a planning process to define a new radiology service line. The decision matrix gave it a high priority, and administrators want to evaluate its financial feasibility. Estimated fixed costs are $1 million, and the estimated net reimbursement level is $1,500 per procedure. Physician and other provider salaries on a direct basis are $340 per procedure, and total operating expenses will add another $160 per procedure. Calculate the breakeven point for this potential new service line.arrow_forward
- Required information. [The following information applies to the questions displayed below) The following information is provided for each Investment Center. Investment Center Cameras Phones Computers Income $ 4,500,000 1,500,000 800,000 Average Assets $ 20,000,000 12,500,000 10,000,000 Compute return on investment for each investment center. Which center performed the best based on return on investment? Complete this question by entering your answers in the tabs below. Return on Performance Investment Based on ROI Compute return on investment for each investment center. Note: Round your final answer to 1 decimal place. Investment Center Cameras Phones Computers Income $ 4,500,000 $ 1,500,000 800.000 Average Assets 20,000,000 12,500,000 Return on Investment % % 10,000,000 %arrow_forwardThe government decided to have a training program. Below is the costs and nu alternative program can achieve. Project cost Number of Trainees AB C D E F 100 80 190 270 400 300 10 20 45 60 65 80 of trainee each a. The government decided that the program can be repeated over time and therefore, they may choose a small size program as long as it trains at least 15 trainees. Would this choice be different from the most cost-effective project? (Show your numbers in the above table) b. Assume that the government will not be able to repeat the program soon, so the more the number of trainees the better. But at the same time the budget cannot exceed 280. Which project would they choose in this case? (Show your calculations in the above table)arrow_forwardhelp now please. ! Required information [The following information applies to the questions displayed below] The following information is provided for each Investment Center. Investment Center Cameras Phones Computers Income Less: Target income Residual income (loss) $ Income $ 6,350,000 1,806,000 1,100,000 $ Compute return on investment for each investment center. Which center performed the best based on return on investment? A 3 Cameras 6,350,000 $ 3,444,000 (2,906,000) $ Average Assets $ 28,700,000 12,900,000 17,000,000 Phones Ĉ 1,806,000 $ 216,720 (1,589,280) $ Computers 1,100,000 132,000 (968,000)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Inspection and Quality control in Manufacturing. What is quality inspection?; Author: Educationleaves;https://www.youtube.com/watch?v=Ey4MqC7Kp7g;License: Standard youtube license