Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 19, Problem 19.38P
1.
To determine
Quality:
Quality is the special trait possessed by a product that satisfies the needs and wants of the consumers of that product.
To determine: Decision making on purchase of gray cloth.
2.
To determine
Decision making on implementation of scrap reduction program.
3.
To determine
Decision making on implementation of scrap reduction program.
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Rupert’s Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. The finance team at RAW has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow:
Activity
Cost Driver
Activity Cost
Cost Driver Volume
Processing order
Number of orders
$ 70,000
5,000
orders
Loading truck
Number of items
105,000
75,000
items
Delivering order
Number of orders
85,000
5,000
orders
Billing
Number of invoices
68,000
4,000
invoices
Total overhead
$ 328,000
Two of Rupert's customers are McLean Designs and Neveux Appliances. Data for orders and deliveries to these two customers follow:
McLean Designs
Neveux Appliances
Order value (total)
$ 72,000
$ 82,000
Number of orders
52
96
Total number of items
510
1,200
Number of invoices
12
90…
Required information
[The following information applies to the questions displayed below.]
Aztec Industries produces bread which goes through two operations, mixing and baking, before it is ready to be
packaged. Next year's expected costs and activities are shown below.
Mixing
405,000 DLH
805,000 MH
$607,500
Baking
85,000 DLH
805,000 MH
$405,000
Direct labor hours
Machine hours
Overhead costs
Compute Aztec's departmental overhead rate for the baking department based on direct labor hours.
Multiple Choice
$0.50 per DLH
$0.75 per DLH
$4.76 per DLH
$2.07 per DLH
Rupert’s Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. The finance team at RAW has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow:
Activity
Cost Driver
Activity Cost
Cost Driver Volume
Processing order
Number of orders
$ 84,000
6,000
orders
Loading truck
Number of items
290,000
145,000
items
Delivering order
Number of orders
102,000
6,000
orders
Billing
Number of invoices
85,000
5,000
invoices
Total overhead
$ 561,000
Two of Rupert's customers are McLean Designs and Neveux Appliances. Data for orders and deliveries to these two customers follow:
McLean Designs
Neveux Appliances
Order value (total)
$ 86,000
$ 96,000
Number of orders
66
236
Total number of items
900
1,600
Number of invoices
14
180…
Chapter 19 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 19 - Describe two benefits of improving quality.Ch. 19 - Prob. 19.2QCh. 19 - Name two items classified as prevention costs.Ch. 19 - Give two examples of appraisal costs.Ch. 19 - Distinguish between internal failure costs and...Ch. 19 - Describe three methods that companies use to...Ch. 19 - Companies should focus on financial measures of...Ch. 19 - Give two examples of nonfinancial measures of...Ch. 19 - Give two examples of nonfinancial measures of...Ch. 19 - When evaluating alternative ways to improve...
Ch. 19 - Distinguish between customer-response time and...Ch. 19 - Prob. 19.12QCh. 19 - Give two reasons why delays occur.Ch. 19 - Companies should always make and sell all products...Ch. 19 - Prob. 19.15QCh. 19 - Rector Corporation is examining its quality...Ch. 19 - Six Sigma is a continuous quality improvement...Ch. 19 - Costs of quality. (CMA, adapted) Osborn, Inc.,...Ch. 19 - Costs of quality analysis. Adirondack Company...Ch. 19 - Costs-of-quality analysis. Safe Travel produces...Ch. 19 - Costs of quality, quality improvement. iCover...Ch. 19 - Prob. 19.22ECh. 19 - Prob. 19.23ECh. 19 - Waiting time. Its a Dogs World (IDW) makes toys...Ch. 19 - Waiting time, service industry. The registration...Ch. 19 - Waiting time, cost considerations, customer...Ch. 19 - Nonfinancial measures of quality and time. For the...Ch. 19 - Nonfinancial measures of quality, manufacturing...Ch. 19 - Statistical quality control. Harvest Cereals...Ch. 19 - Quality improvement, Pareto diagram,...Ch. 19 - Quality improvement, relevant costs, and relevant...Ch. 19 - Quality improvement, relevant costs, and relevant...Ch. 19 - Waiting times, manufacturing cycle times. The...Ch. 19 - Prob. 19.34PCh. 19 - Manufacturing cycle times, relevant revenues, and...Ch. 19 - Compensation linked with profitability, waiting...Ch. 19 - Ethics and quality. Weston Corporation...Ch. 19 - Prob. 19.38P
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