Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2.3SE
Classify costs by value chain function (Learning Objective 2)
Classify each of The J. M. Smucker Company’s costs as one of the six business functions in the value chain.
- a. Cost of a prime-time TV ad featuring Smucker’s® Fruit & Honey™ Fruit Spreads
- b. Salary of engineers who are designing the new plant’s layout
- c.
Depreciation on Orrville, Ohio, plant - d. Depreciation on delivery vehicles
- e. Transportation costs to deliver Folgers Coffee® to retailers such as Kroger, Walmart, and Save-A-Lot
- f. Costs of a customer support center website
- g. Plant manager’s salary
- h. Purchase of strawberries used in Smucker’s® Strawberry Preserves
- i. Depreciation on food research lab
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Activity-Based Costing, Lean Operations, and the Costs of Quality
E4-24A Compare traditional and ABC allocations on a job (Learning Objective 2)
Radley Products has adopted an ABC costing system. The following manufacturing activi-
ties, indirect manufacturing costs, and cost drivers have been identified:
Activity
Machine setup
Total estimated MOH
costs related to activity
Total estimated amount of
allocation base activity
$ 120,000
$1,050,000
Machining
Polishing
Quality control
Facility-level costs
sdngas 000'
6,000 machine hours
10,000 polishing cloths
4,000 tests run
50,000 DL hours
000'08
$ 280,000
$ 120.000
Total manufacturing overhead (MOH)
$1.650.000
The Job Cost Record for Job #624 revealed that direct materials requisitioned for the
job totaled $1,050. The Job Cost Record also showed that direct labor for this job totaled
10 hours at a wage rate of 525 per hour.
Other data collected on the resources used by Job #624 included:
1 machine setup required
5 machine hours
2…
Calculate a job cost using ABC (Learning Objective 2)Oliver Industries, a small, family-run manufacturer, has adopted an ABC system . The fol- lowing manufacturing activities, indirect manufacturing costs, and usage of cost drivers have been estimated for the year :54-7Direct materials ................................................................................ ? Direct labor ...................................................................................... ? Manufacturing overhead ...... .......... .......... ............. ................. .......... ? Total job cost .................................................................................... $?Classifying costs within the cost hierarchy (Learning Objective 2) Classify each of the following costs as either unit-level, batch-level, product-level, orfacility-level.a. Engineering costs for new productb. Order processingc. Depreciation on factoryd. Direct labore. Shipment of an order to a customerf. Product line manager…
E4-23A Use ABC to allocate manufacturing overhead (Learning Objective 2)
Several years after reengineering its production process, Biltmore Corporation hired a new controller, Rachael Johnson. She developed an ABC system very similar to the one used by Biltmore’s chief rival, Westriver. Part of the reason Johnson developed the ABC system was because Biltmore’s profits had been declining even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, Biltmore had used a plantwide overhead rate based on direct labor hours that was developed years ago.
For the upcoming year, Biltmore’s budgeted ABC manufacturing overhead allocation rates are as follows:
Activity Allocation Base Activity Cost Allocation Rate
Materials handling # of parts $3.84 per part
Machine setup # of setups $330.00 per setup
Insertion of parts # of parts $30.00 per part
Finishing Finishing DL hrs $54.00 per hour
The…
Chapter 2 Solutions
Managerial Accounting (5th Edition)
Ch. 2 - (Learning Objective 1) Which of the following...Ch. 2 - (Learning Objective 2) Which of the following is...Ch. 2 - (Learning Objective 3) A cost that can be traced...Ch. 2 - (Learning Objective 4) Period costs are often...Ch. 2 - (Learning Objective 4) Conversion costs consist of...Ch. 2 - (Learning Objective 4) Which of the following is...Ch. 2 - Prob. 7QCCh. 2 - (Learning Objective 5) Which of the following...Ch. 2 - Prob. 9QCCh. 2 - Prob. 10QC
Ch. 2 - Short Exercises S2-1 Identify types of companies...Ch. 2 - Identify type of company from balance sheets...Ch. 2 - Classify costs by value chain function (Learning...Ch. 2 - Classify costs as direct or indirect (Learning...Ch. 2 - Prime costs Cost objects Product costs Assigned...Ch. 2 - Prob. 2.6SECh. 2 - Classify product costs and period costs (Learning...Ch. 2 - Classify a manufacturers costs (Learning Objective...Ch. 2 - Classify costs incurred by a dairy processing...Ch. 2 - Determine total manufacturing overhead (Learning...Ch. 2 - Prepare a retailers income statement (Learning...Ch. 2 - Compute Cost of Goods Sold for a merchandiser...Ch. 2 - Calculate direct materials used (Learning...Ch. 2 - Compute Cost of Goods Manufactured (Learning...Ch. 2 - Describe other cost terms (Learning Objectives 6...Ch. 2 - Classify costs as fixed or variable (Learning...Ch. 2 - Prob. 2.17SECh. 2 - Classify costs along the value chain for a...Ch. 2 - Classify costs along the value chain for a...Ch. 2 - Value chain and sustainability efforts (Learning...Ch. 2 - Prob. 2.21AECh. 2 - Construct an income statement using product and...Ch. 2 - Work backward to find missing amounts (Learning...Ch. 2 - Prepare a retailers income statement (Learning...Ch. 2 - Compute direct materials used and Cost of Goods...Ch. 2 - Compute Cost of Goods Manufactured and Cost of...Ch. 2 - Continues E2-26A: Prepare income statement...Ch. 2 - Determine whether information is relevant...Ch. 2 - Prob. 2.29AECh. 2 - Classify costs along the value chain for a...Ch. 2 - Classify costs along the value chain for a...Ch. 2 - Value chain and sustainability efforts (Learning...Ch. 2 - Classify and calculate a manufacturers costs...Ch. 2 - Construct an income statement using product and...Ch. 2 - Work backward to find missing amounts (Learning...Ch. 2 - Prob. 2.36BECh. 2 - Compute direct materials used and Cost of Goods...Ch. 2 - Compute Cost of Goods Manufactured and Cost of...Ch. 2 - Continues E2-38B: Prepare income statement...Ch. 2 - Determine whether information is relevant...Ch. 2 - Prob. 2.41BECh. 2 - Classify costs along the value chain (Learning...Ch. 2 - Determine ending inventory balances (Learning...Ch. 2 - Prepare income statements (Learning Objective 5)...Ch. 2 - Prob. 2.45APCh. 2 - Prob. 2.46APCh. 2 - Classify costs along the value chain (Learning...Ch. 2 - Determine ending inventory balances (Learning...Ch. 2 - Prepare income statements (Learning Objective 5)...Ch. 2 - Prob. 2.50BPCh. 2 - Prob. 2.51BPCh. 2 - Calculate operating income (Learning Objective 5)...Ch. 2 - Prob. 2.53ACT
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
- Click to watch the Tell Me More Learning Objective 4 video and then answer the questions below. 1. Which of the following represents the computation of direct materials cost per equivalent unit? Total direct cost for the period divided by total equivalent units of direct materials. Total equivalent units of direct materials divided by total direct cost for the period. Total direct cost for the period divided by total units of direct materials. Total units of direct materials divided by total direct cost for the period. 2. What is the conversion cost per equivalent unit, when the total conversion cost for the period is $1,225 and the total units of packaged drinking water produced during the same period is 5,000 gallons (70 percent complete). $0.17 per gallon $0.35 per gallon $2.86 per gallon None of these choices are correct.arrow_forwardClick to watch the Tell Me More Learning Objective 1 video and then answer the questions below. 1. Which of the following manufacturers is most likely to use a process cost system? Purse manufacturer Sports drink manufacturer Automobile manufacturer Guitar manufacturer 2. Process and job order cost systems are similar in that both systems _______. record and summarize product costs classify product costs as direct materials, direct labor, and factory overhead allocate factory overhead costs to products All of these choices are correct.arrow_forwardClick to watch the Tell Me More Learning Objective 3 video and then answer the questions below. 1. The journal entry to recognize depreciation on machinery is ________. a debit to Factory Overhead and a credit to Accumulated Depreciation a debit to Accumulated Depreciation and a credit to Factory Overhead a debit to Factory Overhead and a credit to Depreciation Expense a debit to Depreciation Expense and a credit to Factory Overhead 2. Process and job order cost systems are similar in ________ manner. recording and summarizing product costs classifying product costs as direct materials, direct labor, and factory overhead allocating factory overhead costs to products All of these choices are correct.arrow_forward
- E-LEARNING SERVICES SQU LIBRARIES -LEARNING SYSTEM (ACADEMIC) Process costing: Time left 1:55:02 O a. allocates applied manufacturing overhead cost to product cost. O b. is normally used by companies which produce shoes. O C. All the given answers are correct. O d. uses the manufacturing accounts, including Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods. O e. assigns direct materials cost, direct labor cost, and manufacturing overhead costs to products to compute product cost per unit. Company XYZ made total sales revenue of $200,000. The variable manufacturing costs were $75,000 while the fixed manufacturing costs were $20,000. The variable selling and administrative expenses were $45,000 while the fixed selling and administrative expenses were $10,000. How much was the total contribution margin ($)? O a. 125,000 O b. 105,000 Fi O C. 145,000 O d. None of the given answers O e. 80,00Oarrow_forwardP10-53B Determine transfer price at a manufacturer under various scenarios (Learning Objective 4) Assume the Small Components Division of Lang Manufacturing produces a video card used in the assembly of a variety of electronic products. The division's manufacturing costs, and variable selling expenses related to the video card are as follows: Cost per unit Direct materials $ 14.00 Direct labor $ 4.00 Variable manufacturing overhead $ 8.00 Fixed manufacturing overhead (at current production level) $ 9.00 Variable selling expenses $ 10.00 The Computer Division of Lang Manufacturing can use the video card produced by the Small Components Division and is interested in purchasing the video card in-house rather than buying it from an outside supplier. The Small Components Division has sufficient excess capacity with which to make the extra video cards. Because of competition, the market price for this video card is $30 regardless of whether the…arrow_forwardFA-22A Using ABC to bill clients at a service firm (Learning Objective 2) Kushner & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Kushner charges customers at a billing rate equal to 130% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($63 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Kushner allocates operating overhead to jobs based on professional hours spent on the job. Kushner estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year. All operating costs other than professional salaries (travel reimbursements, copy costs, secretarial salaries, office lease, and so forth) can be assigned to the three activities. Total activity costs, cost drivers, and total usage of those cost drivers are estimated as…arrow_forward
- Learning Material Relevant Cost Part 1 Practice Problem Direction: Identify whether the following costs are relevant or irrelevant: _1. Research and development costs incurred in the prior months 2. Contribution margin of the decrease in regular sales for accepting a special order 3. Alternative usage of plant space (rentals to others for a fee, production of new products, etc.) 4. Cost of inventory acquired several years ago. 5. Joint production costs incurred _6. Depreciation of equipment used in production _7. Salary of a manager of a product line that is being considered to be dropped. 8. Rental costs of additional space for the production of a new product _9. Cost of special device that is necessary if a special order is accepted. 10. Direct materials, direct labor and variable overhead incurred on units produced last period 11. Further processing costs 12. Allocated main office expenses to different departments 13. Prime costs of units ordered by one-time customers 14. Current…arrow_forwardS17-1 Distinguishing between job order costing and process costing Learning Objective 1 Would the following companies most likely use job order costing or process costing? a. A manufacturer of refrigerators b. A manufacturer of specialty wakeboards c. A manufacturer of luxury yachts d. A professional services firm e. A landscape contractor f. A custom home builder g. A cell phone manufacturer h. A manufacturer of frozen pizzas i. A manufacturer of multivitamins j. A manufacturer of tennis shoesarrow_forwardLearning Objectives 2, 3, 4 1. Total cost per EUP $2.26 3. WIP Balance $1,836 Open with P18-38B Preparing a production cost report, two materials added at different points, no beginning WIP or costs transferred in; journal entries Bryan's Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows: UNITS Beginning Work-in-Process Inventory Started in production Completed and transferred out to Compression in January Ending Work-in-Process inventory (35% of the way through the preparation process) COSTS Beginning Work-in-Process Inventory Costs added during January: Wood Adhesives Direct labor Manufacturing overhead allocated Total costs…arrow_forward
- Learning Objectives 2, 3, 4 1. Total EUP for CC 2,850 3. WIP Balance $1,145 P18-31A Preparing a production cost report, two materials added at different points, no beginning WIP or costs transferred in; journal entries Smith's Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows: UNITS Beginning Work-in-Process Inventory Started in production Completed and transferred out to Compression in January Ending Work-in-Process inventory (30% of the way through the preparation process) COSTS Beginning Work-in-Process Inventory Costs added during January Wood Adhesives Direct labor Manufacturing overhead allocated Total costs Requirements…arrow_forwardE18-17 Comparing job order costing versus process costing Learning Objective 1 For each of the following products or services, indicate if the cost would most likely be determined using a job order costing system or a process costing system. a. Soft drinks b. Automobile repairs c. Customized furniture d. Aluminum foil e. Lawn chairs f. Chocolate candy bars g. Hospital surgery h. Pencilsarrow_forwardRelevant Costs for Short-Ten ating income data for the year just ended: Members of the board of directors of Security Alliance have received the following oper- P8-50A Prepare and use contribution margin statements for discontinuing a ine decision (Learning Objective 4) a Security Alliance Product Line Contribution Margin Income Statement For the Year Product lines Industrial Household Systems 5. 6 Sales revenue 7 Less cost of goods sold: Variable Systems 380,000 $ Company Total 690,000 2$ 310,000 8 46,000 32,000 280,000 (2,000) $ 78,000 346,000 266,000 Fixed 9. 10 Gross profit 11 Less marketing and administrative expenses: Variable 66,000 268,000 13 14 Operating income (loss) 15 12 Fixed 63,000 37,000 (102,000) $ 69,000 23,000 176,000 $ 132,000 60,000 74,000 Members of the board are surprised that the industrial systems product line is losing money. They commission a study to determine whether the company should discontinue the line. Company accountants estimate that discontinuing the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY