Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 24, Problem 16E
The accountant for a subunit of Speed Sports Company went on vacation before completing the subunit’s monthly responsibility report. This is as far as she got:
Requirements
- 1. Complete the responsibility report for this subunit.
- 2. Based on the data presented, what type of responsibility center is this subunit?
- 3. Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding $12,000?
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Nation’s Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firm’s controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm’s equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y = a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: (image below)
Required:1. Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation’s Capital Fitness, Inc. Express the cost behavior pattern in equation form.2. Using your answer to requirement (1), what is the variable component of the maintenance cost?3. Compute the predicted maintenance cost at 590 hours of activity.4. Compute the variable cost per hour and the fixed cost per hour at 600 hours of activity. Explain why the fixed cost per hour could be…
One subunit of Soaring Sports Manufacturing Company had the following financial results last month:
E (Click the icon to view the financial results.)
Requirements
1. Complete the performance evaluation report for this subunit.
2. Based on the data presented, what type of responsibility center is the subunit?
3. Which items should be investigated if part of the management's decision criteria is to investigate all variances exceeding $3,200 or 11%?
4. Should only unfavorable variances be investigated? Explain.
Requirement 1. Complete the performance evaluation report for this subunit. (Enter the variances as positive numbers. Rour
(U). If the variance is 0, make sure to enter in a "0". A variance of zero is considered favorable.)
Data table
Variance
B
E
Variance
Percentage
Soaring Sports Manufacturing Company-Golf Accessories Subunit
Product
Actual
Budgeted
(U or F)
(U or F)
2
Monthly Performance Report
Direct materials
26,925 $
25,000
3
For the Month
Direct labor
14,235
15,000
U
%…
Nation's Capital Fitness, Incorporated, operates a chain of fitness centers in the Washington, D.C., area. The firm's
controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern
of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of an
equation, in the form of Y= a + bx, for maintenance costs. Data regarding the maintenance hours and costs for last year
are as follows:
Month
January
February
March
April
May
June
July
August
September
October
November
December
Total
Average
Hours of
Maintenance
Service
560
480
280
470
350
460
320
430
490
380
350
340
4,910
409
Maintenance cost
Maintenance
Costs
$ 5,110
4,240
2,730
4,300
3,030
4, 120
3,000
3,590
4,000
3,220
3,170
3,070
$ 43,580
$ 3,632
PR 6-38 (Algo) Part 3 Compute the predicted maintenance cost...
3. Compute the predicted maintenance cost at 670 hours of activity.
Answer is complete but not entirely correct.
$
49,192 X
Chapter 24 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 24 - Prob. 1TICh. 24 - Fill in the blanks with the phrase that best...Ch. 24 - Prob. 3TICh. 24 - Fill in the blanks with the phrase that best...Ch. 24 - Prob. 5TICh. 24 - Fill in the blanks with the phrase that best...Ch. 24 - Prob. 7TICh. 24 - Prob. 8TICh. 24 - Prob. 9TICh. 24 - Prob. 10TI
Ch. 24 - Prob. 11TICh. 24 - Prob. 12TICh. 24 - Prob. 13TICh. 24 - Match the responsibility center to the correct...Ch. 24 - Prob. 15TICh. 24 - Prob. 16TICh. 24 - Prob. 17TICh. 24 - Prob. 18TICh. 24 - Prob. 19TICh. 24 - Prob. 20TICh. 24 - Sheffield Company manufactures power tools. The...Ch. 24 - Prob. 22TICh. 24 - Which is not one of the potential advantages of...Ch. 24 - The Quaker Foods division of PepsiCo is most...Ch. 24 - Which of the following is not a goal of...Ch. 24 - Which of the following balanced scorecard...Ch. 24 - The performance evaluation of a cost center is...Ch. 24 - Assume the Residential Division of Kipper Faucets...Ch. 24 - Assume the Residential Division of Kipper Faucets...Ch. 24 - Assume the Residential Division of Kipper Faucets...Ch. 24 - Assume the Residential Division of Kipper Faucets...Ch. 24 - Penn Company has a division that manufactures a...Ch. 24 - Explain the difference between a centralized...Ch. 24 - Prob. 2RQCh. 24 - List the disadvantages of decentralization.Ch. 24 - What is goal congruence?Ch. 24 - Prob. 5RQCh. 24 - What is the purpose of a responsibility accounting...Ch. 24 - Prob. 7RQCh. 24 - Prob. 8RQCh. 24 - Prob. 9RQCh. 24 - What are the goals of a performance evaluation...Ch. 24 - Prob. 11RQCh. 24 - How is the use of a balanced scorecard as a...Ch. 24 - What is a key performance indicator?Ch. 24 - What are the four perspectives of the balanced...Ch. 24 - Explain the difference between a controllable and...Ch. 24 - Prob. 16RQCh. 24 - What are two key performance indicators used to...Ch. 24 - Prob. 18RQCh. 24 - Prob. 19RQCh. 24 - Prob. 20RQCh. 24 - Prob. 21RQCh. 24 - Prob. 22RQCh. 24 - What is the biggest advantage of using RI to...Ch. 24 - What are some limitations of financial performance...Ch. 24 - Prob. 25RQCh. 24 - Prob. 26RQCh. 24 - Prob. 27RQCh. 24 - Prob. 1SECh. 24 - Prob. 2SECh. 24 - Well-designed performance evaluation systems...Ch. 24 - Consider the following key performance indicators,...Ch. 24 - Management by exception is a term often used in...Ch. 24 - Consider the following data, and determine which...Ch. 24 - XTreme Sports Company makes snowboards, downhill...Ch. 24 - Prob. 8SECh. 24 - Using ROI and RI to evaluate investment centers...Ch. 24 - Henderson Company manufactures electronics. The...Ch. 24 - Prob. 11ECh. 24 - Prob. 12ECh. 24 - Well-designed performance evaluation systems...Ch. 24 - Consider the following key performance indicators,...Ch. 24 - One subunit of Harris Sports Company had the...Ch. 24 - The accountant for a subunit of Speed Sports...Ch. 24 - Zims, a national manufacturer of lawn-mowing and...Ch. 24 - Refer to the data in Exercise E24-17. Calculate...Ch. 24 - Prob. 19ECh. 24 - One subunit of Racer Sports Company had the...Ch. 24 - Consider the following condensed financial...Ch. 24 - Prob. 22APCh. 24 - The Harris Company is decentralized, and divisions...Ch. 24 - One subunit of Track Sports Company had the...Ch. 24 - Consider the following condensed financial...Ch. 24 - Prob. 26BPCh. 24 - The Hernandez Company is decentralized, and...Ch. 24 - Prob. 28PCh. 24 - This problem continues the Piedmont Computer...Ch. 24 - The Trolley Toy Company manufactures toy building...Ch. 24 - Dixie Irwin is the department manager for...Ch. 24 - Prob. 1FCCh. 24 - In 150 words or fewer, list each of the four...
Additional Business Textbook Solutions
Find more solutions based on key concepts
1. For Frank’s Funky Sounds, straight-line depreciation on the trucks is a
Learning Objective 1
a. variable cos...
Horngren's Accounting (12th Edition)
Preparing Financial Statements from a Trial Balance The following accounts are taken from Equilibrium Riding, I...
Fundamentals Of Financial Accounting
BE1-7 Indicate which statement you would examine to find each of the following items: income statement (IS), ba...
Financial Accounting: Tools for Business Decision Making, 8th Edition
Bank loan; accrued interest LO132 On October 1, Eder Fabrication borrowed 60 million and issued a nine-month, ...
Intermediate Accounting
How is activity-based costing useful for pricing decisions?
Cost Accounting (15th Edition)
Determine the estimated cost of the work performed each week given the tasks—with their associated costs and sc...
Construction Accounting And Financial Management (4th Edition)
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
- Hi there, can you please help me with the following, I just want to make sure I am on the right track and make changes as apporpriate. CoGo Trading a subsidiary of Best Fit Ltd has just prepared the final results for the year ended 30 June 2021. To evaluate the performance of the business and to inform relevant stakeholders, you are required to prepare a performance report showing: Appropriate variances for revenue and cost items (dollar amount and percentage) Indicating whether variances are favourable or unfavourable Identify variances that are significant (alert any variances exceeding 5%) for the organisation for further investigation and direction by the supervisor. Complete the Performance Report above outlining the variances (both in dollars and percentages). CoGo Trading Performance Report for the year ended 30 June 2021 Revenue Costs Variable Cost of Sales Sales Commissions Sales Discounts Other Sales Expenses Fixed Advertising Depreciation Electricity Insurance Rent Salaries…arrow_forwardNation's Capital Fitness, Incorporated, operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y= a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Month January February March April May June July August September October November December Total Average Hours of Maintenance Service Variable maintenance cost 560 480 280 470 350 460 320 430 490 380 350 340 4,910 409 $ Maintenance Costs $ 5,110 4,240 2,730 4,300 3,030 4, 120 PR 6-38 (Algo) Part 2 What is the variable component of the maintenance cost? 2. Using your answer to requirement 1, what is the variable component of the maintenance cost? Note: Round your answer to 2 decimal places. 3,000 3,590…arrow_forwardNation's Capital Fitness, Incorporated, operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y = a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Month January February March April May June July August September October November December Total Average Hours of Maintenance Service Variable maintenance cost 520 470 250 490 340 470 330 410 480 380 390 340 4,870 406 Maintenance Costs $ 5,305 4,170 2,740 4,280 3,050 4,160 3,040 3,570 3,990 3,230 3,170 3,120 $ 43,825 $ 3,652 2. Using your answer to requirement 1, what is the variable component of the maintenance cost? Note: Round your answer to 2 decimal places. ********* per hourarrow_forward
- Nation's Capital Fitness, Incorporated, operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y= a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Month January February March April May June July August September October November December Total Average Hours of Maintenance Service 560 480 280 470 350 Monthly maintenance cost = 460 320 430 490 380 350 340 4,910 409 Maintenance Costs $ 5,110 4,240 2,730 4,300 3,030 4,120 3,000 3,590 4,000 3,220 3,170 3,070 $ 43,580 $ 3,632 PR 6-38 (Algo) Part 1 Estimate the behavior of the maintenance costs incurred... Required: 1. Using the high-low method of cost estimation, estimate the behavior of the maintenance…arrow_forwardA company prepares the master budget by taking each division manager's estimate of revenues and costs for the coming period and entering the data into the budget without adjustment. At the end of the year, division managers are given a bonus if their actual division profit exceeds the budgeted profit. What problems do you see with this system?arrow_forwardFriendly Bank is attempting to determine the cost behavior of its small business lending operations. One of the major activities is the application activity. Two possible activity drivers have been mentioned: application hours (number of hours to complete the application) and number of applications. The bank controller has accumulated the following data for the setup activity: Required: 1. Estimate a regression equation with application hours as the activity driver and the only independent variable. If the bank forecasts 2,600 application hours for the next month, what will be the budgeted application cost? 2. Estimate a regression equation with number of applications as the activity driver and the only independent variable. If the bank forecasts 80 applications for the next month, what will be the budgeted application cost? 3. Which of the two regression equations do you think does a better job of predicting application costs? Explain. 4. Run a multiple regression to determine the cost equation using both activity drivers. What are the budgeted application costs for 2,600 application hours and 80 applications?arrow_forward
- Using responsibility reports to evaluate cost, revenue, and profit centers One subunit of Harris Sports Company had the following financial results last month: Requirements Complete the performance evaluation report for this subunit Enter the variance percent as a percentage of the budgeted amount rounded to two decimal places. Based on the data presented, what type of responsibility center is this subunit? Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding $2,500 or 10%? Should only unfavorable variances be investigated? Explain.arrow_forwardSunshine Goods Ltd is a revenue maximizing firm that engages in the analysis of variances to provide useful information to management. The company manufactures and sells three (3) products, RG, KC and MG. During July 2019 the following budgeted and actual results were presented to you the management accountant for analysis: Budgeted Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 585,000 900 650 820 738,000 KC 500,000 500 1,000 850 425,000 MG 300,000 600 500 720 432,000 Total 2,000 1,595,000 Actual Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 500,000 500 1,000 800 400,000 KC 270,000 300 900 `900 270,000 MG 105,000 350 300 700 245,000 Total 1,150 915,000 Required: Sales margin quantity…arrow_forwardDetermine if the selection of system 1 or 2 is sensitive to variation in the return required by management. The corporate MARR ranges from 8% to16% per year on different projects. Use tabulated factors or a spreadsheet, as requested by your instructor.arrow_forward
- Taylor Consulting makes it a practice to stay involved with the client to help them stay on track to achieve their goals. A co-worker had completed the balanced scorecard for Buckeye Electric six months ago. Your manager has instructed you to consult with Buckeye Electric management regarding any balanced scorecard item whose performance metric has achieved less than 50% of the target. Determine which Performance Metrics require a consultation. Also, indicate the Performance Perspective for each Performance Metric. This information is important because you will need to know which manager to contact. Performance Metrics Last Year Target Year to Date Consultation Required Performance Perspective 1. Revenue growth rate 14.0% 15.0% 14.6% 2. Utilization of asset rate 6.0% 12.0% 7.0% 3. Operating costs per customer $150 $125 $145 4. Customer satisfaction rating 80.0% 87.0% 90.0% 5. Problem resolution time 6 hr 3 hr 4 hr 6. Employee productivity rate 2.0% 3.0% 2.4% 7.…arrow_forwardSunshine Goods Ltd is a revenue maximizing firm that engages in the analysis of variances to provide useful information to management. The company manufactures and sells three (3) products, RG, KC and MG. During July 2019 the following budgeted and actual results were presented to you the management accountant for analysis: Budgeted Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 585,000 900 650 820 738,000 KC 500,000 500 1,000 850 425,000 MG 300,000 600 500 720 432,000 Total 2,000 1,595,000 Actual Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 500,000 500 1,000 800 400,000 KC 270,000 300 900 `900 270,000 MG 105,000 350 300 700 245,000 Total 1,150 915,000 Required: Sales margin price…arrow_forwardTerry Travers is the manufacturing supervisor of Aurora Manufacturing Company, which produces avariety of plastic products. Some of these products are standard items that are listed in the company’scatalog, while others are made to customer specifications. Each month, Travers receives a performancereport showing the budget for the month, the actual activity, and the variance between budget and actual.Part of Travers’s annual performance evaluation is based on his department’s performance against budget.Aurora’s purchasing manager, Sally Christensen, also receives monthly performance reports and she, too,is evaluated in part on the basis of these reports.The monthly reports for June had just been distributed when Travers met Christensen in the hallwayoutside their offices. Scowling, Travers began the conversation, “I see we have another set of monthlyperformance reports hand-delivered by that not very nice junior employee in the budget office. He seemedpleased to tell me that I’m in…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
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