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
Question
Chapter 25, Problem 34P
1.
To determine
Prepare a differential analysis to ascertain if Company P must replace the employee or outsource the payroll function.
2.
To determine
State the other factors that Company P must consider while making decision.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Cal’s Carpentry is considering outsourcing its accountsreceivable function. Currently, Cal employs two full-time clerksand one part-time clerk to manage accounts receivable. Each fulltime clerk has an annual salary of $36,000 plus fringe benefitscosting 30 percent of their salary. The part-time clerk makes$18,000 per year but has no fringe benefits. Total salary plus fringecost is $111,600. Cal estimates that each account receivable incursa $10 variable cost. The Small Business Accounts ReceivablesGroup (SBARG) specializes in handling accounts receivable forsmall- to medium-size companies. Doris Roberts from SBARGhas offered to do the accounts receivable for Cal’s Carpentry ata fixed cost of $75,000 per year plus $30 per account receivable.Next year, Cal expects to have 2000 accounts receivable.(a) Calculate the cost for Cal’s Carpentry to continue doingaccounts receivable in-house.(b) Calculate the cost for Cal’s Carpentry to use SBARG tohandle the accounts receivable.(c) If the fixed…
You are a manager at a high-tech company in Kanata, Ontario. Due to a slow down in the economy, you have
decided to lay-off Chelsea Lui at the end of the current bi-weekly pay period (Friday). You will ask her to leave
and not return next week. Chelsea has worked for the company for 7.25 years and makes $65,000 per
year. Your annual payroll for the company is $4,600,000.
Calculate Chelsea's severance pay.
Working area
Calculate Chelsea's gross pay.
Working area
Donovan Ramsey, the Chief Financial Officer of LevelUp Business Consulting, has advised you that the company is considering closing its Calgary, Alberta office at the beginning of the next calendar year and transitioning the staff of that location to permanent work from home employees. The employees home offices would not be considered a permanent establishment of the employer.
Eight staff members currently report to the Alberta office, and the total payroll is $775,000.00.
The organization’s head office and payroll department are in Mississauga, Ontario. The current Ontario payroll is $4,750,000.00.
You have been asked to prepare an analysis showing how closing this permanent establishment in Alberta will impact the employee’s coverage for provincial healthcare and the organization’s payroll expense for provincial health taxes.
Be specific in your analysis by providing a comparison of current versus projected costs that may result from this change.
Chapter 25 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 25 - Doherty Company is considering replacing the...Ch. 25 - Prob. 2TICh. 25 - Prob. 3TICh. 25 - Prob. 4TICh. 25 - Prob. 5TICh. 25 - Prob. 6TICh. 25 - Thomas Company makes a product that regularly...Ch. 25 - Prob. 8TICh. 25 - McCollum Company manufactures two products. Both...Ch. 25 - Prob. 10TI
Ch. 25 - Grimm Company makes decorative wedding cakes. The...Ch. 25 - Prob. 12TICh. 25 - Prob. 1QCCh. 25 - Prob. 2QCCh. 25 - Which of the following costs are irrelevant to...Ch. 25 - When making decisions, managers should consider a....Ch. 25 - When pricing a product or service, managers must...Ch. 25 - When companies are price-setters, their products...Ch. 25 - Prob. 7QCCh. 25 - In deciding which product lines to emphasize when...Ch. 25 - When making outsourcing decisions, which of the...Ch. 25 - When deciding whether to sell as is or process a...Ch. 25 - List the four steps in short-term decision making....Ch. 25 - Prob. 2RQCh. 25 - What makes information irrelevant to decision...Ch. 25 - What are sunk costs? Give an example.Ch. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - What are the two keys in short-term decision...Ch. 25 - What questions should managers answer when setting...Ch. 25 - Prob. 9RQCh. 25 - What is target pricing? Who uses it?Ch. 25 - What does the target full product cost include?Ch. 25 - What is cost-plus pricing? Who uses it?Ch. 25 - What questions should managers answer when...Ch. 25 - When completing a differential analysis, when are...Ch. 25 - Prob. 15RQCh. 25 - What questions should managers answer when...Ch. 25 - Prob. 17RQCh. 25 - What is a constraint?Ch. 25 - Prob. 19RQCh. 25 - What is the decision rule concerning products to...Ch. 25 - Prob. 21RQCh. 25 - Prob. 22RQCh. 25 - What questions should managers answer when...Ch. 25 - What questions should managers answer when...Ch. 25 - Prob. 25RQCh. 25 - Prob. 26RQCh. 25 - You are trying to decide whether to trade in your...Ch. 25 - Skiable Acres operates a Rocky Mountain ski...Ch. 25 - Refer to details about Skiable Acres from Short...Ch. 25 - Prob. 4SECh. 25 - StoreAll produces plastic storage bins for...Ch. 25 - Suppose Roasted Pepper restaurant is considering...Ch. 25 - Priscilla Smiley manages a fleet of 250 delivery...Ch. 25 - Heavenly Dessert processes cocoa beans into cocoa...Ch. 25 - Dan Jacobs, production manager for GreenLife,...Ch. 25 - Suppose the Baseball Hall of Fame in Cooperstown,...Ch. 25 - Prob. 11ECh. 25 - Prob. 12ECh. 25 - Top managers of Video Avenue are alarmed by their...Ch. 25 - Refer to Exercise E25-13. Assume that Video Avenue...Ch. 25 - Prob. 15ECh. 25 - Moore Company sells both designer and moderately...Ch. 25 - Prob. 17ECh. 25 - Cool Systems manufactures an optical switch that...Ch. 25 - Refer to Exercise E25-18. Cool Systems needs...Ch. 25 - NaturalMaid processes organic milk into plain...Ch. 25 - Sea Blue manufactures flotation vests in...Ch. 25 - Prob. 22APCh. 25 - Members of the board of directors of Security...Ch. 25 - Brinn, located in Port St. Lucie, Florida,...Ch. 25 - Snow Ride manufactures snowboards. Its cost of...Ch. 25 - Prob. 26APCh. 25 - Prob. 27BPCh. 25 - Green Thumb operates a commercial plant nursery,...Ch. 25 - Members of the board of directors of Security Team...Ch. 25 - Prob. 30BPCh. 25 - Prob. 31BPCh. 25 - Elm Petroleum has spent 204,000 to refine 61,000...Ch. 25 - Prob. 34PCh. 25 - The Boeing Company manufacturers many different...Ch. 25 - Prob. 1EI
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
- Tonya Latirno is a staff accountant for Cannally and Kennedy, a local CPA firm. For the past 10 years, the firm has given employees a year-end bonus equal to two weeks' salary. On November 15, the firm's management team announced that there would be no annual bonus this year. Because of the firm's long history of giving a year-end bonus, Tonya and her co-workers had come to expect the bonus and felt that Cannally and Kennedy had breached an implicit agreement by discontinuing the bonus. As a result, Tonya decided that she would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year. Cannally and Kennedy's policy is to pay overtime at 150% of straight time. Tonya's supervisor was surprised to see overtime being reported, because there is generally very little additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, because employees are on the “honor system” in reporting their…arrow_forwardTonya Latirno is a staff accountant for Cannally and Kennedy, a local CPA firm. For the past 10 years, the firm has given employees a year-end bonus equal to two weeks' salary. On November 15, the firm's management team announced that there would be no annual bonus this year. Because of the firm's long history of giving a year-end bonus, Tonya and her coworkers had come to expect the bonus and believed that Cannally and Kennedy had breached an implicit agreement by discontinuing the bonus. As a result, Tonya decided that she would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year. Cannally and Kennedy's policy is to pay overtime at 150% of straight time. Tonya's supervisor was surprised to see overtime being reported, because there is generally very little additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, because employees are on the "honor system" in reporting…arrow_forward> Mary Tan is the controller for Duck Associates, a property management company in Portland, Oregon. Each year, Tan and payroll clerk Toby Stock meet with the external auditors about payroll accounting. This year, the auditors suggest that Tan consider outsourcing Duck Associates's payroll accounting to a company specializing in payroll processing services. This would allow Tan and her staff to focus on their primary responsibility: accounting for the properties under management. At present, payroll requires 1.5 employee positions-payroll clerk Toby Stock and a bookkeeper who spends half her time entering payroll data in the system. meniups/l Tan considers this suggestion, and she lists the following items relating to out- sourcing payroll accounting: a. The current payroll software that was purchased for $4,000 three years ago would not be needed if payroll processing were outsourced. b. uck Associates's bookkeeper would spend half her time preparing the weekly payroll input form that…arrow_forward
- onya Latirno is a staff accountant for Cannally and Kennedy, a local CPA firm. For the past 10 years, the firm has given employees a year-end bonus equal to two weeks’ salary. On November 15, the firm’s management team announced that there would be no annual bonus this year. Because of the firm’s long history of giving a year-end bonus, Tonya and her co-workers had come to expect the bonus and felt that Cannally and Kennedy had breached an implicit agreement by discontinuing the bonus. As a result, Tonya decided that she would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year. Cannally and Kennedy’s policy is to pay overtime at 150% of straight time. Tonya’s supervisor was surprised to see overtime being reported, because there are generally very little additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, because employees are on the “honor system” in reporting their…arrow_forwardPaul Howard, the new plant manager of Garden Scapes Manufacturing Plant Number 7, has just reviewed a draft of his year-end financial statements. Howard receives a year-end bonus of 11.5% of the plant’s operating income before tax. The year-end income statement provided by the plant’s controller was disappointing to say the least. After reviewing the numbers, Howard demanded that his controller go back and “work the numbers” again. Howard insisted that if he didn’t see a better operating income number the next time around he would be forced to look for a new controller. Garden Scapes Manufacturing classifies all costs directly related to the manufacturing of its product as product costs. These costs are inventoried and later expensed as costs of goods sold when the product is sold. All other expenses, including finished-goods warehousing costs of $3,640,000, are classified as period expenses. Howard had suggested that warehousing costs be included as product costs because they are…arrow_forwardMary Tan is the controller for Duck Associates, a property management company in Portland, Oregon. Each year, Tan and payroll clerk Toby Stock meet with the external auditors about payroll accounting. This year, the auditors suggest that Tan consider outsourcing Duck Associates’s payroll accounting to a company specializing in payroll processing services. This would allow Tan and her staff to focus on their primary responsibility: accounting for the properties under management. At present, payroll requires 1.5 employee positions—payroll clerk Toby Stock and a bookkeeper who spends half her time entering payroll data in the system. Tan considers this suggestion, and she lists the following items relating to outsourcing payroll accounting: The current payroll software that was purchased for $4,000 three years ago would not be needed if payroll processing were outsourced. Duck Associates’s bookkeeper would spend half her time preparing the weekly payroll input form that is given to the…arrow_forward
- An employee who earned a salary of $4,000 per month was startled at how low his net pay was. The Payroll Department provided the following information: CPP: $100 each (employee and employer EI: $80 re employee. $112 re emplyer Income tax $750 Union dues $50 Charitable donation $25 Vacation pay accrued $240 Calculate the employee’s net pay. Select answer from the options below $2,783 $2,995 $2,775 $2,543arrow_forwardBetty Crawford is a staff accountant for a local CPA firm. For the past 15 years, the CPA firm has given employees a year-end bonus equal to two weeks’ salary. On November 30, the firm’s management team announced that there would be no annual bonus this year. Because of the firm’s long history of giving a year-end bonus, Betty and her co-workers had come to expect the bonus and felt that the firm had breached an implicit agreement by discontinuing the bonus. As a result, Betty decided that she would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year. The firm's policy is to pay overtime at 150% of straight time. Betty’s supervisor was surprised to see overtime being reported because there are generally very few additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, because employees are on the “honor system” in reporting their work hours. 1. Is the firm acting in an…arrow_forwardTonya Latirno is a staff accountant for Cannally and Kennedy, a local CPA firm. For the past 10 years, the firm has given employees a year-end bonus equal to two weeks’ salary.On November 15, the firm’s management team announced that there would be no annual bonus this year. Because of the firm’s long history of giving a year-end bonus, Tonya and her coworkers had come to expect the bonus and believed that Cannally and Kennedy had breached an implicit agreement by discontinuing the bonus. As a result, Tonya decided thatshe would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year. Cannally and Kennedy’s policy is to pay overtime at 150% of straight time.Tonya’s supervisor was surprised to see overtime being reported, because there is generally very little additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, because employees are on the “honor system” in reporting their…arrow_forward
- Tonya is a staff accountant for a local CPA firm. For the past 10 years, the firm has given employees a year-end bonus equal to two weeks' salary. On November 15, the firm's management team announced that there would be no annual bonus this year. Because of the firm's long history of giving a year-end bonus, Tonya and her co-workers had come to expect the bonus and felt that the CPA firm owed the money to the employees. Tonya decided that she would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year because overtime hours are paid at "time and a half" rates. Tonya's supervisor was surprised to see overtime being reported, because there's usually not an increase in client service at the end of the calendar year. However, the overtime was not questioned, because employees are on the "honor system" in reporting their work hours. What are your thoughts on this situation?arrow_forwardThe HIM director, Linda, has been given $15,000.00 for the overtime needed to catch up on the loose filing. If the average salary of the HIM clerical staff is $15.75, how many hours of overtime can be worked??arrow_forwardMary Tan is the controller for Duck Associates, a property management company in Portland, Oregon. Each year, Tan and payroll clerk Toby Stock meet with the external auditors about payroll accounting. This year, the auditors suggest that Tan consider outsourcing Duck Associates' payroll accounting to a company specializing in payroll processing services. This would allow Tan and her staff to focus on their primary responsibility: accounting for the properties under management. At present, payroll requires 1.5 employee positions—payroll clerk Toby Stock and a bookkeeper who spends half her time entering payroll data in the system. Tan considers this suggestion, and she lists the following items relating to outsourcing payroll accounting: The current payroll software that was purchased for $4,000 three years ago would not be needed if payroll processing were outsourced. Duck Associates' bookkeeper would spend half her time preparing the weekly payroll input form that is given to the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
What Is A Checking Account?; Author: The Smart Investor;https://www.youtube.com/watch?v=vGymt1Rauak;License: Standard Youtube License