CRITICAL THINKING
Communication Activity
Diane Barone was a good friend of yours in High school and is from your home town. While you chose to major in accounting when you both went away to college, she majored in marketing and management. You are now the
1. Since Melton occasionally prepares snack foods for special orders in the Snack Foods Division, why don't we track costs of the orders separately?
2. What is an equivalent unit?
3. Why am I getting four production cost reports? Isn't there one work in process account?
Instructions
Prepare a memo to Diane. Answer her questions and include any additional information you think would be helpful. You may write informally but do use proper grammar and punctuation.
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Managerial Accounting: Tools for Business Decision Making
- Assume you have been hired by Cabelas Sporting Goods. As part of your new role in the accounting department, you have been tasked to set up a responsibility accounting structure for the company. As your first task, your supervisor has asked you to give an example of a cost center, profit center, and an investment center within the Cabelas organization. Your supervisor is a little unsure of the difference between a profit center and investment center and would like you to explain the difference.arrow_forwardAssume you are the manager for the semi-trucks division at the Speedy Delivery Company. The semi-truck division is a cost center and you are reviewing the driver overtime costs for the previous year, shown here: A. Microsoft Excel or another spreadsheet application, create a line chart with markers showing the driver overtime expense. Describe your observations. B. Knowing that safety is important in your industry and weather plays a significant role in the safety of drivers, you decide to talk with the safety manager and obtained the following information: Using Microsoft Excel or another spreadsheet application, create individual line charts with markers showing the average snowfall and non-company highway accidents. Describe your observations and actions you might consider.arrow_forwardCost Information and Ethical Behavior, Service Organization Jean Erickson, manager and owner of an advertising company in Charlotte, North Carolina, arranged a meeting with Leroy Gee, the chief accountant of a large, local competitor. The two are lifelong friends. They grew up together in a small town and attended the same university. Leroy is a competent, successful accountant but is having some personal financial difficulties after some of his investments turned sour, leaving him with a 15,000 personal loan to pay offjust when his oldest son is starting college. Jean, on the other hand, is struggling to establish a successful advertising business. She had recently acquired the rights to open a branch office of a large regional advertising firm headquartered in Atlanta, Georgia. During her first 2 years, she was able to build a small, profitable practice. However, the chance to gain a significant foothold in Charlotte hinged on the success of winning a bid to represent the state of North Carolina in a major campaign to attract new industry and tourism. The meeting she had scheduled with Leroy concerned the bid she planned to submit. Jean: Leroy, Im at a critical point in my business venture. If I can win the bid for the states advertising dollars, Ill be set. Winning the bid will bring 600,000 to 700,000 of revenues into the firm. On top of that, I estimate that the publicity will bring another 200,000 to 300,000 of new business. Leroy: I understand. My boss is anxious to win that business as well. It would mean a huge increase in profits for my firm. Its a competitive business, though. As new as you are, I doubt that youll have much chance of winning. Jean: Youre forgetting two very important considerations. First, I have the backing of all the resources and talent of a regional firm. Second, I have some political connections. Last year, I was hired to run the publicity side of the governors campaign. He was impressed with my work and would like me to have this business. I am confident that the proposals I submit will be very competitive. My only concern is to submit a bid that beats your firm. If I come in with a lower bid and good proposals, the governor can see to it that I get the work. Leroy: Sounds promising. If you do win, however, there will be a lot of upset people. After all, they are going to claim that the business should have been given to local advertisers, not to some out-of-state firm. Given the size of your office, youll have to get support from Atlanta. You could take a lot of heat. Jean: True. But I am the owner of the branch office. That fact alone should blunt most of the criticism. Who can argue that Im not a local? Listen, with your help, I think I can win this bid. Furthermore, if I do win it, you can reap some direct benefits. With that kind of business, I can afford to hire an accountant, and Ill make it worthwhile for you to transfer jobs. I can offer you an up-front bonus of 15,000. On top of that, Ill increase your annual salary by 20%. That should solve most of your financial difficulties. After all, we have been friends since day oneand what are friends for? Leroy: Jean, my wife would be ecstatic if I were able to improve our financial position as quickly as this opportunity affords. I certainly hope that you win the bid. What kind of help can I provide? Jean: Simple. To win, all I have to do is beat the bid of your firm. Before I submit my bid, I would like you to review it. With the financial skills you have, it should be easy for you to spot any excessive costs that I may have included. Or perhaps I included the wrong kind of costs. By cutting excessive costs and eliminating costs that may not be directly related to the project, my bid should be competitive enough to meet or beat your firms bid. Required: 1. What would you do if you were Leroy? Fully explain the reasons for your choice. What do you suppose the code of conduct for Leroys company would say about this situation? 2. What is the likely outcome if Leroy agrees to review the bid? Is there much risk to him personally if he reviews the bid? 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- It is your first six months at your new job as an HR assistant at Groceries for You, a home delivery grocery service. When you ask the HR director, Chang, about performance evaluations, he just rolls his eyes and tells you to schedule a meeting in his Outlook calendar to discuss them. In the meantime, you gather some data that might be helpful in your discussion with Chang. Number of managers 4 Number of employees 82 Average span of control Delivery—38 Warehouse—24 Marketing/technology—16 Job types 11—customer service 1—delivery manager 1—warehouse manager 1—marketing and technology manager 38—delivery drivers 24—warehouse workers 1—tech support 5—marketing and website design When you meet, Chang is very forward with you about the current process. “Right now, managers groan when they are told they need to complete evaluations. The evaluations are general—we use the same form for all jobs in the organization. It appears that promotion decisions are…arrow_forwardQuestion: Complete the sentences with suitable words. Use only one word in each sentence 1. Sara gives a lot of time and energy to work as she is 2. Many candidates applied for the post but a few were invited for the job 3. An employee with excellent communication skills conveys the message effectively to others. 4. You can call a person and respect for others. 5. A person who has strong understands what others talk or say. 6. The new manager has good and he can work well with others to achieve the company's goals. 7. Ahmed was fired as he did not meet the expectations of the if he shows care skills easily skills 8. The selection committee selected the right candidates at the held in the company's office. for the post of Manager since I don't have 9. I didn't required experience. 10. Iqbal was chosen for The award for his outstanding contributions to the company's growth. 11. The company received a large number of applications for the of the month of office assistant. 12. When they…arrow_forwardEthics in Action Assume that you are the division controller for Auntie M's Cookie company. Auntie. I has introduced a new chocolate chip cookie called Full of chips, and it is a success. As aresult, the product manager responsible for the launch of this new cookie was promoted to division vice priesident and became your boss. A new product manager. Bishop, has been brought in to replace the promoted manager. Bishop notices that the full of chips cookie uses a great deal of chips, which increases the cost of the cookie. As a result. Bishop has ordered that the amount of chips used in the cookies be reduced by 10%. The manager believes that a 10% reduction in chips will not adversely affect sales but will reduce costs and hence, improve margins. The increased margins would help Bishop meet profit targets for the period. You are looking over some cost of production reports segmented by cookie line. You notice that there is a drop in the materials costs for full of chips. On further…arrow_forward
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