Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 4, Problem 4.53ACT
ABC in Real Companies
Choose a company in any of the following categories: airline, florist, bookstore, bank, grocery store, restaurant, college, retail clothing shop, movie theater, or lawn service. In this activity, you will be making reasonable estimates of the types of costs and activities associated with this company: companies do not typically publish internal cost or process information. Be reasonable in your cost estimates and include your assumptions used in selecting costs.
Basic Discussion Questions
- 1. Describe the company selected, including its products or services.
- 2. List eight key activities performed at this company. Choose at least one activity in the areas of production, sales, human resources, and accounting.
- 3. For each of the key activities, list a potential cost driver for that activity and describe why this cost driver would be appropriate for the associated activity.
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Students have asked these similar questions
Value chain classifications Match each of the following cost items with the value
chain business function where you would expect the cost to be incurred:
Cost Item
Answer
Business Function
a. Research and development
b. Design
c. Production
d. Marketing
e. Distribution
t Customer service
1. Labor time to repair products under warranty
2. TV commercial spots
3. Labor costs of filling customer orders
4. Testing of competitor's product
5. Direct manufacturing labor costs
6. Development of order tracking system for
the Internet
7. Printing cost of new product brochures
8. Hours spent designing childproof bottles
9. Training costs for representatives to staff
the customer call center
10. Installation of robotics equipment in
manufacturing plant
Have a conversation with an Owner-Manager of a business in Australia or a Manager in an organisation such as a Bank, Retail Store, Restaurant, Hotel, Factory etc.
Ask the Owner-Manager or the Manager the following questions:
i) Does the business collect and use cost information for planning and control purposes? How often? (3 marks)
ii) Who is responsible for the collection of cost information? Be as specific as possible. (3 mark)
iii) What type of cost information does the business collect? Provide examples incl. types of reports. (3 marks)
iv) How important does the Owner-Manager or the Manager believe cost information are to the Business's success? Explain. (3 marks)
Have a conversation with an Owner-Manager of a business in Australia or a Manager in an organization
such as a Bank, Retail Store, Restaurant, Hotel, Factory etc. Ask the Owner-Manager or the Manager the
following questions:
Does the business collect and use cost information for planning and control purposes? How
often?
ii)
i)
ii) Who is responsible for the collection of cost information? Be as specific as possible.
ii) What type of cost information does the business collect? Provide examples incl. types of
reports.
iv) How important does the Owner-Manager or the Manager believe cost information are to
iv).
the Business's success? Explain.
IF
Chapter 4 Solutions
Managerial Accounting (5th Edition)
Ch. 4 - (Learning Objective 1) Cost distortion is more...Ch. 4 - (Learning Objective 2) The first step in computing...Ch. 4 - (Learning Objective 2) Activities incurred...Ch. 4 - (Learning Objective 3) Which of the following is...Ch. 4 - (Learning Objective 3) The potential benefits of...Ch. 4 - (Learning Objective 4) Lean operations are...Ch. 4 - Prob. 7QCCh. 4 - (Learning Objective 4) Concerning lean operations,...Ch. 4 - (Learning Objective 5) Which of the following is...Ch. 4 - (Learning Objective 5) Which of the following...
Ch. 4 - Understanding key terms (Learning Objectives 1, 2,...Ch. 4 - Use departmental overhead rates to allocate...Ch. 4 - Compute departmental overhead rates (Learning...Ch. 4 - Prob. 4.4SECh. 4 - Prob. 4.5SECh. 4 - Calculate a job cost using ABC (Learning Objective...Ch. 4 - Classifying costs within the cost hierarchy...Ch. 4 - Classifying costs within the cost hierarchy...Ch. 4 - Determine the usefulness of refined costing...Ch. 4 - Prob. 4.10SECh. 4 - Identifying costs as value-added or...Ch. 4 - Identify lean production characteristics (Learning...Ch. 4 - Identify the DOWNTIME activities at a manufacturer...Ch. 4 - Prob. 4.14SECh. 4 - Classifying costs of quality (Learning Objective...Ch. 4 - Quality initiative decision (Learning Objective 5)...Ch. 4 - Assess the impact of a quality initiative...Ch. 4 - Identify ethical standards violated (Learning...Ch. 4 - Compare traditional and departmental cost...Ch. 4 - Compute activity rates and apply to jobs (Learning...Ch. 4 - Apply activity cost allocation rates (Learning...Ch. 4 - Using ABC to bill clients at a service firm...Ch. 4 - Compare traditional and ABC allocations at a...Ch. 4 - Compare traditional and ABC allocations on a job...Ch. 4 - Use ABC to allocate manufacturing overhead...Ch. 4 - Continuation of E4-25A: Determine product...Ch. 4 - Prob. 4.27AECh. 4 - Classify costs and make a quality-initiative...Ch. 4 - Prob. 4.29AECh. 4 - Compare traditional and departmental cost...Ch. 4 - Prob. 4.31BECh. 4 - Prob. 4.32BECh. 4 - Prob. 4.33BECh. 4 - Compare traditional and ABC cost allocations at a...Ch. 4 - Prob. 4.35BECh. 4 - Prob. 4.36BECh. 4 - Prob. 4.37BECh. 4 - Prob. 4.38BECh. 4 - Classify costs and make a quality-initiative...Ch. 4 - Prob. 4.40BECh. 4 - Prob. 4.41APCh. 4 - Use ABC to compute full product costs (Learning...Ch. 4 - Prob. 4.43APCh. 4 - Prob. 4.44APCh. 4 - Prob. 4.45APCh. 4 - Prob. 4.46BPCh. 4 - Prob. 4.47BPCh. 4 - Comprehensive ABC implementation (Learning...Ch. 4 - Using ABC in conjunction with quality decisions...Ch. 4 - Comprehensive ABC (Learning Objectives 2 3)...Ch. 4 - Prob. 4.51SCCh. 4 - Discussion Questions 1. Explain why departmental...Ch. 4 - ABC in Real Companies Choose a company in any of...Ch. 4 - Value-Added versus Non-Value-Added at a Restaurant...Ch. 4 - Ethics involved with ABC and hazardous waste costs...
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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
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