Managerial Accounting: Creating Value in a Dynamic Business Environment
11th Edition
ISBN: 9781259569562
Author: Ronald W Hilton Proffesor Prof, David Platt
Publisher: McGraw-Hill Education
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Chapter 5, Problem 62P
To determine
Prepare a table showing Incorporation G’s traditional based product costing system distorts the product costs of G, T and W.
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Which of the following statements related to cost estimation methods is true ?
a . Only high -low method has a slope and an intercept .
b. The scatter - graph method is used to derive an estimated line of cost behavior by graphically connecting the two cost amounts identified with the highest and lowest volume levels .
c. The most complex method of cost estimation is the high - low method .
d. The least -squares regression method is the most accurate and reliable method to determine the cost behavior compared to scatter -graph plot and high -low methods .
e. None of the given answers
Which of the following statements related to CVP chart is not true?
O a. None of the given answers.
O b. To calculate the total fixed cost from a graph is by multiplying a level of volume by the variable
cost per unit found out earlier and subtracting that from the total cost for that level of volume.
Oc. The high-low method is a way to estimate the cost behavior by graphically connecting the two
cost amounts identified with the highest and lowest volume levels.
O d. To determine the variable cost per unit froma graph, the change in cost is divided by the
change in units.
O e. The slope of the total cost line determines the fixed cost per unit.
Of. The intercept between the total cost line on a graph and the y axis determines the fixed cost.
on
Mazoon Company sells 500 units resulting in $300,000 of sales revenue, $100,000 of variable costs,
and $36,000 of fixed costs. The number of units that must be sold to achieve $40,000 of operating
income is:
Fir
F2
F3
F9
F10
F1
F4
F5
F6
F7
F8
23…
Which of the following statements related to CVP chart is not true?
O a.
To determine the variable cost per unit from a graph, the change in cost is divided by the change in units.
O b. The scatter graph method is a way to estimate the cost behavior by graphically connecting the two cost amounts
identified with the highest and lowest volume levels.
O c.
The slope of the total cost line determines the variable cost per unit.
O d. To calculate the total fixed cost from a graph is by multiplying a level of volume by the variable cost per unit found out
earlier and subtracting that from the total cost for that level of volume.
e.
The intercept between the total cost line on a graph and the y-axis determines the fixed cost.
f. None of the given answers.
Chapter 5 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 5 - Briefly explain how a traditional, volume-based...Ch. 5 - Prob. 2RQCh. 5 - Explain how an activity-based costing system...Ch. 5 - What are cost drivers? What is their role in an...Ch. 5 - List and briefly describe the four broad...Ch. 5 - How can an activity-based costing system alleviate...Ch. 5 - Prob. 7RQCh. 5 - How is the distinction between direct and indirect...Ch. 5 - Explain the concept of a pool rate in...Ch. 5 - Briefly explain two factors that tend to result in...
Ch. 5 - List three factors that are important in selecting...Ch. 5 - Prob. 12RQCh. 5 - Explain why a new product-costing system may be...Ch. 5 - Prob. 14RQCh. 5 - Are activity-based costing systems appropriate for...Ch. 5 - Explain why maintaining their medical-services...Ch. 5 - How could the administration at Immunity Medical...Ch. 5 - Prob. 18RQCh. 5 - Prob. 19RQCh. 5 - What is meant by the term activity analysis? Give...Ch. 5 - Prob. 21RQCh. 5 - What is meant by customer-profitability analysis?...Ch. 5 - Explain the relationship between customer profit...Ch. 5 - What is a customer profitability profile?Ch. 5 - Describe the use of practical capacity in a TDABC...Ch. 5 - Tioga Company manufactures sophisticated lenses...Ch. 5 - Urban Elite Cosmetics has used a traditional cost...Ch. 5 - Kentaro Corporation manufactures Digital Video...Ch. 5 - Kentaro Corporation manufactures Digital Video...Ch. 5 - Prob. 31ECh. 5 - Refer to the description given for Wheelco, Inc....Ch. 5 - Prob. 33ECh. 5 - United Technologies Corporation implemented...Ch. 5 - Redwood Company sells craft kits and supplies to...Ch. 5 - Non-value-added costs occur in nonmanufacturing...Ch. 5 - Since you have always wanted to be an...Ch. 5 - Prob. 39ECh. 5 - Prob. 42ECh. 5 - Big Apple Design Company specializes in designing...Ch. 5 - Prob. 44ECh. 5 - Borealis Manufacturing has just completed a major...Ch. 5 - Ontario, Inc. manufactures two products, Standard...Ch. 5 - Kitchen Kings Toledo plant manufactures three...Ch. 5 - Prob. 48PCh. 5 - Maxey Sons manufactures two types of storage...Ch. 5 - Prob. 50PCh. 5 - John Patrick has recently been hired as controller...Ch. 5 - The controller for Tulsa Medical Supply Company...Ch. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - World Gourmet Coffee Company (WGCC) is a...Ch. 5 - Knickknack, Inc. manufactures two products: Odds...Ch. 5 - Prob. 58PCh. 5 - Marconi Manufacturing produces two items in its...Ch. 5 - Gigabyte, Inc. manufactures three products for the...Ch. 5 - Refer to the new target prices for Gigabytes three...Ch. 5 - Prob. 62PCh. 5 - Better Bagels, Inc. manufactures a variety of...Ch. 5 - Midwest Home Furnishings Corporation (MHFC)...Ch. 5 - Fresno Fiber Optics, Inc. manufactures fiber optic...Ch. 5 - Refer to the information given in the preceding...Ch. 5 - Whitestone Company produces two subassemblies,...Ch. 5 - Morelli Electric Motor Corporation manufactures...Ch. 5 - Refer to the product costs developed in...Ch. 5 - Morelli Electric Motor Corporations controller,...
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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
- all of the following are reasons to use backflush costing, except a. Managers tend to use their limited resources on developing more accurate product cost data. b. Complex Ledger systems may be too costly to develop under traditional cost tracking systems. c. Accuracy is critical whem allocationg accurate conversion cost per unit. d. A fairly rough allocation may be sufficient for external reporting purposes.arrow_forwardHW 8. Please complete all requirements :)arrow_forwardPlease see the picture below for details on the problem. Please be sure to include cell referencing in the answer and the appropriate formula i.e. weighted average unit cost: (C10*E10)+(C11*E11)+(C12*E12)/(C10+C11+C12). I know the answer for the first box is suppose to be 7.9166666667 but I am having difficulty putting that inside excel using cell reference and the correct formula set up.arrow_forward
- 7. Which of the following charts best represent total variable costs? For each chart, the line represents the cost behavior pattern, the vertical axis represents costs, and the horizontal axis represents total volume, (A) Your answer is (B) (C) (D) Explain your answer: 8. Which of the following is NOT a cost estimation method? A) High-low cost estimation B) Scatter diagrams C) Least-square regressions D) CVP analysis Your answer is Explain your answer: 9. Assume a local Cost Cutters provides cuts, perms, and hairstyling services. Annual fixed costs are $120,000, and variable costs are 40 percent of sales revenue. Determine its break-even point in sales dollars. A) $250,000 B) $200,000 c) $240,000 D) $360,000 Your answer is Explain your answer:arrow_forwardWhich one of the following is a disadvantage of Mass Production system? a. Higher level of inventory at all levels and hence higher inventory cost. b. Larger space requirements. c. Breakdown of one machine will stop an entire production line. d. Higher cost due to frequent set up changes.arrow_forwardUse the following information about sales and costs to prepare a scatter diagram. Draw a cost line that reflects the behavior displayed by this cost. Determine whether the cost is variable, step-wise, fixed, mixed, or curvilinear. Period Sales Costs Period Sales Costs $760 $590 9. $580 $390 2. 800 560 10. 320 240 3. 200 230 II. 240 230 4 400 400 12. 720 550 5 480 390 13 280 260 6 620 550 14. 440 410 7 680 590 15 380 260 8 540 430arrow_forward
- With the aid of computer software, managers can vary assumptions regardingselling prices, costs, and volume and can immediately see the effects of eachchange on the break-even point and profit. Such an analysis is called A. “What if” or sensitivity analysis.B. Vary the data analysis.C. Computer aided analysis.D. Data gathering.arrow_forward6.) Statement 1. The high-low method needs three observations of costs to calculate the cost formula.Statement 2. The least-squares regression method uses all of the available data to find the best fitting line.Statement 3. The calculations in the least-squares regression method is always accurate in all data sets between any kind of activity and cost. Which of the following is true?Group of answer choices Statement 1 Statement 3Statements 1 and 3Statements 1 and 2 Statements 2 and 3 Statement 2 7.) Which of the following statements is true about broker markets?Group of answer choices Brokers’ extensive contacts provide them with a pool of price information that individual investors could easily duplicate themselves, and hence not really value adding. Investors have an incentive to hire a broker because what they charge as a commission is less than the cost of direct search. Brokers can guarantee an order because they have an inventory of securities. Brokers bring buyers and sellers…arrow_forwardThe line that begins at the origin on a CVP graph represents total expenses. total fixed expenses. total sales revenues. both the total expenses and the total sales revenues. Which of the following best describes the concept of a "constraint?" Expected future costs that differ among alternatives. None of the items in this list of answers. A benefit foregone by choosing one alternative course over another. The distribution of all products to be sold.arrow_forward
- Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardAssume that a newly implemented ABC system concludes that the number of orders placed is the best cost driver for the order-filling activity. Assign order-filling costs using this driver to each customer type and then calculate the new unit bid price for each customer type. Note: Do not round interim calculations. Round the final order cost allocation to the nearest whole dollar. Round final bid prices to the nearest cent.arrow_forwardExplain how the high-low method is used for cost estimation. What, if any, are the limitations of this approach to cost estimation?arrow_forward
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