Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 7, Problem 7.76ACT
A.
To determine
To apply: The ethical framework designed under IMA Statement of Ethical Professional Practice while giving answers to the questions.
B.
To determine
To analyze: The impact of the error on breakeven sales and the new sales commission proposal.
C.
To determine
To identify: The specific steps should be taken by C in resolving the situation by referring IMA Statement of Ethical Professional Practice.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.You are required to submit this assignment to LopesWrite. Please refer to the directions in the Student Success Center.Paul Duncan, financial manager of EduSoft Inc., is facing a dilemma. The firm was founded 5 years ago to provide educational software for the rapidly expanding primary and secondary school markets. Although EduSoft has done well, the firm's founder believes an industry shakeout is imminent. To survive, EduSoft must grab market share now, and this will require a large infusion of new capital.Because he expects earnings to continue rising sharply and looks for the stock price to follow suit, Mr. Duncan does not think it would be wise to issue new common stock at this time. On the other hand, interest rates are currently high by historical standards, and the firm's B rating means that interest payments on a new debt issue would be prohibitive.…
Valencia Manufacturing Company manufactures and sells musical gadgets. You have just begun yoursummer internship at Valencia Manufacturing. To expand sales, the business is considering paying acommission to its sales team. You have been asked to compute 1) the new break-even sales figure, and 2) theoperating profit if sales increase by 10% under the new sales commission plan. She is confident that you canhandle the task, because you learned CVP analysis in your accounting class.The following data was obtained:Selling price per unit $200Variable expenses per unit: Direct Material $40Direct Labour $32Variable Manufacturing Overhead $18Fixed expenses: Fixed Manufacturing Overhead $190,000Fixed Selling Costs $115,000Fixed Administrative Costs $135,000Production/Sales 6,000 UnitsAfter collecting your data, you performed your analysis and submitted a memo to your manager, who was verypleased with the work done. Your report indicated that the new sales commission plan would result in…
Valencia Manufacturing Company manufactures and sells musical gadgets. You have just
begun your summer internship at Valencia Manufacturing. To expand sales, the business is
considering paying a commission to its sales team. You have been asked to compute 1) the
new break-even sales figure, and 2) the operating profit if sales increase by 10% under the
new sales commission plan. She is confident that you can handle the task, because you
learned CVP analysis in your accounting class.
The following data was obtained:
Selling price per unit
Variable expenses per unit:
$200
$40
$32
$18
Direct Material
Direct Labour
Variable Manufacturing Overhead
Fixed expenses:
Fixed Manufacturing Overhead
Fixed Selling Costs
Fixed Administrative Costs
$190,000
$115,000
$135,000
6,000 Units
Production/Sales
After collecting your data, you performed your analysis and submitted a memo to your
manager, who was very pleased with the work done, Your report indicated that the new sales
commission plan would…
Chapter 7 Solutions
Managerial Accounting (5th Edition)
Ch. 7 - (Learning Objective 1) The contribution margin is...Ch. 7 - (Learning Objective 1) The contribution margin...Ch. 7 - (Learning Objective 2) The formula to find the...Ch. 7 - Prob. 4QCCh. 7 - Prob. 5QCCh. 7 - Prob. 6QCCh. 7 - (Learning Objective 4) Which of the following is...Ch. 7 - Prob. 8QCCh. 7 - Prob. 9QCCh. 7 - Prob. 10QC
Ch. 7 - Compute unit contribution margin and contribution...Ch. 7 - Prob. 7.2SECh. 7 - Prob. 7.3SECh. 7 - Find target profit volume (Learning Objective 2)...Ch. 7 - Prob. 7.5SECh. 7 - Prob. 7.6SECh. 7 - Prob. 7.7SECh. 7 - Prob. 7.8SECh. 7 - Compute margin of safety (Learning Objective 5)...Ch. 7 - Compute and use operating leverage factor...Ch. 7 - Calculate breakeven and target profit sales...Ch. 7 - Prob. 7.12SECh. 7 - Prob. 7.13SECh. 7 - Prob. 7.14SECh. 7 - Compute margin of safety (Learning Objective 5)...Ch. 7 - Compute and use operating leverage factor...Ch. 7 - Prob. 7.17SECh. 7 - Prob. 7.18SECh. 7 - Prepare contribution margin income statements...Ch. 7 - Work backward to find missing information...Ch. 7 - Find breakeven and target profit volume (Learning...Ch. 7 - Prob. 7.22AECh. 7 - Prob. 7.23AECh. 7 - Prob. 7.24AECh. 7 - Prob. 7.25AECh. 7 - Prob. 7.26AECh. 7 - Sustainability and CVP concepts (Learning...Ch. 7 - Prob. 7.28AECh. 7 - Calculate contribution margin and breakeven...Ch. 7 - Prob. 7.30AECh. 7 - Extension of E7-30A: Multiproduct firm (Learning...Ch. 7 - Prob. 7.32AECh. 7 - Breakeven and an advertising decision at a...Ch. 7 - Prob. 7.34AECh. 7 - Prob. 7.35AECh. 7 - Prob. 7.36AECh. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Prob. 7.39AECh. 7 - Prob. 7.40BECh. 7 - Work backward to find missing information...Ch. 7 - Find breakeven and target profit volume (Learning...Ch. 7 - Prob. 7.43BECh. 7 - Prob. 7.44BECh. 7 - Prob. 7.45BECh. 7 - Prob. 7.46BECh. 7 - Continuation of E7-46B: Changing business...Ch. 7 - Sustainability and CVP (Learning Objective 3)...Ch. 7 - Prob. 7.49BECh. 7 - Prob. 7.50BECh. 7 - Prob. 7.51BECh. 7 - Prob. 7.52BECh. 7 - Find breakeven for a multiproduct firm (Learning...Ch. 7 - Breakeven and an advertising decision at a...Ch. 7 - Compute margin of safety and operating leverage...Ch. 7 - Use operating leverage factor to find fixed costs...Ch. 7 - Prob. 7.57BECh. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Prob. 7.59BECh. 7 - Comprehensive CVP analysis (Learning Objectives 1,...Ch. 7 - Find missing data in CVP relationships (Learning...Ch. 7 - Prob. 7.62APCh. 7 - Prob. 7.63APCh. 7 - Prob. 7.64APCh. 7 - Prob. 7.65APCh. 7 - Prob. 7.66APCh. 7 - Find missing data in CVP relationships (Learning...Ch. 7 - Prob. 7.68BPCh. 7 - Comprehensive CVP problem (Learning Objectives 1,...Ch. 7 - Prob. 7.70BPCh. 7 - Prob. 7.71BPCh. 7 - CVP analysis at a multiproduct firm (Learning...Ch. 7 - Prob. 7.73SCCh. 7 - Discussion Questions 1. Define breakeven point....Ch. 7 - Prob. 7.75ACTCh. 7 - Prob. 7.76ACTCh. 7 - Prob. 7.77ACT
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
- Ethical Behavior Consider the following scenario between Dave, a printer, and Steve, an assistant in the local universitys athletic department. Steve: Dave, our department needs to have 10,000 posters printed for the basketball team for next year. Heres the mock-up, and well need them in a month. How much will you charge? Dave: Well, given the costs I have for ink and paper, 1 can come in at around 5,000. Steve: Great, heres what I want you to do. Print me up an invoice for 7,500. Huts our budget. Then, when they pay you, you give me a check for 2,500. Ill make sure that you get the job. Required: CONCEPTUAL CONNECTION Is Steves proposal ethical? What should Dave do?arrow_forwardJacks Apps Company researches, develops, and sells traditional applications (i.e., apps) for middle-aged mobile phone device users. In an attempt to tap into the large young adult app market to boost sales and advertising revenues. Jacks CFO, Daniel, is considering hiring students from area high schools and universities to drastically increase the innovativeness of the companys apps. Specifically, Daniel hopes that Jacks new student employee pool will make Jack's next wave of phone apps inventions popular with young adults by providing innovative services, such as exchanging payments for late-night food deliveries, arranging informal dating and other social gatherings, exchanging perspectives on different professors, and identifying unusual debit card purchase patterns to assist with early fraud detection notification. Based on cost estimates from Jacks finance team and surveys of its new target customers (i.e., New Customer Financial Survey), Daniel estimates that this new customer market would increase Jacks annual net income by 10,000,000. In addition to the New Customer Financial Survey. Jacks management team conducted a Business Sustainability Analysis. Specifically, the stakeholder engagement portion of the Business Sustainability Analysis revealed that four of Jacks most important stakeholder groups (advertisers, regulators, employees, and customers) would react stronglysome favorably and others unfavorablyto the decision to push its app business in the direction of the young adult market. Specifically, ten percent of its existing advertisers would drop Jacks as a client, thereby reducing its annual advertising revenue of 10,000,000. Also, confidential discussions with competitors suggest that the new fraud detection app would require sensitive customer information that Jacks would be unable to protect perfectly from data hackers, thereby resulting in annual fines of 1,500,000 from regulators. In addition, employee engagement meetings indicated that they would strongly favor the expansion into the young adult market. Daniel estimates that improved employee morale would significantly increase their productivity and creativity, thereby increasing annual sales revenue by 2,000,000. Finally, focus groups with existing customers revealed that they would highly value the increased workforce diversity of Jacks hiring a large number of talented young female employees with an expertise in technology. Daniel estimates that this positive customer sentiment would translate into an additional 3,000,000 in annual traditional apps sales. Required: 1. Using the New Customer Financial Survey and the Business Sustainability Analysis calculate the net change in Jacks Apps Companys net income that would be expected from pursuing the young adult app market. 2. Based on the calculation in Requirement 1, should Jacks Apps pursue the young adult app market? Explain your answer. 3. CONCEPTUAL CONNECTION Describe two additional considerations that Jacks Apps Company management might be wise to consider before making a final decision on whether or not to pursue the young adult apps market.arrow_forward1. Explain how the organizations culture would influence the design of a new Accounting Information system for a company. 2. An university has various schools and departments that offer various Degree and Diploma courses. The University has been offering courses through two modes of study that include the Full-Time classes and Evening Classes. The university management has been evaluating the possibility of introducing a new mode of study where the university will offer the students the option of selecting 100% online classes option. The University will deploy this 100% online classes option by using Zoom video conferencing software. Other software’s and platforms that the university will use for the 100% online classes mode like google classroom and other softwares. The university has invited you as an expert of accounting information systems to help in the design and implementation of a new revenue transaction cycle system that will be used for the new 100% online classes option mode…arrow_forward
- Valencia Manufacturing Company manufactures and sells musical gadgets. You have just begun your summer internship at Valencia Manufacturing. To expand sales, the business is considering paying a commission to its sales team. You have been asked to compute 1) the new break-even sales figure, and 2) the operating profit if sales increase by 10% under the new sales commission plan. She is confident that you can handle the task, because you learned CVP analysis in your accounting class.The following data was obtained:Selling price per unit $200 Variable expenses per unit: Direct Material $40Fixed expenses:Production/SalesDirect Labour $32 Variable Manufacturing Overhead $18Fixed Manufacturing Overhead Fixed Selling CostsFixed Administrative Costs$190,000 $115,000 $135,0006,000 Units Find the break-even in sales find the operating profit before and after the fixed cost adjustmentsarrow_forwardAnalyzing a cost-volume-profit graph Nolan Rouse is considering starting a Web-based educational business, e-Prep MBA. He plans to offer a short-course review of accounting for students entering MBA programs. The materials would be available on a password-protected Web site; students would complete the course through self—study. Rouse would have to grade the course assignments, but most of the work would be in developing the course materials, setting up the site, and marketing. Unfortunately, Rouse’s hard drive crashed before he finished his financial analysis. However, he did recover the following partial CVP chart: Requirements Label each axis, the sales revenue line, the total costs line, the fixed costs line, the operating income area, and the breakeven point. It Rouse attracts 300 students to take the course, will the venture be profitable Explain your answer. What are the breakeven sales in students and dollars?arrow_forwardValencia Manufacturing Company manufactures and sels musical gadgets. You have just begun your summer intermship at Valencia Manufacturing. To expand sales, the business is considering paying a commission to its sales team. You have been asked to compute 1) the new break-even sales figure, and 2) the operating profit if sales increase by 10% under the new sales commission plan. She is confident that you can handle the task, because you learned CVP analysis in your accounting class. The following data was obtained: Selling price per unit Variable expenses per unit: $200 $40 $32 $18 Direct Material Direct Labour Variable Manufacturing Overhead Fixed expenses: Fixed Manufacturing Overhead Fixed Selling Costs Fixed Administrative Costs $190,000 $115,000 $135,000 6,000 Units Production/Sales After collecting your data, you performed your analysis and submitted a memo to your manager, who was very pleased with the work done. Your report indicated that the new sales commission plan would…arrow_forward
- Valencia Manufacturing Company manufactures and sells musical gadgets. You have justbegun your summer internship at Valencia Manufacturing. To expand sales, the business isconsidering paying a commission to its sales team. You have been asked to compute 1) thenew break-even sales figure, and 2) the operating profit if sales increase by 10% under thenew sales commission plan. She is confident that you can handle the task, because youlearned CVP analysis in your accounting class.The following data was obtained:Selling price per unit $200Variable expenses per unit: Direct Material $40Direct Labour $32Variable Manufacturing Overhead $18Fixed expenses: Fixed Manufacturing Overhead $190,000Fixed Selling Costs $115,000Fixed Administrative Costs $135,000Production/Sales 6,000 UnitsAfter collecting your data, you performed your analysis and submitted a memo to yourmanager, who was very pleased with the work done. Your report indicated that the new salescommission plan would result in a…arrow_forwardBefore you begin this assignment review the Tying It All Together feature in the chapter. Best Buy Co., Inc. is a leading provider of technology products. Customers can shop at more than 1,700 stores or online. The company is also known for its Geek Squad for technology services. Suppose Best Buy is considering a particular HDTV for a major sales item for Black Friday, the day after Thanksgiving, known as one of the busiest shopping days of the year. Assume the HDTV has a regular sales price of $900, a cost of $500, and a Black Friday proposed discounted sales price of $650. Best Buy’s 2015 Annual Report states that failure to manage costs could have a material adverse effect on its profitability and that certain elements in its cost structure are largely fixed in nature. Best Buy, like most companies, wishes to maintain price competitiveness while achieving acceptable levels of profitability. (Item 1A. Risk Factors.) Requirements Calculate the gross profit of the HDTV at the regular…arrow_forwardYou wish to take an Excel course. You may enroll at one within your school or you may take a community class at the local library. You've gathered the following information to aid in your decision-making process: Costs/Benefits College Course Community Course Cost $4,300 $1,190 Distance to course 0.20 miles (walking distance) 18 miles (driving distance) Timing of course Weekday Weekend Number of meetings 16 8 Qualitative considerations Convenience, quality of instruction Flexibility, brief duration Pretend transportation (gas, mileage, and parking) cost $220 per class session at the library. If you consider solely the cost - including transportation - of each alternative, which would you choose? Multiple Choice College course Community course Both alternatives Neither alternativearrow_forward
- E-LEARNING COST ACCOUNTING ASSIGNMENT Answer all the THREE Questions. 1 Mr Gardens, the financial controller of Sugarland Ltd, accidentally tossed the company's cost records into a wastebasket which had been light .On realising that mistake, he rushed to the roaring blaze and managed to retrieve only a few of the records. From the salvaged records, he managed to determine the following facts about the current year 2020: (i) Sales totaled sh 1,000,000 during 2020. (ii) The beginning inventories for the year were: work in progress sh 120,000; Finished goods sh 60,000. (iii) There were no closing inventories of raw materials. (iv) Direct labor is equal to 25% of conversion cost; direct, labor is also equal to 40% of prime cost. (v) The work in progress inventory decreased by sh 20,000 during the year. (vi)Gross margin during the year was 55% of sales. (vii) Manufacturing overheads amounted to sh 240,000 in the year. (iv) Administrative expenses for 2014 were twice as great as net income…arrow_forwardCreative Homework/Short Project Your friend's small business makes hand-crafted papers that she sells di- rectly to her customers online. Fortunately, her business is growing quickly, and she is considering selling her unique product to other businesses. From your market- ing class, you know that different channel structures exist for both consumer and B2B markets. Summarize the differences between these two channel structures. What advice can you give her?arrow_forward8 https://www.linkedin.com/learning/exams/summative/courses/accounting-foundations-2018 NG What is the best way for a small hardware store to compete against Home Depot, when Home Depot can charge less for the same products? Select an answer: Focus on customer service, and create relationships. Try to convince Home Depot to close its store. Buy cheaper, inferior products. Try to find suppliers who will charge less for their products. Skip Previous e to searcharrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
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
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
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
GE McKinsey Matrix for SBU Strategies; Author: Wolters World;https://www.youtube.com/watch?v=FffD1Ze76JQ;License: Standard Youtube License