Questions and Answers of Cost Management A Strategic Emphasis

(Variance analysis and report; IMA case adapted) Henry Pacer is the general manager for the Ace Chemicals Division. Following is his division's Income Statement for the month just completed.Henry
(Changes of Standards; CMA adapted) NuLathe Co. produces a turbo engine component for jet aircraft manufacturers. A standard cost system has been used for years with good results.Unfortunately,
(CMA adapted) Allglow Company is a cosmetics manufacturer specializing in stage makeup The company's best selling product is to protect the skin from frequent use of makeup. SkinKlear is packaged in
(CMA, STRATEGY) Paste Products manufactures paste for commercial customers that is marketed in ten-gallon metal containers. Always cost conscientious, the firm uses a standard cost system that is
(Comprehensive: CMA adopted) The financial results for the Continuing Education Department of BusEd Corporation for November 19x8 are presented at the top of the next page Mary Ross, president of
For the past several years, a large U.S. based hotel/restaurant operator has been pursuing a strategy of disposing of its U.S. company-owned properties. Four years ago, the company owned and operated
In 19X5, events which were thought about and planned for the past several years in the Industrial Chemicals Company (ICC) culminated in the most significant change in the company's 80-plus year
HeadGear, Inc is a small manufacturer of headphones for use In commercial and personal applications. The HeadGear headphones are known for their outstanding sound quality and light weight, which
Johnson Supply Company is a large retailer of office supplies. It is organized into six regional divisions, five within the United States, and one international division. The fimri is growing
In rts thirteen year of operations, Mount Drake Software is reviewing the methods it has used to evaluate its profit SBUs. Mount Drake has six product divisions, each of which is a profit SBU, and
In 19X4, the Polymer Products Company was a multinational company engaged in themanufacture of a widely diverse line of products including chemical and agricultural products, man-made fibers,
Midwest Petro-Chemical, an industrial chemical distributor, was formed in 1960 by James Fletcher, a chemical engineer who had spent 10 years with the petrochemical division of a major oil company.
Required:Consider the financial data below for the Example Company, and assess the vakie of the Company. Explain your choice(s) of valuation method(s). Example Company Selected Financial Data Account
I've been hearing a lot lately about something "called EVA, which stands for Economic Value Added, and I was curious whether it is something we can use at OSI," Keith Martin said as he finished his
; (Sales forecast, CMA adapted) Bailment Company is a temporary employment fimri that has offices throughout the United States. Bailment is a well established company in a highly competitive
Exquisite Foods Incorporated (EFI) sells premium foods. Three independent strategies are being considered to promote a new product, Souffles for Microwaves, to dual-career families. Currently the
Sportway, Inc. is a wholesale distributor supplying a wide range of moderately priced sporting equipment to large chain stores. About 60 percent of Sportway's products are purchased from other
Robert Products Inc. consists of three decentralized divisions, Bayside Division, Cole Division and Diamond Division. The president of Robert Products has given the manage'rs of the three divisions
MACRS (CMA adapted) Beloit Company manufacturers motorized utility equipment and trucks. Beloit's Assembly Department employs about 200 workers who are covered by a labor contract that will expire on
(From Management Accounting Campus Report, contributed by Nabil Hassan) The Nabil Company makes a microcomputer desk ttiat it sells for $50 under a contract to a large computer retailer. The company
Valport Company employs a job cost system based on the full absorption of actual costs Factory overtiead is applied on the basis of machine hours (MH) using a predetennined overhead rate. The current
Constructo Inc. is a manufacturer of furnishings for infants and children. The company uses a job cost system and employs a full absorption accounting method for cos^ accumulation.Constructo's
Ranka Company manufacturers high quality leather products. The company's profits have declined during the past nine months. Ranl^a has used unit cost data that were developed eighteen months ago in
In the fall of 1989, the Texas Division of Southwestern Bell Telephone Company (SWBT)was facing considerable earnings uncertainty. Nine months had passed since the Texas Public Utilities Commission
Rice is one of the staple foods in IVIali, West Africa, and, happily for this country, most of what is consumed annually (between 72% and 85%) is grown on the rice paddies along the Niger River.
BACKGROUND:Blue Ridge Manufacturing produces and sells towels for the U.S. "sports towel" market. A"sports towel" is a towel that has the promotion of an event or a logo printed on it. They're called
The challenge of operating efficiently is spelled out in the rate agreement. Our interim goal is to reduce annual operation and maintenance expense (other than fuel and purchased power) by $40
BACKGROUND Tektronix, Inc. headquartered in Portland, Oregon, is a world leader in the production of electronic test and measurement instruments. The company's principal product since its founding in
The Califomia-lllini Manufacturing Company's (CI) plant operates in the rural central valley of California. It is family-owned and run. CI's plant manager, a grandson of the founder, went to school
Silver Aviation assembles small aircraft for commercial use. The majority of Silver's business is with small freight airlines serving those areas where the airport size does not accommodate larger
(Analyzing Quality Cost Report) Bergen, Inc., produces telephone equipment at its Georgia plant. In recent years, the company's maricet share has been eroded by stiff competition from Asian and
The Brenham General Hospital was approached by Health Food, Inc. (HFI) which specializes in the preparation of meals for institutional patients. HFI stated that it would prepare all inpatient meals
The Pump Division has one plant dedicated to the design and manufacture of large, highly technical, customized pumps. Typically the contract life (production cycle) is one to three years. Most
Laurent Products is a manufacturer of plastic packaging products with plants located throughout Europe and customers worldwide. "There is no doubt that the need to continue to grow sales is an
Mr. Carter is the manager of Simmons Fann and Seed Company, a wholesaler of fertilizer, seed, and other fam supplies. The company has been successful in recent years primarily because of great
The following requirement is based on infomnation in the Atlantic City Casino case, case 2-33 at the end of Chapter 2. Re-read the case and complete the requirements below.REQUIRED:1. Using the data
Melfotxl Hospital operates a general hospital, but rents space and beds to separatelyowned entities rendering specialized services such as pediatrics and psychiatric care_ Meiford charges each
Kirsten Malon has found a way to profitably exploit her computer know-how. She has started a firni that offers consulting sen/ices for computer and software repair and analysis.Most of her customers
Delight Inc., is a large manufacturer of lighting fixtures for both wholesalers and electrical contractors. An important aspect of the business with electrical contractors is Delight's ability to
Aerospace Inc is a manufacturer of airplane parts and engines for a variety of military as well as civilian aircraft. Though there are many commercial customers for most of the company's products,
After his first two years at Bronson Beverages (BB), a publicly held wholesaler of beers and wines, Jim Best has advanced to a senior cost analyst position with a very good salary.REQUIRED:For each
Several years ago the management of a large hotel chain. Hotel Corporation of America(HCA) purchased a casino in Las Vegas. Pleased with the results HCA const, ucteu another casino in Atlantic City
Sovera Enterprises, an expanding conglomerate, was founded 35 years ago by Emil Sovera. The company's policy lias been to acquire businesses that show significant profit potential; if a business
FASTSOFT is a small software developer that markets a software system (FAST-PAK)which provides a very fast back-up of computer disk drives. The firm has also begun to develop and will soon test
Barry McDonald, CFO for Recreational Products, Inc (RPl), is convinced it would be profitable for his firm to invest in a manufacturing operation in Singapore. RPI makes a variety of recreational
Blue Ridge Manufacturing produces and sells towels for the U.S. "sports towel" market. A"sports towel" is a towel that has the promotion of an event or a logo printed on it. They're called sports
The challenge of operating efficiently is spelled out in the rate agreement. Our interim goal is to reduce annual operation and maintenance expense (other than fuel and purchased power) by $40
BACKGROUND Tektronix, Inc. headquartered in Portland, Oregon, is a world leader in the production of electronic test and measurement instruments. The company's principal product since its founding in
Refer to the data in Brief Exercise 15-16. Provide the correct summary journal entries for actual and applied factory overhead costs (both variable and fixed) for the year. Assume that the company
Ready Products Inc. operates two divisions, each with its own manufacturing facility. The accounting system reports the following data for 2022:Ready estimates the useful life of each manufacturing
Carrie Lee, the president of Lee Enterprises, was concerned about the results of her company’s new quality control efforts. “Maybe the emphasis we’ve placed on upgrading our quality control
Assume that in October 2022 the Schmidt Machinery Company (Exhibit 14.1) manufactured and sold 950 units for $835 each. During this month, the company incurred $475,000 total variable costs and
Refer to the information for Brooks Plumbing Products Inc. (BPP) in Problem 20-51. Required 1. What is the valuation of BPP (for 2022) using the market value method? 2. What is the valuation of BPP
Intangibles such as customer relationships can account for a massive amount of the total assets of firms in the United States, though such assets are not recorded on firms’ balance sheets under
Explain the difference between the engineered-cost and discretionary-cost approaches to evaluating support departments.
Obtain a copy of the following article: John H. Fleming, Curt Coffman, and James K. Harter, “Manage Your Human Sigma,” Harvard Business Review, July–August 2005, pp. 107–114 (available at
You are given the following environmental quality-related costs:Employee training ........................................................................ $100,000Product design
Consolidated Industries is a diversified manufacturer with business units organized as divisions, including the Reigis Steel Division. Consolidated monitors its divisions on the basis of both unit
Blackwood Industries manufactures die machinery. To meet its expansion needs, it recently (2020) acquired one of its suppliers, Delta Steel. To maintain Delta’s separate identity, Blackwood reports
Sticky Fingers Inc. produces packing and masking tape. Last year’s annual report has been compiled, and you are in charge of business analysis for the year. The company had a goal for inventory
Tinsley Inc. is an industry-leading cardboard manufacturer. You have been asked to determine a market value for the firm’s equity. The firm has 100,000 shares outstanding, earnings per share of
Williams Company is a manufacturer of auto parts having the following financial statements for 2021–2022.RequiredCalculate and interpret the financial ratios for Williams for both years. Because
Refer to the information in Exercise 20-34.Required:1. Calculate free cash flow at Williams Company for each of the two years.2. Develop a business valuation for Williams Company for 2022 using the
Consider the following balance sheet and income statement for Yum! Brands Inc. (the company that operates Kentucky Fried Chicken and Pizza Hut), in condensed form, including some information from the
Using the information in Exercise 20-38 for Yum! Brands, determine the estimated valuation of the company at the end of 2019 using each of the following three methods (round answers to the nearest
McCoy Brands Inc. (MBI) is a retailer of consumer products. The company made two acquisitions in previous years to diversify its product lines. In 2020, MBI acquired a consumer electronics firm
Brooks Plumbing Products Inc. (BPP) manufactures plumbing fixtures and other home improvement products that are sold in Home Depot and Walmart as well as hardware stores. BPP has a solid reputation
The authors of an article published in Harvard Business Review (Laurie Bassei and Daniel McMurrer, “Maximizing Your Return on People,” Harvard Business Review (March 2007), p. 115-123) discuss
Liz Raiborn Inc. has the following financial results for the years 2022 through 2024 for its three regional divisions:RequiredCalculate return on sales (ROS), asset turnover (AT), and return on
Alex Chunn Inc. has the following financial data for 2022 for its three regional divisions:RequiredPrepare an Excel spreadsheet that will calculate return on sales (ROS) for each division for 2022.
What is meant by the term investment center? How is the financial performance of investment centers measured?
Mark Hancock Inc. manufactures a specialized surgical instrument called the HAN-20. The firm has grown rapidly in recent years because of the product’s low price and high quality. However, sales
Security Technology Inc. (STI) is a manufacturer of an electronic control system used in the manufacture of certain special-duty auto transmissions used primarily for police and military
Start Me Up, Inc., manufactures a caffeinated energy drink that sells for $4 each. The results for its first year of operations appear in the table below:Number of drinks produced
Woodland Hotels Inc. operates four resorts in the heavily wooded areas of northern California. The resorts are named after the predominant trees at the resort: Pine Valley, Oak Glen, Mimosa, and
Use the data in Problem 17-70 to respond to the requirements that follow.Required 1. If you haven’t done so already (in conjunction with Problem 17-70), prepare in Excel a COQ report for 2022
PIM Industries Inc. manufactures electronics components. Each unit costs $30 before the final test. The final test rejects, on average, 5% of the 50,000 units manufactured per year. The average
This chapter includes an overview of a COQ reporting system. Such a system has, in fact, been applied in practice by a number of companies. This exercise pertains to the application of a COQ
A customer’s order is delivered (received by the customer) on December 1, 2022. This order was placed with the company on September 1, 2022, and received by the manufacturing department on
Genova Company classifies its costs of quality into four categories. The costs of quality (COQ) as a percentage of cost of goods sold for the last three years are as follows:Required1. Use a
Sigma process that many organizations are using today to improve the quality of their services and products. One could get the impression from the discussion that this topic is more properly a
In 2023, a manufacturing company instituted a total quality management (TQM) program producing the comparative report shown below:On the basis of this report, which one of the following statements is
Refer to the information in Brief Exercise 17-13. What is the expected average loss (cost) per unit, E(L(x)), based on a Taguchi quality loss function (QLF), if the manufacturing process is centered
Refer to the information in Brief Exercise 17-13. Calculate the estimated total quality loss (cost) when the measured quality characteristic, x (e.g., circumference, measured in inches), is 78. Round
Use the data for Ashley Technology Inc. in Problem 16-41 to complete the following requirements. Also assume that fixed manufacturing costs are $50 million in both 2021 and 2022.Required1. Compute
Solidtronic Inc., an original equipment manufacturer (OEM), has a product specification of 75 ± 5 (i.e., T [the target value] = 75). The cost for warranty services (when the quality characteristic,
Ashley Technology Inc. manufactures a scrambling device for cellular telephones. The device’s main component is a delicate part, CT140. CT140 is easily damaged and requires careful handling. Once
Use the data for Ashley Technology Inc. in Problem 16-41 to complete the following requirements:Required1. Compute the partial financial productivity ratios for direct materials and direct labor for
Software Solution (SOS) helps subscribers solve software problems. All transactions are made over the telephone. For the year 2021, 10 engineers, most of whom are recent graduates, handled 100,000
Hathaway Products Inc. produces an innovative lighting system used in restaurants and high-end retail stores to provide a pleasing, warm atmosphere. Hathaway produces two versions of the product,
Each summer, the Harbour Report (www.oliverwyman. com/index.html) rates the productivity of the major automakers, including the “Detroit Big Three,” Toyota, Honda, and many other brands. The
Inc. provided the following information:Budgeted production .............................. 10,000 unitsActual production ....................................... 9,500 unitsBudgeted input
Which of the following statements is true?a. The lower the partial productivity ratio, the greater the productivity.b. Productivity improves when partial productivity increases.c. Prices of inputs
What is productivity? What does it measure?
This assignment involves the use of a traditional (i.e., non-time-driven) ABC system to address the problem of measuring and managing the cost of capacity. As controller for Zen Company, you’ve
Obtain and read the following article: Robert S. Kaplan and David P. Norton, “Mastering the ManagementSystem,” Harvard Business Review, January 2008, pp. 63–77 (available at ftp://public.
New Millennium Technologies uses a standard cost system. It budgeted 50,000 machine hours to manufacture 100,000 units in 2022. The budgeted total fixed factory overhead was $9,000,000. The company
See the following: K. P. Coyne, S. T. Coyne, and E. J. Coyne Jr., “When You’ve Got to Cut Costs Now: A Practical Guide to Reducing Overhead by 10%, 20%, or (wince) 30%,” Harvard Business
Refer to the information for Johnny Lee Inc. in Exercise 15-24. Assume that in a given month (December) the standard allowed machine hours for output produced was 5,500. Also, assume that the
Walkenhorst Company’s machining department prepared its 2022 budget based on the following data:Practical capacity ........................................................... 40,000 unitsStandard

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