Questions and Answers of Financial And Management Accounting

McGregor Electronics makes wireless handheld telephones and answering machine units for use in the home. It makes two models, a three-phone set with answering machine and a six-phone set with
Using the following information, determine which customer is more profitable to serve. Calculate both total profit and profit percentage (of revenue) for each customer. Line Item Customer A Customer
Define the term “value attribute” and give several examples of them.
In this exercise, you are going to “cut and paste” costs and driver frequencies and then use this information to develop activity-based costs. T he worksheets you will need for this exercise
For the list of activities in the following table, note whether they are value-add (VA), business value-add (BVA), or waste (W). Activity Туре Activity Туре Provide service to customer Ship
Grill masters makes a variety of gas and charcoal grills for customers across the United States. While the grills vary in a number of ways, the primary differences are features (special functions)
What defines a good customer profitability analysis vs. a bad one?
In this exercise, you are going to take the answers you derived for DB 13.2 and use this information to cost out the work done for individual customers during the year. You will need the following
Sub- tropics makes a variety of clothing for use in very hot climates. Its special fabrics wick moisture away from the body of the wearer, without becoming sodden because it has rapid-drying
For the list of activities in the following table, note whether they are value-add (VA), business value-add (BVA), or waste (W). Activity Туре Activity Туpe Fill customer order Take customer
What is the measurement of short-term customer profitability?
Happy Kitchen, Inc., produces several lines of dish towels and pot holders that are sold through department stores, grocery stores, and through wholesalers to smaller kitchen shops throughout the
Sparkle, Inc., makes paper towels that it sells to several different types of customers: wholesale distributors, warehouse stores, and grocery stores. The wholesale distributor requires smaller cases
The following table contains information about several activity-based customer costs and the use of these activities by the firm’s customers.REQUIRED:Using the information provided, please develop
Name some of the costs, outside of producing the product, that customers cause in organizations that serve them.
Bright Forever Flowers is a producer of silk flowers used in all forms of arrangements. It sells its products to retail stores, through a catalog supported by an internet website, and floral shops.
The overarching goal is to calculate and analyze Prestige Auto’s revised departmental budgets in terms of their projected dollars of value- add vs. percentage value-add. The learning objectives are
Chopsticks, Inc., makes chopsticks that are used in Chinese restaurants and in households across the Midwest. It has several different types of customers, including restaurants, department stores,
The following table contains information about several activity-based customer costs and the use of these activities by customers.REQUIRED:Using the information provided, please develop an ABC rate
What are the benefits of decentralization?
A project has the following cash flows:Period 0 Negative $100,000Period 1 Positive $75,000Period 2 Positive $50,000Period 3 Positive $75,000The firm has to pay 8% on its capital funds. What is the
Peterson Industries has three potential projects it could invest in for the coming year. Finances are tight, so it needs to choose the projects with the greatest benefit for the company. The
The overarching goal for this problem is to calculate and evaluate trends in key financial performance metrics including RI and ROE. The learning objectives are to analyze Prestige’s performance on
Arial Production makes movies and music videos. It has three divisions: Filming, Sound, and Editing. Sam Norwell, president and CEO of Arial Production, feels it is best to keep his divisions
What are some of the costs of decentralization?
A project has the following cash flows:Period 0 Negative $75,000Period 1 Positive $50,000Period 2 Positive $25,000Period 3 Positive $30,000The firm has to pay 9% on its capital funds. What is the
Randall Associates has three potential projects it could invest in for the coming year. Finances are tight, so the company needs to choose the projects with the greatest return for the company. The
The overarching goal of this problem is to calculate the amount of SG&A overhead charged to each of Prestige’s three business segments using direct vs. sequential allocation, then evaluate the
Manson’s Pay roll Service consists of two primary divisions—Pay roll Services and Tax Services.The pay roll services division does very well, earning on average 18% ROI. Tax services, in the
For the following list of measurements, determine whether they take a strategic perspective (S), a core strategies perspective (C), critical success factors (F), or the key performance indicators (K)
Cold Springs has four subunits: Filtering, Bottle Production, Bottling, and Distribution. They are run as independent units and can actually buy their inputs or sell their output either to the next
What are the various types of responsibility centers found commonly in organizations and what are they held accountable for?
For the following list of measurements, determine whether they take a strategic perspective (S), a core strategies perspective (C), critical success factors (F), or the key performance indicators (K)
The bottle production department of Cold Springs has decided it would like to renegotiate its transfer price to Bottling now that it sees what advantages can be gained. Current transfer prices,
What is the controllability criterion?
Helter-Skelter makes various games. Its financial structure is made up of the following:Long- term bonds—8% returns, 40%Short- term bonds—6% returns, 20%Capital stock—7% returns, 40%What is the
Ajax Manufacturing has two support centers, Engineering and Accounting, and two production centers, Cutting and Milling. The overhead costs for the coming year for the four departments, and their
How would you define responsibility accounting?
Best Met makes baseball mitts. Its financial structure is made up of the following:Long- term bonds—10% returns, 30%Preferred stock—8% returns, 25%Capital stock—9% returns, 45%What is the
Sunrise Development makes various types of modular homes for the housing market. The company has two support departments, Personnel and Finance, and two producing departments: Cutting and Assembly.
Please identify and define the three planning cycles that take place in most major corporations.
Sun wise Distributors has recently been very busy in its fruit juice bottling division. It has needed to borrow four employees from Packaging at a cost of $35,000 per employee with 30% benefits. It
Parlance, Inc., has three divisions that it is trying to evaluate to determine which division should get the largest share of the capital available for new projects for the coming year. Sam Peabody,
What is a strategic business unit and how does it function in an organization?
Teady Products has recently been very busy in its manufacturing division. It has needed to borrow five employees from Product Prep at a cost of $30,000 per employee with 35% benefits. Manufacturing
Kentucky Homes, a producer of various RVs and trailer homes, has three divisions that are always competing for funds: RVs, Trailer Homes, and Campers. Ken Williams, CEO of Kentucky Homes, has usually
What are the major purposes served by planning and budgeting systems in organizations?
Heaven’s to Betsy produces kitchen aprons and potholders. It recently decided to treat each of these product lines as a specific division. Kitchen Aprons had a net operating profit after tax of
Define some of the problems caused by accounting metrics.
What are the primary differences between direct, step-down, and reciprocal allocation methods?
Define the benefits of a market-based transfer price and note when it may not, or cannot, be used.
Why is it dangerous to evaluate a subunit’s performance with one simple number, such as its profit, during a particular period?
Lemon Enterprises reports the following actual vs. budgeted performance for the year.REQUIRED:Compute the variances by line item for Lemon Enterprises. Line Item Actual Budget $ 2,252,000 Sales $
Blue Spruce is a large wholesale gardening operation that sells trees, shrubs, and a variety of perennials and other bedding plants to small retail garden shops throughout New England. The company is
The overarching goal is to calculate the line item variances for New Car Sales, Used Car Sales, and Repairs for 20x6. T he learning objectives are to utilize variance analysis to evaluate the
Perkins Lumber has recently put in an activity-based costing (ABC) system. It wants to use it to assign the costs of its personnel and accounting departments to the two revenue centers, Lumber and
Provide an explanation of maximizing shareholder value and how the management accounting system helps support this goal.
No Holds Barred produces shish kebab holders and rotisserie units. It recently decided to treat each of these product lines as a specific division. The shish kebab unit had a net operating profit
Grummond Engine Repair has recently adopted ABC for its two support groups, Engineering and Finance. Engineering is charged out on engineering hours (which includes computer support), while Finance
What is the congruence problem and how can accounting measures be modified to address this shortcoming?
Real Life Productions has two major divisions, Filming and Distribution. It uses the work done by Accounting and Marketing in the following ways.Assign the costs of the supporting departments to the
On Your Own has two major divisions, Internet Sales and Direct Sales. It uses the work done by Computing and Development in the following ways.Please assign the costs of the supporting departments to
Please describe the interdependency problem in organizations and note two key ways in which this interdependency needs to be dealt with.
Holy Cow is a producer of milk products, including an entire line of frozen ice cream. In fact , the company has three major product lines: milk , creams, and ice cream products. There is a manager
Silverado, Inc., produces a wide range of silver utensils for use in buet serving settings. Its buet spoons are valued for their size, balance, and durability, as are its other serving pieces. The
What does it mean to have favorable variances? Unfavorable variances?
Hughes Industries reported the following actual vs. budgeted performance for the year.REQUIRED:Compute the variances by line item for Hughes Industries. Line Item Actual Budgeted Sales $ 3,250,500 $
The overarching goal is to calculate the performance ratio variances for New Car Sales, Used Car Sales, and Repairs for 20x6.The learning objectives are to utilize variance analysis to evaluate the
Fine Metals, Inc., is a wholesaler of precious metals. The company maintains two key product lines: gold and silver. The company keeps the metals in both coins and bars and sells to both the
What does the term “management-by-exception” mean and how is it used?
Pierce Enterprises has four operating divisions that reported the following results for 20x6.REQUIRED:a. Compute the variances by line item for Pierce Enterprise’s four divisions and company
Bent Rods, Inc., repairs engine rods of various types for diesel motors. The company is one of the few in its industry to do these repairs, so it has a fairly stable customer flow. That said, the
Define profit variance analysis and describe when it is used.
Doggone, Inc., has four operating divisions that reported the following results for 20x6.REQUIRED:a. Compute the variances by line item for Doggone, Inc.’s four divisions and company total.b. Which
Better Products, Inc., buys electronic games wholesale and then sells them retail via the internet. It is a highly competitive business that Better Products has to carefully manage to remain
Define accounting return variance analysis and describe when it is used.
Jameson Industries reported the following results for 20x6 for its three operating divisions. REQUIRED:a. Compute the sales volume and sales price variances for the three divisions of Jameson
Andrews Chicken is a producer of poultry products that sells directly both to the wholesale market that serves restaurants and to large grocery chains. The chicken market is a solid one, with only
What are the pros and cons of disaggregating profit variances by line item?
Best of Luck, Inc., reported the following results for 20x6 for its three operating divisions.REQUIRED:a. Compute the sales volume and sales price variances for the three divisions of Best of Luck,
Southview Medical is a medium- sized general practice clinic that has invested in its own radiology and laboratory departments, which are run as profit centers. The clinic has three profit
What does it mean to disaggregate profit variances by responsibility center, and why would we do this?
Hansen Industries reported the following results for 20x6.REQUIRED:Calculate the industry volume variance and market share variance for the year. Hansen Industries Budget Actual Industry Volume
Fiskar, Inc., has conducted a study of its managers’ motivations. It used the expectancy theory framework and a questionnaire that asked the managers to quantify their expectations on a 10-point
When we speak of disaggregating variances by profit driver, what are we trying to accomplish?
Candice, Inc., reported the following results for 20x6.REQUIRED:Calculate the industry volume variance and market share variance for the year. Candice, Inc. Budget Actud Industry Volume (millions)
Carlisle Enterprises has three managers it is considering for promotion to a top spot in the corporate hierarchy. These three managers have performed at relatively the same level throughout the two
What is the primary difference between a static and a flexible budget?
Sunset Industries is thinking about putting in a new incentive system that incorporates individual, group, and corporate performance in setting bonuses. Tom Grady believes he only has a minimal
Identify and define the various variances that we use to disaggregate the revenue and profit variance. Please be specific as to the type of variance and why it is used.
Harrold Enterprises is thinking about putting in a new incentive system for its top management team that balances individual, divisional, and corporate performance in setting bonuses. John McIntosh,
What do the terms “industry volume variance” and “market share variance” mean?
What does it mean to use relative performance evaluations when assessing the performance of a subunit?
Define subjective performance evaluations and identify when they may be used.
What is the difference between a favoritism bias and a hindsight bias?
What is expectancy theory and how can it be used in evaluating subunit performance?
For each of the following set of measures, indicate whether it is financial (F), customer- focused (C), internal processes (P), or innovation growth-oriented (I) in nature. Measure Турe Measure
Wonder Products purchases granite cleaning products from a Midwestern manufacturer and sells the product under its own brand name. The company sells its goods to local hardware stores and granite
Highways End produces energy drinks that are sold in convenience stores and at rest stops along major highways. The drinks provide a burst of energy that can keep drivers alert for long distances.
What does it mean to take a systems perspective to process management? How does this affect how managers approach their work in organizations?

Showing 600 - 700 of 1184