Questions and Answers of Horngrens Cost Accounting

Gonzalo Inc. is a small distributor of mechanical pencils. Gonzalo identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following
Gonzalo Inc. is a small distributor of mechanical pencils. Gonzalo identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following
Gonzalo Inc. is a small distributor of mechanical pencils. Gonzalo identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following
Gonzalo Inc. is a small distributor of mechanical pencils. Gonzalo identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following
Winchester Manufacturing, Inc., plans to develop a new industrial motor. The product will take 6 months to design and test. The company expects the motor to sell 10,000 units during the first 6
What are the three major factors affecting pricing decisions?
How do companies make long-run pricing decisions?
How do companies determine target cost?
Why is it important for managers to distinguish cost incurrence from locked-in costs?
How do companies price products using the cost-plus approach?
Describe life-cycle budgeting and life-cycle costing and when should companies use these techniques?
What is price discrimination and peak load pricing and why are there price differences across countries?
How do antitrust laws affect pricing?
How can a company’s revenues and costs differ across customers?
How do customer-profitability profiles help managers?
Why do managers prepare cost-hierarchy based operating income statements?
What criteria should managers use to guide cost-allocation decisions?
What are two key decisions managers must make when collecting and allocating costs in indirect-cost pools?
What are the two components of the sales volume variance and the two components of the sales-quantity variance?
When should managers use the dual-rate method over the single-rate method?
What factors should managers consider when deciding between allocation based on budgeted and actual rates and budgeted and actual usage?
What methods can managers use to allocate costs of multiple support departments to operating departments?
What methods can managers use to allocate common costs to two or more users?
How can contract disputes over reimbursement amounts based on costs be reduced?
What is product bundling, and how can managers allocate revenues of a bundled product to individual products in the bundle?
What do the terms joint cost and splitoff point mean, and how do joint products differ from byproducts?
Why are joint costs allocated to individual products?
What methods can be used to allocate joint costs to individual products?
When is the sales value at splitoff method considered preferable for allocating joint costs to individual products and why?
Are joint costs relevant in a sell-or-processfurther decision?
What methods can be used to account for byproducts, and which of them is preferable?
Under what conditions is a process-costing system used?
How are average unit costs computed when no inventories are present?
What are the five steps in a process-costing system, and how are equivalent units calculated?
What are the weighted-average and first-in, first-out (FIFO) methods of process costing?Under what conditions will they yield different levels of operating income?
How are the weighted-average and FIFO process-costing methods applied to transferred-in costs?
What is an operation-costing system, and when is it a better approach to product costing?
What are spoilage, rework, and scrap?
What is the distinction between normal and abnormal spoilage?
How do the weighted-average and FIFO methods of process costing calculate the costs of good units and spoilage?
How does inspecting at various stages of completion affect the amount of normal and abnormal spoilage?
How do job-costing systems account for spoilage?
How do job-costing systems account for rework?
How is scrap accounted for?
What are the four cost categories of a costs-of-quality program?
What nonfinancial measures and methods can managers use to improve quality?
How do managers identify the relevant costs and benefits of quality-improvement programs?
How do managers use financial and nonfinancial measures to evaluate quality?
What is customer-response time and what are the reasons for delays?
What are relevant revenues and costs of delays?
What financial and nonfinancial measures of time can managers use in the balanced scorecard?
What are the six categories of costs associated with goods for sale?
What does the EOQ decision model help managers do, and how do managers decide on the safety-stock levels?
How do errors in predicting the parameters of the EOQ model affect costs? How can companies reduce the conflict between the EOQ decision model and models used for performance evaluation?
Why are companies using just-in-time (JIT) purchasing?
How do materials requirements planning (MRP) systems differ from just-in-time (JIT) production systems?
What are the features and benefits of a just-in-time (JIT) production system?
How does backflush costing simplify traditional inventory costing?
How is lean accounting different from traditional costing systems?
What are the five stages of capital budgeting?
What are the two primary discounted cash flow (DCF) methods for project evaluation?
What are the payback and discounted payback methods? What are their main weaknesses?
What are the strengths and weaknesses of the accrual accounting rate-of-return (AARR) method for evaluating long-term projects?
What are the relevant cash inflows and outflows for capital budgeting decisions?How should accrual accounting concepts be considered?
What conflicts can arise between using DCF methods for capital budgeting decisions and accrual accounting for performance evaluation?How can these conflicts be reduced?
How can managers use capital budgeting to achieve strategic goals?
What is a management control system, and how should it be designed?
What are the benefits and costs of decentralization?
What are transfer prices, and what criteria do managers use to evaluate them?
What are alternative ways of calculating transfer prices?
Under what market conditions do market-based transfer prices promote goal congruence?
What problems can arise when full cost plus a markup is used as the transfer price?
Within a range of feasible transfer prices, what are alternative ways for firms to arrive at the eventual hybrid price?
What is the general guideline for determining a minimum transfer price?
How do income tax considerations affect transfer pricing in multinationals?
What financial and nonfinancial performance measures do companies use in their balanced scorecards?
What are the relative merits of return on investment (ROI), residual income (RI), and economic value added (EVA) as performance measures for subunit managers?
Over what time frame should companies measure performance, and what are the alternative choices for calculating the components of each performance measure?
What targets should companies use, and when should they give feedback to managers regarding their performance relative to these targets?
How can companies compare the performance of divisions operating in different countries?
Why are managers compensated based on a mix of salary and incentives?
What are the four levers of control, and why does a company need to implement them?
Describe EVA.
Jimenez Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available for the year 2017.Calculate the revenues budget (label it Schedule 1) and the
Jimenez Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. It expects to manufacture 20,000 Knox lamps and 10,000 Ayer lamps in 2017.The following data are available for
Jimenez Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available for the year 2017. Machine setup-hours is the only driver of manufacturing
Jimenez Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available for the year 2017.Calculate (1) the budgeted unit costs of ending
Jimenez Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available for the year 2017. The numbers below represent the calculations from the
Consider the Stylistic Furniture example described earlier. Suppose that to maintain its sales quantities, Stylistic needs to decrease selling prices to $582 per Casual table and $776 per Deluxe
What is the master budget, and why is it useful?
When should a company prepare budgets? What are the advantages of preparing budgets?
What is the operating budget and what are its components?
How can managers plan for changes in the assumptions underlying the budget and manage risk?
How do companies use responsibility centers?
Why are human factors crucial in budgeting?
What are the special challenges involved in budgeting at multinational companies?
What are static budgets and static-budget variances?
How can managers develop a flexible budget, and why is it useful to do so?
How are flexible-budget and sales-volume variances calculated?
What is a standard cost and what are its purposes?

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