Questions and Answers of Horngrens Cost Accounting

Why should a company calculate price and efficiency variables?
How do managers use variances?
What is benchmarking and why is it useful?
Jamie Draperies manufactures curtains. To complete a curtain, Jamie requires the following inputs:During the second quarter, Jamie Draperies made 1,500 curtains and used 14,000 square yards of fabric
Consider Zenefit Corporation again. With the same information for 2017 as provided in Try It 7-1, calculate Zenefit’s flexible-budget and sales-volume variances for (a)revenues,(b) variable
Consider Zenefit Corporation. With the same information for 2017 as provided in Try It 7-1, calculate Zenefit’s flexible budget for(a) revenues,(b) variable costs,(c) fixed costs, and(d) operating
Zenefit Corporation sold laser pointers for $$11$ each in 2017. Its budgeted selling price was $$12$ per unit. Other information related to its performance is given below:Calculate Zenefit’s
How do managers plan variable overhead costs and fixed overhead costs?
How are budgeted variable overhead and fixed overhead cost rates calculated?
What variances can be calculated for variable overhead costs?
What variances can be calculated for fixed overhead costs?
What is the most detailed way for a company to reconcile actual overhead incurred with the amount allocated during a period?
What is the relationship between the sales volume variance and the production-volume variance?
How can variance analysis be used in an activity-based costing system?
How are overhead variances useful in nonmanufacturing settings?
How does variable costing differ from absorption costing?
How does income differ under variable and absorption costing?
Why might managers build up finished-goods inventory if they use absorption costing?
How does throughput costing differ from variable costing and absorption costing?
What are the various capacity levels a company can use to compute the budgeted fixed manufacturing cost rate?
What are the major factors managers consider in choosing the capacity level to compute the budgeted fixed manufacturing cost rate?
What issues must managers take into account when planning capacity levels and for assigning capacity costs?
SharpPitch, Inc., manufactures karaoke machines for several well-known companies.The machines differ significantly in their complexity and their manufacturing batch sizes. The following costs were
Automotive Products (AP) designs and produces automotive parts. In 2017, actual variable manufacturing overhead is $$308,600.$ AP’s simple costing system allocates variable manufacturing overhead
CKM is an architectural firm that designs and builds buildings.It prices each job on a cost plus 20% basis. Overhead costs in 2017 are $4,011,780. CKM’s simple costing system allocates overhead
ABC, retail product-line profitability. Henderson Supermarkets (HS) operates at capacity and decides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen foods.
Legion Bank (LB) is examining the profitability of its Star Account, a combined savings and checking account. Depositors receive a 6% annual interest rate on their average deposit. LB earns an
Shades & Hues (S&H) is a designer of high-quality curtains and bedsheets. Each design is made in small batches. Each spring, S&H comes out with new designs for the curtains and for the
Activity-based costing, activity-based management, merchandising. Main Street Books and Café (MSBC) is a large city bookstore that sells books and music CDs and has a café. MSBC operates at
Where does the management accounting function fit into an organization’s structure?
What are the ethical responsibilities of management accountants?
Pepsi Corporation uses trucks to transport bottles from the warehouse to different retail outlets. Gasoline costs are $0.15 per mile driven. Insurance costs are $6,000 per year. Calculate the total
Diana Corporation provides the following information for 2017:Calculate the total manufacturing costs incurred in 2017. Beginning inventory of direct materials, 1/1/2017 Purchases of direct materials
Diana Corporation provides the following information for 2017:Calculate(a) Cost of goods manufactured in 2017 and(b) Cost of goods sold in 2017 Beginning work-in-process inventory, 1/1/2017 Total
How is financial accounting different from management accounting?
How do management accountants support strategic decisions?
What are the three key features of cost accounting and cost management?
How do companies add value, and what are the dimensions of performance that customers are expecting of companies?
How do managers make decisions to implement strategy?
What guidelines do management accountants use?
What are the building-block concepts of a costing system?
How do you distinguish job costing from process costing?
What is the main challenge of implementing job-costing systems?
How do you implement a normal-costing system?
Your manager asks you to bring the following incomplete accounts of Endeavor Printing, Inc., up to date through January 31, 2017. Consider the data that appear in the T-accounts as well as the
How do you distinguish actual costing from normal costing?
How are transactions recorded in a manufacturing job-costing system?
How should managers dispose of under- or overallocated manufacturing overhead costs at the end of the accounting year?
What is the role of information technology in job costing?
What are some variations of normal costing?
Amherst Metal Works produces two types of metal lamps. Amherst manufactures 20,000 basic lamps and 5,000 designer lamps. Its simple costing system uses a single indirect-cost pool and allocates costs
Amherst Metal Works produces two types of metal lamps. Amherst manufactures 20,000 basic lamps and 5,000 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost pool
Family Supermarkets (FS) has decided to increase the size of its Memphis store. It wants information about the profitability of individual product lines: soft drinks, fresh produce, and packaged
When does product undercosting or overcosting occur?
How do managers refine a costing system?
What is the difference between the design of a simple costing system and an activity-based costing (ABC) system?
What is a cost hierarchy?
How do managers cost products or services using ABC systems?
What should managers consider when deciding to implement ABC systems?
How can ABC systems be used to manage better?
When can department costing systems be used instead of ABC systems?
Donna Corporation manufactures custom cabinets for kitchens. It uses a normalcosting system with two direct-cost categories—direct materials and direct manufacturing labor—and one indirect-cost
Donna Corporation manufactures custom cabinets for kitchens. It uses a normalcosting system with two direct-cost categories—direct materials and direct manufacturing labor—and one indirect-cost
Donna Corporation manufactures custom cabinets for kitchens. It uses a normalcosting system with two direct-cost categories—direct materials and direct manufacturing labor—and one indirect-cost
Describe the five-step decision-making process.
As the new controller, reply to the following comment made by your plant manager: “When I employ a proper accounting software, which can process all my daily accounting records and provide me with
Key success factors. Dalworth Construction Company provides construction services for major projects. Managers at the company believe that construction is a people-management business, and they list
Hannah Gilpin is the controller of Blakemore Auto Glass, a division of Eastern Glass and Window. Her division has been under pressure to improve its divisional operating income. Currently, divisions
How is financial accounting different from management accounting?
How do management accountants support strategic decisions?
How do companies add value, and what are the dimensions of performance that customers are expecting of companies?
How do managers make decisions to implement strategy?
What guidelines do management accountants use?
What are the ethical responsibilities of management accountants?
Campbell Soup Company incurs the following costs:a. Purchase of tomatoes by a canning plant for Campbell’s tomato soup productsb. Materials purchased for redesigning Pepperidge Farm biscuit
Foxwood Company is a metal- and woodcutting manufacturer, selling products to the home construction market. Consider the following data for 2017:Required 1. Prepare an income statement with a
How do managers decide whether a cost is a direct or an indirect cost?
How do managers decide whether a cost is a variable or a fixed cost?
How should managers estimate and interpret cost information?
What are the differences in the accounting for inventoriable versus period costs?
What is the flow of inventoriable and period costs in manufacturing and merchandising settings?
Why do managers assign different costs to the same cost objects?
What are the three key features of cost accounting and cost management?
Finding unknown amounts. An auditor for the Internal Revenue Service is trying to reconstruct some partially destroyed records of two taxpayers. For each case in the accompanying list, find the
How can CVP analysis help managers?
How can managers determine the breakeven point or the output needed to achieve a target operating income?
How can managers incorporate income taxes into CVP analysis?
How do managers use CVP analysis to make decisions?
What can managers do to cope with uncertainty or changes in underlying assumptions?
How should managers choose among different variable-cost/fixed-cost structures?
How can managers apply CVP analysis to a company producing multiple products?
How do managers apply CVP analysis in service and not-for-profit organizations?
What is the difference between contribution margin and gross margin?
Wembley Travel Agency specializes in flights between Los Angeles and London. It books passengers on United Airlines at $$900$ per round-trip ticket. Until last month, United paid Wembley a
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Use (a) the equation method and (b) the contribution method to calculate operating income if Bernard
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Calculate (a) the breakeven point in units and revenues and (b) the number of windows Bernard Windows must
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Calculate the number of windows Bernard Windows must install and the revenues needed to earn a target net
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Calculate the margin of safety in units and dollars and the margin of safety percentage if Bernard Windows
Bernard Windows is a small company that installs windows. Its cost structure is as follows:Bernard is considering changing its sales compensation for next year. Bernard would pay salespeople a 5%
Bernard Windows plans to sell two different brands of windows—Chad and Musk—and budgets the following:Calculate the breakeven point for Bernard Windows in terms of (a) the number of units sold

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