C LIO, customer profit U ty, quality, just-in-time systems, investment decisions, transfer pricing, and performance evaluation. Each of these topics invariably has product costing planning and control, and decision-making perspectives. A command of the first 11 chapters will help you master these topics. For example, Chapter 12 on strategy describes the balanced scorecard, a set of finan- cial and nonfinancial measures used to implement strategy that builds on the planning and control functions. The section on strategic analysis of operating income builds on ideas of product costing and variance analysis. The section on downsizing and managing capacity builds on ideas of relevant revenues and relevant costs DECISION POINT What are the three Key features of cost accounting and cost management? PROBLEM FOR SELF-STUDY Foxwood Company is a metal- and woodcutting manufacturer, selling products to the home- construction market. Consider the following data for 2017: Sandpaper Materials-handling costs Lubricants and coolants Miscellaneous indirect manufacturing labor Direct manufacturing labor Direct materials inventory, Jan 1, 2017 Direct materials inventory, Dec 31, 2017 Finished-goods inventory, Jan. 1, 2017 Finished-goods inventory, Dec 31, 2017 Work-in-process inventory, Jan. 1. 2017 Work-in-process inventory, Dec 31, 2017 Plant-leasing costs Depreciation-plant equipment Property taxes on plant equipment Fire insurance on plant equipment Direct materials purchased Revenues Marketing promotions Marketing salaries Distribution costs Customer service costs $ 2,000 70,000 5,000 40,000 300,000 40,000 50,000 100,000 150,000 10,000 14,000 54,000 36,000 4,000 3,000 460,000 1,360,000 60,000 100,000 70,000 100,000 Require Prepare an income statement with a separate supporting schedule of cost of goods manu- factured. For all manufacturing items, classify costs as direct costs or indirect costs and indicate by V or F whether each is a variable cost or a fixed cost (when the cost object is a product unit). If in doubt, decide on the basis of whether the total cost will change sub- stantially over a wide range of units produced. 2 Suppose that both the direct material costs and the plant-leasing costs are for the produc- tion of 900,000 units. What is the direct material cost of each unit produced? What is the plant-leasing cost per unit? Assume that the plant-leasing cost is a fixed cost. * Suppose Foxwood Company manufactures 1,000,000 units next year. Repeat the compu- tation in requirement 2 for direct materials and plant-leasing costs. Assume the implied cost-behavior patterns persist. As a management consultant, explain concisely to the company president why the unit cost for direct materials did not change in requirements 2 and 3 but the unit cost for Pan Teasing costs did change