亨格瑞管理会计英文第15版练习答案04

1、 CHAPTER 4COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVEFUNDA-MENTAL ASSIGN-MENTMATERIALCRITICAL THINKING EXERCISES AND EXERCISESPROBLEMSCASES, EXCEL, COLLAB. & INTERNET EXERCISESLO1: Describe the purposes of cost management systems.31, 3450LO2: Explain the relationship between cost, cost ob

2、ject, cost accumulation, and cost assignment.4556LO3: Distinguish between direct and indirect costs.A1,B136, 37, 38, 39, 4445, 4956LO4: Explain the major reasons for allocating costs.B233, 414654LO5: Identify the main types of manufacturing costs: direct materials, direct labor, and indirect product

3、ion costs.36, 37, 38, 39LO6: Explain how the financial statements of merchandisers and manufacturers differ because of the types of goods they sell.A257, 60, 61LO7: Understand the main differences between traditional and activity-based costing systems and why ABC systems provide value to managers.A3

4、, A4, B3, B433, 40, 41, 4248, 49, 5055, 56, 57, 58, 59, 60, 61LO8: Use activity-based cost information to make strategic and operational control decisions.A4, B432, 37, 4348, 49, 5055, 56, 60CHAPTER 4 Cost Management Systems and Activity-Based Costing4-A1(20-30 min.) See Table 4-A1 on the following

5、page.4-A2 (25-30 min.)1. Merchandise Inventories, 1,000 devices $97$97,0002. Direct materials inventory$ 40,000Work-in-process inventory0Finished goods inventory 97,000Total inventories$137,0003.NILE ELECTRONICS PRODUCTSStatement of Operating IncomeFor the Year Ended December 31, 20X9Sales (9,000 un

6、its at $170)$1,530,000Cost of goods sold:Beginning inventory$ 0Purchases 970,000Cost of goods available for sale$ 970,000Less ending inventory 97,000Cost of goods sold (an expense) 873,000Gross margin or gross profit$ 657,000Less other expenses: selling & administrative costs 185,000Operating in

7、come (also income before taxes in this example)$ 472,000 TABLE 4-A1STATEMENT OF OPERATING INCOME OPERATING INCOME BY PRODUCT LINEEXTERNAL REPORTING PURPOSE INTERNAL STRATEGIC DECISION MAKING PURPOSECustomLargeSmallDetailed Std. Std.Cost Type, Assignment MethodSales$155,000$30,000$45,000$80,000Cost o

8、f goods sold: Direct material40,0005,00015,00020,000 Direct, Direct Trace Indirect manufacturing 41,000 28,0001 5,000 8,000 Indirect, Alloc. Mach. Hours 81,000 33,000 20,000 28,000 Gross profit 74,000 (3,000) 25,000 52,000 Selling and administrative expenses: Commissions15,0001,5003,50010,000 Direct

9、, Direct TraceDistribution to warehouses 10,400 1,0002 3,000 6,400 Indirect, Allocation - WeightTotal selling and admin. expenses 25,400 2,500 6,500 16,400 Contribution to corporate expenses and profit 48,600$(5,500)$18,500$35,600 Unallocated expenses: Administrative salaries8,000 Other administrati

10、ve expenses 4,000 Total unallocated expenses 12,000 Operating income before tax$ 36,600 1 Total machine hours is 1,400 + 250 + 400 = 2,050. Indirect manufacturing cost per machine hour is then $41,000 2,050 = $20. The allocation to custom detailed is $20 1,400 machine hours = $28,000.2 Total weight

11、shipped is 25,000 kg + 75,000 kg + 160,000 kg = 260,000 kg. Indirect distribution costs per kilogram is then $10,400 260,000 kg = $0.04. The allocation to custom detailed is $0.04 25,000 kg = $1,000. 4. ORINOCO, INC.Statement of Operating IncomeFor the Year Ended December 31, 20X9Sales (9,000 units

12、at $170)$1,530,000Cost of goods manufactured and sold:Beginning finished goods inventory$ 0Cost of goods manufactured: Beginning WIP inventory$ 0Direct materials used530,000Direct labor290,000Indirect manufacturing 150,000Total mfg. costs to account for$970,000Less ending work-in- process inventory

13、0 970,000Cost of goods available for sale$970,000Less ending finished goods inventory 97,000Cost of goods sold (an expense) 873,000Gross margin or gross profit$ 657,000Less other expenses: selling and administrative costs 185,000Operating income (also income before taxes in this example)$ 472,0005.T

14、he balance sheet for the merchandiser (Nile) has just one line for inventories, the ending inventory of the items purchased for resale. The balance sheet for the manufacturer (Orinoco) has three items: direct materials inventory, work-in-process inventory, and finished goods inventory.The income sta

15、tements are similar except for the computation of cost of goods available for sale. The merchandiser (Nile) simply shows purchases for the year plus beginning inventory. In contrast, the manufacturer (Orinoco) shows beginning work-in-process inventory plus the three categories of cost that comprise

16、manufacturing cost (direct materials used, direct labor, and factory (or manufacturing) overhead) and then deducts the ending work-in-process inventory. The manufacturer then adds the beginning finished goods inventory to this cost of goods manufactured to get the cost of goods available for sale.6.

17、The purpose is providing aggregate measures of inventory value and cost of goods manufactured for external reporting to investors, creditors, and other external stakeholders. 4-A3 (10-15 min.)There can be many justifiable answers for each item other than the listed cost driver and behavior. The purp

18、ose of this exercise is to generate an active discussion regarding those chosen by First Banks managers. One point that should be emphasized is that many times managers choose cost drivers that are not the most plausible or reliable because of lack of data availability. Cost drivers are also used as

19、 a basis to allocate activity and resource costs and so the availability of data is often an important consideration.ActivityOrCostResourceCost DriverBehaviora.*RNumber of square feetFb.*RNumber of person hoursFc.RNumber of computer transactionsVd.ANumber of schedulese.RNumber of person hoursFf.RNum

20、ber of loan inquiries Vg.*ANumber of investmentsh.ANumber of applicationsi.RNumber of person hoursVj.RNumber of minutesVk.RNumber of person hoursFl.ANumber of loans* An argument can be made that maintenance of the building is an activity. If this was the case, resources such as supplies and labor wo

21、uld be resources consumed, and several resource cost drivers would be needed. In addition, a separate resource and associated cost driver would be needed for insurance costs. However, the company had a contract for maintenance (fixed price), so this was a fixed-cost resource that was added to other

22、occupancy costs such as insurance. The cost driver chosen for all these occupancy costs was square feet occupied by the various departments.* Normally, the cost driver used for any labor resource is person hours. It is assumed that the staff person hours used are regular hours rather than overtime o

23、r temporary labor hours. Thus, the cost is fixed with respect to changes in hours used. As the hours used increases (decreases) the utilization of the resources increases (decreases) and eventually, management will need to make a decision whether to expand capacity (or whether to cut back on labor).

24、 This is an example of a step cost that is fixed over wide ranges of cost-driver level.* Students may try to determine the cost behavior of activities even though the problem requirements do not ask for it. Point out that activities almost always have mixed cost behavior because they consume various

25、 resources. Some of these are fixed-cost and others variable-cost resources. For example, the activity “research to evaluate a loan application” consumes such fixed-cost resources as manager labor time and computers (assumed owned by the bank). This activity also consumes variable-cost resources suc

26、h as telecommunications time and external computing services.4-A4(20-30 min.) 1.The first step is to determine the cost per cost-driver unit for each activity:MonthlyCost-Cost perManufacturingDriverDriverActivity Cost driverOverheadActivityUnitMaterial Handling Direct materials cost$12,000$200,000$

27、0.06Engineering Engineering change notices20,000201,000.00Power Kilowatt hours 16,000400,0000.04Total Manufacturing Overhead$48,000Next, the costs of each activity can be allocated to each of the three products:PHYSICAL FLOW / ALLOCATED COSTCostSeniorBasicDeluxeMaterial Handling $.06 25,000 = $1,500

28、$.06 50,000 = $ 3,000 $.06 125,000 = $ 7,500Engineering$1,000 13 = 13,000$1,000 5 = 5,000$1,000 2 = 2,000Power$.04 50,000 = 2,000 $.04 200,000 = 8,000 $.04 150,000 = 6,000Total$16,500$16,000$15,5002.Overhead rate based on direct labor costs:Rate = Total manufacturing overhead Total direct labor cost

29、 = $48,000 $8,000 = $6.00/DL$Overhead allocated to each product is:Senior:$6.00 4,000=$24,000Basic:$6.00 1,000= 6,000Deluxe:$6.00 3,000= 18,000Total$48,000Notice that much less manufacturing overhead cost is allocated to Basic using direct labor as a cost driver. Why? Because Basic uses only a small

30、 amount of labor but large amounts of other resources, especially power.3.The product costs in requirement 1 are more accurate if the cost drivers are good indicators of the causes of the costs - they are both plausible and reliable. For example, kilowatt hours is certainly a better measure of the c

31、ost of power costs than is direct labor hours. Therefore, the allocation of power costs in requirement 1 is certainly better than in requirement 2. Materials handling and engineering are likewise more plausible. A manager would be much more confident in the manufacturing overhead allocated to produc

32、ts in requirement 1. Remember, however, that there are incremental costs of data collection associated with the more accurate ABC system. The benefit/cost criteria must be applied in deciding which costing system is “best.”4-B1(20-30 min.) See Table 4-B1 on the following page.4-B2(25-30 min.)1.$1,08

33、0,000 45,000 hours = $24 per direct-labor hour2.(a) $585,000 15,000 hours = $39 per direct-labor hour(b) $495,000 30,000 hours = $16.50 per direct-labor hour3.(a) $585,000 97,500 hours = $6 per machine hour(b) $495,000 30,000 hours = $16.50 per direct-labor hour4.(a) $24 (1.0 + 14.0) = $360.00$24 (1

34、.5 + 3.0) = $108.00$24 (1.3 + 8.0) = $223.20(b) ($39 1.0) + ($16.50 14.0) = $39.00 + $231.00 = $270.00($39 1.5) + ($16.50 3.0) = $58.50 + $ 49.50 = $108.00($39 1.3) + ($16.50 8.0) = $50.70 + $132.00 = $182.70(c) ($6 12.0) + ($16.50 14.0) = $ 72.00 + $231.00 = $303.00($6 17.0) + ($16.50 3.0) = $102.0

35、0 + $ 49.50 = $151.50($6 14.0) + ($16.50 8.0) = $ 84.00 + $132.00 = $216.00(d) First consider using departmental instead of firm-wide rates (part b vs. part a). Departmental rates that use direct-labor hours as the base decrease the cost applied to units of A and C and leave B unaffected. Other prod

36、ucts that use relatively less assembly time will increase in cost. Now examine changing to a base of machine hours in machining (part c vs. part a). Product B is the only one with an increase in cost in (c) compared to (a). Why? Because Bs uses only 16% of the direct labor hours used for A, B, and C

37、, so it is is allocated only 16% of the costs allocated on the basis of direct labor hours. But it uses 40% of the machine hours, and there is allocated 40% of costs that are allocated on the basis on machine hours. Therefore, it receives relatively more costs with a base of machine hours than with

38、a base of direct-labor hours. TABLE 4-B1 STATEMENT OF OPERATING INCOMEOPERATING INCOME BY PRODUCT LINEThousands of DollarsLawnHandScooterMowerToolCost Type,PartsPartsParts Assignment MethodLawn Mower Parts Hand Tool PartsCost Type, Assignment MethodSales$990$350$380$260Cost of goods sold: Direct mat

39、erial400175125100 Direct, Direct Trace Indirect manufacturing 94 68 1 14 12 Indirect Mach.Hrs 494 243 139 112 Gross profit 496 107 241 148 Selling and administrative expenses: Commissions55252010 Direct, Direct TraceDistribution to warehouses 150 20 2 80 50 Indirect - WeightTotal selling and adminis

40、trative expenses 205 45 100 60 Contribution to corporate expenses and profit 291$ 62$141$ 88 Unallocated expenses: Corporate salaries11 Other general expenses 17 Total unallocated expenses 28 Operating income before tax$263 1 Total machine hours is 8,500 + 1,750 + 1,500 = 11,750. Indirect manufactur

41、ing cost per machine hour is then $94,000 11,750 = $8. The allocation to scooter parts is $8 8,500 machine hours = $68,000.2 Total weight shipped is 100,000 kg + 400,000 kg + 250,000 kg = 750,000 kg. Indirect distribution costs per kilogram is then $150,000 750,000 kg = $0.20. The allocation to scoo

42、ter parts is $0.20 100,000 kg = $20,000. 4-B3 (30-35 min.) 1. The existing system allocates all costs based on direct labor cost. The rate for allocating indirect production costs is:Estimated indirect production cost Estimated direct labor cost= 24,500,000 35,000,000 = 70%That is, each time 1 is sp

43、ent on direct labor, Watanabe adds 0.7 of indirect production cost to the cost of the product. 2. Under an ABC system, Watanabe would allocate indirect production costs separately for each activity. This would result in the following four allocation rates:Receiving: Receiving costs Direct material c

44、ost=4,800,000 60,000,000 = 0.08 per 1of dir. mat.Assembly:Assembly costs Number of control units=13,800,000 92,000 = 150 per control unitQual. Control: Quality control cost QC hours=1,800,000 600 = 3,000 per QC hourShipping: Shipping cost # of boxes shipped=4,100,000 8,200 = 500 per box shipped3. (a

45、) The cost will contain 3 components (in thousands of yen):Direct material 8,000Direct labor2,000Indirect production cost (2,000 .7 = 1,400) 1,400Total cost11,400Price (11,400 1.3)14,820 (b) The cost will have 7 components, 4 of them allocating indirect production costs (totals in thousands of yen):

46、Direct materials 8,000Direct labor2,000Receiving (0.08 8,000)640Assembly (150 5,000)750Quality control (3,000 50)150Shipping (500 600) 300Total indirect production cost 1,840Total cost11,840Price (11 ,840 1.3)15,392 4. The order from Nissan requires a relatively large amount of receiving, quality co

47、ntrol, and shipping resources compared to the relative amount of labor required. This makes its indirect production costs are relatively expensive relative to the labor required. The following illustrates why an allocation on the basis of labor cost results in less costs than allocations based on th

48、e four activities:Budgeted Cost-Nissan Cost-NissanActivity Allocation BaseAllocation BasePercentageDirect materials60,000,0008,000,00013.3%Direct labor35,000,0002,000,0005.7Receiving60,000,0008,000,00013.3Assembly92,0005,0005.4Quality control600508.3Shipping8,2006007.3Using the single direct-labor c

49、ost-allocation base, this order would receive 5.7% of all indirect production costs. The main reason that indirect production costs for this order under the ABC system are relatively high is the large relative cost of materials that drives a large allocation (13.3%) of receiving costs to this order.

50、 The allocations of both quality control and shipping costs are slightly larger that they would be using a direct-labor cost-allocation base, while the allocation of assembly costs is slightly smaller.4-B4(50-60 min.)1. A summary of the analyses follows.PenCell-PhoneCasingsCasingsCompanyBase Gross P

51、rofit Percentage*1.25%38.75%8.07%Plan Gross Profit Percentage*10.80%37.20%17.40%Support of Product Manager?StrongNoneSupport of President?Moderate* See Exhibit 4-6 on p. 136 of the text.* See Panel B of Exhibit 4-B4 that follows.Exhibit 4-B4, Panels A and B on the following pages can be used to expl

52、ain the impact of the controllers idea using the process map of the traditional costing system and the related financial reports. Notice that the $80,000 annual decrease in the cost of engineers needs to be converted to a $20,000 quarterly savings. The controllers idea will result in an increase of

53、9.55% in the gross profit of the pen-casings line but a decrease of 1.55% in the cell-phone line. The product manager of pen casings would probably give strong support to the idea but the cell-phone casings manager would most likely not support the idea. Although the company-level gross profit margi

54、n improves, the presidents support may not be strong. Why? There is not a strong consensus among product-line managers. Top management is normally hesitant to support actions that do not have the unanimous support among product-line managers unless there is solid evidence of material improvement in

55、profitability. While the current loss would be reversed, the return on sales is still nominal at 3,500 $480,000 = .73%. Exhibit 4-B4: Panel AProcess Map of Traditional Cost SystemUnallocated$80,000Direct Materials for Pen Casings $22,500Direct Labor for Pen Casings $135,000Direct Materials for Cell

56、Phone Casings $24,000Direct Labor for Cell Phone Casings $15,000Pen CasingsSales $360,000Cell Phone Casings Sales $120,000All Indirect Resources $200,000All Unallocated Value Chain Costs $80,000Cost DriverDirect Labor Hours = 4,500 + 1,000 = 5,500 Exhibit 4-B4: Panel BPRO-FORMA FINANCIAL REPORTS:TRA

57、DITIONAL COST ALLOCATION SYSTEMSTATEMENT OF OPERTING INCOMECONTRIBUTION TO CORPORATE COSTS AND PROFITEXTERNAL REPORTING PURPOSEINTERNAL STRATEGIC DECISION MAKING AND OPERATIONAL-CONTROL PURPOSEPen CasingsCell Phone CasingsSales$480,000$360,000$120,000 1Cost of goods sold:Direct material46,50022,5002

58、4,000 2Direct labor150,000135,00015,000Indirect manufacturing 200,000163,636 3 36,364 4Cost of goods sold 396,500 321,136 75,364Gross profit83,500$ 38,864$ 44,636Corporate expenses (unallocated) 80,000Operating income$ 3,500Gross profit margin17.40% 510.80%37.20%1. $80,000 .75 22. $12,000 2 3. $200,

59、000 4,500/(4,500 + 1,000)4. $200,000 1,000/(4,500 + 1,000)5. $83,500/$480,000 Perhaps the most important factor bearing on the presidents support is lack of confidence in the accuracy of the cost and hence gross margin figures. She probably will inquire whether the shift in the consumption percentag

60、es by the two activities is captured by the traditional costing system. Does the change in allocation rates from 90:10 to 82:18 based on direct labor hour changes accurately capture the impact of the operational changes? An informal analysis of the controllers idea might look like the following table.Likely Impact