1. Which of the following is not a benefit of decentralization?
Permits timely decisions with the best available information.
Better coordination of decisions.
Trains future managers.
Empowers employees and increases job satisfaction.
Monthly Fee for Membership
$40,000 per year
Revenue - Individual
Revenue - Family
Variable cost Individual
1.What information is presented in a balance sheet?
Assets liabilities and equity.
2. Why are the personal activities of a business owner excluded from
the financial statements of the owners business?
A financial statementthat reports the asset
The analysis of Home Retail Group
1. Key activities and brief description
Home Retail Group sells products under two distinctive and
complementary retail brands, Argos and Homebase.
Additionally it also has some financial Services offers a
range of credit
The IKEA Case:
IKEA is a privately held, international home products company that designs and sells
ready-to-assemble furniture such as beds and desks, appliances and home accessories.
The company is the world's largest furniture retailer. Founded in 1943
The first transaction applies to money measurement concept, but it is not
compliance. Because the employees have been included in the financial statement as
on asset. It occurs normally because if employees work very well, their monetary
value will be inc
Would you like to go skating with me?
Yes, I think so
Yes, I'd love to
I'm afraid not
Would you like something to drink? What about a cup of tea?
No, I wouldn't.
Yes, I want.
Yes, I like.
Exercises for Unit Two
A1. Which of the following users are not external users of accounting information
B. Creditors C. Investors
D2. Which of the following is not an accounting standard-setting organization?
5. Refer to lesson 3 and lesson3(2), which countrys GAAP appears to be the most
oriented toward equity investors? Which countrys GAAP appears to be the least
oriented toward equity investors? Why do you say that?
U.Ks GAAP is the most c
which describes the outsourcing process for HPs production of Proliant ML150. For each leg of the
production chain, indentify the various accounting and related issues that might arise.
The might issues:
Different Socio-economic en
Price Per Unit
Variable Cost per Unit
Labor Hours per Unit
Decision Making in the Short Term
The temporary gaps between the demand and supply of available capacity.
The maximum volume of activity that a company can sustain with available
1. _ is generally prepared as the first step in preparing the operating
a. A sales budget
b. An operating expense budget
c. A purchases budget
d. A budgeted income statement
2. Use the chapter 7 notes on truth-inducing incentive schemes for this
1) Refining a cost system includes:
A) classifying as many costs as indirect costs as is feasible
B) creating as many cost pools as possible
C) identifying the activities involved in a process
D) seeking a lesser level of detail
2) When designin
Answer questions 1 and 2 using the following information:
1) Hubba Company has a current production capacity level of 200,000 units per month. At this
level of production, variable costs are $0.90 per unit and fixed costs are $0.50 per unit. Total
1. In job-costing, manufacturing overhead is allocated to jobs based on
budgeted consumption of the allocation base(s)
budgeted fixed costs
actual consumption of the allocation base(s) by the various jobs
actual consumption of indirect costs
Performance Evaluation in Decentralized Organizations
Firms decentralize because, as organizations grow, the number and types of decisions that
need to be made increase substantially. A single individual will not
Activity-Based Costing and Management
Unit profit margin equals a products unit contribution margin less the controllable cost of
(1) Determine how to form cost pools, (2) identify which
Budgetary Control and Variance Analysis
Many organizations use a budget as a benchmark for evaluating actual performance.
A plan that represents the expected revenues, costs, and profit corresponding to the
Operating Budgets: Bridging Planning and Control
A plan for using limited resources.
Firms budget for (1) planning, (2) coordination, and (3) control (performance evaluation
Transaction No.1: Starting the Operations
Hikes Consultants started its operations on January 31 when the owner made $20 000 cash
contribution. This accounting event acts to increase both as assets(Cash) and equity(Contributed
Investments in affiliates over which the
company has significant influence
Significant influence the power to participate
in, but not control, the affiliates operating and
A 20% to 50% interest in voting
Material-handling cost per mirror:
*The total number of direct-labor hours.
An alternative calculation, since both types of product use
the same amount of the cost driver, is the following:
EXERCISE 4-16 (20 MINUTES)
CALCULATION OF EQUIVALENT UNITS: HEALTHY LIFE STYLES, INC.
ion with Complet
Respect Respect Direc