Question No. 1 (a)
ABC Company produces office furniture, including ball point pens. Ball point
pens are bundled in packages of four. The sales budget for the first four
months of the year for this product is as follows:
Sale price per pa
Question No. 1 (a to h)
Evergreen Market is located in the town of Huntsville. Its store hours fluctuate from
month to month as the tourist trade in the community varies. The utility costs for
1. In centralized decision making, decisions are
made at the very top level, and lower-level
managers are responsible for implementing
these decisions. For decentralized decision
This exercise provides an opportunity to use CVP analysis to compute breakeven units,
target profit and target Return on Investment.
Compute the sales price per unit and the variable cost per unit.
Review the CVP formula posted in Mo
Chatper 11 Notes
Most students struggle with memorizing what seems to be complex formulas
for this chapter. However, if one understands the objective of the formulas, it does
not require memorization.
The objective of the formula is to segregate the varia
This exercise provides opportunity to understand the classification of fixed and
variable costs and to use account analysis to predict future cost.
Classify the list of costs by fixed and variable.
Hint: Costs that changes as a result of sa
This exercise provides an opportunity to practice arriving a mark-up percentage
to reach a target return under absorption cost-based, variable cost-based and total
cost-based pricing methods.
Absorption costs: All production costs includes
This exercise provides an opportunity to practice how to compute allocated
overhead to jobs and determine whether overhead is over-applied or under-applied.
It also enables the application of the concept of tactical decision making learned
This exercise provides an opportunity to understand the classification of
activities performed by corporation under 1) organizational strategies, 2) operating
plans, 3) actual operations 4) measuring, monitoring and motivating performance.
1. Budgets are the quantitative expressions of
plans. Budgets are used to translate the
goals and strategies of an organization into
increasing advertising). This adjusted
forecast then bec
A MANAGERIAL CONTROL TOOL
1. Standard costs are essentially budgeted
amounts on a per-unit basis. Unit stand ards serve as inputs in building budgets.
9. Managers generally tend to have more con trol over
SHORT-RUN DECISION MAKING:
1. Tactical decisions are short run in nature;
they involve choosing among alternatives
with an immediate or limited end in view.
1. Knowledge of cost behavior allows a
manager to assess changes in costs that
result from changes in activity. This allows a
manager to examine the effects of choices
that change activity. For example, if exce
1. Job-order costing accumulates costs by
jobs, and process costing accumulates costs
by processes. Job-order costing is suitable
for operations that produce custom-made
products that receive different dose
BASIC MANAGERIAL ACCOUNTING CONCEPTS
1. A cost object is something for which you want
to know the cost. For example, a cost object
may be the human resources department of a
company. The costs related to that cost object
INTRODUCTION TO MANAGERIAL ACCOUNTING
1. Managerial accounting is the provision of
information for internal users in a firm.
transportation, and communication over the
past 50 years have c