Chapter 12 Differential Analysis
Managers have to make many decisions including:
- What products to sell?
- Do we make or buy the raw materials we need for production?
- Should we accept a special order project at a special price?
Differential analysis fo
EIERCISE 55 Compute the BreakEven Point ILDEl
- Guided Example 5-6
Mauro Products distn'butes a single product, a 1llvovel": basket whose selling
price is $15 and whose variable expense is $12 per unit. The companv's
monthly:I xed expense is $4,200.
EXERCISE 51 Preparing a Conoihution Format Income Statement |L[51|
- Guided Example 51
Whirlv Corporation's most reoent income statement is shown below:
Total Par Uni:
Saiescfw_10,00units] $050,000 $05.00
Variable expenses . 200,000 20.00
Exercise 10-1 (20 minutes)
Number of helmets.
Standard kilograms of plastic per helmet.
Total standard kilograms allowed.
Standard cost per kilogram.
Total standard cost.
Actual cost incurred (given).
Total standard c
Exercise 5-1 (20 minutes)
1. The new income statement would be:
Sales (10,100 units).
Net operating income.
You can get th
EXERCISE 21 ldenfying Direct and Indirect Costs |l;O21|
Northwest Hospital is a fullservice hospital that provides everyiing from
major surgery and emergency room care to oulpatienl clinics.
For each cost incurred at Northwest Hospital, indicale
EXERCISE 34 Prepare Journal Entries [L034]
I Guided Example 34
Larned Corporation recorded the following transactions for the just
a- $E, in raw materials were purchased on account.
b- $?1, in raw materials were reguisitioned for use in
EXERCISE 1 Variable and Absorption lHosting Unit Product Costs |l_CI1|
- Guided Example E-t
Ida Sidha Karya lIllompany is a familyowned company located in the village
of Gianyar on the island of Bali in Indonesia. The company practices a
EXERCISE 52 Production Budget [LOB3]
I Guided Example 82
Down Under Products, Ltd, of Australia has budgeted sales of its popular
boomerang for the next four months as follows:
Sill h it:
Aprl . 5D.BDID
May . T5300
Jinn . 90.0!
.1113 . mom
Chapter 13 Capital Budgeting
Capital budgeting - how managers plan significant investments in projects that have long-term
implications like purchase of new equipment or the introduction of new products.
- Most companies have more potential projects than
amuse 101 Eirect meals Fain-lees 
- Glider! Emma 1111
Bender lrlduslrins Berhed efdejrsia I'I'l'llfiul'- snarling emipmert
Che ufl1e ms products, a fit-email heI'netforthe Ndrth American
rml'inet. remir a speciEl plastic. During the IszIter ending
EXERCISE 121 Identifying Relevant Costs |EO121|
A number of costs are listed betew that mayr be relevant in decisions taced
by the management of Svahm AB, 3 Swedish manufacturer of sailing
. mummummm .
EXERCISE 132 Net Present 1'v'alue Method [LENS2]
I Guided Example 13.2
The management pf Kunkel Company is considering the purchase cf a
$21000 machine that 1weuld reduce operating costs by $?,000 per year. At
the end ef the machine's veveer useful life
EXERCISE 111 Compute the Return on Investment [RBI] [LD111]
I Guided Example 11-1
Alyeska Services Company, a division of a major oil company, provides
various services to the operators of the North Slope oil eld in Alaska- Data
concerning the most recent
EIEREISE 41 Process Costing Journal Entries |I:0ll-1|
- Guided Example 41
Uuaity Erick Company produces bliclcs in two processing
departmentsMoldng and Filing. lniormaon relang to the company's
operations in March folows:
a. Raw materials were issued for
EXERCISE 91 Prepare a Flexible Budget EDS1|
I Guided Example 9-1
Puget Sound Divers is a company lira! provides diving services such as
underwater ship repairs to clients in the Puget Sound area. The company's
planning budget for May appears below:
exsnnsE ie First Stage Allocation g org]
I Guided Example ?2
SecuIiCorp operates a fleet of armored cars that make scheduled pickups
and deliveries in the Los Angeles area. The company is implementing an
activitybased costing system that has four activity
EIEREISE 36 Schedules of lEost of Goods Manufactured and Cost of Goods
I Guided Example 345
Primare Corporation has provided the following data concerning last
month's manufacturing operations.
Full-laser: of raw materials .
lndreot materlals inclu
Exercise 3-6 [20 minutes)
1. Cost of Goods Manufactured
Raw materials inventory, beginning . $12,000
Add: Purchases of raw materials . 30,000
Toial raw materials available . 42,000
Deduct: Raw materials inventory, ending 18,000
EXERCISE 31 Compute the Predeterrnined verhead Rate [LBJ1]
I Guided Example 3-1
Harris Fabrics computes its predetermined overhead rate annually on the
basis of direct laborhours. At the beginning of the year, It estimated that
20,000 direct laborhours wo
Credit Card Sales
Why use credit cards?1. seller doesnt have to evaluate each customers credit or make decisions about how much credit to allow2. lessen risk of
non payment risk of non payment transferred to credit card company
3. receive cash sooner4. po
Plant Assets(Property, Plant and Equipment or Fixed Assets) tangible assets used in a companys operations that have a useful life of more than one accounting period. Four main issues in
accounting for plant assets:1.Computing the cost(Asset cost includes)
Chapter 3 Job Order Costing
All manufacturing and service firms use cost accounting to develop and report information about
product and service cost.
Two basic types of Cost Accounting systems:
1. Job Order Costing used for customized products and service
Chapter 4- Process Costing
2 common methods for determining product costs
1. Job order costing (Chapter 3)
a. When many different jobs or products are worked on each period.
2. Process costing (Chapter 4)
a. Mass production, repetitive operations, low fle
TWO DEPARTMENTS, JOURNAL ENTRIES WITH SUPPORTING CALCULATIONSWEIGHTED AVERAGE
1. Materials Inventory
Purchased materials on account.
2. Work in Process - Department 1
Chapter 2 Managerial Accounting Concepts and Cost Flows
Managerial accounting systems provide management with financial and other business information that
is useful in analyzing and making business decisions
In managerial accounting, the word cost is use
TRADITIONAL PRODUCT COSTING VERSUS ACTIVITY-BASED COSTING
Total overhead costs:
Direct labor hours
Overhead cost per direct labor hour
Job cost calculations:
Overhead ($41.60 x 270) a
EXERCISE 12 Controlling
Assume that you work for an airline unloading luggage from airplanes. Your
boss has said that, on ayeragea each airplane contains till] pieces of
luggage- Furthermore, your boss has stated that you should be able to
unload 1 pieces
Exercise 3-4 (15 minutes)
a. Raw Materials.
b. Work in Process.
c. Work in Process.
Exercise 1-2 (10 minutes)
The student would feel unfairly criticized for unloading 150 pieces
of luggage in 13 minutes. The student would perceive that,
according to the bosss expectations, he should be able to unload
10 pieces of luggage per minute. Ther
Exercise 3-1 (10 minutes)
The estimated total manufacturing overhead cost is computed as
Y = $94,000 + ($2.00 per DLH)(20,000 DLHs)
Estimated fixed manufacturing overhead. $ 94,000
Estimated variable manufacturing overhead:
$2.00 per DLH 20,000 D
Exercise 2-1 (15 minutes)
The wages of
A particular patient
Heating the hospital