Hoffman Discount Drugs, Inc. (HDDI) was an american retail drug store. HDDI operated all across
the United States with over 580 stores. Stores were often situated within shopping malls which usually
included a supermarket chain store.
COST ALLOCATION, CUSTOMER-PROFITABILITY
ANALYSIS, AND SALES-VARIANCE ANALYSIS
14-1 Disagree. Cost accounting data plays a key role in many management planning and
control decisions. The division president will be able to make better operating a
STRATEGY, BALANCED SCORECARD, AND
STRATEGIC PROFITABILITY ANALYSIS
12-1 Strategy specifies how an organization matches its own capabilities with the
opportunities in the marketplace to accomplish its objectives.
12-2 The five key forces to cons
QUALITY, TIME, AND THE THEORY OF CONSTRAINTS
19-1 Quality costs (including the opportunity cost of lost sales because of poor quality) can be
as much as 10% to 20% of sales revenues of many organizations. Quality-improvement
DECISION MAKING AND RELEVANT INFORMATION
The five steps in the decision process outlined in Exhibit 11-1 of the text are
Identify the problem and uncertainties.
Make predictions about the future.
ALLOCATION OF SUPPORT-DEPARTMENT COSTS,
COMMON COSTS, AND REVENUES
15-1 The single-rate (cost-allocation) method makes no distinction between fixed costs and
variable costs in the cost pool. It allocates costs in each cost pool to cost objects
COST ALLOCATION: JOINT PRODUCTS AND BYPRODUCTS
16-1 Exhibit 16-1 presents many examples of joint products from four different general
industries. These include:
Separable Products at the Splitoff Point
Lamb Lamb cuts,
17-1 Industries using process costing in their manufacturing areas include chemical
processing, oil refining, pharmaceuticals, plastics, brick and tile manufacturing, semiconductor
chips, beverages, and breakfast cereals.
PERFORMANCE MEASUREMENT, COMPENSATION, AND
Examples of financial and nonfinancial measures of performance are
ROI, residual income, economic value added, and return on sales
Nonfinancial: Customer pe
SPOILAGE, REWORK, AND SCRAP
18-1 Managers have found that improved quality and intolerance for high spoilage have
lowered overall costs and increased sales.
18-2 Spoilageunits of production that do not meet the standards required by customers f
PRICING DECISIONS AND COST MANAGEMENT
The three major influences on pricing decisions are
13-2 Not necessarily. For a one-time-only special order, the relevant costs are only those costs
that will chang
MASTER BUDGET AND RESPONSIBILITY ACCOUNTING
The budgeting cycle includes the following elements:
Planning the performance of the company as a whole as well as planning the performance
of its subunits. Management agrees on what is
NOTATION USED IN CHAPTER 3 SOLUTIONS
Variable cost per unit
Contribution margin per unit
Target operating income
Cost-volume-profit (CVP) analysis examines the behavi
Cost poola grouping of individual indirect cost items.
Cost tracingthe assigning of direct costs to the chosen cost object.
Cost allocationthe assigning of indirect costs to the chosen cost object.
Cost-allocation basea factor th
ACTIVITY-BASED COSTING AND ACTIVITY-BASED MANAGEMENT
Broad averaging (or peanut-butter costing) describes a costing approach that uses broad
averages for assigning (or spreading, as in spreading peanut butter) the cost of resources
FLEXIBLE BUDGETS, DIRECT-COST VARIANCES,
AND MANAGEMENT CONTROL
Management by exception is the practice of concentrating on areas not operating as
expected and giving less attention to areas operating as expected. Variance analysis helps
FLEXIBLE BUDGETS, OVERHEAD COST VARIANCES, AND
Effective planning of variable overhead costs involves:
1. Planning to undertake only those variable overhead activities that add value for
customers using the product or s
INVENTORY COSTING AND CAPACITY ANALYSIS
No. Differences in operating income between variable costing and absorption costing are
due to accounting for fixed manufacturing costs. Under variable costing, only variable
manufacturing costs are in
DETERMINING HOW COSTS BEHAVE
The two assumptions are
Variations in the level of a single activity (the cost driver) explain the variations in the
related total costs.
Cost behavior is approximated by a linear cost funct
THE MANAGER AND MANAGEMENT ACCOUNTING
See the front matter of this Solutions Manual for suggestions regarding your choices of
assignment material for each chapter.
Management accounting measures, analyzes, and reports financial and nonfinanc
TABLE OF CONTENTS
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