Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 2, Problem 31P
The actions listed next are associated with either an activity-based operational
- a. Budgeted costs for the maintenance department are compared with the actual costs of the maintenance department.
- b. The maintenance department manager receives a bonus for “beating” budget.
- c. The costs of resources are traced to activities and then to products.
- d. The purchasing department is set up as a responsibility center.
- e. Activities are identified and listed.
- f. Activities are categorized as adding or not adding value to the organization.
- g. A standard for a product’s material usage cost is set and compared against the product’s actual materials usage cost.
- h. The cost of performing an activity is tracked over time.
- i. The distance between moves is identified as the cause of materials handling cost.
- j. A purchasing agent is rewarded for buying parts below the standard price set by the company.
- k. The cost of the materials handling activity is reduced dramatically by redesigning the plant layout.
- l. An investigation is undertaken to find out why the actual labor cost for the production of 1,000 units is greater than the labor standard allowed.
- m. The percentage of defective units is calculated and tracked over time.
- n. Engineering has been given the charge to find a way to reduce setup time by 75 percent.
- o. The manager of the receiving department lays off two receiving clerks so that the fourth-quarter budget can be met.
Required:
Classify the preceding actions as belonging to either an activity-based operational control system or a traditional control system. Explain why you classified each action as you did.
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Students have asked these similar questions
A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called a(n) _____ center.
a.investment
b.cost
c.profit
d.volume
For each of the following support departments, identify a cost driver that could be used for allocating the support department costs to the profit center:a. Legalb. Duplication servicesc. Electronic data processingd. Central purchasinge. Telecommunicationsf. Accounts receivable
For each of the following, select its best description.
A. Provides information used to evaluate the performance of a department.
B. Performs an organization's main functions, like manufacturing and selling.
C. Costs incurred for the joint benefit of more than one department.
D. Holds manager responsible for revenues, costs and major investing decisions.
E. Costs that can be readily traced to a department.
F. Costs not within a manager's control or influence.
1. Investment center
2. Responsibility accounting system
3. Uncontrollable costs
|4. Operating department
5. Direct expenses
6. Indirect expenses
Chapter 2 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 2 - What is an accounting information system?Ch. 2 - What is the difference between a financial...Ch. 2 - What are the objectives of a cost management...Ch. 2 - Define and explain the two major subsystems of the...Ch. 2 - What is a cost object? Give some examples.Ch. 2 - Prob. 6DQCh. 2 - What is a direct cost? An indirect cost?Ch. 2 - Prob. 8DQCh. 2 - What is allocation?Ch. 2 - Explain how driver tracing works.
Ch. 2 - What is a tangible product?Ch. 2 - Prob. 12DQCh. 2 - Give three examples of product cost definitions....Ch. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Pietro Frozen Foods, Inc., produces frozen pizzas....Ch. 2 - For next year, Pietro predicts that 50,000 units...Ch. 2 - Pietro expects to produce 50,000 units and sell...Ch. 2 - Refer to Cornerstone Exercises 2.2 and 2.3. Next...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Prob. 9ECh. 2 - The following items are associated with a cost...Ch. 2 - Nizam Company produces speaker cabinets. Recently,...Ch. 2 - Three possible product cost definitions were...Ch. 2 - Wyandotte Company provided the following...Ch. 2 - For each of the following independent situations,...Ch. 2 - LeMans Company produces specialty papers at its...Ch. 2 - Kildeer Company makes easels for artists. During...Ch. 2 - Anglin Company, a manufacturing firm, has supplied...Ch. 2 - Lakeesha Barnett owns and operates a package...Ch. 2 - Millennium Pharmaceuticals, Inc. (MPI), designs...Ch. 2 - Jazon Manufacturing produces two different models...Ch. 2 - Ellerson Company provided the following...Ch. 2 - Ellerson Company provided the following...Ch. 2 - Orinder Company provided the following information...Ch. 2 - Last year, Orsen Company produced 25,000 juicers...Ch. 2 - Last year, Orsen Company produced 25,000 juicers...Ch. 2 - The ability to assign a cost directly to a cost...Ch. 2 - Selected information concerning the operations of...Ch. 2 - Brody Company makes industrial cleaning solvents....Ch. 2 - Wright Plastic Products is a small company that...Ch. 2 - The following items are associated with a...Ch. 2 - The actions listed next are associated with either...Ch. 2 - Spencer Company produced 200,000 cases of sports...Ch. 2 - Prob. 33PCh. 2 - Mason, Durant, and Westbrook (MDW) is a tax...Ch. 2 - Orman Company produces neon-colored covers for...Ch. 2 - High drug costs are often in the news. Consumer...
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