Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 13, Problem 13.1.6MBA
To determine
Concept Introduction:
Budgets:
Budgets are prepared to estimate the revenue, costs, receipts and payments for the business. There are several types of budgets prepared for a manufacturing concern. Few major types of budgets prepared by each manufacturing concert are as follows:
- Sales
budget - Cash Collection budget
- Production budget
- Raw material purchase budget
- Expenses Budgets
- Cash disbursement budget
To Calculate:
The Process that requires improvement
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Management was very concerned that their traditional method of costing may no longer be appropriate and wanted to consider using the ABC costing method. It has been suggested that three Cost pools be established, with the following cost Drivers, and the Overhead cost be shared among them as follows:
Cost Pool
Amount
Cost Driver
Assembling
$ 50,000
Labour cost
Manufacturing
$ 54,000
Labour Hours
Inspecting
$ 16,000
Number of Inspections
In the month of January, the following production data was recorded:
Refrigerators
Stoves
Units produced
15,000
25,000
Direct Materials Used
$ 75,000
$ 125,000
Direct Labour Cost
$ 40,000
$ 72,000
Direct Labour Hours
12,000
15,000
Number of Inspections
300
500
Work in Progress at the start of the month
$ 12,500
$ 14,000
Work…
Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs
according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that the company
switch to an activity-based costing system. The controller's staff prepared the following cost estimates for next year (year 2) for the
recommended cost drivers.
Activity
Purchasing material
Receiving material
Setting up equipment
Machine depreciation and maintenance
Ensuring regulatory compliance
Shipping
Total estimated cost
Number of units produced
Direct labor-hours
In addition, management estimated 45,000 direct labor-hours for year 2.
Assume that the following cost-driver volumes occurred in January, year 2:
Number of purchase orders
Direct materials costs
Number of production runs
Machine-hours
Number of inspections
Units shipped
Recommended Cost Driver
Number of purchase orders
Direct materials cost
Number of…
Chippity Inc. is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units
of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. Chippity uses the weighted-average
method of process costing. Summary data for September are:
(Click the icon to view the data.)
Required
1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule.
2. Summarize total costs to account for, calculate cost per equivalent unit for each cost category, and assign total costs to units completed and transferred out (including normal spoilage), to
abnormal spoilage, and to units in ending work in process.
Requirement 1. For each cost category, calculate equivalent units. Show physical units in the first column of your schedule.
Enter the…
Chapter 13 Solutions
Survey of Accounting (Accounting I)
Ch. 13 - Static budgets are often used: A.By production...Ch. 13 - The total estimated sales for the coming year is...Ch. 13 - Dixon Company expects $650,000 of credit sales in...Ch. 13 - The actual and standard direct materials costs for...Ch. 13 - Bower Company produced 4,000 units of product. The...Ch. 13 - Prob. 1CDQCh. 13 - What is the manager’s role in a responsibility...Ch. 13 - Briefly describe the type of human behavior...Ch. 13 - Give an example of budgetary slack.Ch. 13 - What behavioral problems are associated with...
Ch. 13 - Prob. 6CDQCh. 13 - Prob. 7CDQCh. 13 - Under what circumstances would a static budget be...Ch. 13 - How do computerized budgeting systems aid firms in...Ch. 13 - What is the first step in preparing a master...Ch. 13 - Why should the production requirements set forth...Ch. 13 - Why should the timing of direct materials...Ch. 13 - Prob. 13CDQCh. 13 - Prob. 14CDQCh. 13 - Prob. 15CDQCh. 13 - Prob. 16CDQCh. 13 - Prob. 17CDQCh. 13 - Prob. 18CDQCh. 13 - What is meant by reporting by the "principle of...Ch. 13 - Prob. 20CDQCh. 13 - How are standards used in budgetary performance...Ch. 13 - a. What are the two variances between the actual...Ch. 13 - Prob. 23CDQCh. 13 - Prob. 24CDQCh. 13 - Prob. 25CDQCh. 13 - Prob. 26CDQCh. 13 - Flexible budget for selling and administrative...Ch. 13 - Static budget vs. flexible budget The production...Ch. 13 - Flexible budget for Fabrication Department...Ch. 13 - Sales and production budgets Ultimate Audio...Ch. 13 - Professional fees earned budget Day & Spieth,...Ch. 13 - Professional labor cost budget Based on the data...Ch. 13 - Direct materials purchases budget Zippy's Frozen...Ch. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Production and direct labor cost budgets Levi...Ch. 13 - Factory overhead cost budget Nutty Candy Company...Ch. 13 - Cost of goods sold budget The controller of Pueblo...Ch. 13 - Prob. 13.13ECh. 13 - Schedule of cash collections of accounts...Ch. 13 - Schedule of cash payments Tadpole Learning Systems...Ch. 13 - Schedule of cash payments Organic Physical Therapy...Ch. 13 - Capital expenditures budget On August 1, 20Y4. the...Ch. 13 - Standard product cost Sorrento Furniture Company...Ch. 13 - Prob. 13.19ECh. 13 - Direct materials variances The following data...Ch. 13 - Standard direct materials cost per unit from...Ch. 13 - Standard product cost, direct materials variance...Ch. 13 - Direct labor variances The following data relate...Ch. 13 - Prob. 13.24ECh. 13 - Direct materials and direct labor variances At the...Ch. 13 - Prob. 13.26ECh. 13 - Factory overhead cost variances The following data...Ch. 13 - Prob. 13.28ECh. 13 - Factory overhead variance corrections The data...Ch. 13 - Prob. 13.30ECh. 13 - Sales, production, direct materials purchases, and...Ch. 13 - Sales, production, direct materials purchases, and...Ch. 13 - Sales, production, direct materials purchases, and...Ch. 13 - Sales, production, direct materials purchases, and...Ch. 13 - Budgeted income statement and supporting budgets...Ch. 13 - Budgeted income statement and supporting budgets...Ch. 13 - Budgeted income statement and supporting budgets...Ch. 13 - Budgeted income statement and supporting budgets...Ch. 13 - Budgeted income statement and supporting budgets...Ch. 13 - Budgeted income statement and supporting budgets...Ch. 13 - Prob. 13.2.7PCh. 13 - Budgeted income statement and supporting budgets...Ch. 13 - Cash budget The controller of Shoe Mart Inc. asks...Ch. 13 - Cash budget The controller of Shoe Mart Inc. asks...Ch. 13 - Direct materials and direct labor variance...Ch. 13 - Direct materials and direct labor, variance...Ch. 13 - Prob. 13.6.1PCh. 13 - Prob. 13.6.2PCh. 13 - Prob. 13.6.3PCh. 13 - Prob. 13.6.4PCh. 13 - Prob. 13.6.5PCh. 13 - Standards for nonmanufacturing expenses The...Ch. 13 - Prob. 13.7PCh. 13 - Prob. 13.1.1MBACh. 13 - Prob. 13.1.2MBACh. 13 - Prob. 13.1.3MBACh. 13 - Prob. 13.1.4MBACh. 13 - Prob. 13.1.5MBACh. 13 - Prob. 13.1.6MBACh. 13 - Prob. 13.2.1MBACh. 13 - Prob. 13.2.2MBACh. 13 - Prob. 13.2.3MBACh. 13 - Prob. 13.2.4MBACh. 13 - Process yield Hendrick Motorsports sponsors cars...Ch. 13 - Prob. 13.3.1MBACh. 13 - Prob. 13.3.2MBACh. 13 - Prob. 13.3.3MBACh. 13 - Prob. 13.3.4MBACh. 13 - Prob. 13.4.1MBACh. 13 - Prob. 13.4.2MBACh. 13 - Prob. 13.4.3MBACh. 13 - Prob. 13.4.4MBACh. 13 - Prob. 13.5.1MBACh. 13 - Prob. 13.5.2MBACh. 13 - Prob. 13.5.3MBACh. 13 - Prob. 13.5.4MBACh. 13 - Utilization rate Delta Air Lines (DAL) reported...Ch. 13 - Prob. 13.6.2MBACh. 13 - Prob. 13.6.3MBACh. 13 - Prob. 13.7.1MBACh. 13 - Prob. 13.7.2MBACh. 13 - Prob. 13.7.3MBACh. 13 - Ethics and professional conduct in business The...Ch. 13 - Prob. 13.2.1CCh. 13 - Prob. 13.2.2CCh. 13 - Prob. 13.3.1CCh. 13 - Prob. 13.3.2CCh. 13 - Objectives of the master budget Domino's Pizza LLC...Ch. 13 - Prob. 13.5.1CCh. 13 - Prob. 13.5.2CCh. 13 - Prob. 13.6CCh. 13 - Prob. 13.7C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Anderson Company has the following departmental manufacturing structure for one of its products: After some study, the production manager of Anderson recommended the following revised cellular manufacturing approach: Required: 1. Calculate the total time it takes to produce a batch of 20 units using Andersons traditional departmental structure. 2. Using cellular manufacturing, how much time is saved producing the same batch of 20 units? Assuming the cell operates continuously, what is the production rate? Which process controls this production rate? 3. What if the processing times of molding, welding, and assembly are all reduced to six minutes each? What is the production rate now, and how long will it take to produce a batch of 20 units?arrow_forwardRobotic Construction Toys Corp. is using a costs-of-quality approach to evaluate design engineering efforts for a new toy robot. The company's senior managers expect the engineering work to reduce appraisal, internal failure, and external failure activities. The predicted reductions in activities over the two-year life of the toy robot follow. Also shown are the cost allocation rates for the activities. (Click on the icon to view the information.) Data table Activity Inspection of incoming materials Inspection of finished goods.... Number of defective units discovered in-house. Number of defective units discovered by customers.. Lost sales to dissatisfied customers Requirements ...... **** Predicted Reduction in Activity Units 3. What major difficulty would management have had in implementing this costs-of-quality approach? What alternative approach could it use to measure quality improvement? 300 $ 300 $ 3,200 $ 900 $ 320 $ - 1. Calculate the predicted quality cost savings from the…arrow_forwardManagement was very concerned that their traditional method of costing may no longer be appropriate and wanted to consider using the ABC costing method. It has been suggested that three Cost pools be established, with the following cost Drivers, and the Overhead cost be shared among them as follows: Cost Pool Amount Cost Driver Assembling $ 50,000 Labour cost Manufacturing $ 54,000 Labour Hours Inspecting $ 16,000 Number of Inspections In the month of January, the following production data was recorded: Refrigerators Stoves Units produced 15,000 25,000 Direct Materials Used $ 75,000 $ 125,000 Direct Labour Cost $ 40,000 $ 72,000 Direct Labour Hours 12,000 15,000 Number of Inspections 300 500 Work in Progress at the start of the month $ 12,500 $ 14,000 Work in Progress at the end of the month. $ 7,500 $ 12,000…arrow_forward
- Management was very concerned that their traditional method of costing may no longer be appropriate and wanted to consider using the ABC costing method. It has been suggested that three Cost pools be established, with the following cost Drivers, and the Overhead cost be shared among them as follows: Cost Pool Amount Cost Driver Assembling $ 50,000 Labour cost Manufacturing $ 54,000 Labour Hours Inspecting $ 16,000 Number of Inspections In the month of January, the following production data was recorded: Refrigerators Stoves Units produced 15,000 25,000 Direct Materials Used $ 75,000 $ 125,000 Direct Labour Cost $ 40,000 $ 72,000 Direct Labour Hours 12,000 15,000 Number of Inspections 300 500 Work in Progress at the start of the month $ 12,500 $ 14,000 Work in Progress at the end of the month. $ 7,500 $ 12,000…arrow_forwardhow can i resolve this problem? Arona Corporation manufactures canoes in two departments, Fabrication and Waterproofing. In the Fabrication Department, fiberglass panels are attached to a canoe- shaped aluminum frame. The canoes are then transferred to the Waterproofing department to be coated with sealant. Arona uses a weighted-average process cost system to collect costs in both departments. All materials in the Fabrication Department are added at the beginning of the production process. On July 1, the Fabrication Department had 30 canoes in process that were 20% complete with respect to conversion cost. On July 31, Fabrication had 20 canoes in process that were 40% complete with respect to conversion cost. During July, the Fabrication Department completed 90 canoes and transferred them to the Waterproofing Department. What are the Fabrication Department's equivalent units of production related to conversion costs for July?arrow_forwardChipville Inc. is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. Chipville uses the weighted-average method of process costing. Summary data for September are: (Click the icon to view the data.) Required 1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule. 2. Summarize total costs to account for, calculate cost per equivalent unit for each cost category, and assign total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. Materials Costs incurred to date Divide by: Equivalent units of work done to date Cost per equivalent unit for work done to date Finally,…arrow_forward
- Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that the company switch to an activity-based costing system. The controller's staff prepared the following cost estimates for next year (year 2) for the recommended cost drivers. Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Purchasing material Number of purchase orders $ 121,200 240 purchase orders Receiving material Direct materials cost 225,600 $ 2,820,000 Setting up equipment Number of production runs 219,360 120 runs Machine depreciation and maintenance Machine-hours 75,540 15,108 hours Ensuring regulatory compliance Number of inspections 437,400 54 inspections Shipping Number of units shipped 1,058,400 588,000 units Total estimated cost $ 2,137,500 In addition, management…arrow_forwardFisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that the company switch to an activity-based costing system. The controller's staff prepared the following cost estimates for next year (year 2) for the recommended cost drivers. Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Purchasing material Number of purchase orders $ 138,000 240 purchase orders Receiving material Direct materials cost 248,000 $ 3,100,000 Setting up equipment Number of production runs 241,200 120 runs Machine depreciation and maintenance Machine-hours 83,800 16,760 hours Ensuring regulatory compliance Number of inspections 475,200 54 inspections Shipping Number of units shipped 1,108,800 616,000 units Total estimated cost $ 2,295,000 In addition, management…arrow_forwardFisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that the company switch to an activity-based costing system. The controller's staff prepared the following cost estimates for next year (year 2) for the recommended cost drivers. Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Purchasing material Number of purchase orders $ 130,800 240 purchase orders Receiving material Direct materials cost 238,400 $ 2,980,000 Setting up equipment Number of production runs 231,840 120 runs Machine depreciation and maintenance Machine-hours 80,260 16,052 hours Ensuring regulatory compliance Number of inspections 459,000 54 inspections Shipping Number of units shipped 1,087,200 604,000 units Total estimated cost $ 2,227,500 In addition, management…arrow_forward
- You have been hired as a Cost Accountant by Sundial, Inc., which produces sunglasses. Your duties include developing cost standards for materials and labor, designing and implementing cost accounting systems, defining various product and operational costs, analyzing production costs and recommending changes. When the trial period is over, you will have a performance review to demonstrate the completed tasks and gained knowledge. You have read the Cost of Quality Report of Sundial, Inc. and discovered that quality costs constitute 4.2% of sales. The amount is enormous, and your boss asks you to develop a set of measures to reduce it. Sundial, Inc. Cost of Quality Report For the Year Cost of Quality Percent of Sales ($32,000,000) Prevention costs $160,000 0.5% Appraisal costs…arrow_forwardMichael’s Pottery makes decorative garden pieces using three consecutive processes: Moulding, Baking & Spraying. Quality control check takes place during the process, at which point, rejected units are separated from good units. The following details relate to production for the month of October 2020, for the Baking Department. Work-in-process, October 1: -0- Transfer from Moulding: 2,000 units valued at $336.40 each Other manufacturing costs incurred during October: Direct material added Direct Manufacturing Wages Manufacturing Overhead Applied $202,120 $212,840 $306,160 Normal losses are estimated to be 5% of the units transferred in during the period. Losses from the Baking Department are deemed to be scrap and sold at $382 each. At inspection 300 decorative pieces were rejected as scrap. These units had reached the following degree of completion: From Moulding 100% Direct material added 40% Conversion costs 12½% 1,200 pieces were completed and transferred out to the…arrow_forwardMichael’s Pottery makes decorative garden pieces using three consecutive processes: Moulding, Baking & Spraying. Quality control check takes place during the process, at which point, rejected units are separated from good units. The following details relate to production for the month of October 2020, for the Baking Department. Work-in-process, October 1: -0- Transfer from Moulding: 2,000 units valued at $336.40 each Other manufacturing costs incurred during October: Direct material added Direct Manufacturing Wages Manufacturing Overhead Applied $202,120 $212,840 $306,160 Normal losses are estimated to be 5% of the units transferred in during the period. Losses from the Baking Department are deemed to be scrap and sold at $382 each. At inspection 300 decorative pieces were rejected as scrap. These units had reached the following degree of completion: From Moulding 100% Direct material added 40% Conversion costs 12½% 1,200 pieces were completed and transferred out to the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY