To: Lecturer 1. Coursework’s format is point form or writing in paragraph? 2. What’s the content concern about? 3. How can I score the 50 marks? 4. Can you look over my assignment’s answer whether right or wrong? Which part I must do the correction? Assignment answer A. Problem for self-study Campbell Soup Company incurs in the following costs: a. Purchases of tomatoes by canning plant for Campbell’s tomato soup products. Answer: Production. b. Materials purchased for redesigning Pepprigde Farm biscuit containers to make biscuits stay fresh longer. Answer: Design of products, services, or processes. c. Payment to Backer, Spielvogel Bates, the advertising agency for the Healthy Request line of soup products. Answer: Marketing. d. Salaries of food technologists researching feasibility of a Prego pizza sauce that has zero calories. Answer: Research and development. e. Cost of legal and investment banking advice for the takeover bid of Arnotts Limited of Australia. Answer: Strategy and development. f. Cost of toll-free telephone line used for customer inquires about possible product defects in Campbell’s Soups. Answer: Customer service. g. Cost of gloves used by line operators on the Swanson Fiesta breakfast food production line. Answer: Production. h. Cost of hand-held computers used by Pepperigde Farm delivery staff serving major supermarket accounts. Answer: Distribution. Required Classify each cost item (a-h) into one of the parts of the value chain shown in Exhibit 1-1.
B 1.2 Describe the business function in the value chain. Answer: These business functions are: a. Strategy and Administration It spams across all the other business functions. It includes general administrative tasks such as human resource management, legal matters and tax planning. b. Research and development The generation of, and experimentation with, ideas related to new products and services. c. Design of products, services, or processes The detailed planning and engineering of products, services or processes. d. Production The coordination and assembly of resources to produce a product or deliver a service. e. Marketing The process by which individual or groups learn about and value the attributes of products and purchase those products or services. f. Distribution The mechanism by which the product or services are delivered to the customers. g. Customer service The support activities provided to the customers.
1.4 Distinguish between management accounting and financial accounting. Answer: Management accounting The focus of management accounting is on the needs of Managers within the organization, rather than interested parties outside the organization. Management accounting is intended for internal users such as managers. It is not highly regulated, not mandatory (but used when benefits exceed costs) and future oriented. Financial accounting Financial accounting is primarily intended for external users such as investors, creditors, etc and concerned with external financial accounting. It is highly regulated by FASB (Financial Accounting Standards Board) and SEC (Securities and Exchange Commission), mandatory for publicly traded companies and historic in nature.
1.7 Explain the meaning of cost management. Answer: We use cost management to describe the actions by managers to satisfy customers while continuously reducing and controlling costs. An important component of cost management is the recognition that prior management decisions often commit the organization to the subsequent incurrence of costs.
1.13 Name 3 functions performed by the controller. Answer: These functions are: a. Accountant for planning and control (includes budgets and performance reports). b. General Accounting. c. Internal audit.
1.17 Value chain and classification of costs, computer company. Apple Computer incurs the following costs: a. Electricity costs for the plant assembling the Macintosh computer lines of products. Answer: Production. b. Transportation costs for shipping Macintosh software to a retail chain. Answer: Distribution. c. Payment to David Kelly Designs for design of the Power book carrying cases. Answer: Design of products, services, or processes. d. Salary of computer scientist working on the next generation of minicomputers. Answer: Research and development. e. Costs of Apple employee’s visit to a major customer to illustrate Apple’s ability to interconnect with other computers. Answer: Customer service. f. Salary to the president of Apple Computer. Answer: Strategy and administration. g. Payment to television station for running Apple advertisements. Answer: Marketing. h. Cost of cables purchased from outside supplier to be used with the Macintosh printer. Answer: Production.
1.18 Value chain and classification of costs, pharmaceutical company. Merck, a pharmaceutical company, incurs the following costs: a. Cost of redesigning blister packs to make drug containers more tamper-proof. Answer: Design of products, services, or processes. b. Cost of videos sent to doctors to promote sales of a new drug. Answer: Marketing. c. Cost of toll-free telephone line used for customer inquires about usage, slide effects of drugs, and so on. Answer: Customer service. d. Equipment purchased by a scientist to conduct experiments on drugs yet to be approved by the government. Answer: Design of products, services, or processes. e. Cost of feed paid to members of Merck’s board of directors. Answer: Strategy and administration. f. Labor costs of workers in the packaging area of a production facility. Answer: Production. g. Bonus paid to a salesperson for exceeding monthly sales quota. Answer: Marketing. h. Cost of Federal Express courier service to deliver drugs to hospitals. Answer: Distribution.
C 2-1 Defined cost object and give three examples. Answer: A cost object is anything for which a separate measurement of costs is desired. Cost objects are chosen not for their own sake but to help decision making. Example of cost objects: Cost Object ● Product ● Services ● Project Illustration A ten-spend bicycle Airline flight from Los Angeles to London Construction of road and rail underwater tunnel from Folkestown, United Kingdom, to Calais, France
2-5 What is a cost driver? Give one example for each area in the value chain. Answer: A cost driver is an activity or event causing costs. Costs drivers vary widely among different firms and industries. A cost driver is any factor that affects costs. That is, a change in the cost driver will cause a change in the total cost of a related cost object. Example of Cost Drivers for Business Function Areas in the Value Chain: Business Function ● Research and Development ● Design of Products, Services, and Processes ● Production ● Marketing ● Distribution ● Customer Service ● Strategy and Administration Example of Cost Driver Number of projects Number of products Number of unit produced Number of advertisements run Number of items distributed Number of service calls Number of board of directors members
2-24 Costs of goods manufactured. Prepare a schedule of cost of goods manufactured for the Canseco Company from the following account balance (in thousands). Beginning of 19_4 End of 19_4 Directs materials inventory $22,000 $26,000 Work in process inventory 21,000 20,000 Finished goods inventory 18,000 23,000 Purchases of direct materials 75,000 Direct manufacturing labor 25,000 Indirect manufacturing labor 15,000 Plant insurance 9,000 Depreciation – plant building and equipment 11,000 Repairs and maintenance – plant 4,000 Marketing, distribution, and customer – service costs 93,000 General and administrative costs 29,000
Answer: Canseco Company Schedule of Cost of Goods Manufactured For the Year Ended December 31, 19_4 $ (in thousands) $ (in thousands) Directs materials costs: Beginning inventory 22,000 Purchases of direct inventory 75,000 Cost of direct materials available for use 97,000 Ending inventory 26,000 Direct materials used 71,000 Direct manufacturing labor costs: 25,000 Indirect manufacturing costs: Indirect manufacturing labor 15,000 Plant insurance 9,000 Depreciation – plant building and equipment 11,000 Repairs and maintenance – plant 4,000 39,000 Manufacturing costs incurred during 19_4 135,000 Add beginning work in process inventory 21,000 Total manufacturing costs to account for 156,000 Deduct ending work in process inventory 20,000 Cost of goods manufactured (to Income Statement) 136,000
2-25 Income statement, manufacturing sector. Prepare an income statement for the company in the preceding problem, assuming sales of $300 million. Canseco Company Income Statement For the Year Ended December 31, 19_4 $ (in thousands) $ (in thousands) Sales 3,000,000 Cost of goods sold: Beginning finished goods inventory 18,000 Cost of goods manufactured 136,000 Cost of goods available for sale 154,000 Ending finished goods inventory 23,000 Cost of goods sold 131,000 Gross margin (or gross profit) 2,869,000 Marketing, distribution, and customer – service costs 93,000 General and administrative costs 29,000 Repairs and maintenance – plant 4,000 Total 126,000 Operating income 2,743,000
2-27 Income statement and schedule of cost of goods manufactured. The Howell Corporation has the following account balances (in millions): For Specific Date For Year 19_4 Direct materials, Jan. 1, 19_4 Work in process, Jan. 1, 19_4 Finished goods, Jan. 1, 19_4 Direct materials, Dec. 31, 19_4 Work in process, Dec. 31, 19_4 Finished goods, Dec. 31, 19_4 $15 10 70 20 5 55 Purchases of direct materials Direct manufacturing labor Depreciation – plant, building, and equipment Plant supervisory salaries Miscellaneous plant overhead Sales Marketing, distribution, and customer-service costs Plant supplies used Plant utilities Indirect manufacturing labor $325 100
80 5 35 950
240 10 30 60
Answer: Howell Corporation Income Statement For the Year Ended December 31, 19_4 $ (in millions) $ (in millions) Sales 950 Cost of goods sold: Beginning finished goods inventory 70 Cost of goods manufactured 605 Cost of goods available for sale 675 Ending finished goods inventory 55 Cost of goods sold 625 Gross margin (or gross profit) 325 Marketing, distribution, and customer – service costs 240 Plant supervisory salaries 5 Miscellaneous plant overhead 35 Total 280 Operating income 45
Howell Corporation Schedule of Cost of Goods Manufactured For the Year Ended December 31, 19_4 $ (in millions) $ (in millions) Directs materials costs: Beginning inventory 15 Purchases of direct inventory 325 Cost of direct materials available for use 340 Ending inventory 20 Direct materials used 320 Direct manufacturing labor costs: 100 Indirect manufacturing costs: Indirect manufacturing labor 60 Depreciation – plant building and equipment 80 Plant utilities 30 Plant supplies used 10 180 Manufacturing costs incurred during 19_4 600 Add beginning work in process inventory 10 Total manufacturing costs to account for 610 Deduct ending work in process inventory 5 Cost of goods manufactured (to Income Statement) 605
2-29 Income statement and schedule of cost of goods manufactured. The following items pertain to Chan Corporation (in millions) For Specific Date For Year 19_4 Work in process, Jan. 1, 19_5 Direct materials, Dec. 31, 19_5 Finished goods, Dec. 31, 19_5 Account payable, Dec. 31, 19_5 Account receivable, Jan. 1, 19_5 Work in process, Dec. 31, 19_5 Finished goods, Jan. 1, 19_5 Account receivable, Dec. 31, 19_5 Account payable, Jan. 1, 19_5 Direct materials, Jan. 1, 19_5
$10 5 12 20 50 2 40 30 40 30 Plant utilities Indirect manufacturing labor Depreciation – plant, building, and equipment Sales Miscellaneous manufacturing overhead Marketing, distribution, and customer-service costs Direct material purchased Direct manufacturing labor Plant supplies used Property taxes on plant $5 20
9 350
10
90 80 40 6 1 Required Prepare an income statement and a supporting schedule of costs of goods manufactured. Answer: Chan Corporation Income Statement For the Year Ended December 31, 19_5 $ (in millions) $ (in millions) Sales 350 Cost of goods sold: Beginning finished goods inventory 40 Cost of goods manufactured 194 Cost of goods available for sale 234 Ending finished goods inventory 12 Cost of goods sold 222 Gross margin (or gross profit) 128 Marketing, distribution, and customer – service costs 90 Miscellaneous manufacturing overhead 10 Total 100 Operating income 28
Chan Corporation Schedule of Cost of Goods Manufactured For the Year Ended December 31, 19_5 $ (in millions) $ (in millions) Directs materials costs: Beginning inventory 30 Purchases of direct inventory 80 Cost of direct materials available for use 110 Ending inventory 5 Direct materials used 105 Direct manufacturing labor costs: 40 Indirect manufacturing costs: Indirect manufacturing labor 20 Depreciation – plant building and equipment 9 Plant utilities 5 Property taxes on plant 1 Plant supplies used 6 41 Manufacturing costs incurred during 19_5 186 Add beginning work in process inventory 10 Total manufacturing costs to account for 196 Deduct ending work in process inventory 2 Cost of goods manufactured (to Income Statement) 194
Thanks.
------------------------------------------- This is by the student from Super Tuisyen(Gelang Patah)TQ!
To: Lecturer
ReplyDelete1. Coursework’s format is point form or writing in paragraph?
2. What’s the content concern about?
3. How can I score the 50 marks?
4. Can you look over my assignment’s answer whether right or wrong? Which part I must do the correction?
Assignment answer
A. Problem for self-study
Campbell Soup Company incurs in the following costs:
a. Purchases of tomatoes by canning plant for Campbell’s tomato soup products.
Answer: Production.
b. Materials purchased for redesigning Pepprigde Farm biscuit containers to make biscuits stay fresh longer.
Answer: Design of products, services, or processes.
c. Payment to Backer, Spielvogel Bates, the advertising agency for the Healthy Request line of soup products.
Answer: Marketing.
d. Salaries of food technologists researching feasibility of a Prego pizza sauce that has zero calories.
Answer: Research and development.
e. Cost of legal and investment banking advice for the takeover bid of Arnotts Limited of Australia.
Answer: Strategy and development.
f. Cost of toll-free telephone line used for customer inquires about possible product defects in Campbell’s Soups.
Answer: Customer service.
g. Cost of gloves used by line operators on the Swanson Fiesta breakfast food production line.
Answer: Production.
h. Cost of hand-held computers used by Pepperigde Farm delivery staff serving major supermarket accounts.
Answer: Distribution.
Required
Classify each cost item (a-h) into one of the parts of the value chain shown in Exhibit 1-1.
B
1.2 Describe the business function in the value chain.
Answer:
These business functions are:
a. Strategy and Administration
It spams across all the other business functions. It includes general administrative tasks such as human resource management, legal matters and tax planning.
b. Research and development
The generation of, and experimentation with, ideas related to new products and services.
c. Design of products, services, or processes
The detailed planning and engineering of products, services or processes.
d. Production
The coordination and assembly of resources to produce a product or deliver a service.
e. Marketing
The process by which individual or groups learn about and value the attributes of products and purchase those products or services.
f. Distribution
The mechanism by which the product or services are delivered to the customers.
g. Customer service
The support activities provided to the customers.
1.4 Distinguish between management accounting and financial accounting.
ReplyDeleteAnswer: Management accounting
The focus of management accounting is on the needs of Managers within the organization, rather than interested parties outside the organization. Management accounting is intended for internal users such as managers. It is not highly regulated, not mandatory (but used when benefits exceed costs) and future oriented.
Financial accounting
Financial accounting is primarily intended for external users such as investors, creditors, etc and concerned with external financial accounting. It is highly regulated by FASB (Financial Accounting Standards Board) and SEC (Securities and Exchange Commission), mandatory for publicly traded companies and historic in nature.
1.7 Explain the meaning of cost management.
Answer: We use cost management to describe the actions by managers to satisfy customers while continuously reducing and controlling costs. An important component of cost management is the recognition that prior management decisions often commit the organization to the subsequent incurrence of costs.
1.13 Name 3 functions performed by the controller.
Answer:
These functions are:
a. Accountant for planning and control (includes budgets and performance reports).
b. General Accounting.
c. Internal audit.
1.17 Value chain and classification of costs, computer company. Apple Computer incurs the following costs:
a. Electricity costs for the plant assembling the Macintosh computer lines of products.
Answer: Production.
b. Transportation costs for shipping Macintosh software to a retail chain.
Answer: Distribution.
c. Payment to David Kelly Designs for design of the Power book carrying cases.
Answer: Design of products, services, or processes.
d. Salary of computer scientist working on the next generation of minicomputers.
Answer: Research and development.
e. Costs of Apple employee’s visit to a major customer to illustrate Apple’s ability to interconnect with other computers.
Answer: Customer service.
f. Salary to the president of Apple Computer.
Answer: Strategy and administration.
g. Payment to television station for running Apple advertisements.
Answer: Marketing.
h. Cost of cables purchased from outside supplier to be used with the Macintosh printer.
Answer: Production.
1.18 Value chain and classification of costs, pharmaceutical company. Merck, a pharmaceutical company, incurs the following costs:
a. Cost of redesigning blister packs to make drug containers more tamper-proof.
Answer: Design of products, services, or processes.
b. Cost of videos sent to doctors to promote sales of a new drug.
Answer: Marketing.
c. Cost of toll-free telephone line used for customer inquires about usage, slide effects of drugs, and so on.
Answer: Customer service.
d. Equipment purchased by a scientist to conduct experiments on drugs yet to be approved by the government.
Answer: Design of products, services, or processes.
e. Cost of feed paid to members of Merck’s board of directors.
Answer: Strategy and administration.
f. Labor costs of workers in the packaging area of a production facility.
Answer: Production.
g. Bonus paid to a salesperson for exceeding monthly sales quota.
Answer: Marketing.
h. Cost of Federal Express courier service to deliver drugs to hospitals.
Answer: Distribution.
C
2-1 Defined cost object and give three examples.
Answer: A cost object is anything for which a separate measurement of costs is desired. Cost objects are chosen not for their own sake but to help decision making.
Example of cost objects:
Cost Object
● Product
● Services
● Project Illustration
A ten-spend bicycle
Airline flight from Los Angeles to London
Construction of road and rail underwater tunnel from Folkestown, United Kingdom, to Calais, France
2-5 What is a cost driver? Give one example for each area in the value chain.
ReplyDeleteAnswer: A cost driver is an activity or event causing costs. Costs drivers vary widely among different firms and industries. A cost driver is any factor that affects costs. That is, a change in the cost driver will cause a change in the total cost of a related cost object.
Example of Cost Drivers for Business Function Areas in the Value Chain:
Business Function
● Research and Development
● Design of Products, Services, and Processes
● Production
● Marketing
● Distribution
● Customer Service
● Strategy and Administration Example of Cost Driver
Number of projects
Number of products
Number of unit produced
Number of advertisements run
Number of items distributed
Number of service calls
Number of board of directors members
2-24 Costs of goods manufactured. Prepare a schedule of cost of goods manufactured for the Canseco Company from the following account balance (in thousands).
Beginning of 19_4 End of 19_4
Directs materials inventory $22,000 $26,000
Work in process inventory 21,000 20,000
Finished goods inventory 18,000 23,000
Purchases of direct materials 75,000
Direct manufacturing labor 25,000
Indirect manufacturing labor 15,000
Plant insurance 9,000
Depreciation – plant building and equipment 11,000
Repairs and maintenance – plant 4,000
Marketing, distribution, and customer – service costs 93,000
General and administrative costs 29,000
Answer:
Canseco Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 19_4
$ (in thousands) $ (in thousands)
Directs materials costs:
Beginning inventory
22,000
Purchases of direct inventory 75,000
Cost of direct materials available for use 97,000
Ending inventory 26,000
Direct materials used 71,000
Direct manufacturing labor costs: 25,000
Indirect manufacturing costs:
Indirect manufacturing labor 15,000
Plant insurance 9,000
Depreciation – plant building and equipment 11,000
Repairs and maintenance – plant 4,000 39,000
Manufacturing costs incurred during 19_4 135,000
Add beginning work in process inventory 21,000
Total manufacturing costs to account for 156,000
Deduct ending work in process inventory 20,000
Cost of goods manufactured (to Income Statement) 136,000
2-25 Income statement, manufacturing sector. Prepare an income statement for the company in the preceding problem, assuming sales of $300 million.
Canseco Company
Income Statement For the Year Ended December 31, 19_4
$ (in thousands) $ (in thousands)
Sales 3,000,000
Cost of goods sold:
Beginning finished goods inventory 18,000
Cost of goods manufactured 136,000
Cost of goods available for sale 154,000
Ending finished goods inventory 23,000
Cost of goods sold 131,000
Gross margin (or gross profit) 2,869,000
Marketing, distribution, and customer – service costs 93,000
General and administrative costs 29,000
Repairs and maintenance – plant 4,000
Total 126,000
Operating income 2,743,000
2-27 Income statement and schedule of cost of goods manufactured. The Howell Corporation has the following account balances (in millions):
ReplyDeleteFor Specific Date For Year 19_4
Direct materials, Jan. 1, 19_4
Work in process, Jan. 1, 19_4
Finished goods, Jan. 1, 19_4
Direct materials, Dec. 31, 19_4
Work in process, Dec. 31, 19_4
Finished goods, Dec. 31, 19_4 $15
10
70
20
5
55 Purchases of direct materials
Direct manufacturing labor
Depreciation – plant, building, and equipment
Plant supervisory salaries
Miscellaneous plant overhead
Sales
Marketing, distribution, and customer-service costs
Plant supplies used
Plant utilities
Indirect manufacturing labor $325
100
80
5
35
950
240
10
30
60
Answer:
Howell Corporation
Income Statement For the Year Ended December 31, 19_4
$ (in millions) $ (in millions)
Sales 950
Cost of goods sold:
Beginning finished goods inventory 70
Cost of goods manufactured 605
Cost of goods available for sale 675
Ending finished goods inventory 55
Cost of goods sold 625
Gross margin (or gross profit) 325
Marketing, distribution, and customer – service costs 240
Plant supervisory salaries 5
Miscellaneous plant overhead 35
Total 280
Operating income 45
Howell Corporation
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 19_4
$ (in millions) $ (in millions)
Directs materials costs:
Beginning inventory
15
Purchases of direct inventory 325
Cost of direct materials available for use 340
Ending inventory 20
Direct materials used 320
Direct manufacturing labor costs: 100
Indirect manufacturing costs:
Indirect manufacturing labor 60
Depreciation – plant building and equipment 80
Plant utilities 30
Plant supplies used 10 180
Manufacturing costs incurred during 19_4 600
Add beginning work in process inventory 10
Total manufacturing costs to account for 610
Deduct ending work in process inventory 5
Cost of goods manufactured (to Income Statement) 605
2-29 Income statement and schedule of cost of goods manufactured. The following items pertain to Chan Corporation (in millions)
ReplyDeleteFor Specific Date For Year 19_4
Work in process, Jan. 1, 19_5
Direct materials, Dec. 31, 19_5
Finished goods, Dec. 31, 19_5
Account payable, Dec. 31, 19_5
Account receivable, Jan. 1, 19_5
Work in process, Dec. 31, 19_5
Finished goods, Jan. 1, 19_5
Account receivable, Dec. 31, 19_5
Account payable, Jan. 1, 19_5
Direct materials, Jan. 1, 19_5
$10
5
12
20
50
2
40
30
40
30 Plant utilities
Indirect manufacturing labor
Depreciation – plant, building, and equipment
Sales
Miscellaneous manufacturing overhead
Marketing, distribution, and customer-service costs
Direct material purchased
Direct manufacturing labor
Plant supplies used
Property taxes on plant $5
20
9
350
10
90
80
40
6
1
Required
Prepare an income statement and a supporting schedule of costs of goods manufactured.
Answer:
Chan Corporation
Income Statement For the Year Ended December 31, 19_5
$ (in millions) $ (in millions)
Sales 350
Cost of goods sold:
Beginning finished goods inventory 40
Cost of goods manufactured 194
Cost of goods available for sale 234
Ending finished goods inventory 12
Cost of goods sold 222
Gross margin (or gross profit) 128
Marketing, distribution, and customer – service costs 90
Miscellaneous manufacturing overhead 10
Total 100
Operating income 28
Chan Corporation
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 19_5
$ (in millions) $ (in millions)
Directs materials costs:
Beginning inventory
30
Purchases of direct inventory 80
Cost of direct materials available for use 110
Ending inventory 5
Direct materials used 105
Direct manufacturing labor costs: 40
Indirect manufacturing costs:
Indirect manufacturing labor 20
Depreciation – plant building and equipment 9
Plant utilities 5
Property taxes on plant 1
Plant supplies used 6 41
Manufacturing costs incurred during 19_5 186
Add beginning work in process inventory 10
Total manufacturing costs to account for 196
Deduct ending work in process inventory 2
Cost of goods manufactured (to Income Statement) 194
Thanks.
-------------------------------------------
This is by the student from Super Tuisyen(Gelang Patah)TQ!