管理会计(英文版)课后习题答案(高等教育出版社)chapter 10
双语版管理会计第十章
Quantity variance $800 unfavorable
Price variance $170 favorable
10-19
Quick Check
Zippy
Recall that the standard quantity for 1,000 Zippies is 1,000 × 1.5 pounds per Zippy = 1,500 pounds.
Hanson’s materials quantity variance (MQV) and Hanson’s materials price variance (MPV) for last week was：？
10-18
Quick Check
Zippy
Standard Quantity Actual Quantity
Materials price variance
MPV = (AQ × AP) – (AQ × SP) = AQ(AP – SP) = 210 kgs ($4.90/kg – $5.00/kg) = 210 kgs (– $0.10/kg) = $21 F
10-15
Responsibility for Materials Variances
Standard Rate per Hour
Standard Hours per Unit
通常使用单一的 标准工资率反映企业
多种工资标准.
确定单个产品耗费 的人工小时
10-5
Setting Variable Manufacturing Overhead Standards 制定变动制造费用标准
Price Standard
You purchased cheap material, so my people had to use more of it.
管理会计(英文版)课后习题答案(高等教育出版社)chapter 4
管理会计（高等教育出版社）于增彪（清华大学）改编余绪缨（厦门大学）审校CHAPTER 4ACTIVITY-BASED COSTINGQUESTIONS FOR WRITING AND DISCUSSION1.Unit costs provide essential informationneeded for inventory valuation and prepara-tion of income statements. Knowing unit costs is also critical for many decisions such as bidding decisions and accept-or-reject special order decisions.2.Cost measurement is determining the dollaramounts associated with resources used in production. Cost assignment is associating the dollar amounts, once measured, with units produced.3.An actual overhead rate is rarely used be-cause of problems with accuracy and timeli-ness. Waiting until the end of the year to en-sure accuracy is rejected because of the need to have timely information. Timeliness of information based on actual overhead costs runs into difficulty (accuracy problems) because overhead is incurred nonuniformly and because production also may be non-uniform.4.For plantwide rates, overhead is first col-lected in a plantwide pool, using direct trac-ing. Next, an overhead rate is computed and used to assign overhead to products. 5.First stage: Overhead is assigned to produc-tion department pools using direct tracing, driver tracing, and allocation. Second stage: Individual departmental rates are used to assign overhead to products as they pass through the departments.6.Departmental rates would be chosen overplantwide rates whenever some depart-ments are more overhead intensive than others and if certain products spend more time in some departments than they do in others.7.Plantwide overhead rates assign overheadto products in proportion to the amount of the unit-level cost driver used. If the prod-ucts consume some overhead activities in different proportions than those assigned by the unit-level cost driver, then cost dis-tortions can occur (the product diversity factor). These distortions can be significant if the nonunit-level overhead costs represent a significant proportion of total overhead costs.8.Low-volume products may consume non-unit-level overhead activities in much greater proportions than indicated by a unit-levelcost driver and vice versa for high-volumeproducts. If so, then the low-volume prod-ucts will receive too little overhead and thehigh-volume products too much.9.If some products are undercosted and oth-ers are overcosted, a firm can make a num-ber of competitively bad decisions. For ex-ample, the firm might select the wrongproduct mix or submit distorted bids.10.Nonunit-level overhead activities are thoseoverhead activities that are not highly corre-lated with production volume measures. Ex-amples include setups, material handling,and inspection. Nonunit-level cost driversare causal factors—factors that explain theconsumption of nonunit-level overhead. Ex-amples include setup hours, number ofmoves, and hours of inspection.11.Product diversity is present whenever prod-ucts have different consumption ratios fordifferent overhead activities.12.An overhead consumption ratio measuresthe proportion of an overhead activity con-sumed by a product.13.Departmental rates typically use unit-levelcost drivers. If products consume nonunit-level overhead activities in different propor-tions than those of unit-level measures, thenit is possible for departmental rates to moveeven further away from the true consumptionratios, since the departmental unit-level ra-tios usually differ from the one used at theplant level.14.Agree. Prime costs can be assigned usingdirect tracing and so do not cause cost dis-tortions. Overhead costs, however, are notdirectly attributable and can cause distor-tions. For example, using unit-level activitydrivers to trace nonunit-level overhead costswould cause distortions.15.Activity-based product costing is an over-head costing approach that first assignscosts to activities and then to products. Theassignment is made possible through theidentification of activities, their costs, and theuse of cost drivers.16.An activity dictionary is a list of activitiesaccompanied by information that describeseach activity (called attributes)17. A primary activity is consumed by the finalcost objects such as products and custom-ers, whereas secondary activities are con-sumed by other activities (ultimately con-sumed by primary activities).18.Costs are assigned using direct tracing andresource drivers.19.Homogeneous sets of activities are pro-duced by associating activities that have thesame level and that can use the same driverto assign costs to products. Homogeneoussets of activities reduce the number of over-head rates to a reasonable level.20. A homogeneous cost pool is a collection ofoverhead costs that are logically related tothe tasks being performed and for whichcost variations can be explained by a singleactivity driver. Thus, a homogeneous pool ismade up of activities with the same process,the same activity level, and the same driver.21.Unit-level activities are those that occur eachtime a product is produced. Batch-level activi-ties are those that are performed each time abatch of products is produced. Product-levelor sustaining activities are those that areperformed as needed to support the variousproducts produced by a company. Facility-level activities are those that sustain a facto-ry’s general man ufacturing process.22.ABC improves costing accuracy wheneverthere is diversity of cost objects. There arevarious kinds of cost objects, with productsbeing only one type. Thus, ABC can be use-ful for improving cost assignments to costobjects like customers and suppliers. Cus-tomer and supplier diversity can occur for asingle product firm or for a JIT manufactur-ing firm.23.Activity-based customer costing can identifywhat it is costing to service different custom-ers. Once known, a firm can then devise astrategy to increase its profitability by focus-ing more on profitable customers, convertingunprofitable customers to profitable oneswhere possible, and “firing” customers thatcannot be made profitable.24.Activity-based supplier costing traces allsupplier-caused activity costs to suppliers.This new total cost may prove to be lowerthan what is signaled simply by purchaseprice.EXERCISES4–11.Quarter 1 Quarter 2 Q uarter 3 Quarter 4 Total Units produced 400,000 160,000 80,000 560,000 1,200,000 Prime costs $8,000,000 $3,200,000 $1,600,000 $11,200,000 $24,000,000 Overhead costs $3,200,000 $2,400,000 $3,600,000 $2,800,000 $12,000,000 Unit cost:Prime $20 $20 $20 $20 $20Overhead 8 15 45 5 10Total $28 $35 $65 $25 $30 2. Actual costing can produce wide swings in the overhead cost per unit. Thecause appears to be nonuniform incurrence of overhead and nonuniform production (seasonal production is a possibility).3. First, calculate a predetermined rate:OH rate = $11,640,000/1,200,000= $9.70 per unitThis rate is used to assign overhead to the product throughout the year.Since the driver is units produced, $9.70 would be assigned to each unit.Adding this to the actual prime costs produces a unit cost under normal cost-ing:Unit cost = $9.70 + $20.00 = $29.70This cost is close to the actual annual cost of $30.00.1. $13,500,000/3,600,000 = $3.75 per direct labor hour (DLH)2. $3.75 ⨯ 3,456,000 = $12,960,0003. Applied overhead $ 12,960,000A ctual overhead 13,600,000U nderapplied overhead $ 640,0004. Predetermined rates allow the calculation of unit costs and avoid the prob-lems of nonuniform overhead incurrence and nonuniform production asso-ciated with actual overhead rates. Unit cost information is needed throughout the year for a variety of managerial purposes.4–31. Predetermined overhead rate = $4,500,000/600,000 = $7.50 per DLH2. Applied overhead = $7.50 ⨯ 585,000 = $4,387,5003. Applied overhead $ 4,387,500Actual overhead 4,466,250Underapplied overhead $ (78,750)4. Unit cost:Prime costs $ 6,750,000Overhead costs 4,387,500Total $ 11,137,500Units ÷750,000Unit cost $ 14.851. Predetermined overhead rate = $4,500,000/187,500 = $24 per machine hour(MHr)2. Applied overhead = $24 187,875 = $4,509,0003. Applied overhead $ 4,509,000Actual overhead 4,466,250Overapplied overhead $ 42,7504. Unit cost:Prime costs $ 6,750,000Overhead costs 4,509,000Total $ 11,259,000Units ÷750,000Unit cost $ 15.01**Rounded5. Gandars needs to determine what causes its overhead. Is it primarily labordriven (e.g., composed predominantly of fringe benefits, indirect labor, and personnel costs), or is it machine oriented (e.g., composed of depreciation on machinery, utilities, and maintenance)? It is impossible for a decision to be made on the basis of the information given in this exercise.1. Predetermined rates:Drilling Department: Rate = $600,000/280,000 = $2.14* per MHrAssembly Department: Rate = $392,000/200,000= $1.96 per DLH*Rounded2. Applied overhead:Drilling Department: $2.14 ⨯ 288,000 = $616,320Assembly Department: $1.96 ⨯ 196,000 = $384,160Overhead variances:Drilling Assembly Total Actual overhead $602,000 $ 412,000 $ 1,014,000 Applied overhead 616,320 384,160 1,000,480 Overhead variance $ (14,320) over $ 27,840 under $ 13,520 3. Unit overhead cost = [($2.14 ⨯ 4,000) + ($1.96 ⨯ 1,600)]/8,000= $11,696/8,000= $1.46**Rounded1. Activity rates:Machining = $632,000/300,000= $2.11* per MHrInspection = $360,000/12,000= $30 per inspection hour*Rounded2. Unit overhead cost = [($2.11 ⨯ 8,000) + ($30 ⨯ 800)]/8,000= $40,880/8,000= $5.114–71. Yes. Since direct materials and direct labor are directly traceable to eachproduct, their cost assignment should be accurate.2. Elegant: (1.75 ⨯ $9,000)/3,000 = $5.25 per briefcaseFina: (1.75 ⨯ $3,000)/3,000 = $1.75 per briefcaseNote: Overhead rate = $21,000/$12,000 = $1.75 per direct labor dollar (or 175 percent of direct labor cost).There are more machine and setup costs assigned to Elegant than Fina. This is clearly a distortion because the production of Fina is automated and uses the machine resources much more than the handcrafted Elegant. In fact, the consumption ratio for machining is 0.10 and 0.90 (using machine hours as the measure of usage). Thus, Fina uses nine times the machining resources as Elegant. Setup costs are similarly distorted. The products use an equal number of setups hours. Yet, if direct labor dollars are used, then the Elegant briefcase receives three times more machining costs than the Fina briefcase.4–7 Concluded3. Overhead rate = $21,000/5,000= $4.20 per MHrElegant: ($4.20 ⨯ 500)/3,000 = $0.70 per briefcaseFina: ($4.20 ⨯ 4,500)/3,000 = $6.30 per briefcaseThis cost assignment appears more reasonable given the relative demands each product places on machine resources. However, once a firm moves to a multiproduct setting, using only one activity driver to assign costs will likely produce product cost distortions. Products tend to make different demands on overhead activities, and this should be reflected in overhead cost assign-ments. Usually, this means the use of both unit- and nonunit-level activity drivers. In this example, there is a unit-level activity (machining) and a non-unit-level activity (setting up equipment). The consumption ratios for each (using machine hours and setup hours as the activity drivers) are as follows:Elegant FinaMachining 0.10 0.90 (500/5,000 and 4,500/5,000)Setups 0.50 0.50 (100/200 and 100/200)Setup costs are not assigned accurately. Two activity rates are needed—one based on machine hours and the other on setup hours:Machine rate: $18,000/5,000 = $3.60 per MHrSetup rate: $3,000/200 = $15 per setup hourCosts assigned to each product:Machining: Elegant Fina$3.60 ⨯ 500 $ 1,800$3.60 ⨯ 4,500 $ 16,200Setups:$15 ⨯ 100 1,500 1,500Total $ 3,300 $ 17,700Units ÷3,000 ÷3,000Unit overhead cost $ 1.10 $ 5.90Activity dictionary:Activity Activity Primary/ ActivityName Description Secondary Driver Providing nursing Satisfying patient Primary Nursing hours care needsSupervising Coordinating Secondary Number of nurses nurses nursing activitiesFeeding patients Providing meals Primary Number of mealsto patientsLaundering Cleaning and Primary Pounds of laundry bedding and delivering clothesclothes and beddingProviding Therapy treatments Primary Hours of therapy physical directed bytherapy physicianMonitoring Using equipment to Primary Monitoring hours patients monitor patientconditions1. dCost of labor (0.75 ⨯ $40,000) $30,000Forklift (direct tracing) 6,000 Total cost of receiving $36,000 2. b3. a4. c5. dActivity rates (Questions 2–5):Receiving: $36,000/50,000 = $0.72 per partSetup: $60,000/300 = $200 per setupGrinding: $90,000/18,000 = $5 per MHrInspecting: $45,000/4,500 = $10 per inspection hour6. aOverhead rate = $231,000/20,000 = $11.55 per DLH Direct materials $ 850Direct labor 600Overhead ($11.55 ⨯ 50) 578*Total cost $ 2,028Units ÷100Unit cost $ 20.28*Rounded4–9 Concluded7. bDirect materials $ 850.00Direct labor 600.00Overhead:Setup 200.00 ($200 ⨯ 1)Inspecting 40.00 ($10 ⨯ 4)Grinding 100.00 ($5 ⨯ 20)Receiving 14.40 ($0.72 ⨯ 20) Total costs $ 1,804.40Units ÷100Unit cost $ 18.04**Rounded4–101. Unit-level: Testing products, inserting dies2. Batch-level: Setting up batches, handling wafer lots, purchasingmaterials, receiving materials3. Product-level: Developing test programs, making probe cards,engineering design, paying suppliers4. Facility-level: Providing utilities, providing space4–111. Unit-level activities: MachiningBatch-level activities: Setups and packing Product-level activities: ReceivingFacility-level activities: None2. Pools and drivers:Unit-levelPool 1:Machining $80,000Activity driver: Machine hoursBatch-levelPool 2:Setups $24,000Packing 30,000Total cost $54,000Product-levelPool 3:Receiving $18,000Activity driver: Receiving orders4–11 Concluded3. Pool rates:Pool 1: $80,000/40,000 = $2 per MHrPool 2: $54,000/300 = $180 per setupPool 3: $18,000/600 = $30 per receiving order 4. Overhead assignment:InfantryPool 1: $2 ⨯ 20,000 = $ 40,000Pool 2: $180 ⨯ 200 = 36,000Pool 3: $30 ⨯ 200 = 6,000Total $ 82,000Special forcesPool 1: $2 ⨯ 20,000 = $ 40,000Pool 2: $180 ⨯ 100 = 18,000Pool 3: $30 ⨯ 400 = 12,000Total $ 70,0004–121. Deluxe Percent Regular PercentPrice $900 100% $750 100% Cost 576 64 600 80 Unit gross profit $324 36% $150 20% Total gross profit:($324 ⨯ 100,000) $32,400,000($150 ⨯ 800,000) $120,000,0002. Calculation of unit overhead costs:Deluxe Regular Unit-level:Machining:$200 ⨯ 100,000 $20,000,000$200 ⨯ 300,000 $60,000,000 Batch-level:Setups:$3,000 ⨯ 300 900,000$3,000 ⨯ 200 600,000 Packing:$20 ⨯ 100,000 2,000,000$20 ⨯ 400,000 8,000,000 Product-level:Engineering:$40 ⨯ 50,000 2,000,000$40 ⨯ 100,000 4,000,000 Facility-level:Providing space:$1 ⨯ 200,000 200,000$1 ⨯ 800,000 800,000 Total overhead $ 25,100,000 $ 73,400,000 Units ÷100,000 ÷800,000 Overhead per unit $ 251 $ 91.75Deluxe Percent Regular Percent Price $900 100% $750.00 100%Cost 780* 87*** 574.50** 77***Unit gross profit $120 13%*** $175.50 23%***Total gross profit:($120 ⨯ 100,000) $12,000,000($175.50 ⨯ 800,000) $140,400,000*$529 + $251**$482.75 + $91.75***Rounded3. Using activity-based costing, a much different picture of the deluxe and regu-lar products emerges. The regular model appears to be more profitable. Per-haps it should be emphasized.4–131. JIT Non-JITSales a$12,500,000 $12,500,000Allocation b750,000 750,000a$125 ⨯ 100,000, where $125 = $100 + ($100 ⨯ 0.25), and 100,000 is the average order size times the number of ordersb0.50 ⨯ $1,500,0002. Activity rates:Ordering rate = $880,000/220 = $4,000 per sales orderSelling rate = $320,000/40 = $8,000 per sales callService rate = $300,000/150 = $2,000 per service callJIT Non-JITOrdering costs:$4,000 ⨯ 200 $ 800,000$4,000 ⨯ 20 $ 80,000Selling costs:$8,000 ⨯ 20 160,000$8,000 ⨯ 20 160,000Service costs:$2,000 ⨯ 100 200,000$2,000 ⨯ 50 100,000T otal $ 1,160,000 $ 340,000For the non-JIT customers, the customer costs amount to $750,000/20 = $37,500 per order under the original allocation. Using activity assignments, this drops to $340,000/20 = $17,000 per order, a difference of $20,500 per or-der. For an order of 5,000 units, the order price can be decreased by $4.10 per unit without affecting customer profitability. Overall profitability will decrease, however, unless the price for orders is increased to JIT customers.3. It sounds like the JIT buyers are switching their inventory carrying costs toEmery without any significant benefit to Emery. Emery needs to increase prices to reflect the additional demands on customer-support activities. Fur-thermore, additional price increases may be needed to reflect the increased number of setups, purchases, and so on, that are likely occurring inside the plant. Emery should also immediately initiate discussions with its JIT cus-tomers to begin negotiations for achieving some of the benefits that a JIT supplier should have, such as long-term contracts. The benefits of long-term contracting may offset most or all of the increased costs from the additional demands made on other activities.4–141. Supplier cost:First, calculate the activity rates for assigning costs to suppliers: Inspecting components: $240,000/2,000 = $120 per sampling hourReworking products: $760,500/1,500 = $507 per rework hourWarranty work: $4,800/8,000 = $600 per warranty hourNext, calculate the cost per component by supplier:Supplier cost:Vance Foy Purchase cost:$23.50 ⨯ 400,000 $ 9,400,000$21.50 ⨯ 1,600,000 $ 34,400,000 Inspecting components:$120 ⨯ 40 4,800$120 ⨯ 1,960 235,200 Reworking products:$507 ⨯ 90 45,630$507 ⨯ 1,410 714,870 Warranty work:$600 ⨯ 400 240,000$600 ⨯ 7,600 4,560,000 Total supplier cost $ 9,690,430 $ 39,910,070Units supplied ÷400,000 ÷1,600,000Unit cost $ 24.23* $ 24.94**RoundedThe difference is in favor of Vance; however, when the price concession is con sidered, the cost of Vance is $23.23, which is less than Foy’s component.Lumus should accept the contractual offer made by Vance.4–14 Concluded2. Warranty hours would act as the best driver of the three choices. Using thisdriver, the rate is $1,000,000/8,000 = $125 per warranty hour. The cost as-signed to each component would be:Vance Foy Lost sales:$125 ⨯ 400 $ 50,000$125 ⨯ 7,600 $ 950,000$ 50,000 $ 950,000 U nits supplied ÷ 400,000 ÷1,600,000I ncrease in unit cost $ 0.13* $ 0.59**RoundedPROBLEMS4–151. Product cost assignment:Overhead rates:Patterns: $30,000/15,000 = $2.00 per DLHFinishing: $90,000/30,000 = $3.00 per DLHUnit cost computation:Duffel BagsPatterns:$2.00 ⨯ 0.1 $0.20$2.00 ⨯ 0.2 $0.40Finishing:$3.00 ⨯ 0.2 0.60$3.00 ⨯ 0.4 1.20Total per unit $0.80 $1.602. Cost before addition of duffel bags:$60,000/100,000 = $0.60 per unitThe assignment is accurate because all costs belong to the one product.4–15 Concluded3. Activity-based cost assignment:Stage 1:Pool rate = $120,000/80,000 = $1.50 per transactionStage 2:Overhead applied:Backpacks: $1.50 ⨯ 40,000* = $60,000Duffel bags: $1.50 ⨯ 40,000 = $60,000*80,000 transactions/2 = 40,000 (number of transactions had doubled)Unit cost:Backpacks: $60,000/100,000 = $0.60 per unitDuffel bags: $60,000/25,000 = $2.40 per unit4. This problem allows the student to see what the accounting cost per unitshould be by providing the ability to calculate the cost with and without the duffel bags. With this perspective, it becomes easy to see the benefits of the activity-based approach over those of the functional-based approach. The activity-based approach provides the same cost per unit as the single-product setting. The functional-based approach used transactions to allocate accounting costs to each producing department, and this allocation probably reflects quite well the consumption of accounting costs by each producing department. The problem is the second-stage allocation. Direct labor hours do not capture the consumption pattern of the individual products as they pass through the departments. The distortion occurs, not in using transac-tions to assign accounting costs to departments, but in using direct labor hours to assign these costs to the two products.In a single-product environment, ABC offers no improvement in product cost-ing accuracy. However, even in a single-product environment, it may be poss-ible to increase the accuracy of cost assignments to other cost objects such as customers.4–161. Plantwide rate = $660,000/440,000 = $1.50 per DLHOverhead cost per unit:Model A: $1.50 ⨯ 140,000/30,000 = $7.00Model B: $1.50 ⨯ 300,000/300,000 = $1.502. Departmental rates:Department 1: $420,000/180,000 = $2.33 per MHr*Department 2: $240,000/400,000 = $0.60 per DLHDepartment 1: $420,000/40,000 = $10.50 DLHDepartment 2: $240,000/40,000 = $6.00 per MHrOverhead cost per unit:Model A: [($2.33 ⨯ 10,000) + ($0.60 ⨯ 130,000)]/30,000 = $3.38Model B: [($2.33 ⨯ 170,000) + ($0.60 ⨯ 270,000)]/300,000 = $1.86Overhead cost per unit:Model A: [($10.50 ⨯ 10,000) + ($6.00 ⨯ 10,000)]/30,000 = $5.50Model B: [($10.50 ⨯ 30,000) + ($6.00 ⨯ 30,000)]/300,000 = $1.65*Rounded numbers throughoutA common justification is that of using machine hours for machine-intensivedepartments and labor hours for labor-intensive departments. Using this rea-soning, the first set of departmental rates would be selected (machine hours for Department 1 and direct labor hours for Department 2).3. Calculation of pool rates:Driver Pool RateBatch-level pool:Setup and inspection Product runs $320,000/100 = $3,200 per runUnit-level pool:Machine andmaintenance Machine hours $340,000/220,000 = $1.545 per MHr Note: Inspection hours could have been used as an activity driver instead of production runs.Overhead assignment:Model BBatch-level:Setups and inspection$3,200 ⨯ 40 $ 128,000$3,200 ⨯ 60 $ 192,000Unit-level:Power and maintenance$1.545 ⨯ 20,000 30,900$1.545 ⨯ 200,000 309,000Total overhead $ 158,900 $ 501,000Units produced ÷30,000 ÷ 300,000Overhead per unit $ 5.30 $ 1.674. Using activity-based costs as the standard, we can say that the first set ofdepartmental rates decreased the accuracy of the overhead cost assignment (over the plantwide rate) for both products. The opposite is true for the second set of departmental rates. In fact, the second set is very close to the activity assignments. Apparently, departmental rates can either improve or worsen plantwide assignments. In the first case, D epartment 1’s costs are assigned at a 17:1 ratio which overcosts B and undercosts A in a big way.Yet, this is the most likely set of rates at the departmental level! This raises some doubt about the conventional wisdom regarding departmental rates.4–171. Labor and gasoline are driver tracing.Labor (0.75 ⨯ $120,000) $ 90,000 Time = Resource driverGasoline ($3 ⨯ 6,000 moves) 18,000 Moves = Resource driverDepreciation (2 ⨯ $6,000) 12,000 Direct tracingTotal cost $ 120,0002. Plantwide rate = $600,000/20,000= $30 per DLHUnit cost:DeluxePrime costs $80.00 $160Overhead:$30 ⨯ 10,000/40,000 7.50$30 ⨯ 10,000/20,000 15$87.50 $1753. Pool 1: Maintenance $ 114,000Engineering 120,000Total $ 234,000Maintenance hours ÷4,000Pool rate $ 58.50Note:Engineering hours could also be used as a driver. The activities are grouped together because they have the same process, are both product lev-el, and have the same consumption ratios (0.25, 0.75).Pool 2: Material handling $ 120,000Number of moves ÷6,000Pool rate $ 20Pool 3: Setting up $ 96,000Number of setups ÷80Pool rate $ 1,200Note: Material handling and setups are both batch-level activities but have dif-ferent consumption ratios.Pool 4: Purchasing $ 60,000Receiving 40,000Paying suppliersTotal $ 130,000Orders processed ÷750Pool rate $ 173.33Note:The three activities are all product-level activities and have the same consumption ratios.Pool 5: Providing space $ 20,000Machine hours ÷10,000Pool rate $ 2Note: This is the only facility-level activity.4. Unit cost:Basic Deluxe Prime costs $ 3,200,000 $ 3,200,000Overhead:Pool 1:$58.50 ⨯ 1,000 58,500$58.50 ⨯ 3,000 175,500 Pool 2:$20 ⨯ 2,000 40,000$20 ⨯ 4,000 80,000 Pool 3:$1,200 ⨯ 20 24,000$1,200 ⨯ 60 72,000 Pool 4:$173.33 ⨯ 250 43,333$173.33 ⨯ 500 86,665 Pool 5:$2 ⨯ 5,000 10,000$2 ⨯ 5,000 10,000 Total $ 3,375,833 $ 3,624,165Units produced ÷40,000 ÷20,000Unit cost (ABC) $ 84.40 $ 181.21Unit cost (traditional) $ 87.50 $ 175.00The ABC costs are more accurate (better tracing—closer representation of actual resource consumption). This shows that the basic model was over-costed and the deluxe model undercosted when the plantwide overhead rate was used.1. Unit-level costs ($120 ⨯ 20,000) $ 2,400,000Batch-level costs ($80,000 ⨯ 20) 1,600,000Product-level costs ($80,000 ⨯ 10) 800,000Facility-level ($20 ⨯ 20,000) 400,000Total cost $ 5,200,0002. Unit-level costs ($120 ⨯ 30,000) $ 3,600,000Batch-level costs ($80,000 ⨯ 20) 1,600,000Product-level costs ($80,000 ⨯ 10) 800,000Facility-level costs 400,000Total cost $ 6,400,000The unit-based costs increase because these costs vary with the number of units produced. Because the batches and engineering orders did not change, the batch-level costs and product-level costs remain the same, behaving as fixed costs with respect to the unit-based driver. The facility-level costs are fixed costs and do not vary with any driver.3. Unit-level costs ($120 ⨯ 30,000) $ 3,600,000Batch-level costs ($80,000 ⨯ 30) 2,400,000Product-level costs ($80,000 ⨯ 12) 960,000Facility-level costs 400,000Total cost $ 7,360,000Batch-level costs increase as the number of batches changes, and the costs of engineering support change as the number of orders change. Thus, batches and orders increased, increasing the total cost of the model.4. Classifying costs by category allows their behavior to be better understood.This, in turn, creates the ability to better manage costs and make decisions.1. The total cost of care is $1,950,000 plus a $50,000 share of the cost of super-vision [(25/150) ⨯ $300,000]. The cost of supervision is computed as follows: Salary of supervisor (direct) $ 70,000Salary of secretary (direct) 22,000Capital costs (direct) 100,000Assistants (3 ⨯ 0.75 ⨯ $48,000) 108,000Total $ 300,000Thus, the cost per patient day is computed as follows:$2,000,000/10,000 = $200 per patient day(The total cost of care divided by patient days.) Notice that every maternity patient—regardless of type—would pay the daily rate of $200.2. First, the cost of the secondary activity (supervision) must be assigned to theprimary activities (various nursing care activities) that consume it (the driver is the number of nurses):Maternity nursing care assignment:(25/150) ⨯ $300,000 = $50,000Thus, the total cost of nursing care is $950,000 + $50,000 = $1,000,000.Next, calculate the activity rates for the two primary activities:Occupancy and feeding: $1,000,000/10,000 = $100 per patient dayNursing care: $1,000,000/50,000 = $20 per nursing hour。
管理会计英文版答案
CHAPTER 1Managerial Accounting, the Business Organization, andProfessional Ethics1-A1 Solution:Information is often useful for more than one function, so the following classifications for each activity are not definitive but serve as a starting point for discussion:1. Scorekeeping. A depreciation schedule is used in preparing financialstatements to report the results of activities.2. Problem solving. Helps a manager assess the impact of a purchase decision.3. Scorekeeping. Reports on the results of an operation. Could also beattention directing if scrap is an area that might require management attention.4. Attention directing. Focuses attention on areas that need attention.5. Attention directing. Helps managers learn about the information contained ina performance report.6. Scorekeeping. The statement reports what has happened. Could also beattention directing if the report highlights a problem or issue.7. Problem solving. Assuming the cost comparison is to help the managerdecide between two alternatives, this is problem solving.8. Attention directing. Variances point out areas where results differ fromexpectations. Interpreting them directs attention to possible causes of thedifferences.9. Problem solving. Aids a decision about where to make parts.10. Attention directing and problem solving. Budgeting involves makingdecisions about planned activities -- hence, aiding problem solving. Budgets also direct attention to areas of opportunity or concern --hence, directingattention. Reporting against the budget also has a scorekeeping dimension.1-A2 Solution:1. Budgeted Actual DeviationsAmounts Amounts or Variances Room rental $ 140 $ 140 $ 0Food 700 865 165UEntertainment 600 600 0Decorations 220 260 40UTotal $1,660 $1,865 $205U 2. Because of the management by exception rule, room rental and entertainmentrequire no explanation. The actual expenditure for food exceeded the budget by $165. Of this $165, $150 is explained by attendance of 15 persons morethan budgeted (at a budget of $10 per person for food) and $15 is explained by expenditures above $10 per person.Actual expenditures for decorations were $40 more than the budget. Thedecorations committee should be asked for an explanation of the excessexpenditures.1-29 Solution:1. Controller. Financial statements are generally produced by the controller'sdepartment.2. Controller. Advising managers aids operating decisions.3. Controller. Advice on cost analysis aids managers' operating decisions.4. Treasurer. Analysts affect the company's ability to raise capital, which is theresponsibility of the treasurer.5. Treasurer. Financing the business is the responsibility of the treasurer.6. Controller. Tax returns are part of the accounting process overseen by thecontroller.7. Treasurer. Insurance, as with other risk management activities, is usually theresponsibility of the treasurer.8. Treasurer. Allowing credit is a financial decision.CHAPTER 2INTRODUCTION TO COST BEHAVIOR AND COST-VOLUME RELATIONSHIPS2-A3 Solution:The following format is only one of many ways to present a solution. This situation is reallya demonstration of "sensitivity analysis," whereby a basic solution is tested to see how much it is affected by changes in critical factors. Much discussion can ensue, particularly about the finalthree changes.The basic contribution margin per revenue mile is $1.50 - $1.30 = $.20(1) (2) (3) (4) (5)(1)×(2) (3)-(4)Revenue Cont ri buti on To talMi l es Margi n Pe r Cont ri buti on Fi xed NetSol d Revenue Mi l e Margi n Expen se s In co me 1. 800,000$.20$160,000$120,000$ 40,0002. (a) 800,000.35280,000120,000160,000(b) 880,000.20176,000120,00056,000(c) 800,000.0756,000120,000(64,000)(d) 800,000.20160,000132,00028,000(e) 840,000.17142,800120,00022,800(f) 720,000.25180,000120,00060,000(g) 840,000.20168,000132,00036,0002-B2 Solution:1. $2,300 ÷ ($30 - $10) = 115 child-days or 115 × $30 = $3,450 revenue dollars.2. 176 × ($30 - $10) - $2,300 = $3,520 - $2,300 = $1,2203. a. 198 × ($30 - $10) - $2,300 = $3,960 - $2,300 = $1,660 or (22 × $20) + $1,220 = $440 + $1,220 = $1,660 b. 176 × ($30 - $12) - $2,300 = $3,168 - $2,300 = $868 or $1,220 - ($2 × 176) = $868 c. $1,220 - $220 = $1,000d. [(9.5 × 22) × ($30 - $10)] - ($2,300 + $300) = $4,180 - $2,600 = $1,580e.[(7 × 22) × ($33 - $10)] - $2,300 = $3,542 - $2,300 = $1,2422-B 3 So lu tio n :1.$16)($20$5,000- = $4$5,000= 1,250 units2. Contribution margin ratio:($40,000)$30,000)($40,000- = 25%$8,000 ÷ 25% = $32,0003.$14)($30$7,000)($33,000-+ = $16$40,000 = 2,500 units4. ($50,000 - $20,000)(110%) = $33,000 contribution margin;$33,000 - $20,000 = $13,0005. New contribution margin:$40 - ($30 - 20% of $30)= $40 - ($30 - $6) = $16;New fixed expenses: $80,000 × 110% = $88,000;$16$20,000)($88,000+ = $16$108,000 = 6,750 units2-27 Soluti on:2-38Sol uti on:1. 100% Full 50% FullRoom revenue @ $50 $1,825,000 a$ 912,500 bVariable costs @ $10 365,000 182,500Contribution margin 1,460,000 730,000Fixed costs 1,200,000 1,200,000Net income (loss) $ 260,000 $ (470,000)a 100 × 365 = 36,500 rooms per year36,500 × $50 = $1,825,000b50% of $1,825,000 = $912,5002. Let N = number of rooms$50N -$10N - $1,200,000 = 0N = $1,200,000 ÷ $40 = 30,000 rooms Percentage occupancy = 30,000 ÷ 36,500 = 82.2%2-40 Solution:1. Let R = pints of raspberries and 2R = pints of strawberriessales - variable expenses - fixed expenses = zero net income$1.10(2R) + $1.45(R) - $.75(2R) - $.95(R) - $15,600 = 0$2.20R + $1.45R - $1.50R - $.95R -$15,600 = 0$1.2R - $15,600 = 0 R = 13,000 pints of raspberries2R = 26,000 pints of strawberries2. Let S = pints of strawberries($1.10 - $.75) × S - $15,600 = 0.35S - $15,600 = 0S = 44,571 pints of strawberries3. Let R = pints of raspberries($1.45 - $.95) × R - $15,600 = 0$.50R - $15,600 = 0R = 31,200 pints of raspberries2-42 Solution:Several variations of the following general approach are possible:Sales - Variable expenses - Fixed expenses = Target after-tax net income 1 - tax rateS - .75S - $440,000 =.3)-(1$84,000.25S = $440,000 + $120,000 3-A1 Solution:Some of these answers are controversial, and reasonable cases can be built for alternative classifications. Class discussion of these answers should lead to worthwhile disagreements about anticipated cost behavior with regard to alternative cost drivers.1. (b) Discretionary fixed cost.2. (e) Step cost.3. (a) Purely variable cost with respect to revenue.4. (a) Purely variable cost with respect to miles flown.5. (d) Mixed cost with respect to miles driven.6. (c) Committed fixed cost.7. (b) Discretionary fixed cost.8. (c) Committed fixed cost.9. (a) Purely variable cost with respect to cases of Coca-Cola.10. (b) Discretionary fixed cost.11. (b) Discretionary fixed cost.3-A2 Solution:1. Support costs based on 60% of the cost of materials:Sign A Sign B Direct materials cost $400 $200 Support cost (60% of m ater ial s c o st) $240 $120 Support costs based on $50 per power tool operation:Sign A Sign B Power tool operations 3 6 Support cost $150 $300 2. If the activity analysis is reliable, by using the current method, Evergreen Signs is predicting too much cost for signs that use few power tool operations and is predicting too little cost for signs that use many power tool operations. As a result the company could be losing jobs that require few power tool operations because its bids are too high -- it could afford to bid less on these jobs. Conversely, the company could be getting too many jobs that require many power tool operations, because its bids are too low -- given what the "true" costs will be, the company cannot afford these jobs at those prices. Either way, the sign business could be more profitable if the owner better understood and used activity analysis. Evergreen Signs would be advised to adopt the activity-analysis recommendation, but also to closely monitor costs to see if the activity-analysis predictions of support costs are accurate.3-B2 Solution:Board Z15 Board Q52Mark-up method:Material cost $40 $60Support costs (100%) $40 $60Activity analysis method:Manual operations 15 7Support costs (@$4) $60 $28The support costs are different because different cost behavior is assumed by the two methods. If the activity analyses are reliable, then boards with few manual operations are overcosted with the markup method, and boards with many manual operatio ns are undercosted with the markup method.3-B3 Solution:Variable cost per machine hour =Change in Repair Cost Change in Machine Hours= (P260,000,000 - P200,000,000) (12,000 - 8,000)= P15,000 per machine hourFixed cost per month = total cost - variable cost= P260,000,000 - P15,000 x 12,000= P260,000,000 - P180,000,000= P 80,000,000 per monthor = P200,000,000 - P15,000 x 8,000= P200,000,000 - P120,000,000= P 80,000,000 per month3-32 Solution:1. Machining labor: G, number of units completed or labor hours2. Raw material: B, units produced; could also be D if the company’s purchases do not affect the price of the raw material.3. Annual wage: C or E (depending on work levels), labor hours4. Water bill: H, gallons used5. Quantity discounts: A, amount purchased6. Depreciation: E, capacity7. Sheet steel: D, number of implements of various types8. Salaries: F, number of solicitors9. Natural gas bill: C, energy usage3-34 Solution:1. 2001 2002Sales revenues $57 $116Less: Operating income (loss) (19) 18Operating expenses $76 $ 982. Change in operating expenses ÷ Change in revenues = Variable cost percentage($98 - $76) ÷ ($116 - $57) = $22 ÷ $59 = .37 or 37%Fixed cost = Total cost – Variable cost= $76 - .37 × $57= $55or= $98 - .37 × $116= $55Cost function = $55 + .37 × Sales revenue3. Because fixed costs to not change, the entire additional total contributionmargin is added to operating income. The $57 sales revenue in 2001generated a total contribution margin of $57 × (1 - .37) = $36, which was $19 short of covering the $55 of fixed cost. But the additional $59 of salesrevenue in 2002 generated a total contribution margin of $59 × (1 - .37) = $37 that could go directly to operating income because there was no increase infixed costs. It wiped out the $19 operating loss and left $18 of operatingincome.3-35 Solution:1. Fuel costs: $.40 × 16,000 miles per month = $6,400 per month.2. Equipment rental: $5,000 × 7 × 3 = $105,000 for seven pieces of equipment for three months3. Ambulance and EMT cost: $1,200 × (2,400/200) = $1,200 × 12 = $14,4004. Purchasing: $7,500 + $5 × 4,000 = $27,500 for the month.3-36 Solution:There may be some disagreement about these classifications, but reasons for alternative classifications should be explored.Cost Discretionary Committed Advertising $22,000Depreciation $ 47,000 Company health insurance 21,000 Management salaries 85,000 Payment of long-term debt 50,000 Property tax 32,000 Grounds maintenance 9,000Office remodeling 21,000Research and development 46,000Totals $98,000 $235,000。
(完整word版)国际财务管理课后习题答案chapter10
CHAPTER 10 MANAGEMENT OF TRANSLATION EXPOSURESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Explain the difference in the translation process between the monetary/nonmonetary method and the temporal method.Answer: Under the monetary/nonmonetary method, all monetary balance sheet accounts of a foreign subsidiary are translated at the current exchange rate. Other balance sheet accounts are translated at the historical rate exchange rate in effect when the account was first recorded. Under the temporal method, monetary accounts are translated at the current exchange rate. Other balance sheet accounts are also translated at the current rate, if they are carried on the books at current value. If they are carried at historical value, they are translated at the rate in effect on the date the item was put on the books. Since fixed assets and inventory are usually carried at historical costs, the temporal method and the monetary/nonmonetary method will typically provide the same translation.2. How are translation gains and losses handled differently according to the current rate method in comparison to the other three methods, that is, the current/noncurrent method, the monetary/nonmonetary method, and the temporal method?Answer: Under the current rate method, translation gains and losses are handled only as an adjustment to net worth through an equity account named the “cumulative translation adjustment” account. Nothing passes through the income statement. The other three translation methods pass foreign exchange gains or losses through the income statement before they enter on to the balance sheet through the accumulated retained earnings account.3. Identify some instances under FASB 52 when a foreign enti ty’s functional currency would be the same as the parent firm’s currency.Answer: Three examples under FASB 52, where the foreign entity’s functional currency will be the same as the parent firm’s currency, are: i) the foreign entity’s cash flows directly affect the parent’s cash flows and are readily available for remittance to the parent firm; ii) the sales prices for the foreign entity’s products are responsive on a short-term basis to exchange rate changes, where sales prices are determined through wo rldwide competition; and, iii) the sales market is primarily located in the parent’s country or sales contracts are denominated in the parent’s currency.4. Describe the remeasurement and translation process under FASB 52 of a wholly owned affiliate that keeps its books in the local currency of the country in which it operates, which is different than its functional currency.Answer: For a foreign entity that keeps its books in its local currency, which is different from its functional currency, the translation process according to FASB 52 is to: first, remeasure the financial reports from the local currency into the functional currency using the temporal method of translation, and second, translate from the functional currency into the reporting currency using the current rate method of translation.5. It is, generally, not possible to completely eliminate both translation exposure and transaction exposure. In some cases, the elimination of one exposure will also eliminate the other. But in other cases, the elimination of one exposure actually creates the other. Discuss which exposure might be viewed as the most important to effectively manage, if a conflict between controlling both arises. Also, discuss and critique the common methods for controlling translation exposure.Answer: Since it is, generally, not possible to completely eliminate both transaction and translation exposure, we recommend that transaction exposure be given first priority since it involves real cash flows. The translation process, on-the-other hand, has no direct effect on reporting currency cash flows, and will only have a realizable effect on net investment upon the sale or liquidation of the assets.There are two common methods for controlling translation exposure: a balance sheet hedge and a derivatives hedge. The balance sheet hedge involves equating the amount of exposed assets in an exposure currency with the exposed liabilities in that currency, so the net exposure is zero. Thus when an exposure currency exchange rate changes versus the reporting currency, the change in assets will offset the change in liabilities. To create a balance sheet hedge, once transaction exposure has been controlled, often means creating new transaction exposure. This is not wise since real cash flow losses can result. A derivatives hedge is not really a hedge, but rather a speculative position, since the size of the “hedge” is based on the future expected spot rate of exchange for the exposure currency with the reporting currency. If the actual spot rate differs from the expected rate, the “hedge” may result in the loss of real cash flows.PROBLEMS1. Assume that FASB 8 is still in effect instead of FASB 52. Construct a translation exposure report for Centralia Corporation and its affiliates that is the counterpart to Exhibit 10.7 in the text. Centralia and its affiliates carry inventory and fixed assets on the books at historical values.Solution: The following table provides a translation exposure report for Centralia Corporation and its affiliates under FASB 8, which is essentially the temporal method of translation. The difference between the new report and Exhibit 10.7 is that nonmonetary accounts such as inventory and fixed assets are translated at the historical exchange rate if they are carried at historical costs. Thus, these accounts will not change values when exchange rates change and they do not create translation exposure.Examination of the table indicates that under FASB 8 there is negative net exposure for the Mexican peso and the euro, whereas under FASB 52 the net exposure for these currencies is positive. There is no change in net exposure for the Canadian dollar and the Swiss franc. Consequently, if the euro depreciates against the dollar from €1.1000/$1.00 to €1.1786/$1.00, as the text example assumed, exposed assets will now fall in value by a smaller amount than exposed liabilities, instead of vice versa. The associated reporting currency imbalance will be $239,415, calculated as follows:Reporting Currency Imbalance=-€3,949,0000€1.1786/$1.00--€3,949,0000€1.1000/$1.00=$239,415.Translation Exposure Report under FASB 8 for Centralia Corporation and its Mexican and Spanish Affiliates, December 31, 2005 (in 000 Currency Units)Canadian Dollar MexicanPeso EuroSwissFrancAssetsCash CD200 Ps 6,000 € 825SF 0 Accounts receivable 0 9,000 1,045 0Inventory 0 0 0 0Net fixed assets 0 0 0 0Exposed assets CD200 Ps15,000 € 1,870SF 0LiabilitiesAccounts payable CD 0 Ps 7,000 € 1,364SF 0Notes payable 0 17,000 935 1,400Long-term debt 0 27,000 3,520 0Exposed liabilities CD 0 Ps51,000 € 5,819SF1,400Net exposure CD200 (Ps36,000) (€3,949)(SF1,400)2. Assume that FASB 8 is still in effect instead of FASB 52. Construct a consolidated balance sheet for Centralia Corporation and its affiliates after a depreciation of the euro from €1.1000/$1.00 to €1.1786/$1.00 that is the counterpart to Exhibit 10.8 in the text. Centralia and its affiliates c arry inventory and fixed assets on the books at historical values.Solution: This problem is the sequel to Problem 1. The solution to Problem 1 showed that if the euro depreciated there would be a reporting currency imbalance of $239,415. Under FASB 8 this is carried through the income statement as a foreign exchange gain to the retained earnings on the balance sheet. The following table shows that consolidated retained earnings increased to $4,190,000 from $3,950,000 in Exhibit 10.8. This is an increase of $240,000, which is the same as the reporting currency imbalance after accounting for rounding error.Consolidated Balance Sheet under FASB 8 for Centralia Corporation and its Mexican and Spanisha This includes CD200,000 the parent firm has in a Canadian bank, carried as $150,000. CD200,000/(CD1.3333/$1.00) = $150,000.b$1,750,000 - $300,000 (= Ps3,000,000/(Ps10.00/$1.00)) intracompany loan = $1,450,000.c,d Investment in affiliates cancels with the net worth of the affiliates in the consolidation.e The Spanish affiliate owes a Swiss bank SF375,000 (÷ SF1.2727/€1.00 = €294,649). This is carried on the books,after the exchange rate change, as part of €1,229,649 = €294,649 + €935,000. €1,229,649/(€1.1786/$1.00) = $1,043,313.3. In Example 10.2, a f orward contract was used to establish a derivatives “hedge” to protect Centralia from a translation loss if the euro depreciated from €1.1000/$1.00 to €1.1786/$1.00. Assume that an over-the-counter put option on the euro with a strike price of €1.1393/$1.00 (or $0.8777/€1.00) can be purchased for $0.0088 per euro. Show how the potential translation loss can be “hedged” with an option contract.Solution: As in example 10.2, if the potential translation loss is $110,704, the equivalent amount in functiona l currency that needs to be hedged is €3,782,468. If in fact the euro does depreciate to €1.1786/$1.00 ($0.8485/€1.00), €3,782,468 can be purchased in the spot market for $3,209,289. At a striking price of €1.1393/$1.00, the €3,782,468 can be sold throu gh the put for $3,319,993, yielding a gross profit of $110,704. The put option cost $33,286 (= €3,782,468 x $0.0088). Thus, at an exchange rate of €1.1786/$1.00, the put option will effectively hedge $110,704 - $33,286 = $77,418 of the potential translat ion loss. At terminal exchange rates of €1.1393/$1.00 to €1.1786/$1.00, the put option hedge will be less effective. An option contract does not have to be exercised if doing so is disadvantageous to the option owner. Therefore, the put will not be exer cised at exchange rates of less than €1.1393/$1.00 (more than $0.8777/€1.00), in which case the “hedge” will lose the $33,286 cost of the option.MINI CASE: SUNDANCE SPORTING GOODS, INC.Sundance Sporting Goods, Inc., is a U.S. manufacturer of high-quality sporting goods--principally golf, tennis and other racquet equipment, and also lawn sports, such as croquet and badminton-- with administrative offices and manufacturing facilities in Chicago, Illinois. Sundance has two wholly owned manufacturing affiliates, one in Mexico and the other in Canada. The Mexican affiliate is located in Mexico City and services all of Latin America. The Canadian affiliate is in Toronto and serves only Canada. Each affiliate keeps its books in its local currency, which is also the functional currency for the affiliate. The current exchange rates are: $1.00 = CD1.25 = Ps3.30 = A1.00 = ¥105 = W800. The nonconsolidated balance sheets for Sundance and its two affiliates appear in the accompanying table.Nonconsolidated Balance Sheet for Sundance Sporting Goods, Inc. and Its Mexican and Canadiana The parent firm is owed Ps1,320,000 by the Mexican affiliate. This sum is included in the parent’s accounts receivable as $400,000, translated at Ps3.30/$1.00. The remainder of the parent’s (Mexican affiliate’s) a ccounts receivable (payable) is denominated in dollars (pesos).b The Mexican affiliate is wholly owned by the parent firm. It is carried on the parent firm’s books at $2,400,000. This represents the sum of the common stock (Ps4,500,000) and retained earnings (Ps3,420,000) on the Mexican affiliate’s books, translated at Ps3.30/$1.00.c The Canadian affiliate is wholly owned by the parent firm. It is carried on the parent firm’s books at $3,600,000. This represents the sum of the common stock (CD2,900,000) and the retained earnings (CD1,600,000) on the Canadian affiliate’s books, translated at CD1.25/$1.00.d The parent firm has outstanding notes payable of ¥126,000,000 due a Japanese bank. This sum is carried on th e parent firm’s books as $1,200,000, translated at ¥105/$1.00. Other notes payable are denominated in U.S. dollars.e The Mexican affiliate has sold on account A120,000 of merchandise to an Argentine import house. This sum is carried on the Mexican affi liate’s books as Ps396,000, translated at A1.00/Ps3.30. Other accounts receivable are denominated in Mexican pesos.f The Canadian affiliate has sold on account W192,000,000 of merchandise to a Korean importer. This sum is carried on the Canadian affilia te’s books as CD300,000, translated at W800/CD1.25. Other accounts receivable are denominated in Canadian dollars.You joined the International Treasury division of Sundance six months ago after spending the last two years receiving your MBA degree. The corporate treasurer has asked you to prepare a report analyzing all aspects of the translation exposure faced by Sundance as a MNC. She has also asked you to address in your analysis the relationship between the firm’s translation exposure and its transa ction exposure. After performing a forecast of future spot rates of exchange, you decide that you must do the following before any sensible report can be written.a. Using the current exchange rates and the nonconsolidated balance sheets for Sundance and its affiliates, prepare a consolidated balance sheet for the MNC according to FASB 52.b. i. Prepare a translation exposure report for Sundance Sporting Goods, Inc., and its two affiliates.ii. Using the translation exposure report you have prepared, determine if any reporting currency imbalance will result from a change in exchange rates to which the firm has currency exposure. Your forecast is that exchange rates will change from $1.00 = CD1.25 = Ps3.30 = A1.00 = ¥105 = W800 to $1.00 = CD1.30 = Ps3.30 = A1.03 = ¥105 = W800.c. Prepare a second consolidated balance sheet for the MNC using the exchange rates you expect in the future. Determine how any reporting currency imbalance will affect the new consolidated balance sheet for the MNC.d. i. Prepare a transaction exposure report for Sundance and its affiliates. Determine if any transaction exposures are also translation exposures.ii. Investigate what Sundance and its affiliates can do to control its transaction and translation exposures. Determine if any of the translation exposure should be hedged.Suggested Solution to Sundance Sporting Goods, Inc.Note to Instructor: It is not necessary to assign the entire case problem. Parts a. and b.i. can be used as self-contained problems, respectively, on basic balance sheet consolidation and the preparation of a translation exposure report.a. Below is the consolidated balance sheet for the MNC prepared according to the current rate method prescribed by FASB 52. Note that the balance sheet balances. That is, Total Assets and Total Liabilities and Net Worth equal one another. Thus, the assumption is that the current exchange rates are the same as when the affiliates were established. This assumption is relaxed in part c.Consolidated Balance Sheet for Sundance Sporting Goods, Inc. its Mexican and Canadian Affiliates, December 31, 2005: Pre-Exchange Rate Change (in 000 Dollars)Sundance, Inc. Mexican Canadian Consolidateda$2,500,000 - $400,000 (= Ps1,320,000/(Ps3.30/$1.00)) intracompany loan = $2,100,000.b,c The investment in the affiliates cancels with the net worth of the affiliates in the consolidation.d The parent owes a Japanese bank ¥126,000,000. This is carried on the books as $1,200,000 (=¥126,000,000/(¥105/$1.00)).e The Mexican affiliate has sold on account A120,000 of merchandise to an Argentine import house. This is carried on the Mexican affiliate’s books as Ps396,000 (= A120,000 x Ps3.30/A1.00).f The Canadian affiliate has sold on account W192,000,000 of merchandise to a Korean importer. This is carried on the Canadian affiliate’s books as CD300,000 (= W192,000,000/(W800/CD1.25)).b. i. Below is presented the translation exposure report for the Sundance MNC. Note, from the report that there is net positive exposure in the Mexican peso, Canadian dollar, Argentine austral and Korean won. If any of these exposure currencies appreciates (depreciates) against the U.S. dollar, exposed assets denominated in these currencies will increase (fall) in translated value by a greater amount than the exposed liabilities denominated in these currencies. There is negative net exposure in the Japanese yen. If the yen appreciates (depreciates) against the U.S. dollar, exposed assets denominated in the yen will increase (fall) in translated value by smaller amount than the exposed liabilities denominated in the yen.Translation Exposure Report for Sundance Sporting Goods, Inc. and its Mexican and Canadian Affiliates, December 31, 2005 (in 000 Currency Units)b. ii. The problem assumes that Canadian dollar depreciates from CD1.25/$1.00 to CD1.30/$1.00 and that the Argentine austral depreciates from A1.00/$1.00 to A1.03/$1.00. To determine the reporting currency imbalance in translated value caused by these exchange rate changes, we can use the following formula:Net Exposure Currency i S(i/reporting)-Net Exposure Currency i S(i/reporting)new old = Reporting Currency Imbalance.From the translation exposure report we can determine that the depreciation in the Canadian dollar will cause aCD4,200,000 CD1.30/$1.00-CD4,200,000CD1.25/$1.00= -$129,231reporting currency imbalance.Similarly, the depreciation in the Argentine austral will cause aA120,000 A1.03/$1.00-A120,000A1.00/$1.00= -$3,495reporting currency imbalance.In total, the depreciation of the Canadian dollar and the Argentine austral will cause a reporting currency imbalance in translated value equal to -$129,231 -$3,495= -$132,726.c. The new consolidated balance sheet for Sundance MNC after the depreciation of the Canadian dollar and the Argentine austral is presented below. Note that in order for the new consolidated balance sheet to balance after the exchange rate change, it is necessary to have a cumulative translation adjustment account balance of -$133 thousand, which is the amount of the reporting currency imbalance determined in part b. ii (rounded to the nearest thousand).Consolidated Balance Sheet for Sundance Sporting Goods, Inc. its Mexican and Canadian Affiliates, December 31, 2005: Post-Exchange Rate Change (in 000 Dollars)a$2,500,000 - $400,000 (= Ps1,320,000/(Ps3.30/$1.00)) intracompany loan = $2,100,000.b,c The investment in the affiliates cancels with the net worth of the affiliates in the consolidation.d The parent owes a Japanese bank ¥126,000,000. This is carried on the books as $1,200,000 (=¥126,000,000/(¥105/$1.00)).e The Mexican affiliate has sold on account A120,000 of merchandise to an Argentine import house. This is carried on the Mexican affiliate’s books as Ps384,466 (= A120,000 x Ps3.30/A1.03).f The Canadian affiliate has sold on account W192,000,000 of merchandise to a Korean importer. This is carried on the Canadian affiliate’s books as CD312,000 (=W192,000,000/(W800/CD1.30)).d. i. The transaction exposure report for Sundance, Inc. and its two affiliates is presented below. The report indicates that the Ps1,320,000 accounts receivable due from the Mexican affiliate is not also a translation exposure because this is netted out in the consolidation. However, the ¥126,000,000 notes payable of the parent is also a translation exposure. Additionally, the A120,000 accounts receivable of the Mexican affiliate and the W192,000,000 accounts receivable of the Canadian affiliate are both translation exposures.Transaction Exposure Report for Sundance Sporting Goods, Inc. andits Mexican and Canadian Affiliates, December 31, 2005d. ii. Since transaction exposure may potentially result in real cash flow losses while translation exposure does not have an immediate direct effect on operating cash flows, we will first address the transaction exposure that confronts Sundance and its affiliates. The analysis assumes the depreciation in the Canadian dollar and the Argentine austral have already taken place.The parent firm can pay off the ¥126,000,000 loan from the Japanese bank using funds from the cash account and money from accounts receivable that it will collect. Additionally, the parent firm can collect the accounts receivable of Ps1,320,000 from its Mexican affiliate that is carried on the books as $400,000. In turn, the Mexican affiliate can collect the A120,000 accounts receivable from the Argentine importer, valued at Ps384,466 after the depreciation in the austral, to guard against further depreciation and to use to partially pay off the peso liability to the parent. The Canadian affiliate can eliminate its transaction exposure by collecting the W192,000,000 accounts receivable as soon as possible, which is currently valued at CD312,000.The elimination of these transaction exposures will affect the translation exposure of Sundance MNC. A revised translation exposure report follows.Revised Translation Exposure Report for Sundance Sporting Goods, Inc. and its Mexican and Canadian Affiliates, December 31, 2005 (in 000 Currency Units)Note from the revised translation exposure report that the elimination of the transaction exposure will also eliminate the translation exposure in the Japanese yen, Argentine austral and the Korean won. Moreover, the net translation exposure in the Mexican peso has been reduced. But the net translation exposure in the Canadian dollar has increased as a result of the Canadian affiliate’s collection of the won receivable.The remaining translation exposure can be hedged using a balance sheet hedge or a derivatives hedge. Use of a balance sheet hedge is likely to create new transaction exposure, however. Use of a derivatives hedge is actually speculative, and not a real hedge, since the size of the “hedge” is based on one’s expectation as to the future spot exchange rate. An incorrect estimate will result in the “hedge” losing money for the MNC.。
管理会计(英文版)课后习题答案(高等教育出版社)chapter 19
管理会计（高等教育出版社）于增彪（清华大学）改编余绪缨（厦门大学）审校CHAPTER 19INVENTORY MANAGEMENTQUESTIONS FOR WRITING AND DISCUSSION1.Ordering costs are the costs of placing andreceiving an order. Examples include clerical costs, documents, insurance, and unloading.2.Setup costs are the costs of preparingequipment and facilities so that they can be used for producing a product or component.Examples include wages of idled production workers, lost income, and the costs of test runs.3.Carrying costs are the costs of carrying in-ventory. Examples include insurance, taxes, handling costs, and the opportunity cost of capital tied up in inventory.4.Stockout costs are the costs of insufficientinventory (e.g., lost sales and interrupted production).5.As ordering costs decrease, fewer and larg-er orders must be placed. This, in turn, in-creases the units in inventory and, thus, in-creases carrying costs.6.Reasons for carrying inventory include thefollowing: (a) to balance setup and carrying costs; (b) to satisfy customer demand; (c) to avoid shutting down manufacturing facilities;(d) to take advantage of discounts; and (e)to hedge against future price increases.7.The economic order quantity is the amountthat should be ordered so as to minimize the sum of ordering and carrying costs.8.Reorder point = 3 12 = 36 units; Safetystock = 3(15 – 12) = 9 units9.Safety stock is simply the difference be-tween maximum demand and average de-mand, multiplied by the lead time. By reor-dering whenever the inventory level hits thesafety stock point, a company is ensured ofalways having sufficient inventory on hand tomeet demand.10.JIT minimizes carrying costs by driving in-ventories to insignificant levels. Orderingcosts are minimized by entering into long-term contracts with suppliers (or driving se-tup times to zero).11.JIT manufacturing is a demand-pull ap-proach to manufacturing. It differs from tradi-tional manufacturing by significantly reducingreliance on inventories, forming manufactur-ing cells, using interdisciplinary labor, decen-tralizing services, and adopting a philosophyof total quality control.12.Manufacturing cells are collections of ma-chines and labor dedicated to the productionof a single product or subassembly. Eachcell is capable of performing a variety of op-erations. This differs from the departmentalorganization where a collection of the samemachines is used to perform the same oper-ation on multiple products.13.By forming manufacturing cells that arededicated to a single product, all costs asso-ciated with the cell are traceable to the prod-uct. Machinery and services that formerlybelonged to several products now belongonly to a single product. For example, de-preciation, material handling, and mainten-ance become direct product costs.14.JIT hedges against future price increasesand obtains lower input prices (better usuallythan quantity discounts) by the use of long-term contractual relationships with suppliers.Suppliers are willing to give these breaks sothat they can reduce the uncertainty in thedemand for their products.15.EDI, or electronic data interchange, allowssuppliers to have access to a buyer’s dat a-base. Information on the buyer’s database isused to determine when supplies should bedelivered. When supplies arrive, their receiptis noted electronically, and payment is in-itiated. No paperwork is involved. Conti-nuous replenishment is where suppliers aregiven responsibility to replenish the buyer’sinventory stock. EDI facilitates this by provid-ing information (electronically) needed by thesupplier to make replenishment decisions. 16.Shutdowns in a JIT environment are avoidedby practicing total preventive maintenanceand total quality control and by developingclose relationships with suppliers to ensureon-time delivery of materials. Internally, aKanban system is used to ensure the timelyflow of materials and components.17.The Kanban system is used to ensure thatparts or materials are available whenneeded (just in time). The flow of materials iscontrolled through the use of markers orcards that signal production of the necessaryquantities at the necessary time.18.Constraints represent limited resources ordemand. Internal constraints are limiting fac-tors found within the firm. External con-straints are limiting factors imposed on thefirm from external sources.19.Loose constraints are those where the prod-uct mix chosen does not consume all theavailable resources. A binding constraint isone where the product mix uses all the li-mited resource.20.Following are three measures of organiza-tional performance used by the theory ofconstraints: throughput—the rate at whichan organization generates money; invento-ry—the money an organization spends inturning materials into throughput; and oper-ating expenses—the money the organiza-tion spends in turning inventories intothroughput. The objective is to maximizethroughput and minimize inventory and op-erating expenses.21.Lower inventories mean that a companymust pay attention to higher quality—it can-not afford to have production go down be-cause of defective parts or products. It alsomeans that improvements can reach thecustomer sooner. Lower inventories meanless space, less overtime, less equipment—in short, lower costs of production and, thus,lower prices are possible. Lower inventoriesalso mean (usually) shorter lead times andbetter ability then to respond to customer re-quests.22.Following are the five steps that TOC usesto improve organizational performance: (1)identify constraints, (2) exploit binding con-straints, (3) subordinate everything else todecisions made in Step 2, (4) elevate bind-ing constraints, and (5) repeat process.23.The drum is the binding constraint that setsthe production rate in the factory. The ropesimply means that the release of materials tothe first process is tied to the rate of thedrummer constraint. The buffer is an amountof inventory placed in front of the drummerprocess to protect throughput.EXERCISES19–11. Annual ordering cost = PD/Q= $500 ⨯ 96,000/6,000= $8,0002. Annual carrying cost = CQ/2= $6 ⨯ 6,000/2= $18,0003. Cost of current inventory policy = Ordering cost + Carrying cost= $8,000 + $18,000= $26,00019–21. EOQ = 2PD/C= 96,000)/6500⨯(2⨯= 16,000,000= 4,0002. Ordering cost = PD/Q= $500 ⨯ 96,000/4,000= $12,000Carrying cost = CQ/2= $6 ⨯ 4,000/2= $12,000Total cost = $6,000 + $6,000= $24,0003. Savings = $26,000 – $24,000 = $2,0001. EOQ = 2PD/C= /0.10⨯(2⨯1,440,000)45= 0001,296,000,= 36,0002. Carrying cost = CQ/2= $0.10 ⨯ 36,000/2= $1,800Ordering cost = PD/Q= $45 ⨯ 1,440,000/36,000= $1,80019–41. Reorder point = Average rate of usage ⨯ Lead time= 8,000 ⨯ 3= 24,000 pounds2. Maximum usage 12,000Average usage 8,000Difference 4,000Lead time ⨯ 3Safety stock 12,000Reorder point = (Average rate of usage ⨯ Lead time) + Safety stock= (8,000 ⨯ 3) + 12,000= 36,000 pounds1. EOQ = 2PD/C= 324,000)/2⨯4,000(2⨯= 000= 36,000 (batch size for lawn mower engines) 2. Setup cost = PD/Q= $4,000 ⨯ 324,000/36,000= $36,000Carrying cost = CQ/2= $2 ⨯ 36,000/2= $36,000Total cost = $72,000 ($36,000 + $36,000)3. ROP = Average daily sales ⨯ Lead timeROP = 1,296 ⨯ 11 = 14,256 lawn mower engines4. EOQ = 2PD/C= 750,000)/3⨯7,200(2⨯= 0003,600,000,= 60,000 (batch size for jet ski engines) Setup cost = $7,200 ⨯ 750,000/60,000= $90,000Carrying cost = $3 ⨯ 60,000/2= $90,000Total cost = $180,000 ($90,000 + $90,000)ROP = 1,500 ⨯ 12 = 18,000 jet ski engines19–5 Concluded5. Lawn mowers require 9 batches per year (324,000/36,000). Jet ski engines re-quire 12.5 batches per year (750,000/60,000). The lead time for the lawn mow-er engines is 11 days and that of the jet ski engines is 12 days. Thus, the total work days needed to produce the annual demand is 249 [(11 ⨯9) + (12 ⨯12.5)]. Since there are 250 work days available each year, it is possible tomeet the annual demand. Given the initial inventory levels of each product, the daily and annual demand, and the lead times, Shields must build a sche-dule that coordinates production, inventory usage, and sales. This is a push system because production and inventory use anticipated demand rather than current demand.19–61. EOQ = 1,000)/2⨯(2⨯324,000= 0324,000,00= 18,000 lawn mower enginesEOQ = 100)/2⨯(2⨯324,000= 32,400,000≈ 5,692 lawn mower engines2. The batch size decreases as the setup time and cost decrease. If the setuptime is 0.05 day (about 1 hour), then the firm can produce 4,000 ⨯ 0.95 = 3,800 units per day, sufficient to meet the combined daily demand for the two en-gines. This implies the ability to produce on demand and eliminates the need to carry finished goods inventory, a JIT objective.19–7Maximum daily usage 1,750Average daily usage 1,500Difference 250Lead time ⨯ 5Safety stock 1,250Reorder point = (Average rate of usage ⨯ Lead time) + Safety stock= (1,500 ⨯ 5) + 1,250= 8,750 units1. a. JIT does not accept setup (or ordering) costs as a given; rather, JIT at-tempts to drive these costs to zero through reducing the time it takes to set up and by developing long-term contracts with suppliers. Carrying costs are minimized by reducing inventories to insignificant levels.b. JIT reduces lead times, which increases a firm’s ability to meet requesteddelivery dates. This is accomplished by (1) reduction of setup times, (2) improved quality, and (3) cellular manufacturing.c. The problems that usually cause shutdowns are (1) machine failure, (2) de-fective material or subassembly, and (3) unavailability of a material or subassembly, or (4) late delivery of parts. JIT attempts to solve each of the four problems by emphasizing total preventive maintenance and total quality control (strives for zero defects) and building the right kind of rela-tionship with suppliers.d. Unreliable production processes are addressed by total quality man-agement. As fewer and fewer defective units are produced, there is less and less need for inventory to replace nonconforming units.e. The objective of taking advantage of discounts is to lower the cost of in-ventory. JIT accomplishes the same objective by negotiating long-term contracts with a few chosen suppliers and establishing more extensive supplier involvement.f. JIT emphasizes long-term contracts that stipulate prices and acceptablequality levels.2. JIT has the policy of stopping production if a problem is detected so that theproblem can be corrected (of course, the problem may also cause production to stop, independent of a policy or practice of stopping so that the source of the problem can be corrected). Since JIT produces on demand, any interrup-tion of production means that throughput is lost. TOC uses a time buffer lo-cated in front of the binding constraint to protect throughput. The time buffer is designed to keep the constrained resource busy for a specified period of time, a time long enough to overcome most disruptions in production.1. The withdrawal Kanban controls movement of work among the manufactur-ing processes. It specifies the quantity that a subsequent process should withdraw from the preceding process.2. The production Kanban also controls movement of work among the manufac-turing processes. It specifies the quantity that the preceding process should produce.3. The vendor Kanban controls movement of parts between the processes andoutside suppliers. It is used to notify suppliers to deliver more parts.19–10The phrase ―implementing JIT‖ conveys to many the notion that one day a co m-pany is conventional and the next day it is JIT with all of the benefits that are typ-ically assigned to JIT. In reality, changing to a JIT environment takes time and pa-tience. It is more of an evolutionary process than a revolutionary process. It takes time to build a ―partners-in-profits‖ relationship with su ppliers. Many firms at-tempt to force the JIT practices with suppliers by dictating terms, but this ap-proach really runs counter to the notion of developing close relationships, some-thing that is vital for the JIT purchasing side to work. There must be trust and mutual benefits, not unilateral benefits, for JIT purchasing to become a success. Also, management should be aware of the disequilibrium that workers may expe-rience with JIT. Many workers may view JIT methodology as simply a way of ex-tracting more and more work out of them with no compensating benefits. Others may see JIT as a threat to their job security as the nonvalue-added activities they perform are eliminated or reduced. Furthermore, management should be ready and willing to place some current sales at risk with the hope of ensuring stronger future sales, or with the hope of reducing inventory and operating costs to im-prove overall profitability. How else can you justify lost sales due to production stoppages that are designed to improve quality and efficiency?1. e2. a3. d4. e5. c19–121. Before JIT unit cost: $247,100/100,000 = $2.471After JIT unit cost: $232,100/100,000 = $2.321JIT costing is more accurate because there are more costs that are traceable to each product.2. Direct materials: DirectDirect labor: DirectMaintenance: DirectPower: DirectDepreciation: Direct (on cell equipment)Material handling: DirectEngineering: Driver tracingSetups: DirectBuilding and grounds: Allocated (driver tracing using square feet for the building costs may be a reasonable possibility)Supplies: DirectSupervision (plant): AllocatedCell supervision: Direct19–131. Type I Type II Type IIIPrice $40.00 $60.00 $75.00 Variable cost 20.00 44.00 34.00 Contribution margin $20.00 $16.00 $41.00 ÷ Machine hours ÷0.50 ÷0.20 ÷1.50 Contribution margin per machine hour $40.00 $80.00 $27.33 The company should sell only the Type II rod with contribution margin per machine hour of $80. Lavel can produce 100,000 (30,000/0.2) Type II rods per year. These 100,000 units, multiplied by the $16 contribution margin per unit, would yield a total contribution margin of $1,600,000.2. Produce and sell 75,000 Type II rods, which would use 15,000 machine hours.Then, produce and sell 10,000 Type I rods, which would use the remaining 5,000 machine hours.Total contribution margin = ($16 ⨯ 75,000) + ($20 ⨯ 10,000)= $1,400,00019–141. The production rate is 600 regular bows per day and 200 deluxe bows perday. The rate is set by the molding process. It is the drummer process since it is the only one with a buffer inventory in front of it.2. Goicoechea has 0.5 day of buffer inventory (400 bows/800 bows per day).This time buffer is determined by how long it takes the plant to correct prob-lems that create production interruptions.3. A is the rope, B is the time buffer, and C is the drummer constraint. The ropeties the production rate of the drummer constraint to the release of raw mate-rials to the first process. The time buffer is used to protect throughput. Suffi-cient inventory is needed to keep the bottleneck operating if the first process goes down. The drummer sets the production rate.PROBLEMS 19–151. Ordering cost = PD/Q= $40 ⨯ 14,000/400= $1,400Carrying cost = CQ/2= $1.75* ⨯ 400/2= $350*10 percent of purchase price or 0.10 ⨯ $17.50 Total cost = $1,400 + $350 = $1,7502. EOQ = 2PD/C= 75/),(⨯⨯402.000114= 000640,= 800Ordering cost = PD/Q= $40 ⨯ 14,000/800= $700Carrying cost = CQ/2= $1.75 ⨯ 800/2= $700Total cost = $700 + $700 = $1,400Savings = $1,750 – $1,400 = $35019–15 Concluded3. Rate of usage = 7 ⨯ 50 = 350 days= 14,000/350 = 40 blocks per dayReorder point = Average rate of usage ⨯ Lead time= 40 ⨯ 5= 200This coincides with the current reorder policy.4. The order quantity would have to be 600 instead of 800 (the EOQ). If so, thefollowing inventory costs would be incurred:Ordering cost = $40 ⨯ 14,000/600= $933Carrying cost = $1.75 ⨯ 600/2= $525Total cost = $933 + $525= $1,458This restriction would mean an additional cost of only $58 ($1,458 – $1,400) over the cost of using the EOQ.5. The most cheese that should be kept on hand given the 10-day constraint is400 blocks (40 ⨯10). Reorder would occur when inventory dropped to 200 units.1. EOQ = 2PD/C= 65,/)⨯2.(⨯3903007= 000360,= 600Reorder point = Average rate of usage ⨯ Lead time= 20 ⨯ 4= 80Ordering cost = PD/Q= $90 ⨯ 7,300/600= $1,095Carrying cost = CQ/2= $3.65 ⨯ 600/2= $1,095Total cost = $1,095 + $1,095= $2,1902. Maximum usage 30Average usage 20Difference 10Lead time ⨯ 4Safety stock 40Ordering cost = PD/Q= $90 ⨯ 7,300/600= $1,095Carrying cost = CQ/2= $3.65 ⨯ [(40 + 600)/2]= $1,168Total cost = $1,095 + $1,168= $2,263New reorder point = (Average usage ⨯ Lead time) + Safety stock= (20 ⨯ 4) + 40= 1201. EOQ = 2PD/C= 3,⨯,(⨯6000360002/)= 000000,144,= 12,000 (batch size)Geneva’s response was correct given its current production environment.The setup time is two working days. The production rate possible is 750 units per day after setup. Thus, the time required to produce the additional 9,000 units would be 14 working days [2 + (9,000/750)].2. To have met the order’s requirements, Geneva could have produced 3,750units within the 7-work-day window [(7 – 2)750] and would have needed 8,250 units in stock—5,250 more than available. Solving delivery problems like the one described would likely require much more inventory than is currently car-ried. If the maximum demand is predictable, then safety stock could be used.The demand can be as much as 9,000 units per year above the expected de-mand. If it is common for all of this extra demand to occur from one or a few large orders, then protecting against lost sales could demand a sizable in-crease in inventory, an approach that could be quite costly. Perhaps some safety stock with expediting and overtime would be more practical. Or, per-haps Geneva should explore alternative inventory management approaches such as those associated with JIT or TOC.3. EOQ = 2PD/C= 3(⨯,⨯362/)00094= 000,2562,≈ 1,502 (batch size)The new lead time = (1.5 hours) + [(1,502/2,000) ⨯ 8 hours]≈ 7.5 hours, or about one work day19–17 ConcludedAt a production rate of 2,000 units per day, Geneva could have satisfied the customer’s time requirements in less than seven days, even without any f i-nished goods inventory. This illustrates very forcefully that inventory may not be the solution to meeting customer needs or dealing with demand uncertain-ty. Perhaps paying attention to setup, moving, and waiting activities offers more benefits. JIT tends to produce smaller batches and shorter cycle times than conventional manufacturing environments. As the EOQ batch size com-putation revealed, by focusing on improving the way production is done, the batch size could be reduced to about 12.5 percent of what it was before the improvements.4. EOQ = 2PD/C= 3(⨯⨯2/),1000036= 000240,≈ 490 (batch size)This further reduction in setup time and cost reduces the batch size even more. As the setup time is reduced to even lower levels and the cost is re-duced, the batch size becomes even smaller.If the cost is $0.864, the batch size is 144:EOQ = 2PD/C= 3,2/)(⨯⨯.00036864= 73620,= 144 (batch size)Furthermore, with the ability to produce 2,000 units per day or 250 units per hour, the day’s demand (36,000/250 = 144) can b e produced in less than an hour. This provides the ability to produce on demand. The key to this out-come was the decrease in setup time and the reduction of wait and move time—all nonvalue-added activities. This illustrates what is meant by refer-ring to inventory management as an ancillary benefit of JIT.19–181. a. The expected demand for the RJ47 battery during the lead time is calcu-lated as the sum of the demand during the lead time times the demand probability for all demand points:Expected demand = (100 ⨯ 0.03) + (200 ⨯ 0.05) + (300 ⨯ 0.20) + (400 ⨯ 0.40)+ (500 ⨯ 0.25) + (600 ⨯ 0.07)= 400b. The reorder point to minimize stockouts would be the maximum demandduring lead time, or 600 units.2. The probability of a stockout at a special reorder point is the sum of theprobabilities for demand greater than the reorder point of 400 units: Probability of 500 units 0.25Probability of 600 units 0.07Total 0.3219–191. KEVCO can expect the following effects:Planning:∙Production planning will change from a centralized batch function process to a more decentralized activity. In some cases, production teams will be responsible for the entire production process of a product.∙The method and timing of how the company prepares its production sche-dules (including capacity requirements) will change to parallel the demand pull approach as opposed to the push approach.∙The Purchasing Department will need production to have high-quality, reli-able, and flexible suppliers who can quickly deliver orders of varying sizes as needed.19–19 ConcludedOperations:∙Setup time changes will reduce lead times significantly.∙ A Kanban system will need to be implemented. A triggering device such asa Kanban card is necessary so that the department or cell knows when tobegin production.∙Greater employee participation will result from cell production team ar-rangements.2. At least five benefits:∙Less rework and fewer defective units because of cell-level accountability and control and product solving at the cell level.∙ A lower cash investment in inventory and plant space. Handling, storage, insurance, breakage, and obsolescence will all be lower.∙More satisfied customers should result because of shorter lead times and higher quality.∙Improved labor productivity as a result of rearranging the production process and the creation of manufacturing cell teams.∙ A reduction of the number of suppliers leading to improved relationships and communication.∙More accurate product costing because direct tracing increases.3. Behavioral effects:∙Higher team morale and motivation, since each cell team is responsible for all cell production and will, therefore, have more control over its work and an increased sense of ownership.∙Higher individual satisfaction, development, and motivation, as manage-ment will encourage participation, training, and input on how to improve the product and production process.∙ A possible resistance to change by those employees who may feel inse-cure or threatened by the change.∙ A sense of partnership with management in achieving the goals and objec-tives of the organization resulting in goal congruence.1. The entire Kanban cycle begins with the need to produce a final product—aproduct demanded by a customer. The demand for a product to be assembled is known from the production schedule. Assume that a final product is needed. The withdrawal Kanban controls movement of work between the as-sembly process and the manufacturing processes. It specifies the quantity that a subsequent process should withdraw from the preceding process. The assembly process uses withdrawal Kanbans to notify the first process that more subassemblies are needed. This is done by having an assembly worker remove the withdrawal Kanban from the container in the withdrawal store and place it on the withdrawal post. This W-Kanban signals that the assembly process is using one unit of Subassembly A and that a replacement for it is needed. The replacement activity is initiated by a carrier who removes the production Kanban from the container of subassemblies in the SB stores area and places this P-Kanban on the production post. The container in the SB stores area is then moved to the withdrawal stores area with the W-Kanban attached (taken from the withdrawal post). The production Kanban tells the workers in the Subassembly A cell to begin producing another unit.The production Kanban is removed and goes with the unit produced (which goes to the SB stores area). This Kanban system ensures that the second process withdraws subassemblies from the first process in the necessary quantity at the necessary time. The Kanban system also controls the first process by allowing it to produce only the quantities withdrawn by the second process. In this way, inventories are kept at a minimum, and the components arrive just in time to be used.2. The second process uses a vendor Kanban to signal the supplier that anotherorder is needed. The process is similar to the internal flow described in Re-quirement 1. However, for the process to work with suppliers, the suppliers must be willing to make frequent and small deliveries. It also means that the supply activity works best if the supplier is located in close proximity to the buyer. The subassemblies must be delivered just in time for use. This calls for a close working relationship with the supplier. The inventory function on the materials side is largely assumed by the supplier. To bear this cost, there must be some compensating benefits for the supplier. Long-term contracts and the reduction of demand uncertainty are significant benefits for the sup-plier. EDI can facilitate the entire arrangement. If the supplier has access to the buyer’s on-line database, then the supplier can use the buyer’s produ c-tion schedule to determine its own production and delivery schedule, making it easier to deliver parts just in time. In effect, the supplier and buyer almost operate as one company.1. ImmuneBoost: CM per machine hour = ($4.00 – $2.40)/1.60= $1.00MentaGrowth: CM per machine hour = ($4.80 – $3.60)/0.80= $1.50Since MentaGrowth provides the greatest contribution per machine hour, the company should produce 800,000 bottles of MentaGrowth (640,000/0.8) and zero bottles of ImmuneBoost. The total contribution margin is 800,000 ⨯ $1.50 = $1,200,000.2. First, the company should produce 480,000 bottles of MentaGrowth. Thisuses up 384,000 machine hours (480,000 ⨯ 0.8). The remaining hours can then be used to produce 160,000 bottles of ImmuneBoost (256,000/1.6). Thus, the optimal mix is 160,000 bottles of ImmuneBoost and 480,000 bottles of Menta-Growth. The maximum total contribution margin is $832,000 [($1.60 ⨯ 160,000) + ($1.20 ⨯ 480,000)].19–221. Dept. B Dept. C TotalC omponent 12-L (1,000 units)Test hours a2,000 3,000 3,000 8,000 Machine hours b1,000 1,000 2,000 4,000C omponent 14-M (800 units)Test hours c800 1,600 —2,400 Machine hours d800 800 —1,600 Component 40-S (2,000 units)Test hours e4,000 4,000 4,000 12,000 Machine hours f4,000 4,000 2,000 10,000 Total test hours 6,800 8,600 7,000 22,400 Total machine hours 5,800 5,800 4,000 15,600 a2 ⨯ 1,000; 3 ⨯ 1,000; 3 ⨯ 1,000 d1 ⨯ 800; 1 ⨯ 800b1 ⨯ 1,000; 1 ⨯ 1,000; 2 ⨯ 1,000 e2 ⨯ 2,000; 2 ⨯ 2,000; 2 ⨯ 2,000c1 ⨯ 800; 2 ⨯ 800 f2 ⨯ 2,000; 2 ⨯ 2,000; 1 ⨯ 2,000The demand can be met in all departments except for Department C. Produc-tion requires 7,000 test hours in Department C, but only 5,500 hours are avail-able.。
《管理会计》英文版课后习题答案
第二章产品成本计算Exercises2–1（指教材上的第2章练习第1题，下同）1. Part #72A Part #172CSteel* $ 12.00 $ 18.00Setup cost** 6.00 6.00Total $ 18.00 $ 24.00*($1.00 ? 12; $1.00 ? 18)**($60,000/10,000)Steel cost is assigned by calculating a cost per ounce and then multiplying this by the ounces used by each part:Cost per ounce= $3,000,000/3,000,000 ounces= $1.00 per ounceSetup cost is assigned by calculating the cost per setup and then dividing this by the number of units in each batch (there are 20 setups per year):Cost per setup = $1,200,000/20= $60,0002. The cost of steel is assigned through the driver tracing using the number of ounces of steel, and the cost of the setups is assigned through driver tracing also using number of setups as the driver.3. The assumption underlying number of setups as the driver is that each part uses an equal amount of setup time. Since Part #72A uses double the setup time of Part #172C, it makes sense to assign setup costs based on setup time instead of number of setups. This illustrates the importance of identifying drivers that reflect the true underlying consumption pattern. Using setup hours [(40 ?10) + (20 ? 10)], we get the following rate per hour:Cost per setup hour = $1,200,000/600= $2,000 per hourThe cost per unit is obtained by dividing each part’s total setup costs by the number of units:Part #72A = ($2,000 ? 400)/100,000 = $8.00Part #172C = ($2,000 ? 200)/100,000 = $4.00Thus, Part #72A has its unit cost increased by $2.00, while Part #172C has its unit cost decreased by $2.00.problems2–51. Nursing hours required per year: 4 ? 24 hours ? 364 days* = 34,944*Note: 364 days = 7 days ? 52 weeksNumber of nurses = 34,944 hrs./2,000 hrs. per nurse = 17.472Annual nursing cost = (17 ? $45,000) + $22,500= $787,500Cost per patient day = $787,500/10,000 days= $78.75 per day (for either type of patient)2. Nursing hours act as the driver. If intensive care uses half of the hours and normal care the other half, then 50 percent of the cost is assigned to each patient category. Thus, the cost per patient day by patient category is as follows:Intensive care = $393,750*/2,000 days= $196.88 per dayNormal care = $393,750/8,000 days= $49.22 per day*$525,000/2 = $262,500The cost assignment reflects the actual usage of the nursing resource and, thus, should be more accurate. Patient days would be accurate only if intensive care patients used the same nursing hours per day as normal care patients.3. The salary of the nurse assigned only to intensive care is a directly traceable cost. To assign the other nursing costs, the hours of additional usage would need to be measured. Thus, both direct tracing and driver tracing would be used to assign nursing costs for this new setting.2–61. Bella Obra CompanyStatement of Cost of Services SoldFor the Year Ended June 30, 2006Direct materials:Beginning inventory $ 300,000Add: Purchases 600,000Materials available $ 900,000Less: Ending inventory 450,000*Direct materials used $ 450,000Direct labor 12,000,000Overhead 1,500,000Total service costs added $ 13,950,000Add: Beginning work in process 900,000Total production costs $ 14,850,000Less: Ending work in process 1,500,000Cost of services sold $ 13,350,000*Materials available less materials used2. The dominant cost is direct labor (presumably the salaries of the 100 professionals). Although labor is the major cost of providing many services, it is not always the case. For example, the dominant cost for some medical services may be overhead (e.g., CAT scans). In some services, the dominant cost may be materials (e.g., funeral services).3. Bella Obra CompanyIncome StatementFor the Year Ended June 30, 2006Sales $ 21,000,000Cost of services sold 13,350,000Gross margin $ 7,650,000Less operating expenses:Selling expenses $ 900,000Administrative expenses 750,000 1,650,000Income before income taxes $ 6,000,0004. Services have four attributes that are not possessed by tangible products: (1) intangibility, (2) perishability, (3) inseparability, and (4) heterogeneity. Intangibility means that the buyers of services cannot see, feel, hear, or taste a service before it is bought. Perishability means that services cannot be stored. This property affects the computation in Requirement 1. Inability to store services means that there will never be any finished goods inventories, thus making the cost of services produced equivalent to cost of services sold. Inseparability simply means that providers and buyers of services must be in direct contact for an exchange to take place. Heterogeneity refers to the greater chance for variation in the performance of services than in the production of tangible products.2–71. Direct materials:Magazine (5,000 ? $0.40) $ 2,000Brochure (10,000 ? $0.08) 800 $ 2,800Direct labor:Magazine [(5,000/20) ? $10] $ 2,500Brochure [(10,000/100) ? $10] 1,000 3,500Manufacturing overhead:Rent $ 1,400Depreciation [($40,000/20,000) ? 350*] 700Setups 600Insurance 140Power 350 3,190Cost of goods manufactured $ 9,490*Production is 20 units per printing hour for magazines and 100 units per printing hour for brochures, yielding monthly machine hours of 350 [(5,000/20) + (10,000/100)]. This is also monthly labor hours, as machine labor only operates the presses.2. Direct materials $ 2,800Direct labor 3,500Total prime costs $ 6,300Magazine:Direct materials $ 2,000Direct labor 2,500Total prime costs $ 4,500Brochure:Direct materials $ 800Direct labor 1,000Total prime costs $ 1,800Direct tracing was used to assign prime costs to the two products.3. Total monthly conversion cost:Direct labor $ 3,500Overhead 3,190Total $ 6,690Magazine:Direct labor $ 2,500Overhead:Power ($1 ? 250) $ 250Depreciation ($2 ? 250) 500Setups (2/3 ? $600) 400Rent and insurance ($4.40 ? 250 DLH)* 1,100 2,250Total $ 4,750Brochure:Direct labor $ 1,000Overhead:Power ($1 ? 100) $ 100Depreciation ($2 ? 100) 200Setups (1/3 ? $600) 200Rent and insurance ($4.40 ? 100 DLH)* 440 940Total $ 1,940*Rent and insurance cannot be traced to each product so the costs are assigned using direct labor hours: $1,540/350 DLH = $4.40 per direct labor hour. The other overhead costs are traced according to their usage. Depreciation and power are assigned by using machine hours (250 for magazines and 100 for brochures): $350/350 = $1.00 per machine hour for power and $40,000/20,000 = $2.00 per machine hour for depreciation. Setups are assigned according to the time required. Since magazines use twice as much time, they receive twice the cost: Letting X = the pro?portion of setup time used for brochures, 2X + X = 1 implies a cost assignment ratio of 2/3 for magazines and 1/3 for brochures.Exercises3–11. Resource Total Cost Unit CostPlastic1 $ 10,800 $0.027Direct labor andvariable overhead2 8,000 0.020Mold sets3 20,000 0.050Other facility costs4 10,000 0.025Total $ 48,800 $0.12210.90 ? $0.03 ? 400,000 = $10,800; $10,800/400,000 = $0.0272$0.02 ? 400,000 = $8,000; $8,000/400,000 = $0.023$5,000 ? 4 quarters = $20,000; $20,000/400,000 = $0.054$10,000; $10,000/400,000 = $0.0252. Plastic, direct labor, and variable overhead are flexible resources; molds and other facility costs are committed resources. The cost of plastic, direct labor, and variable overhead are strictly variable. The cost of the molds is fixed for the particular action figure being produced; it is a step cost for the production of action figures in general. Other facility costs are strictly fixed.3–3High (1,400, $7,950); Low (700, $5,150)V = ($7,950 – $5,150)/(1,400 – 700)= $2,800/700 = $4 per oil changeF = $5,150 – $4(700)= $5,150 – $2,800 = $2,350Cost = $2,350 + $4 (oil changes)Predicted cost for January = $2,350 + $4(1,000) = $6,350problems3–61. High (1,700, $21,000); Low (700, $15,000)V = (Y2 – Y1)/(X2 – X1)= ($21,000 – $15,000)/(1,700 – 700) = $6 per receiving orderF = Y2 – VX2= $21,000 – ($6)(1,700) = $10,800Y = $10,800 + $6X2. Output of spreadsheet regression routine with number of receiving orders as the independent variable:Constant 4512.98701298698Std. Err. of Y Est. 3456.24317476605R Squared 0.633710482694768No. of Observations 10Degrees of Freedom 8X Coefficient(s) 13.3766233766234Std. Err. of Coef. 3.59557461331427V = $13.38 per receiving order (rounded)F = $4,513 (rounded)Y = $4,513 + $13.38XR2 = 0.634, or 63.4%Receiving orders explain about 63.4 percent of the variability in receiving cost, providing evidence that Tracy’s choice o f a cost driver is reasonable. However, other drivers may need to be considered because 63.4 percent may not be strong enough to justify the use of only receiving orders.3. Regression with pounds of material as the independent variable:Constant 5632.28109733183Std. Err. of Y Est. 2390.10628259277R Squared 0.824833789433823No. of Observations 10Degrees of Freedom 8X Coefficient(s) 0.0449642991356633Std. Err. of Coef. 0.0073259640055344V = $0.045 per pound of material delivered (rounded)F = $5,632 (rounded)Y = $5,632 + $0.045XR2 = 0.825, or 82.5%Pounds of material delivered explains about 82.5 percent of the variability in receiving cost. This is a better result than that of the receiving orders and should convince Tracy to try multiple regression.4. Regression routine with pounds of material and number of receiving orders as the independent variables:Constant 752.104072925631Std. Err. of Y Est. 1350.46286973443R Squared 0.951068418023306No. of Observations 10Degrees of Freedom 7X Coefficient(s) 0.0333883151096915 7.14702865269395Std. Err. of Coef. 0.00495524841198368 1.68182916088492V1 = $0.033 per pound of material delivered (rounded)V2 = $7.147 per receiving order (rounded)F = $752 (rounded)Y = $752 + $0.033a + $7.147bR2 = 0.95, or 95%Multiple regression with both variables explains 95 percent of the variability in receiving cost. This is the best result.5–21. Job #57 Job #58 Job #59Balance, 7/1 $ 22,450 $ 0 $ 0Direct materials 12,900 9,900 35,350Direct labor 20,000 6,500 13,000Applied overhead:Power 750 600 3,600Material handling 1,500 300 6,000Purchasing 250 1,000 250Total cost $ 57,850 $ 18,300 $ 58,2002. Ending balance in Work in Process = Job #58 = $18,3003. Ending balance in Finished Goods = Job #59 = $58,2004. Cost of Goods Sold = Job #57 = $57,850problems5–31. Overhead rate = $180/$900 = 0.20 or 20% of direct labor dollars.(This rate was calculated using information from the Ladan job; however, the Myron and Coe jobs would give the same answer.)2. Ladan Myron Coe Walker WillisBeginning WIP $ 1,730 $1,180 $2,500 $ 0 $ 0Direct materials 400 150 260 800 760Direct labor 800 900 650 350 900Applied overhead 160 180 130 70 180Total $ 3,090 $2,410 $3,540 $ 1,220 $ 1,840Note: This is just one way of setting up the job-order cost sheets. You might prefer to keep the detail on the materials, labor, and overhead in beginning inventory costs.3. Since the Ladan and Myron jobs were completed, the others must still be in process. Therefore, the ending balance in Work in Process is the sum of the costs of the Coe, Walker, and Willis jobs.Coe $3,540Walker 1,220Willis 1,840Ending Work in Process $6,600Cost of Goods Sold = Ladan job + Myron job = $3,090 + $2,410 = $5,5004. Naman CompanyIncome StatementFor the Month Ended June 30, 20XXSales (1.5 ? $5,500) $8,250Cost of goods sold 5,500Gross margin $2,750Marketing and administrative expenses 1,200Operating income $1,5505–201. Overhead rate = $470,000/50,000 = $9.40 per MHr2. Department A: $250,000/40,000 = $6.25 per MHrDepartment B: $220,000/10,000 = $22.00 per MHr3. Job #73 Job #74Plantwide:70 ? $9.40 = $658 70 ? $9.40 = $658Departmental:20 ? $6.25 $ 125.00 50 ? $6.25 $ 312.5050 ? $22 1,100.00 20 ? $22 440.00$ 1,225.00 $ 752.50Department B appears to be more overhead intensive, so jobs spending more time in Department B ought to receive more overhead. Thus, departmental rates provide more accuracy.4. Plantwide rate: $250,000/40,000 = $6.25Department B: $62,500/10,000 = $6.25Job #73 Job #74Plantwide:70 ? $6.25 = $437.50 70 ? $6.25 = $437.50Departmental:20 ? $6.25 $ 125.00 50 ? $6.25 $ 312.5050 ? $6.25 312.50 20 ? $6.25 125.00$ 437.50 $ 437.50Assuming that machine hours is a good cost driver, the departmental rates reveal that overhead consumption is the same in each department. In this case, there is no need for departmental rates, and a plantwide rate is sufficient.5–41. Overhead rate = $470,000/50,000 = $9.40 per MHr2. Department A: $250,000/40,000 = $6.25 per MHrDepartment B: $220,000/10,000 = $22.00 per MHr3. Job #73 Job #74Plantwide:70 ? $9.40 = $658 70 ? $9.40 = $658Departmental:20 ? $6.25 $ 125.00 50 ? $6.25 $ 312.5050 ? $22 1,100.00 20 ? $22 440.00$ 1,225.00 $ 752.50Department B appears to be more overhead intensive, so jobs spending more time in Department B ought to receive more overhead. Thus, departmental rates provide more accuracy.4. Plantwide rate: $250,000/40,000 = $6.25Department B: $62,500/10,000 = $6.25Job #73 Job #74Plantwide:70 ? $6.25 = $437.50 70 ? $6.25 = $437.50Departmental:20 ? $6.25 $ 125.00 50 ? $6.25 $ 312.5050 ? $6.25 312.50 20 ? $6.25 125.00$ 437.50 $ 437.50Assuming that machine hours is a good cost driver, the departmental rates reveal that overhead consumption is the same in each department. In this case, there is no need for departmental rates, and a plantwide rate is sufficient.5–51. Last year’s unit-based overhead rate = $50,000/10,000 = $5This year’s unit-based overhead rate = $100,000/10,000 = $10Last Year This YearBike cost:2 ? $20 $ 40 $ 403 ? $12 36 36Overhead:5 ? $5 255 ? $10 50Total $101 $126Price last year = $101 ? 1.40 = $141.40/dayPrice this year = $126 ? 1.40 = $176.40/dayThis is a $35 increase over last year, nearly a 25 percent increase. No doubt the Carsons arenot pleased and would consider looking around for other recreational possibilities.2. Purchasing rate = $30,000/10,000 = $3 per purchase orderPower rate = $20,000/50,000 = $0.40 per kilowatt hourMaintenance rate = $6,000/600 = $10 per maintenance hourOther rate = $44,000/22,000 = $2 per DLHBike Rental Picnic CateringPurchasing$3 ? 7,000 $21,000$3 ? 3,000 $ 9,000Power$0.40 ? 5,000 2,000$0.40 ? 45,000 18,000Maintenance$10 ? 500 5,000$10 ? 100 1,000Other$2 ? 11,000 22,000 22,000Total overhead $50,000 $50,0003. This year’s bike rental overhead rate = $50,000/10,000 = $5Carson rental cost = (2 ? $20) + (3 ? $12) + (5 ? $5) = $101Price = 1.4 ? $101 = $141.40/day4. Catering rate = $50,000/11,000 = $4.55* per DLHCost of Estes job:Bike rental rate (2 ? $7.50) $15.00Bike conversion cost (2 ? $5.00) 10.00Catering materials 12.00Catering conversion (1 ? $4.55) 4.55Total cost $41.55*Rounded5. The use of ABC gives Mountain View Rentals a better idea of the types and costs of activities that are used in their business. Adding Level 4 bikes will increase the use of the most expensive activities, meaning that the rental rate will no longer be an average of $5 per rental day. Mountain View Rentals might need to set a Level 4 price based on the increased cost of both the bike and conversion cost.分步成本法6–11. Cutting Sewing PackagingDepartment Department DepartmentDirect materials $5,400 $ 900 $ 225Direct labor 150 1,800 900Applied overhead 750 3,600 900Transferred-in cost:From cutting 6,300From sewing 12,600Total manufacturing cost $6,300 $12,600 $14,6252. a. Work in Process—Sewing 6,300Work in Process—Cutting 6,300b. Work in Process—Packaging 12,600Work in Process—Sewing 12,600c. Finished Goods 14,625Work in Process—Packaging 14,625 3. Unit cost = $14,625/600 = $24.38* per pair6–21. Units transferred out: 27,000 + 33,000 – 16,200 = 43,8002. Units started and completed: 43,800 – 27,000 = 16,8003. Physical flow schedule:Units in beginning work in process 27,000Units started during the period 33,000Total units to account for 60,000Units started and completed 16,800Units completed from beginning work in process 27,000Units in ending work in process 16,200Total units accounted for 60,0004. Equivalent units of production:Materials ConversionUnits completed 43,800 43,800Add: Units in ending work in process:(16,200 ? 100%) 16,200(16,200 ? 25%) 4,050 Equivalent units of output 60,000 47,8506–31. Physical flow schedule:Units to account for:Units in beginning work in process 80,000Units started during the period 160,000Total units to account for 240,000Units accounted for:Units completed and transferred out:Started and completed 120,000From beginning work in process 80,000 200,000 Units in ending work in process 40,000Total units accounted for 240,0002. Units completed 200,000Add: Units in ending WIP ? Fraction complete(40,000 ? 20%) 8,000Equivalent units of output 208,0003. Unit cost = ($374,400 + $1,258,400)/208,000 = $7.854. Cost transferred out = 200,000 ? $7.85 = $1,570,000Cost of ending WIP = 8,000 ? $7.85 = $62,8005. Costs to account for:Beginning work in process $ 374,400Incurred during June 1,258,400Total costs to account for $ 1,632,800Costs accounted for:Goods transferred out $ 1,570,000Goods in ending work in process 62,800Total costs accounted for $ 1,632,8006–31、Units t0 account for:Units in beginning work in process(25% completed) 10000Units started during the period 70000 Total units to account for 80000 Units accounted forUnits completed and transferred outStarted and completed 50000From beginning work in process 10000 60000 Units in ending work in process(60% completed) 20000 Total units accounted for 80000 2、60000+20000×60%=72000（units）3、Unit cost for materials:（$/unit）Unit cost for convension:（$/unit）Total unit cost:5+1.13=6.13（$/unit）4、The cost of units of transferred out:60000×6.13=367800($)The cost of units of ending work in process:20000×5+20000×20%×1.13=113560($)作业成本法4–21. Predetermined rates:Drilling Department: Rate = $600,000/280,000 = $2.14* per MHrAssembly Department: Rate = $392,000/200,000= $1.96 per DLH*Rounded2. Applied overhead:Drilling Department: $2.14 ? 288,000 = $616,320Assembly Department: $1.96 ? 196,000 = $384,160Overhead variances:Drilling Assembly TotalActual overhead $602,000 $ 412,000 $ 1,014,000Applied overhead 616,320 384,160 1,000,480Overhead variance $ (14,320) over $ 27,840 under $ 13,5203. Unit overhead cost = [($2.14 ? 4,000) + ($1.96 ? 1,600)]/8,000= $11,696/8,000= $1.46**Rounded4–31. Yes. Since direct materials and direct labor are directly traceable to each product, their cost assignment should be accurate.2. Elegant: (1.75 ? $9,000)/3,000 = $5.25 per briefcaseFina: (1.75 ? $3,000)/3,000 = $1.75 per briefcaseNote: Overhead rate = $21,000/$12,000 = $1.75 per direct labor dollar (or 175 percent of direct labor cost).There are more machine and setup costs assigned to Elegant than Fina. This is clearly a distortion because the production of Fina is automated and uses the machine resources much more than the handcrafted Elegant. In fact, the consumption ratio for machining is 0.10 and 0.90 (using machine hours as the measure of usage). Thus, Fina uses nine times the machining resources as Elegant. Setup costs are similarly distorted. The products use an equal number of setups hours. Yet, if direct labor dollars are used, then the Elegant briefcase receives three times more machining costs than the Fina briefcase.3. Overhead rate = $21,000/5,000= $4.20 per MHrElegant: ($4.20 ? 500)/3,000 = $0.70 per briefcaseFina: ($4.20 ? 4,500)/3,000 = $6.30 per briefcaseThis cost assignment appears more reasonable given the relative demands each product places on machine resources. However, once a firm moves to a multiproduct setting, using only one activity driver to assign costs will likely produce product cost distortions. Products tend to make different demands on overhead activities, and this should be reflected in overhead cost assignments. Usually, this means the use of both unit- and nonunit-level activity drivers. In this example, there is a unit-level activity (machining) and a nonunit-level activity (setting up equipment). The consumption ratios for each (using machine hours and setup hours as the activity drivers) are as follows:Elegant FinaMachining 0.10 0.90 (500/5,000 and 4,500/5,000)Setups 0.50 0.50 (100/200 and 100/200)Setup costs are not assigned accurately. Two activity rates are needed—one based on machine hours and the other on setup hours:Machine rate: $18,000/5,000 = $3.60 per MHrSetup rate: $3,000/200 = $15 per setup hourCosts assigned to each product:Machining: Elegant Fina$3.60 ? 500 $ 1,800$3.60 ? 4,500 $ 16,200Setups:$15 ? 100 1,500 1,500Total $ 3,300 $ 17,700Units ÷3,000 ÷3,000Unit overhead cost $ 1.10 $ 5.904：Elegant Unit overhead cost：[9000+3000+18000*500/5000+3000/2]/3000=$5.1 Fina Unit overhead cost：[3000+3000+18000*4500/5000+3000/2]/3000=$7.94–51. Deluxe Percent Regular PercentPrice $900 100% $750 100%Cost 576 64 600 80Unit gross profit $324 36% $150 20%Total gross profit:($324 ? 100,000) $32,400,000($150 ? 800,000) $120,000,0002. Calculation of unit overhead costs:Deluxe gularUnit-level:Machining:$200 ? 100,000 $20,000,000$200 ? 300,000 $60,000,000Batch-level:Setups:$3,000 ? 300 900,000$3,000 ? 200 600,000Packing:$20 ? 100,000 2,000,000$20 ? 400,000 8,000,000Product-level:Engineering:$40 ? 50,000 2,000,000$40 ? 100,000 4,000,000Facility-level:Providing space:$1 ? 200,000 200,000$1 ? 800,000 800,000Total overhead $25,100,000 $73,400,000Units ÷100,000 ÷800,000Overhead per unit $251 $91.75Deluxe Percent Regular PercentPrice $900 100% $750.00 100%Cost 780* 87*** 574.50** 77***Unit gross profit $120 13%*** $175.50 23%***Total gross profit:($120 ? 100,000) $12,000,000($175.50 ? 800,000) $140,400,000*$529 + $251**$482.75 + $91.753. Using activity-based costing, a much different picture of the deluxe and regular products emerges. The regular model appears to be more profitable. Perhaps it should be emphasized.4–61. JIT Non-JITSalesa $12,500,000 $12,500,000Allocationb 750,000 750,000a$125 ? 100,000, where $125 = $100 + ($100 ? 0.25), and 100,000 is the average order size times the number of ordersb0.50 ? $1,500,0002. Activity rates:Ordering rate = $880,000/220 = $4,000 per sales orderSelling rate = $320,000/40 = $8,000 per sales callService rate = $300,000/150 = $2,000 per service callJIT Non-JITOrdering costs:$4,000 ? 200 $ 800,000$4,000 ? 20 $ 80,000Selling costs:$8,000 ? 20 160,000$8,000 ? 20 160,000Service costs:$2,000 ? 100 200,000$2,000 ? 50 100,000Total $1,160,000 $340,0 0For the non-JIT customers, the customer costs amount to $750,000/20 = $37,500 per order under the original allocation. Using activity assign?ments, this drops to $340,000/20 = $17,000 per order, a difference of $20,500 per order. For an order of 5,000 units, the order price can be decreased by $4.10 per unit without affecting customer profitability. Overall profitability will decrease, however, unless the price for orders is increased to JIT customers.3. It sounds like the JIT buyers are switching their inventory carrying costs to Emery without any significant benefit to Emery. Emery needs to increase prices to reflect the additional demands on customer-support activities. Furthermore, additional price increases may be needed to reflectthe increased number of setups, purchases, and so on, that are likely occurring inside the plant. Emery should also immediately initiate discussions with its JIT customers to begin negotiations for achieving some of the benefits that a JIT supplier should have, such as long-term contracts. The benefits of long-term contracting may offset most or all of the increased costs from the additional demands made on other activities.4–71. Supplier cost:First, calculate the activity rates for assigning costs to suppliers:Inspecting components: $240,000/2,000 = $120 per sampling hourReworking products: $760,500/1,500 = $507 per rework hourWarranty work: $4,800/8,000 = $600 per warranty hourNext, calculate the cost per component by supplier:Supplier cost:Vance FoyPurchase cost:$23.50 ? 400,000 $ 9,400,000$21.50 ? 1,600,000 $ 34,400,000Inspecting components:$120 ? 40 4,800$120 ? 1,960 235,200Reworking products:$507 ? 90 45,630$507 ? 1,410 714,870Warranty work:$600 ? 400 240,000$600 ? 7,600 4,560,000Total supplier cost $ 9,690,430 $ 39,910,070Units supplied ÷400,000 ÷1,600,000Unit cost $ 24.23* $ 24.94**RoundedThe difference is in favor of Vance; however, when the price concession is considered, the cost of Vance is $23.23, which is less than Foy’s component. Lumus should accept the contractual offer made by Vance.4–7 Concluded2. Warranty hours would act as the best driver of the three choices. Using this driver, the rate is $1,000,000/8,000 = $125 per warranty hour. The cost assigned to each component would be:Vance FoyLost sales:$125 ? 400 $ 50,000$125 ? 7,600 $ 950,000$ 50,000 $ 950,000Units supplied ÷400,000 ÷1,600,000Increase in unit cost $ 0.13* $ 0.59**Rounded$0.075 per unitCategory II: $45/1,000 = $0.045 per unitCategory III: $45/1,500 = $0.03 per unitCategory I, which has the smallest batches, is the most undercosted of the three categories. Furthermore, the unit ordering cost is quite high relative to Category I’s selling price (9 to 15 percent of the selling price). This suggests that something should be done to reduce the order-filling costs.3. With the pricing incentive feature, the average order size has been increased to 2,000 units for all three product families. The number of orders now processed can be calculated as follows:Orders = [(600 ? 50,000) + (1,000 ? 30,000) + (1,500 ? 20,000)]/2,000= 45,000Reduction in orders = 100,000 – 45,000 = 55,000Steps that can be reduced = 55,000/2,000 = 27 (rounding down to nearest whole number)There were initially 50 steps: 100,000/2,000Reduction in resource spending:Step-fixed costs: $50,000 ? 27 = $1,350,000Variable activity costs: $20 ? 55,000 = 1,100,000$2,450,000预算9-4Norton, Inc.Sales Budget For the Coming YearModel Units Price Total SalesLB-1 50,400 $29.00 $1,461,600LB-2 19,800 15.00 297,000WE-6 25,200 10.40 262,080 WE-7 17,820 10.00 178,200 WE-8 9,600 22.00 211,200 WE-9 4,000 26.00 104,000 Total $2,514,080二、1. Raylene’s Flowers and GiftsProduction Budget for Gift BasketsFor September, October, November, and DecemberSept. Oct. Nov. D ec.Sales 200 150 180 250Desired ending inventory 15 18 25 10Total needs 215 168 205 260Less: Beginning inventory 20 15 18 25 Units produced 195 153 187 2352. Raylene’s Flowers and GiftsDirect Materials Purchases BudgetFor September, October, and NovemberFruit: Sept. Oct. Nov.Production 195 153 187? Amount/basket (lbs.) ? 1 ? 1 ?1Needed for production 195 153 187Desired ending inventory 8 9 12Needed 203 162 200Less: Beginning inventory 10 8 9Purchases193 154 190Small gifts: Sept. Oct. Nov.Production 195 153 187 ? Amount/basket (items) ? 5 ? 5 ? 5Needed for production 975 765 935Desired ending inventory 383 468 588Needed 1,358 1,233 1,523Less: Beginning inventory 488 383 468Purchases 870 850 1,055Cellophane: Sept. Oct. Nov.Production 195 153 187。
国际财务管理课后习题答案chapter 10---精品管理资料
CHAPTER 10 MANAGEMENT OF TRANSLATION EXPOSURESUGGESTED ANSWERS AND SOLUTIONS TO END—OF—CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Explain the difference in the translation process between the monetary/nonmonetary method and the temporal method.Answer： Under the monetary/nonmonetary method， all monetary balance sheet accounts of a foreign subsidiary are translated at the current exchange rate。
Other balance sheet accounts are translated at the historical rate exchange rate in effect when the account was first recorded。
Under the temporal method， monetary accounts are translated at the current exchange rate。
Other balance sheet accounts are also translated at the current rate， if they are carried on the books at current value。
If they are carried at historical value, they are translated at the rate in effect on the date the item was put on the books. Since fixed assets and inventory are usually carried at historical costs, the temporal method and the monetary/nonmonetary method will typically provide the same translation.2。
管理会计（英文版）课后习题答案（高等教育出版社）chapter3
管理会计（英文版）课后习题答案（高等教育出版社）chapter3管理会计（高等教育出版社）于增彪（清华大学）改编余绪缨（厦门大学）审校CHAPTER 3ACTIVITY COST BEHAVIORQUESTIONS FOR WRITING AND DISCUSSION1.Knowledge of cost behavior allows a man-ager to assess changes in costs that result from changes in activity. This allows a man-ager to assess the effects of choices that change activity. For example, if excess ca-pacity exists, bids that at least cover variable costs may be totally appropriate. Knowing what costs are variable and what costs are fixed can help a manager make better bids.2.The longer the time period, the more likelythat a cost will be variable. The short run is a period of time for which at least one cost is fixed. In the long run, all costs are variable.3.Resource spending is the cost of acquiringthe capacity to perform an activity, whereas resource usage is the amount of activity ac-tually used. It is possible to use less of the activity than what is supplied. Only the cost of the activity actually used should be as-signed to products.4.Flexible resources are those acquired fromoutside sources and do not involve any long-term commitment for any given amount of resource. Thus, the cost of these resources increases as the demand for them increas-es, and they are variable costs (varying in proportion to the associatedactivity driver).mitted resources are acquired by theuse of either explicit or implicit contracts toobtain a given quantity of resources, regard-less of whether the quantity of resource available is fully used or not. For multiperiod commitments, the cost of these resources essentially corresponds to committed fixed costs. Other resources acquired in advance are short term in nature and essentially cor-respond to discretionary fixed costs.mitted fixed costs are those incurred forthe acquisition of long-term activity capacity and are not subject to change in the short run. Annual resource expenditure is inde-pendent of actual usage. For example, the cost of a factory building is a committed fixed cost. Discretionary fixed costs are those incurred for the acquisition of short-term activity capacity, the levels of which can be altered quickly. In the short run, resource expenditure is also independent of actual ac-tivity usage. An engineer’s salary is an e x-ample of such an expenditure.7. A variable cost increases in direct proportionto changes in activity usage. A one-unit in-crease in activity usage produces an in-crease in cost. A step cost, however, in-creases only as activity usage changes in small blocks or chunks. An increase in cost requires an increase in several units of activ-ity. When a step cost changes over relativelynarrow ranges of activity, it may be moreconvenient to treat it as a variable cost.8. A step cost with narrow steps can be treatedas variable, while one with wide steps is typ-ically treated as fixed.9.An activity rate is the resource expenditure for an activity divided by the activity’s pra c- tical capacity.10.Mixed costs are usually reported in total in the accounting records. How much of the cost is fixed and how much is variable is un- known and must be estimated.11. A scattergraph allows a visual portrayal of the relationship between cost and activity. It reveals to the investigator whether a rela- tionship may exist and, if so, whether a li- near function can be used to approximate the relationship.12.Managers can use their knowledge of cost relationships to estimate fixed and variable components. A scattergraph can be used as an aid in this process. From a scattergraph,a manager can select two points that best represent the relationship. These two points can then be used to derive a linear cost for- mula. The high-low method tells the manag- er which two points to select to compute the linear cost formula. The selection of these two points is not left to judgment.13.Because the scatterplot method is not re- stricted to the high and low points, it is poss- ible to select two points that better represent the relationship between activity and costs, producing a better estimate of fixed and va- riable costs. The main advantage of thehigh-low method is that it removes subjec-tivity from the choice process. The same linewill be produced by two different people.14.Assuming that the scattergraph reveals thata linear cost function is suitable, then themethod of least squares selects a line thatbest fits the data points. The method alsoprovides a measure of goodness of fit sothat the strength of the relationship betweencost and activity can be assessed.15.The best-fitting line is the one that is “clo s-est” to the data points. This is usually meas-ured by the line that has the smallest sum ofsquared deviations.16.No. The best-fitting line may not explainmuch of the total cost variability. There mustbe a strong relationship as well. 17.The coefficient of determination is the per-centage of total variability in costs explainedby the activity. As such, it is a measure ofthe goodness of fit, the strength of the rela-tionship between cost and activity.18.The correlation coefficient is the square rootof the coefficient of determination. The cor-relation coefficient reveals the direction ofthe relationship in addition to the strength ofthe relationship.19.If the variation in cost is not well explainedby activity usage (the coefficient of determi-nation is low) as measured by a single driv-er, then other explanatory variables may beneeded to build a good cost formula.20.If the mixed costs are immaterial, then themethod of decomposition is unimportant. Furthermore, sometimes managerial judg-ment may be more useful for assigningcosts than the use of formal statistical me-thodology.EXERCISES3–11. N umber of Units Total Cost Cost per Unit0 $240,000 NA100,000 240,000 $2.40200,000 240,000 1.20300,000 240,000 0.80400,000 240,000 0.60500,000 240,000 0.482. This depreciation cost is strictly fixed.3–21. Miles Traveled Total Cost Cost per Mile0 $ 0 $0.005,000 6,500 1.30*10,000 13,000 1.3015,000 19,500 1.3020,000 26,000 1.3025,000 32,500 1.30 *$5,200/4,000 or $26,000/20,000 = $1.30 2. The cost of fuel for the delivery activity is strictly variable. 3–31. Number of Units Total Cost Cost per Unit0 $10,000 NA10,000 10,000 $1.0020,000 10,000 0.5030,000 20,000 0.6740,000 20,000 0.5050,000 30,000 0.602. Forming machines rental cost is a step cost.Resource Flexible/Committed Cost BehaviorJet rental Committed FixedHotel rooms Committed FixedBuffet Flexible VariableFavor package Flexible VariableBuses Committed Step3–51. Total Cost Unit CostPlastic$ 10,800 $0.027Direct labor andvariable overhead28,000 0.020 Mold sets320,000 0.050Other facility costs410,000 0.025Total $ 48,800 $0.12210.90 ? $0.03 ? 400,000 = $10,800; $10,800/400,000 = $0.0272$0.02 ? 400,000 = $8,000; $8,000/400,000 = $0.023$5,000 ? 4 quarters = $20,000; $20,000/400,000 = $0.054$10,000; $10,000/400,000 = $0.0252. Plastic, direct labor, and variable overhead are flexible resources; molds andother facility costs are committed resources. The cost of plastic, direct labor, and variable overhead are strictly variable. The cost of the molds is fixed for the particular action figure being produced; it is a step cost for the produc-tion of action figures in general. Other facility costs are strictly fixed.1. X-ray film and developing supplies are likely to vary with the number of pa-cemakers produced. As production increases, we would expect more film and developing supplies to be used. Inspectors and X-ray machines should re-main constant within the relevant range.2. Total cost = $310,000 + ($1.60 ? 100,000) = $470,000Total fixed cost = $310,000Total variable cost = $1.60 ? 100,000 = $160,0003. Unit cost = $470,000/100,000 = $4.70 per pacemaker4. Unit fixed cost = $310,000/100,000 = $3.10 per pacemaker5. Unit variable cost = $1.60 per pacemaker6. a. $438,000/80,000 = $5.48; $310,000/80,000 = $3.88; $1.60b. $502,000/120,000 = $4.18; $310,000/120,000 = $2.58; $1.60The unit cost increases in the first case and decreases in the second case.This is attributable to spreading fixed costs over fewer units of activity output in the first case and over more units in the second case. The unit variable cost stays constant.1. Committed resources: trucks and technicians’ salariesFlexible resources: supplies, small tools, and fuel2. Variable activity rate = $840,000/70,000 = $12 per callFixed activity rate = $1,200,000*/80,000 = $15 per callTotal cost of one call = $12 + $15 = $27 per call*($26,250 ? 40) + ($6,000 ? 25)3. Activity availability = Activity usage + Unused capacityCalls available = Calls made + Unmade calls80,000 calls = 70,000 calls + 10,000 calls4. Total cost of Cost of Cost ofc ommitted resources = activity used + unused capacity$1,200,000 = ($15 ? 70,000) + ($15 ? 10,000)$1,200,000 = $1,050,000 + $150,000Note: The analysis is restricted to committed resources, since only these re-sources will ever have any unused capacity.1. Committed resource charges: monthly fee, activation fee, cancellation fee (iftriggered by contract cancellation prior to one year)Flexible resource charges: all additional charges for airtime, long distance and roaming2. Plan 1:Minutes available = Minutes used + Unused minutes60 minutes = 45 minutes + 15 minutesPlan 2:Minutes available = Minutes used + Unused minutes120 minutes = 45 minutes + 75 minutesPlan 1 is more cost effective. Jana will have some unused capacity (on aver-age, 15 minutes a month), and the overall cost will be lower by $10 per month.3. Plan 1*:Minutes available = Minutes used + Unused minutes60 minutes = 90 minutes + (- 30) minutesPlan 1*:M inutes available = Minutes used + Unused minutes60 minutes = 60 minutes + 0 minutesAdditional minutes = 30 minutes*There are a number of ways to illustrate the use of minuteswith Plan 1. Here are two possibilities. The problem, of course, is that all included monthly minutes are used, and Jana must purchase additional minutes.Plan 2:Minutes available = Minutes used + Unused minutes120 minutes = 90 minutes + 30 minutesPlan 2 is now more cost effective, as the monthly cost is $30. Under Plan 1, Jana will pay $20 plus $30 (30 minutes ? $1.00) or $50 per month. (The $1.00 additional charge includes the airtime and regional roaming charge.)1.Cost of Oil Changes$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000$9,00005001,0001,500Number of Oil ChangesC o s tThe scattergraph provides evidence for a linear relationship.2. High (1,400, $7,950); Low (700, $5,150)V = ($7,950 – $5,150)/(1,400 – 700)= $2,800/700 = $4 per oil changeF = $5,150 – $4(700)= $5,150 – $2,800 = $2,350Cost = $2,350 + $4 (oil changes)Predicted cost for January = $2,350 + $4(1,000) = $6,3503–9 Concluded3. Output of the regression routine calculated by a spreadsheet:Rounding the coefficients:Variable rate = $4.65 per oil changeFixed cost = $1,697Predicted cost for January = $1,697 + $4.65 (oil changes)= $1,697 + $4.65(1,000) = $6,347R2 = 0.97 (rounded)This says that 97 percent of the variability in the cost of providing oil changes is explained by the number of oil changes performed.4. The least-squares method is better because it uses all eight data points in-stead of just two.3–101.The scattergraph provides evidence for a linear relationship, but the observa-tion for 300 moves may be an outlier.2. High (800, $14,560); Low (100, $3,000)V = ($14,560 – $3,000)/(800 – 100)= $11,560/700 = $16.51 per move (rounded)F = $3,000 – $16.51(100)= $3,000 – $1,651 = $1,349Cost = $1,349 + $16.51 (moves)Predicted cost = $1,349 + $16.51(550) = $10,430 (rounded) 3–10 Concluded3. Output of the regression routine calculated by a spreadsheet:Rounding the coefficients:Variable rate = $18.43 per moveFixed cost = $498Cost = $498 + $18.43 (moves)= $498 + $18.43(550) = $10,635 (rounded)R2 = 0.93 (rounded)This says that 93 percent of the variability in the cost of moving materials is explained by the number of moves.4. Normally, we would prefer the least-squares method since the data appear tobe linear. However, the third observation may be an outlier. If the third obser-vation (300 moves and $3,400 of cost) is dropped, the R2 rises to 99 percent.The new cost formula would beCost = $1,411 + $17.28 (moves)The higher fixed cost is much more in keeping with what we observed with the scatterplot in requirement 1.1. Independent variable = number of inspections;Dependent variable = inspection costHigh point (500, $10,000); low point (100, $6,200)2. Variable rate = ($10,000 –$6,200)/(500 –100) = $3,800/400 = $9.50 per inspectionFixed cost = $10,000 – ($9.50)(500) = $5,250Formula for inspection cost = $5,250 + $9.50XEstimated inspection cost = $5,250 + $9.50(280) = $7,9103. Output of regression routine using spreadsheet program:Variable rate = $9.62 per hourFixed cost = $5,370Formula for setup cost = $5,370 + $9.62XEstimated setup cost = $5,370 + $9.62(280) = $8,064 (rounded)R2 = 0.958 or 95.8%The coefficient of determination is high—indicating a strong relationship be-tween inspection cost and the number of inspections.1. Depreciation:Variable rate = ($170,000 – $170,000)/(48,000 – 24,000) = 0 Fixed cost = $170,000 – $0(24,000) = $170,000Depreciation = $170,000Depreciation is purely fixed.Power usage:Variable = ($16,320 – $8,160)/(48,000 – 24,000) = $0.34Fixed cost = $8,160 – $0.34(24,000) = $0Power usage = $0.34(machine hours)Power usage is purely variable.Maintenance:Variable rate = ($149,000 –$101,000)/(48,000 –24,000) = $2.00Fixed cost = $101,000 – $2.00(24,000) = $53,000Maintenance = $53,000 + $2.00(machine hours)Maintenance is a mixed cost.2. Depreciation = $170,000Power usage = $0.34(32,000) = $10,880Maintenance = $53,000 + $2.00(32,000) = $117,0003. Machine related overhead = Depreciation + Power usage + Maintenance= $170,000 + $0.34(MHr) + $53,000 + $2.00(MHr)= $223,000 + $2.34(MHr)For 32,000 machine hours:Machine-related overhead = $223,000 + $2.34(32,000)= $223,000 + $74,880 = $297,880Cost formulas can be combined if the activities they describe share a com-mon objective and if the activity driver is the same. If the activities are not logically related, then it may not be wise to combine cost formulas even if they have a common driver.1. Maintenance cost = $5,750 + $16X2. Maintenance cost = $5,750 + $16(650) = $5,750 + $10,400 = $16,1503. To obtain the percentage explained, r needs to be squared: 0.89 0.89 = 79.21percent. The relationship appears strong but perhaps could be improved by searching for another explanatory variable. Leaving about 20 percent of the variability unexplained may produce less than satisfactory predictions.4. Maintenance cost = 12($5,750) + $16(8,400) = $69,000 + $134,400 = $203,400Note: The fixed cost from the regression results is the fixed cost for the month (since monthly data were used to estimate the equation). However, the question asks for the cost for the year. Therefore, the fixed cost from the re-gression equation must be multiplied by 12.3–141. Overhead = $2,130 + $17(DLH) + $810(setups) + $26(purchase orders)2. Overhead = $2,130 + $17(600) + $810(50)+ $26(120)= $2,130 + $10,200 + $40,500+ $3,120= $55,9503. Since total setup cost is $40,500 for the following month,a 50 percent de-crease would reduce setup cost to $20,250, saving $20,250 for the month.1. Warranty repair cost = $2,000 + $60(number of defects) –$10(inspectionhours)2. Warranty repair cost = $2,000 + $60(100) –$10(150) = $6,5003. The number of defects is positively correlated with warranty repair costs. In-spection hours are negatively correlated with warranty repair costs.4. In this equation, the independent variables—number of defects and inspec-tion hours—account for 88 percent of the variability in warranty repair costs.It seems that analysts have identified some very good drivers for warranty re-pair costs.3–161. Independent variable = direct labor hours; dependent variable = overheadcostHigh point (1,300, $35,200); low point (800, $23,370)Note: The high point is the point of highest direct labor hours (the indepen-dent variable), not the highest cost (which is for Month 7 in this case).2. Variable rate = ($35,200 – $23,370)/(1,300 – 800)= $11,830/500 = $23.66 per direct labor hourFixed cost = $35,200 – ($23.66)(1,300) = $4,442Formula for overhead cost = $4,442 + $23.66 (direct labor hours)Estimated overhead cost = $4,442 + $23.66(1,120) = $30,941 (rounded)3–16 Concluded3. Output of regression routine using spreadsheet program:Variable rate = $25.21 per direct labor hourFixed cost = $3,132Formula for overhead cost = $3,132 + $25.21 (direct labor hours)Estimated overhead cost = $3,132 + $25.21(1,120) = $31,367 (rounded)R2 = 0.95, or 95%The coefficient of determination is high—indicating a strong relationship be-tween overhead cost and direct labor hours.3–171. a2. c3. a4. e5. ePROBLEMS3–181. Salaries:Senior accountant—fixedOffice assistant—fixedInternet and software subscriptions—mixed Consulting by senior partner—variable Depreciation (equipment)—fixed Supplies—mixedAdministration—fixedRent (offices)—fixedUtilities—mixed2. Internet and software subscriptions:V = (Y2– Y1)/(X2– X1)= ($850 – $700)/(150 – 120) = $5 per hourF = Y2– VX2= $850 – ($5)(150) = $100Consulting by senior partner:V = (Y2– Y1)/(X2– X1)= ($1,500 – $1,200)/(150 – 120) = $10 per hour F = Y2– VX2= $1,500 – ($10)(150) = $0Supplies:V = (Y2– Y1)/(X2– X1)= ($1,100 – $905)/(150 – 120) = $6.50 per hour F = Y2– VX2= $1,100 – ($6.50)(150) = $125Utilities:V = (Y2– Y1)/(X2– X1)= ($365 – $332)/(150 – 120) = $1.10 per hour F = Y2– VX2= $365 – ($1.10)(150) = $2003–18 Concluded3. UnitFixed Variable Cost Salaries:Senior accountant $2,500 $ —Office assistant 1,200 —Internet and subscriptions 100 5.00 Consulting —10.00Depreciation (equipment) 2,400 —Supplies 125 6.50Administration 500 —Rent (offices) 2,000 —Utilities 200 1.10 Total cost $9,025 $22.60 Thus, total clinic cost = $9,025 + $22.60/professional hourFor 140 professional hours:Clinic cost = $9,025 + $22.60(140) = $12,189Charge per hour = $12,189/140 = $87.06Fixed charge per hour = $9,025/140 = $64.46Variable charge per hour = $22.604. F or 170 professional hours:Charge/day = $9,025/170 + $22.60 = $53.09 + $22.60 = $75.69The charge drops because the fixed costs are spread over more professional hours.。
管理会计(英文版)课后习题答案(高等教育出版社)chapter 16
管理会计（高等教育出版社）于增彪（清华大学）改编余绪缨（厦门大学）审校CHAPTER 16COST-VOLUME-PROFIT ANALYSIS: A MANAGERIAL PLANNING TOOL QUESTIONS FOR WRITING AND DISCUSSION1.CVP analysis allows managers to focus onselling prices, volume, costs, profits, and sales mix. Many diffe rent “what if” questions can be asked to assess the effect on profits of changes in key variables.2.The units-sold approach defines sales vo-lume in terms of units of product and gives answers in these same terms. The sales-revenue approach defines sales volume in terms of revenues and provides answers in these same terms.3.Break-even point is the level of sales activitywhere total revenues equal total costs, or where zero profits are earned.4.At the break-even point, all fixed costs arecovered. Above the break-even point, only variable costs need to be covered. Thus, contribution margin per unit is profit per unit, provided that the unit selling price is greater than the unit variable cost (which it must be for break-even to be achieved).5.Profit = $7.00 ⨯ 5,000 = $35,0006.Variable cost ratio = Variable costs/Sales.Contribution margin ratio = Contribution margin/Sales. Contribution margin ratio = 1 –Variable cost ratio.7.Break-even revenues = $20,000/0.40 =$50,0008.No. The increase in contribution is $9,000(0.30 ⨯ $30,000), and the increase in adver-tising is $10,000.9.Sales mix is the relative proportion sold ofeach product. For example, a sales mix of3:2 means that three units of one productare sold for every two of the second product.10.Packages of products, based on the ex-pected sales mix, are defined as a singleproduct. Selling price and cost informationfor this package can then be used to carryout CVP analysis.11.Package contribution margin: (2 ⨯ $10) + (1⨯ $5) = $25. Break-even point = $30,000/$25= 1,200 packages, or 2,400 units of A and1,200 units of B.12.Profit = 0.60($200,000 – $100,000) =$60,00013. A change in sales mix will change the contri-bution margin of the package (defined by thesales mix) and, thus, will change the unitsneeded to break even.14.Margin of safety is the sales activity inexcess of that needed to break even. Thehigher the margin of safety, the lower therisk.15.Operating leverage is the use of fixed coststo extract higher percentage changes inprofits as sales activity changes. It isachieved by increasing fixed costs while lo-wering variable costs. Therefore, increasedleverage implies increased risk, and viceversa.16.Sensitivity analysis is a “what if” techniquethat examines the impact of changes in un-derlying assumptions on an answer. A com-pany can input data on selling prices, varia-ble costs, fixed costs, and sales mix and setup formulas to calculate break-even pointsand expected profits. Then, the data can bevaried as desired to see what impactchanges have on the expected profit.17.By specifically including the costs that varywith nonunit drivers, the impact of changesin the nonunit drivers can be examined. Intraditional CVP, all nonunit costs are lumpedtogether as “fixed costs.” While the costs arefixed with respect to units, they vary with re-spect to other drivers. ABC analysis remindsus of the importance of these nonunit driversand costs.18.JIT simplifies the firm’s cost equation sincemore costs are classified as fixed (e.g., di-rect labor). Additionally, the batch-level vari-able is gone (in JIT, the batch is one unit).Thus, the cost equation for JIT includes fixedcosts, unit variable cost times the number ofunits sold, and unit product-level cost timesthe number of products sold (or related cost driver). JIT means that CVP analysis ap-proaches the standard analysis with fixed and unit-level costs only.EXERCISES 16–11. e2. c3. d4. b5. a16–21. f2. d3. b4. a5. g6. e7. c16–31. Units = Fixed cost/Contribution margin= $10,350/($15 – $12)= 3,4502. Sales (3,450 ⨯ $15) $51,750Variable costs (3,450 ⨯ $12) 41,400Contribution margin $ 10,350Fixed costs 10,350Operating income $ 03. Units = (Target income + Fixed cost)/Contribution margin= ($9,900 + $10,350)/($15 – $12)= $20,250/$3= 6,7501. Contribution margin per unit = $15 – $12 = $3Contribution margin ratio = $3/$15 = 0.20, or 20%2. Variable cost ratio = $60,000/$75,000 = 0.80, or 80%3. Revenue = Fixed cost/Contribution margin ratio= $10,350/0.20= $51,7504. Revenue = (Target income + Fixed cost)/Contribution margin ratio= ($9,900 + $10,350)/0.20= $101,25016–51. 0.15($15)(Units) = $15(Units) – $12(Units) – $10,350$2.25(Units) = $3(Units) – $10,350$10,350 = $0.75(Units)Units = 13,8002. Sales (13,800 ⨯ $15) $ 207,000Variable costs (13,800 ⨯ $12) 165,600Contribution margin $ 41,400Fixed costs 10,350Operating income $ 31,050$31,050 does equal 15% of $207,000, so the answer of 13,800 units is correct.1. Before-tax income = (After-tax income)/(1 – Tax rate)= $6,000/(1 – 0.40)= $10,000Units = (Target income + Fixed cost)/Contribution margin= ($10,000 + $10,350)/($15 – $12)= 6,783**The answer is 6,783.3333, and so it must be rounded to a whole unit. You may prefer that students round up the answer to 6,784, instead, since it is better to be marginally above break-even than marginally below it.2. Before-tax income = (After-tax income)/(1 – Tax rate)= $6,000/(1 – 0.50)= $12,000Units = (Target income + Fixed cost)/Contribution margin= ($12,000 + $10,350)/($15 – $12)= 7,4503. Before-tax income = (After-tax income)/(1 – Tax rate)= $6,000/(1 – 0.30)= $8,571Units = (Target income + Fixed cost)/Contribution margin= ($8,571 + $10,350)/($15 – $12)= 6,30716–71. Break-even units = Fixed costs/(Price – Variable cost)= $150,000/($2.45 – $1.65)= $150,000/$0.80= 187,5002. Units = ($150,000 + $12,600)/($2.45 – $1.65)= $162,600/$0.80= 203,2503. Unit variable cost = $1.65Unit variable manufacturing cost = $1.65 – $0.17 = $1.48The unit variable cost is used in cost-volume-profit analysis, since it includes all of the variable costs of the firm.1. Before-tax income = $25,200/(1 – 0.40) = $42,000Units = ($150,000 + $42,000)/$0.80= $192,000/$0.80= 240,0002. Before-tax income = $25,200/(1 – 0.30) = $36,000Units = ($150,000 + $36,000)/$0.80= $186,000/$0.80= 232,5003. Before-tax income = $25,200/(1 – 0.50) = $50,400Units = ($150,000 + $50,400)/$0.80= $200,400/$0.80= 250,5004. 215,000 – 187,500 = 27,500 pansor$526,750 – $459,375 = $67,375A B C D Sales $ 5,000 $ 15,600* $ 16,250* $9,000 Variable costs 4,000 11,700 9,750 5,400* Contribution margin $ 1,000 $ 3,900 $ 6,500* $3,600* Fixed costs 500* 4,000 6,100* 750 Operating income (loss) $ 500 $ (100)* $ 400 $2,850 Units sold 1,000* 1,300 125 90 Price/unit $5 $12* $130 $100* Variable cost/unit $4* $9 $78* $60* Contribution margin/unit $1* $3 $52* $40* Contribution margin ratio 20%* 25%* 40% 40%* Break-even in units 500* 1,334* 118* 19* *Designates calculated amount.Note: When the calculated break-even in units includes a fractional amount, it has been rounded up to the next whole unit.16–101. Variable cost ratio = Variable costs/Sales= $399,900/$930,000= 0.43, or 43%Contribution margin ratio = (Sales – Variable costs)/Sales= ($930,000 – $399,900)/$930,000= 0.57, or 57%2. Break-even sales revenue = $307,800/0.57 = $540,0003. Margin of safety = Sales – Break-even sales= $930,000 – $540,000 = $390,0004. Contribution margin from increased sales = ($7,500)(0.57) = $4,275Cost of advertising = $5,000No, the advertising campaign is not a good idea, because the company’s o p-erating income will decrease by $725 ($4,275 – $5,000).1. Income = Revenue – Variable cost – Fixed cost0 = 1,500P – $300(1,500) – $120,0000 = 1,500P – $450,000 – $120,000$570,000 = 1,500PP = $3802. $160,000/($3.50 – Unit variable cost) = 128,000 unitsUnit variable cost = $2.2516–121. Contribution margin per unit = $5.60 – $4.20*= $1.40*Variable costs per unit:$0.70 + $0.35 + $1.85 + $0.34 + $0.76 + $0.20 = $4.20Contribution margin ratio = $1.40/$5.60 = 0.25 = 25%2. Break-even in units = ($32,300 + $12,500)/$1.40 = 32,000 boxesBreak-even in sales = 32,000 ⨯ $5.60 = $179,200or= ($32,300 + $12,500)/0.25 = $179,2003. Sales ($5.60 ⨯ 35,000) $ 196,000Variable costs ($4.20 ⨯ 35,000) 147,000Contribution margin $ 49,000Fixed costs 44,800Operating income $ 4,2004. Margin of safety = $196,000 – $179,200 = $16,8005. Break-even in units = 44,800/($6.20 – $4.20) = 22,400 boxesNew operating income = $6.20(31,500) – $4.20(31,500) – $44,800= $195,300 – $132,300 – $44,800 = $18,200 Yes, operating income will increase by $14,000 ($18,200 – $4,200).1. Variable cost ratio = $126,000/$315,000 = 0.40Contribution margin ratio = $189,000/$315,000 = 0.602. $46,000 ⨯ 0.60 = $27,6003. Break-even revenue = $63,000/0.60 = $105,000Margin of safety = $315,000 – $105,000 = $210,0004. Revenue = ($63,000 + $90,000)/0.60= $255,0005. Before-tax income = $56,000/(1 – 0.30) = $80,000Note: Tax rate = $37,800/$126,000 = 0.30Revenue = ($63,000 + $80,000)/0.60 = $238,333Sales ............................................................................... $ 238,333 Less: Variable expenses ($238,333 ⨯ 0.40) ................. 95,333 Contribution margin ...................................................... $ 143,000 Less: Fixed expenses ................................................... 63,000 Income before income taxes ........................................ $ 80,000 Income taxes ($80,000 ⨯ 0.30) ...................................... 24,000 Net income ................................................................ $ 56,0001. Operating income = Revenue(1 – Variable cost ratio) – Fixed cost(0.20)Revenue = Revenue(1 – 0.40) – $24,000(0.20)Revenue = (0.60)Revenue – $24,000(0.40)Revenue = $24,000Revenue = $60,000Sales ............................................................................... $ 60,000Variable expenses ($60,000 ⨯ 0.40) .............................. 24,000Contribution margin ...................................................... $ 36,000Fixed expenses .............................................................. 24,000 Operating income ..................................................... $ 12,000 $12,000 = $60,000 ⨯ 20%2. If revenue of $60,000 produces a profit equal to 20 percent of sales and if theprice per unit is $10, then 6,000 units must be sold. Let X equal number of units, then:Operating income = (Price – Variable cost) – Fixed cost0.20($10)X = ($10 – $4)X – $24,000$2X = $6X – $24,000$4X = $24,000X = 6,000 buckets0.25($10)X = $6X – $24,000$2.50X = $6X – $24,000$3.50X = $24,000X = 6,857 bucketsSales (6,857 ⨯ $10) ......................................................... $68,570Variable expenses (6,857 ⨯ $4) ..................................... 27,428Contribution margin ...................................................... $41,142Fixed expenses .............................................................. 24,000 Operating income ..................................................... $17,142 $17,142* = 0.25 ⨯ $68,570 as claimed*Rounded down.Note: Some may prefer to round up to 6,858 units. If this is done, the operat-ing income will be slightly different due to rounding.16–14 Concluded3. Net income = 0.20Revenue/(1 – 0.40)= 0.3333Revenue0.3333Revenue = Revenue(1 – 0.40) – $24,0000.3333Revenue = 0.60Revenue – $24,0000.2667Revenue = $24,000Revenue = $89,98916–151. Company A: $100,000/$50,000 = 2Company B: $300,000/$50,000 = 62. Company BX = $50,000/(1 – 0.80) X = $250,000/(1 – 0.40)X = $50,000/0.20 X = $250,000/0.60X = $250,000 X = $416,667Company B must sell more than Company A to break even because it must cover $200,000 more in fixed costs (it is more highly leveraged).3. Company A: 2 ⨯ 50% = 100%Company B: 6 ⨯ 50% = 300%The percentage increase in profits for Company B is much higher than Com-pany A’s increase because Company B has a higher degree of oper ating leve-rage (i.e., it has a larger amount of fixed costs in proportion to variable costs as compared to Company A). Once fixed costs are covered, additional reve-nue must cover only variable costs, and 60 percent of Company B’s revenue above break-even is profit, whereas only 20 perce nt of Company A’s revenue above break-even is profit.1. Variable Units in PackageProduct Price* –Cost = CM ⨯Mix = CM Scientific $25 $12 $13 1 $13 Business 20 9 11 5 55 Total $68 *$500,000/20,000 = $25$2,000,000/100,000 = $20X = ($1,080,000 + $145,000)/$68X = $1,225,000/$68X = 18,015 packages18,015 scientific calculators (1 ⨯ 18,015)90,075 business calculators (5 ⨯ 18,015)2. Revenue = $1,225,000/0.544* = $2,251,838*($1,360,000/$2,500,000) = 0.5441. Sales mix is 2:1 (Twice as many videos are sold as equipment sets.)2. Variable SalesP roduct Price –Cost = CM ⨯Mix = Total CM Videos $12 $4 $8 2 $16 Equipment sets 15 6 9 1 9 Total $25 Break-even packages = $70,000/$25 = 2,800Break-even videos = 2 ⨯ 2,800 = 5,600Break-even equipment sets = 1 ⨯ 2,800 = 2,8003. Switzer CompanyIncome StatementFor Last YearSales .......................................................................................... $ 195,000Less: Variable costs ................................................................. 70,000Contribution margin ................................................................. $ 125,000Less: Fixed costs ..................................................................... 70,000 Operating income ................................................................ $ 55,000 Contribution margin ratio = $125,000/$195,000 = 0.641, or 64.1%Break-even sales revenue = $70,000/0.641 = $109,2044. Margin of safety = $195,000 – $109,204 = $85,7961. Sales mix is 2:1:4 (Twice as many videos will be sold as equipment sets, andfour times as many yoga mats will be sold as equipment sets.)2. Variable SalesP roduct Price –Cost = CM ⨯Mix = Total CM Videos $12 $ 4 $8 2 $16 Equipment sets 15 6 9 1 9 Yoga mats 18 13 5 4 20 Total $45 Break-even packages = $118,350/$45 = 2,630Break-even videos = 2 ⨯ 2,630 = 5,260Break-even equipment sets = 1 ⨯ 2,630 = 2,630Break-even yoga mats = 4 ⨯ 2,630 = 10,5203. Switzer CompanyIncome StatementFor the Coming YearSales .......................................................................................... $555,000Less: Variable costs ................................................................. 330,000Contribution margin ................................................................. $225,000Less: Fixed costs ..................................................................... 118,350 Operating income ................................................................ $106,650 Contribution margin ratio = $225,000/$555,000 = 0.4054, or 40.54%Break-even revenue = $118,350/0.4054 = $291,9344. Margin of safety = $555,000 – $291,934 = $263,0661. Contribution margin/unit = $410,000/100,000 = $4.10Contribution margin ratio = $410,000/$650,000 = 0.6308Break-even units = $295,200/$4.10 = 72,000 unitsBreak-even revenue = 72,000 ⨯ $6.50 = $468,000or= $295,200/0.6308 = $467,977**Difference due to rounding error in calculating the contribution margin ratio.2. The break-even point decreases:X = $295,200/(P – V)X = $295,200/($7.15 – $2.40)X = $295,200/$4.75X = 62,147 unitsRevenue = 62,147 ⨯ $7.15 = $444,3513. The break-even point increases:X = $295,200/($6.50 – $2.75)X = $295,200/$3.75X = 78,720 unitsRevenue = 78,720 ⨯ $6.50 = $511,68016–19 Concluded4. Predictions of increases or decreases in the break-even point can be madewithout computation for price changes or for variable cost changes. If both change, then the unit contribution margin must be known before and after to predict the effect on the break-even point. Simply giving the direction of the change for each individual component is not sufficient. For our example, the unit contribution changes from $4.10 to $4.40, so the break-even point in units will decrease.Break-even units = $295,200/($7.15 – $2.75) = 67,091Now, let’s look at the break-even point in revenues. We might expect that it, too, will decrease. However, that is not the case in this particular example.Here, the contribution margin ratio decreased from about 63 percent to just over 61.5 percent. As a result, the break-even point in revenues has gone up.B reak-even revenue = 67,091 $7.15 = $479,7015. The break-even point will increase because more units will need to be sold tocover the additional fixed expenses.Break-even units = $345,200/$4.10 = 84,195 unitsRevenue = $547,26816–201.Break-even point = 2,500 units; + line is total revenue and x line is total costs.2. a. Fixed costs increase by $5,000:Break-even point = 3,750 unitsb. Unit variable cost increases to $7:Break-even point = 3,333 unitsc. Unit selling price increases to $12:Break-even point = 1,667 unitsd. Both fixed costs and unit variable cost increase:Break-even point = 5,000 units3. Original data:-$10,000$0$10,000Break-even point = 2,500 unitsa. Fixed costs increase by $5,000:-$15,000$0$15,000Break-even point = 3,750 unitsb. Unit variable cost increases to $7:-$10,000$0$10,000Break-even point = 3,333 unitsc.-$10,000$0$10,000Break-even point = 1,667 unitsd. Both fixed costs and unit variable cost increase:-$15,000$0$15,000Break-even point = 5,000 units4. The first set of graphs is more informative since these graphs reveal howcosts change as sales volume changes.1. Unit contribution margin = $1,060,000/50,000 = $21.20Break-even units = $816,412/$21.20 = 38,510 unitsOperating income = 30,000 ⨯ $21.20 = $636,0002. CM ratio = $1,060,000/$2,500,000 = 0.424 or 42.4%Break-even point = $816,412/0.424 = $1,925,500Operating income = ($200,000 ⨯ 0.424) + $243,588 = $328,3883. Margin of safety = $2,500,000 – $1,925,500 = $574,5004. $1,060,000/$243,588 = 4.352 (operating leverage)4.352 ⨯ 20% = 0.87040.8704 ⨯ $243,588 = $212,019New operating income level = $212,019 + $243,588 = $455,6075. Let X = Units0.10($50)X = $50.00X – $28.80X – $816,412$5X = $21.20X – $816,412$16.20X = $816,412X = 50,396 units6. Before-tax income = $180,000/(1 – 0.40) = $300,000X = ($816,412 + $300,000)/$21.20 = 52,661 units1. Variable Sales PackageP roduct Price –Cost = CM ⨯Mix = CM Vases $40 $30 $10 2 $20 Figurines 70 42 28 1 28 Total $48 Break-even packages = $30,000/$48 = 625Break-even vases = 2 ⨯ 625 = 1,250Break-even figurines = 6252. The new sales mix is 3 vases to 2 figurines.Variable Sales Package P roduct Price –Cost = CM ⨯Mix = CM Vases $40 $30 $10 3 $30 Figurines 70 42 28 2 56 Total $86 Break-even packages = $35,260/$86 = 410Break-even vases = 3 ⨯ 410 = 1,230Break-even figurines = 2 ⨯ 410 = 82016–231. d2. c3. a4. d5. e6. b7. cPROBLEMS16–241. Unit contribution margin = $825,000/110,000 = $7.50Break-even point = $495,000/$7.50 = 66,000 unitsCM ratio = $7.50/$25 = 0.30Break-even point = $495,000/0.30 = $1,650,000or= $25 ⨯ 66,000 = $1,650,0002. Increased CM ($400,000 ⨯ 0.30) $ 120,000Less: Increased advertising expense 40,000Increased operating income $ 80,0003. $315,000 ⨯ 0.30 = $94,5004. Before-tax income = $360,000/(1 – 0.40) = $600,000Units = ($495,000 + $600,000)/$7.50= 146,0005. Margin of safety = $2,750,000 – $1,650,000 = $1,100,000or= 110,000 units – 66,000 units = 44,000 units6. $825,000/$330,000 = 2.5 (operating leverage)20% ⨯ 2.5 = 50% (profit increase)16–251. Sales mix:Squares: $300,000/$30 = 10,000 unitsCircles: $2,500,000/$50 = 50,000 unitsSales Total Product P –V* = P – V ⨯ Mix = CM Squares $30 $10 $20 1 $ 20 Circles 50 10 40 5 200 Package $220 *$100,000/10,000 = $10$500,000/50,000 = $10Break-even packages = $1,628,000/$220 = 7,400 packagesBreak-even squares = 7,400 ⨯ 1 = 7,400Break-even circles = 7,400 ⨯ 5 = 37,0002. Contribution margin ratio = $2,200,000/$2,800,000 = 0.78570.10Revenue = 0.7857Revenue – $1,628,0000.6857Revenue = $1,628,000Revenue = $2,374,2163. New mix:Sales Total Product P –V = P – V ⨯ Mix = CM Squares $30 $10 $20 3 $ 60 Circles 50 10 40 5 200 Package $260 Break-even packages = $1,628,000/$260 = 6,262 packagesBreak-even squares = 6,262 ⨯ 3 = 18,786Break-even circles = 6,262 ⨯ 5 = 31,310CM ratio = $260/$340* = 0.7647*(3)($30) + (5)($50) = $340 revenue per package0.10Revenue = 0.7647Revenue – $1,628,0000.6647Revenue = $1,628,000Revenue = $2,449,2254. Increase in CM for squares (15,000 ⨯ $20) $ 300,000Decrease in CM for circles (5,000 ⨯ $40) (200,000)Net increase in total contribution margin $ 100,000Less: Additional fixed expenses 45,000Increase in operating income $ 55,000Gosnell would gain $55,000 by increasing advertising for the squares. This isa good strategy.16–261. Currently:Sales (830,000 ⨯ $0.36) $ 298,800Variable expenses 224,100Contribution margin $ 74,700Fixed expenses 54,000Operating income $ 20,700New contribution margin = 1.5 ⨯ $74,700 = $112,050$112,050 – promotional spending – $54,000 = 1.5 ⨯ $20,700Promotional spending = $27,0002. Here are two ways to calculate the answer to this question:a. The per-unit contribution margin needs to be the same:Let P* represent the new price and V* the new variable cost.(P – V) = (P* – V*)$0.36 – $0.27 = P* – $0.30$0.09 = P* – $0.30P* = $0.39b. Old break-even point = $54,000/($0.36 – $0.27) = 600,000New break-even point = $54,000/(P* – $0.30) = 600,000P* = $0.39The selling price should be increased by $0.03.3. Projected contribution margin (700,000 ⨯ $0.13) $91,000Present contribution margin 74,700Increase in operating income $16,300The decision was good because operating income increased by $16,300.(New quantity ⨯ $0.13) – $54,000 = $20,700New quantity = 574,615Selling 574,615 units at the new price will maintain profit at $20,700.16–271. P –V = P – V ⨯Mix = TotalResidential $540.00a$221.64c$318.36 2 $636.72 Commercial 160.00b124.52c35.48 1 35.48 Package $672.20 a$13.50 ⨯ 10 ⨯ 4b$40 ⨯ 4c Cost per acre for four applicationsCommercialChemicals $ 70.00 $ 70.00 [$40 + (3 ⨯ $10)] Labor* 80.00 18.00Operating expenses** 55.12 20.00Supplies** 16.52 16.52Total $ 221.64 $ 124.52*10/3 ⨯ $6.00 ⨯ 4; 3/4 ⨯ $6.00 ⨯ 4**The per-acre amount ⨯ 4 applicationsX = F/(P – V)= $39,708/$672.20 = 59* packagesResidential: 2 ⨯ 59 = 118 acresCommercial: 1 ⨯ 59 = 59 acresAverage number of residential customers = 118/0.10 = 1,180*Rounded2. Hours needed to service break-even volume (in packages):Residential: 10/3 ⨯ 4 ⨯ 2 = 26.67* hoursCommercial: 3/4 ⨯ 4 ⨯ 1 = 3.00 hours29.67 hours per packageTotal hours required = 29.67 ⨯ 59 = 1,751 hoursHours per employee = 8 ⨯ 140 = 1,120Employees needed = 1,751/1,120 = 1.6 laborersOne employee is not sufficient.Volume/Employee = 1,120/29.67 = 38 packages. Thus, if volume exceeds 38 composite units (76 residential and 38 commercial), a second laborer is needed (at least part time).*RoundedNote: Adding another employee could affect the costs used in the initial anal-ysis; for example: (1) another truck might be added (increasing fixed costs and the break-even point; (2) a two-man crew might be used (increasing variable costs); (3) the new employee might work evenings/weekends (no change in either fixed or variable costs). CVP used for planning is often an iterative process—the original solution may raise problems that may call for a recal-culation, altering plans further.3. The mix is redefined to be 1.2:0.8:1.0.P roduct P –V = P – V ⨯Mix = Total CM Res.-1 $135.00 $ 77.91* $ 57.09 1.2 $ 68.51 Res.-4 540.00 221.64 318.36 0.8 254.69 Comm. 160.00 124.52 35.48 1.0 35.48 Package $ 358.68 *Variable cost for one-time residential application:Chemicals $40.00Labor 20.00Operating expenses 13.78Supplies 4.13TotalX = F/(P – V) = $39,708/$358.68 = 111 packagesResidential (one application): 1.2 ⨯ 111 = 133 acresResidential (four applications): 0.8 ⨯ 111 = 89 acresCommercial: 1 ⨯ 111 = 111 acres1. Contribution margin ratio = $487,548/$840,600 = 0.582. Revenue = $250,000/0.58 = $431,0343. Operating income = CMR ⨯ Revenue – Total fixed cost0.08R/(1 – 0.34) = 0.58R – $250,0000.1212R = 0.58R – $250,0000.4588R = $250,000R = $544,9004. $840,600 ⨯ 110% = $924,660$353,052 ⨯ 110% = 388,357$536,303CMR = $536,303/$924,660 = 0.58The contribution margin ratio remains at 0.58.5. Additional variable expense = $840,600 ⨯ 0.03 = $25,218New contribution margin = $487,548 – $25,218 = $462,330New CM ratio = $462,330/$840,600 = 0.55Break-even point = $250,000/0.55 = $454,545The effect is to increase the break-even point.6. Present contribution margin $ 487,548Projected contribution margin ($920,600 ⨯ 0.55) 506,330Increase in contribution margin/profit $ 18,782Fitzgibbons should pay the commission because profit would increase by $18,782.1. Let X be a package of three Grade I cabinets and seven Grade II cabinets.Then:0.3X($3,400) + 0.7X($1,600) = $1,600,000X = 748 packagesGrade I: 0.3 ⨯ 748 = 224 unitsGrade II: 0.7 ⨯ 748 = 524 units2. P roduct P –V = P – V ⨯Mix = Total CMGrade I $3,400 $2,686 $714 3 $2,142 Grade II 1,600 1,328 272 7 1,904 Package $4,046 Direct fixed costs—Grade I $ 95,000Direct fixed costs—Grade II 95,000Common fixed costs 35,000Total fixed costs $ 225,000$225,000/$4,046 = 56 packagesGrade I: 3 ⨯ 56 = 168; Grade II: 7 ⨯ 56 = 3923. P roduct P –V = P – V ⨯Mix = Total CMGrade I $3,400 $2,444 $956 3 $2,868 Grade II 1,600 1,208 392 7 2,744 Package $5,612 P ackage CM = 3($3,400) + 7($1,600)P ackage CM = $21,400$21,400X = $1,600,000 – $600,000X = 47 packages remaining141 Grade I (3 ⨯ 47) and 329 Grade II (7 ⨯ 47)Additional contribution margin:141($956 – $714) + 329($392 – $272) $73,602Increase in fixed costs 44,000Increase in operating income $29,602Break-even: ($225,000 + $44,000)/$5,612 = 48 packages144 Grade I (3 ⨯ 48) and 336 Grade II (7 ⨯ 48)If the new break-even point is interpreted as a revised break-even for 2004, then total fixed costs must be reduced by the contribution margin already earned (through the first five months) to obtain the units that must be sold for the last seven months. These units would then be added to those sold during the first five months:CM earned = $600,000 – (83* ⨯ $2,686) – (195* ⨯ $1,328) = $118,102*224 – 141 = 83; 524 – 329 = 195X = ($225,000 + $44,000 – $118,102)/$5,612 = 27 packagesFrom the first five months, 28 packages were sold (83/3 or 195/7). Thus, the revised break-even point is 55 packages (27 + 28)—in units, 165 of Grade I and 385 of Grade II.。
双语版管理会计第十章
Materials price variance
MPV = (AQ × AP) – (AQ × SP) = AQ(AP – SP) = 210 kgs ($4.90/kg – $5.00/kg) = 210 kgs (– $0.10/kg) = $21 F
10-15
Responsibility for Materials Variances
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
10-2
Standard Costs 标准成本
In managerial accounting, two types of standards are commonly used.
Standard Quantity × Standard Price 200 kgs. × $5.00 per kg. = $1,000 Actual Quantity × Standard Price 210 kgs. × 210 kgs $1,029 $5.00 per kg. = $4.90 per kg = $1,050 Actual Quantity × Actual Price 210 kgs. × $4.90 per kg. = $1,029
B
Standard Price or Rate
AxB
Standard Cost per Unit
12.00 35.00 7.50 54.50
Inputs
Direct materials Direct labor Variable mfg. overhead Total standard unit cost
加里森第十四版管理会计课后题答案CH10
Chapter 10Standard Costs and Variances Solutions to Questions10-1 A quantity standard indicates how much of an input should be used to make a unit of output. A price standard indicates how much the input should cost.10-2Ideal standards assume perfection and do not allow for any inefficiency. Ideal standards are rarely, if ever, attained. Practical standards can be attained by employees working at a reasonable, though efficient pace and allow for normal breaks and work interruptions.10-3Under management by exception, managers focus their attention on results that deviate from expectations. It is assumed that results that meet expectations do not require investigation.10-4Separating an overall variance into a price variance and a quantity variance provides more information. Moreover, price and quantity variances are usually the responsibilities of different managers.10-5The materials price variance is usually the responsibility of the purchasing manager. The materials quantity and labor efficiency variances are usually the responsibility of production managers and supervisors.10-6The materials price variance can be computed either when materials are purchased or when they are placed into production. It is usually better to compute the variance when materials are purchased because that is when the purchasing manager, who has responsibility for this variance, has completed his or her work. In addition, recognizing the price variance when materials are purchased allows the company to carry its raw materials in the inventory accounts at standard cost, which greatly simplifies bookkeeping. 10-7This combination of variances may indicate that inferior quality materials were purchased at a discounted price, but the low-quality materials created production problems.10-8If standards are used to find who to blame for problems, they can breed resentment and undermine morale. Standards should not be used to find someone to blame for problems.10-9Several factors other than the contractual rate paid to workers can cause a labor rate variance. For example, skilled workers with high hourly rates of pay can be given duties that require little skill and that call for low hourly rates of pay, resulting in an unfavorable rate variance. Or unskilled or untrained workers can be assigned to tasks that should be filled by more skilled workers with higher rates of pay, resulting in a favorable rate variance. Unfavorable rate variances can also arise from overtime work at premium rates.10-10If poor quality materials create production problems, a result could be excessive labor time and therefore an unfavorable labor efficiency variance. Poor quality materials would not ordinarily affect the labor rate variance.10-11If overhead is applied on the basis of direct labor-hours, then the variable overhead efficiency variance and the direct labor efficiency variance will always be favorable or unfavorable together. Both variances are computed by comparing the number of direct labor-hours actually worked to the standard hours allowed. That is, in each case the formula is:Efficiency variance = SR(AH – SH)Only the ―SR‖ part of the formula, the standard rate, differs between the two variances.10-12 A statistical control chart is a graphical aid that helps identify variances that should be investigated. Upper and lower limits are set on the control chart. Any variances falling between those limits are considered to be normal. Any variances falling outside of those limits are considered abnormal and are investigated.10-13If labor is a fixed cost and standards are tight, then the only way to generate favorable labor efficiency variances is for every workstation to produce at capacity. However, the output of the entire system is limited by the capacity of the bottleneck. If workstations before the bottleneck in the production process produce at capacity, the bottleneck will be unable to process all of the work in process. In general, if every workstation is attempting to produce at capacity, then work in process inventory will build up in front of the workstations with the least capacity.1. Number of chopping blocks .................................. 4,000Number of board feet per chopping block ............. × 2.5 Standard board feet allowed ................................ 10,000 Standard cost per board foot................................ × $1.80 Total standard cost ..............................................$18,000Actual cost incurred ............................................. $18,700 Standard cost above ............................................ 18,000Spending variance —unfavorable ...........................$ 7002.Standard Quantity Allowed for Actual Output, at Standard Price (SQ × SP) Actual Quantity ofInput, at Standard Price(AQ × SP) Actual Quantity ofInput, at Actual Price (AQ × AP)10,000 board feet × $1.80 per board foot11,000 board feet × $1.80 per board footAlternatively, the variances can be computed using the formulas:Materials quantity variance = SP (AQ – SQ)= $1.80 per board foot (11,000 board feet – 10,000 board feet) = $1,800 UMaterials price variance = AQ (AP – SP)= 11,000 board feet ($1.70 per board foot* – $1.80 per board foot) = $1,100 F*$18,700 ÷ 11,000 board feet = $1.70 per board foot.1. Number of meals prepared ..................... 6,000Standard direct labor-hours per meal ...... × 0.20 Total direct labor-hours allowed .............. 1,200 Standard direct labor cost per hour ......... × $9.50Total standard direct labor cost ............... $11,400Actual cost incurred ................................ $11,500 Total standard direct labor cost (above) .. 11,400Spending variance .................................. $ 100 Unfavorable2.Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 1,200 hours × $9.50 per hour1,150 hours × $9.50 per hour 1,150 hours × $10.00 per hourAlternatively, the variances can be computed using the formulas:Labor efficiency variance = SR(AH – SH)= $9.50 per hour (1,150 hours – 1,200 hours) = $475 FLabor rate variance = AH(AR – SR)= 1,150 hours ($10.00 per hour – $9.50 per hour) = $575 U1. Number of items shipped ................................. 140,000 Standard direct labor-hours per item ................ × 0.04 Total direct labor-hours allowed ....................... 5,600 Standard variable overhead cost per hour ......... × $2.80Total standard variable overhead cost .............. $15,680Actual variable overhead cost incurred ............. $15,950 Total standard variable overhead cost (above) .. 15,680 Spending variance ........................................... $ 270 Unfavorable2.Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 5,600 hours × $2.80 per hour5,800 hours × $2.80 per hour 5,800 hours × $2.75 per hour**$15,950 ÷ 5,800 hours = $2.75 per hourAlternatively, the variances can be computed using the formulas:Variable overhead efficiency variance = SR(AH – SH) = $2.80 per hour (5,800 hours – 5,600 hours) = $560 UVariable overhead rate variance = AH(AR – SR) = 5,800 hours ($2.75 per hour – $2.80 per hour) = $290 F1. Number of units manufactured ............................. 20,000 Standard labor time per unit (6 minutes ÷ 60 minutes per hour) .................... × 0.10 Total standard hours of labor time allowed ............ 2,000 Standard direct labor rate per hour ....................... × $24.00 Total standard direct labor cost ............................ $48,000Actual direct labor cost ........................................ $49,300Standard direct labor cost .................................... 48,000Spending variance —unfavorable ...........................$ 1,3002.Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 2,000 hours* × $24.00 per hour2,125 hours × $24.00 per hour*20,000 units × 0.10 hour per unit = 2,000 hoursAlternatively, the variances can be computed using the formulas:Labor efficiency variance = SR (AH – SH)= $24.00 per hour (2,125 hours – 2,000 hours) = $3,000 ULabor rate variance = AH (AR – SR)= 2,125 hours ($23.20 per hour* – $24.00 per hour) = $1,700 F*$49,300 ÷ 2,125 hours = $23.20 per hour3.Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 2,000 hours × $16.00 per hour2,125 hours × $16.00 per hourAlternatively, the variances can be computed using the formulas:Variable overhead efficiency variance = SR (AH – SH) =$16.00 per hour (2,125 hours – 2,000 hours) = $2,000 UVariable overhead rate variance = AH (AR – SR)= 2,125 hours ($18.40 per hour* – $16.00 per hour) = $5,100 U*$39,100 ÷ 2,125 hours = $18.40 per hour1. If the total labor spending variance is $330 unfavorable, and if the laborrate variance is $150 favorable, then the labor efficiency variance must be $480 unfavorable, because the labor rate and labor efficiencyvariances taken together equal the total labor spending variance.Knowing that the labor efficiency variance is $480 unfavorable, oneapproach to the solution would be:Labor efficiency variance = SR (AH – SH)$12 per hour (AH – 210 hours*) = $480 U$12 per hour × AH – $2,520 = $480**$12 per hour × AH = $3,000AH = 250 hours* 168 batches × 1.25 hours per batch = 210 hours** When used with the formula, unfavorable variances are positive and favorable variances are negative.2. Knowing that 250 hours of labor time were used during the week, theactual rate of pay per hour can be computed as follows:Labor rate variance = AH (AR – SR)250 hours (AR – $12 per hour) = $150 F250 hours × AR – $3,000 = -$150*250 hours × AR = $2,850AR = $11.40 per hour* When used with the formula, unfavorable variances are positive and favorable variances are negative.An alternative approach would be to work from known to unknown data in the columnar model for variance analysis:Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 210 hours § × $12.00 per hour*250 hours × $12.00 per hour* 250 hours × $11.40 per hour§168 batches × 1.25 hours per batch = 210 hours *Given1.Standard Quantity Allowedfor Actual Output, at Standard Price(SQ × SP)Actual Quantity ofInput,at Standard Price(AQ × SP) Actual Quantity ofInput, at Actual Price (AQ × AP) 18,000 ounces* × $2.50 per ounce20,000 ounces × $2.50 per ounce 20,000 ounces × $2.40 per ounce*2,500 units × 7.2 ounces per unit = 18,000 ouncesAlternatively, the variances can be computed using the formulas:Materials quantity variance = SP (AQ – SQ)= $2.50 per ounce (20,000 ounces – 18,000 ounces) = $5,000 UMaterials price variance = AQ (AP – SP)= 20,000 ounces ($2.40 per ounce – $2.50 per ounce) = $2,000 F2.Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 1,000 hours* × $10.00 per hour900 hours × $10.00 per hour*2,500 units × 0.4 hour per unit = 1,000 hoursAlternatively, the variances can be computed using the formulas:Labor efficiency variance = SR (AH – SH) = $10 per hour (900 hours – 1,000 hours) = 1,000 FLabor rate variance = AH (AR – SR)= 900 hours ($12 per hour* – $10 per hour) = $1,800 U*10,800 ÷ 900 hours = $12 per hourNotice in the solution below that the materials price variance is computed on the entire amount of materials purchased, whereas the materials quantity variance is computed only on the amount of materials used in production.Standard Quantity Allowed for Actual Output, at Standard Price (SQ × SP) Actual Quantity of Input, at Standard Price (AQ × SP) Actual Quantityof Input, at Actual Price(AQ × AP) 14,400 ounces* × $2.50 per ounce16,000 ounces × $2.50 per ounce 20,000 ounces × $2.40 per ounce*Alternatively, the variances can be computed using the formulas:Materials quantity variance = SP (AQ – SQ)= $2.50 per ounce (16,000 ounces – 14,400 ounces) = $4,000 UMaterials price variance = AQ (AP – SP)= 20,000 ounces ($2.40 per ounce – $2.50 per ounce) = $2,000 FExercise 10-8 (30 minutes)1. a. Notice in the solution below that the materials price variance iscomputed on the entire amount of materials purchased, whereas the materials quantity variance is computed only on the amount of materials used in production.Standard Quantity Allowed for Actual Output, at Standard Price (SQ × SP) Actual Quantity of Input, at Standard Price (AQ × SP) Actual Quantityof Input, at Actual Price(AQ × AP) 40,000 diodes* × $0.30 per diode50,000 diodes × $0.30 per diode 70,000 diodes × $0.28 per diode*5,000 toys × 8 diodes per toy = 40,000 diodesAlternatively, the variances can be computed using the formulas:Materials quantity variance = SP (AQ – SQ)= $0.30 per diode (50,000 diodes – 40,000 diodes) = $3,000 UMaterials price variance = AQ (AP – SP)= 70,000 diodes ($0.28 per diode – $0.30 per diode) = $1,400 Fb. Direct labor variances:Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 3,000 hours* × $14.00 per hour3,200 hours × $14.00 per hour*5,000 toys × 0.6 hours per toy = 3,000 hoursAlternatively, the variances can be computed using the formulas:Labor efficiency variance = SR (AH – SH)= $14.00 per hour (3,200 hours –3,000 hours) = $2,800 ULabor rate variance = AH (AR – SR)= 3,200 hours ($15.00* per hour – $14.00 per hour) = $3,200 U*$48,000 ÷ 3,200 hours = $15.00 per hour2. A variance usually has many possible explanations. In particular, weshould always keep in mind that the standards themselves may beincorrect. Some of the other possible explanations for the variancesobserved at Topper Toys appear below:Materials Price Variance Since this variance is favorable, the actual price paid per unit for the material was less than the standard price. This could occur for a variety of reasons including the purchase of a lower gradematerial at a discount, buying in an unusually large quantity to takeadvantage of quantity discounts, a change in the market price of thematerial, and particularly sharp bargaining by the purchasing department.Materials Quantity Variance Since this variance is unfavorable, morematerials were used to produce the actual output than were called for by the standard. This could also occur for a variety of reasons. Some of the possibilities include poorly trained or supervised workers, improperlyadjusted machines, and defective materials.Labor Rate Variance Since this variance is unfavorable, the actualaverage wage rate was higher than the standard wage rate. Some of the possible explanations include an increase in wages that has not beenreflected in the standards, unanticipated overtime, and a shift towardmore highly paid workers.Labor Efficiency Variance Since this variance is unfavorable, the actual number of labor hours was greater than the standard labor hours allowed for the actual output. As with the other variances, this variance could have been caused by any of a number of factors. Some of the possibleexplanations include poor supervision, poorly trained workers, low-quality materials requiring more labor time to process, and machine breakdowns.In addition, if the direct labor force is essentially fixed, an unfavorable labor efficiency variance could be caused by a reduction in output due to decreased demand for the company’s products.Problem 10-9 (45 minutes) 1. a.Standard Quantity Allowedfor Actual Output, at Standard Price(SQ × SP)Actual Quantity of Input, at Standard Price(AQ × SP) Actual Quantity of Input, at Actual Price (AQ × AP) 20,000 pounds* × $2.50 per pound19,800 pounds × $2.50 per pound 25,000 pounds × $2.95 per pound*5,000 ingots × 4.0 pounds per ingot = 20,000 poundsAlternatively, the variances can be computed using the formulas:Materials quantity variance = SP (AQ – SQ)= $2.50 per pound (19,800 pounds – 20,000 pounds) = $500 FMaterials price variance = AQ (AP – SP)= 25,000 pounds ($2.95 per pound – $2.50 per pound) = $11,250 U1. b.Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 3,000 hours* × $9.00 per hour3,600 hours × $9.00 per hour 3,600 hours × $8.70 per hour*5,000 ingots × 0.6 hour per ingot = 3,000 hoursAlternatively, the variances can be computed using the formulas:Labor efficiency variance = SR (AH – SH)= $9.00 per hour (3,600 hours – 3,000 hours) = $5,400 ULabor rate variance = AH (AR – SR)= 3,600 hours ($8.70 per hour – $9.00 per hour) = $1,080 F1. c.Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 1,500 hours* × $2.00 per hour1,800 hours × $2.00 per hour*5,000 ingots × 0.3 hours per ingot = 1,500 hoursAlternatively, the variances can be computed using the formulas:Variable overhead efficiency variance = SR (AH – SH) = $2.00 per hour (1,800 hours – 1,500 hours) = $600 UVariable overhead rate variance = AH (AR – SR)= 1,800 hours ($2.40 per hour* – $2.00 per hour) = $720 U*$4,320 ÷ 1,800 hours = $2.40 per hour2. Summary of variances:Material quantity variance ...................... $ 500 FMaterial price variance .......................... 11,250 ULabor efficiency variance ....................... 5,400 ULabor rate variance ............................... 1,080 FVariable overhead efficiency variance ..... 600 UVariable overhead rate variance ............. 720 UNet variance ......................................... $16,390 UThe net unfavorable variance of $16,390 for the month caused theplant’s variable cost of goods sold to increase from the budgeted level of $80,000 to $96,390:Budgeted cost of goods sold at $16 per ingot ...... $80,000Add the net unfavorable variance (as above) ....... 16,390Actual cost of goods sold .................................... $96,390This $16,390 net unfavorable variance also accounts for the differencebetween the budgeted net operating income and the actual net loss for the month.Budgeted net operating income .......................... $15,000Deduct the net unfavorable variance added tocost of goods sold for the month ..................... 16,390Net operating loss ............................................. $(1,390)3. The two most significant variances are the materials price variance andthe labor efficiency variance. Possible causes of the variances include: Materials price variance: Outdated standards, uneconomicalquantity purchased, higher qualitymaterials, high-cost method of transport.Labor efficiency variance: Poorly trained workers, poor qualitymaterials, faulty equipment, workinterruptions, inaccurate standards,insufficient demand.Problem 10-10 (45 minutes)1. The standard quantity of plates allowed for tests performed during the month would be:Smears ................................. 2,700Blood tests ............................ 900 Total ..................................... 3,600 Plates per test ....................... × 3 Standard quantity allowed ......10,800The variance analysis for plates would be:Standard Quantity Allowedfor Actual Output, at Standard Price(SQ × SP) Actual Quantity of Input, at Standard Price(AQ × SP) Actual Quantity of Input, at Actual Price (AQ × AP)10,800 plates × $2.50 per plate14,000 plates × $2.50 per plateAlternatively, the variances can be computed using the formulas:Materials quantity variance = SP (AQ – SQ)= $2.50 per plate (14,000 plates – 10,800 plates) = $8,000 Us Materials price variance = AQ (AP – SP)= 16,000 plates ($2.40 per plate* – $2.50 per plate) = $1,600 F*$38,400 ÷ 16,000 plates = $2.40 per plate.Note that all of the price variance is due to the hospital’s 4% quantity discount. Also note that the $8,000 quantity variance for the month is equal to nearly 30% of the standard cost allowed for plates. This variance may be the result of using too many assistants in the lab.2. a. The standard hours allowed for tests performed during the monthwould be:Smears: 0.3 hour per test × 2,700 tests ..... 810 Blood tests: 0.6 hour per test × 900 tests ... 540 Total standard hours allowed ...................... 1,350The variance analysis of labor would be:Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 1,350 hours × $12 per hour1,800 hours × $12 per hourAlternatively, the variances can be computed using the formulas:Labor efficiency variance = SR (AH – SH)= $12 per hour (1,800 hours – 1,350 hours) = $5,400 ULabor rate variance = AH (AR – SR)= 1,800 hours ($10.25 per hour* – $12.00 per hour) = $3,150 F*$18,450 ÷ 1,800 hours = $10.25 per hour2. b. The policy probably should not be continued. Although the hospital issaving $1.75 per hour by employing more assistants relative to the number of senior technicians than other hospitals, this savings is more than offset by other factors. Too much time is being taken in performing lab tests, as indicated by the large unfavorable labor efficiency variance. And, it seems likely that most (or all) of the hospital’s unfavorable quantity variance for plates is traceable to inadequate supervision of assistants in the lab.3. The variable overhead variances follow:Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 1,350 hours × $6.00 per hour1,800 hours × $6.00 per hourAlternatively, the variances can be computed using the formulas:Variable overhead efficiency variance = SR (AH – SH) = $6 per hour (1,800 hours – 1,350 hours) = $2,700 UVariable overhead rate variance = AH (AR – SR)= 1,800 hours ($6.50 per hour* – $6.00 per hour) = $900 U*$11,700 ÷ 1,800 hours = $6.50 per hourYes, the two variances are related. Both are computed by comparing actual labor time to the standard hours allowed for the output of the period. Thus, if there is an unfavorable labor efficiency variance, there will also be an unfavorable variable overhead efficiency variance.1. a. In the solution below, the materials price variance is computed on theentire amount of materials purchased, whereas the materials quantity variance is computed only on the amount of materials used in production:Standard Quantity Allowedfor Actual Output, at Standard Price(SQ × SP) Actual Quantity of Input, at Standard Price(AQ × SP) Actual Quantity of Input, at Actual Price (AQ × AP)4,500 pounds* × $6.00 per pound6,000 pounds × $6.00 per pound*3,000 units × 1.5 pounds per unit = 4,500 poundsAlternatively, the variances can be computed using the formulas:Materials quantity variance = SP (AQ – SQ)= $6 per pound (6,000 pounds – 4,500 pounds) = $9,000 UMaterials price variance = AQ (AP – SP)= 8,000 pounds ($5.75 per pound* – $6.00 per pound) = $2,000 F *$46,000 ÷ 8,000 pounds = $5.75 per poundb. No, the contract should probably not be signed. Although the new supplier is offering the material at only $5.75 per pound, the large materials quantity variance indicates a problem using these materials is production. The company still has 2,000 pounds of unused material in the warehouse; if these materials do as poorly in production as the 6,000 pounds already used, the total quantity variance on the 8,000 pounds of materials purchased will be very large.2. a.Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 1,800 hours* × $12.00 per hour1,600 hours** × $12.00 per hour 1,600 hours** × $12.50 per hour* = 1,800 hours ** 10 workers × 160 hours per worker = 1,600 hoursAlternatively, the variances can be computed using the formulas:Labor efficiency variance = SR (AH – SH)= $12.00 per hour (1,600 hours – 1,800 hours) = $2,400 FLabor rate variance = AH (AR – SR)= 1,600 hours ($12.50 per hour – $12.00 per hour) = $800 Ub. Yes, the new labor mix should probably be continued. Although it increases the average hourly labor cost from $12.00 to $12.50,resulting in an $800 unfavorable labor rate variance, this is more than offset by greater efficiency of labor time. Notice that the labor efficiency variance is $2,400 favorable. Thus, the new labor mix reduces overall labor costs.3.Standard Hours Allowed for Actual Output, at Standard Rate (SH × SR) Actual Hours of Input, at Standard Rate (AH × SR) Actual Hours of Input, at Actual Rate (AH × AR) 1,800 hours × $2.50 per hour1,600 hours × $2.50 per hourAlternatively, the variances can be computed using the formulas:Variable overhead efficiency variance = SR (AH – SH) = $2.50 per hour (1,600 hours – 1,800 hours) = $500 FVariable overhead rate variance = AH (AR – SR)= 1,600 hours ($2.25 per hour* – $2.50 per hour) = $400 F*$3,600 ÷ 1,600 hours = $2.25 per hourBoth the labor efficiency variance and the variable overhead efficiency variance are computed by comparing actual labor-hours to standard labor-hours. Thus, if the labor efficiency variance is favorable, then the variable overhead efficiency variance will be favorable as well.1. a.Standard Quantity Allowedfor Actual Output, at Standard Price(SQ × SP) Actual Quantity ofInput,at Standard Price(AQ × SP) Actual Quantity ofInput, at Actual Price (AQ × AP) 21,600 feet* × $3.00 per foot21,000 feet** × $3.00 per foot 21,000 feet** × $3.20 per foot* 12,000 units × 1.80 feet per unit = 21,600 feet **Alternatively, the variances can be computed using the formulas:Materials quantity variance = SP (AQ – SQ) = $3.00 per foot (21,000 feet – 21,600 feet) = $1,800 FMaterials price variance = AQ (AP – SP)= 21,000 feet ($3.20 per foot – $3.00 per foot) = $4,200 U。
新编[经济学]管理会计英文版课后习题答案高等教育出版社chapter 9
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CHAPTER 9standard costing:a managerial control toolQUESTIONS FOR WRITING AND DISCUSSION1.Standard costs are essentially budgetedamounts on a per-unit basis. Unit standardsserve as inputs in building budgets.2.Unit standards are used to build flexiblebudgets. Unit standards for variable costsare the variable cost component of a flexiblebudgeting formula.3.The quantity decision is determining howmuch input should be used per unit of out-put. The pricing decision determines howmuch should be paid for the quantity of inputused.4.Historical experience is often a poor choicefor establishing standards because the his-torical amounts may include more inefficien-cy than is desired.5.Engineering studies can serve as importantinput to standard setting. Many feel that thisapproach by itself may produce standardsthat are too rigorous.6.Ideal standards are perfection standards,representing the best possible outcomes.Currently attainable standards are standardsthat are challenging but allow some waste.Currently attainable standards are oftenchosen because many feel they tend to mo-tivate rather than frustrate.7.Standard costing systems improve planningand control and facilitate product costing. 8.By identifying standards and assessing devi-ations from the standards, managers can lo-cate areas where change or corrective be-havior is needed.9.Actual costing assigns actual manufacturingcosts to products. Normal costing assignsactual prime costs and estimated overheadcosts to products. Standard costing assignsestimated manufacturing costs to products.10. A standard cost sheet presents the standardamount of and price for each input and usesthis information to calculate the unit standardcost. 11.Managers generally tend to have more con-trol over the quantity of an input used ratherthan the price paid per unit of input.12. A standard cost variance should be investi-gated if the variance is material and if thebenefit of investigating and correcting thedeviation is greater than the cost.13.Control limits indicate how large a variancemust be before it is judged to be materialand the process is out of control. Control lim-its are usually set by judgment although sta-tistical approaches are occasionally used. 14.The materials price variance is often com-puted at the point of purchase rather than is-suance because it provides control infor-mation sooner.15.Disagree. A materials usage variance canbe caused by factors beyond the control ofthe production manager, e.g., purchase of alower-quality material than normal.16.Disagree. Using higher-priced workers toperform lower-skilled tasks is an example ofan event that will create a rate variance thatis controllable.17.Some possible causes of an unfavorablelabor efficiency variance are inefficient labor,machine downtime, and poor quality materi-als.18.Part of a variable overhead spending vari-ance can be caused by inefficient use ofoverhead resources.19.Agree. This variance, assuming that variableoverhead costs increase as labor usage in-creases, is caused by the efficiency or ineffi-ciency of labor usage.20.Fixed overhead costs are either committedor discretionary. The committed costs willnot differ by their very nature. Discretionarycosts can vary, but the level the companywants to spend on these items is decided atthe beginning and usually will be met unlessthere is a conscious decision to change thepredetermined levels.21.The volume variance is caused by the actualvolume differing from the expected volumeused to compute the predetermined stand-ard fixed overhead rate. If the actual volumeis different from the expected, then the com-pany has either lost or earned a contributionmargin. The volume variance signals thisoutcome, and if the variance is large, thenthe loss or gain is large since the volumevariance understates the effect.22.The spending variance is more important.This variance is computed by comparing ac-tual expenditures with budgeted expendi-tures. The volume variance simply tellswhether the actual volume is different fromthe expected volume.EXERCISES 9–11. d2. e3. d4. c5. e6. a9–21. a. The operating personnel of each cost center should be involved in settingstandards. They are the primary source for quantity information. The mate-rials manager and purchasing manager are a source of information for ma-terial prices, and personnel are knowledgeable on wage information. The Accounting Department should be involved in overhead standards and should provide information about past prices and usage. Finally, if infor-mation about absolute efficiency is desired, industrial engineers can pro-vide important input.b. Standards should be attainable; they should include an allowance forwaste, breakdowns, etc. Market prices for materials as well as labor (un-ions) should be a consideration for setting standards. Labor prices should include fringe benefits, and material prices should include freight, taxes, etc.2. In principle, before formal responsibility is assigned, the causes of the vari-ances must be known. To be responsible, a manager must have the ability to control or influence the variance. The following assignments of responsibility are general in nature and have exceptions:MPV: Purchasing managerMUV: Production managerLRV: Production managerLEV: Production managerOH variances: Departmental managers1. SH = 0.8 ⨯ 95,000 = 76,000 hours2. SQ = 5 ⨯ 95,000 = 475,000 components9–41. MPV = (AP – SP)AQ= ($0.03 – $0.032)6,420,000 = $12,840 FMUV = (AQ – SQ)SP= (6,420,000 – 6,400,000)$0.032 = $640 U2. LRV = (AR – SR)AH= ($12.50 – $12.00)2,000 = $1,000 UL EV = (AH – SH)SR= (2,000 – 1,850)$12.00 = $1,800 U9–51. Variable overhead analysis:Actual VOH Budgeted VOH Applied VOH2. Fixed overhead analysis:Actual FOH Budgeted FOH Applied FOH1. Materials: $60 ⨯ 20,000 = $1,200,000L abor: $21 ⨯ 20,000 = $420,0002. Actual Cost* Budgeted Cost VarianceMaterials $1,215,120 $1,200,000 $ 15,120 U Labor 390,000 420,000 30,000 F *$122,000 ⨯ $9.96; 31,200 ⨯ $12.503. MPV = (AP – SP)AQ= ($9.96 – $10)122,000 = $4,880 FMUV = (AQ – SQ)SP= (122,000 – 120,000)$10 = $20,000 UAP ⨯ AQ SP ⨯ AQ SP ⨯ SQ4. LRV = (AR – SR)AH= ($12.50 – $14)31,200 = $46,800 FLEV = (AH – SH)SR= (31,200 – 30,000)$14 = $16,800 UAR ⨯ AH SR ⨯ AH SR ⨯ SH1. MPV = (AP – SP)AQ= ($8.35 – $8.25)114,000 = $11,400 UMUV = (AQ – SQ)SP= (112,500 – 115,200)$8.25 = $22,275 F(A three-pronged variance diagram is not shown because MPV is for mate-rials purchased and not materials used.)2. LRV = (AR – SR)AH= ($9.80 – $9.65)37,560 = $5,634 UNote: AR = $368,088/37,560LEV = (AH – SH)SR= (37,560 – 38,400)$9.65 = $8,106 FAR ⨯ AH SR ⨯ AH SR ⨯ SH3. Materials Inventory ................................... 940,500M PV ............................................................ 11,400Accounts Payable ............................... 951,900Work in Process ....................................... 950,400MUV ...................................................... 22,275Materials Inventory .............................. 928,125Work in Process ....................................... 370,560LRV ............................................................ 5,634LEV ....................................................... 8,106Accrued Payroll ................................... 368,0881. Fixed overhead rate = $0.55/(1/2 hr. per unit) = $1.10 per DLHSH = 1,180,000 ⨯ 1/2 = 590,000Applied FOH = $1.10 ⨯ 590,000 = $649,0002. Fixed overhead analysis:Actual FOH Budgeted FOH Applied FOH(600,000 expected hours = 1/2 hour ⨯ 1,200,000 units)3. Variable OH rate = ($1,350,000 – $660,000)/600,000= $1.15 per DLH4. Variable overhead analysis:Actual VOH Budgeted VOH Applied VOH1. Cases needing investigation:Week 2: Exceeds the 10% rule.Week 4: Exceeds the $8,000 rule and the 10% rule.Week 5: Exceeds the 10% rule.2. The purchasing agent. Corrective action would require a return to the pur-chase of the higher-quality material normally used.3. Production engineering is responsible. If the relationship is expected to per-sist, then the new labor method should be adopted, and standards for materi-als and labor need to be revised.9–101. Standard fixed overhead rate = $2,160,000/(120,000 ⨯ 6)= $3.00 per DLHStandard variable overhead rate = $1,440,000/720,000= $2.00 per DLH2. Fixed: 119,000 ⨯ 6 ⨯ $3.00 = $2,142,000Variable: 119,000 ⨯ 6 ⨯ $2.00 = $1,428,000Total FOH variance = $2,250,000 – $2,142,000= $108,000 UTotal VOH variance = $1,425,000 – $1,428,000= $3,000 F3. Fixed overhead analysis:Actual FOH Budgeted FOH Applied FOHThe spending variance is the difference between planned and actual costs.Each item’s variance should be analyzed to see if these costs can be r e-duced. The volume variance is the incorrect prediction of volume, or alterna-tively, it is a signal of the loss or gain that occurred because of producing at a level different from the expected level.4. Variable overhead analysis:Actual VOH Budgeted VOH Applied VOHThe variable overhead spending variance is the difference between the actual variable overhead costs and the budgeted costs for the actual hours used.The variable overhead efficiency variance is the savings or extra cost at-tributable to the efficiency of labor usage.9–111. MPV = (AP – SP)AQ= ($6.60 – $6.40)1,488,000= $297,600 UMUV = (AQ – SQ)SP= (1,480,000 – 1,400,000)$6.40= $512,000 UNote: There is no three-pronged analysis for materials because materials purchased is different from the materials used. (MPV uses materials pur-chased and MUV uses materials used.)2. LRV = (AR – SR)AH= ($18.10 – $18.00)580,000= $58,000 ULEV = (AH – SH)SR= (580,000 – 560,000)$18.00= $360,000 UAR ⨯ AH SR ⨯ AH SR ⨯ SH3. Fixed overhead analysis:Actual FOH Budgeted FOH Applied FOHNote: Practical volume in hours = 2 ⨯ 288,000 = 576,000 hours4. Variable overhead analysis:Actual VOH Budgeted VOH Applied VOH1. Materials Inventory ................................... 9,523,200MPV ............................................................ 297,600Accounts Payable ............................... 9,820,8002. Work in Process ....................................... 8,960,000MUV ............................................................ 512,000Materials Inventory .............................. 9,472,0003. Work in Process ....................................... 10,080,000LRV ............................................................ 58,000LEV ............................................................. 360,000Accrued Payroll ................................... 10,498,0004. Work in Process ....................................... 3,080,000Fixed Overhead Control...................... 2,240,000Variable Overhead Control ................. 840,0005. Materials and labor:Cost of Goods Sold .................................. 1,227,600MPV ...................................................... 297,600MUV ...................................................... 512,000LRV ....................................................... 58,000LEV ....................................................... 360,000 Overhead disposition:Cost of Goods Sold .................................. 160,000Fixed Overhead Control...................... 160,000Cost of Goods Sold .................................. 32,000Variable Overhead Control ................. 32,0001. Tom purchased the large quantity to obtain a lower price so that the pricestandard could be met. In all likelihood, given the reaction of Jackie Iverson, encouraging the use of quantity discounts was not an objective of setting price standards. Usually, material price standards are to encourage the pur-chasing agent to search for sources that will supply the quantity and quality of material desired at the lowest price.2. It sounds like the price standard may be out of date. Revising the pricestandard and implementing a policy concerning quantity purchases would likely prevent this behavior from reoccurring.3. Tom apparently acted in his own self-interest when making the purchase. Hesurely must have known that the quantity approach was not the objective.Yet, the reward structure suggests that there is considerable emphasis placed on meeting standards. His behavior, in part, was induced by the re-ward system of the company. Probably, he should be retained with some ad-ditional training concerning the goals of the company and a change in em-phasis and policy to help encourage the desired behavior.9–14Materials:AP ⨯ AQ SP ⨯ AQ SP ⨯ SQLabor:AR ⨯ AH SR ⨯ AH SR ⨯ SH1. Materials Inventory ................................... 47,700MPV ...................................................... 5,700Accounts Payable ............................... 42,0002. Work in Process ....................................... 45,000MUV ............................................................ 2,700Materials Inventory .............................. 47,7003. Work in Process ....................................... 105,000LRV ....................................................... 2,300LEV (700)Accrued Payroll ................................... 102,0004. Cost of Goods Sold .................................. 2,700MUV ...................................................... 2,700MPV ............................................................ 5,700LRV ............................................................ 2,300LEV (700)Cost of Goods Sold ............................. 8,7001. VOH efficiency variance = (AH – SH)SVOR$8,000 = (1.2SH – SH)$2$8,000 = $0.4SHSH = 20,000AH = 1.2SH = 24,000 2. LEV = (AH – SH)SR$20,000 = (24,000 – 20,000)SR$20,000 = 4,000SRSR = $5LRV = (AR – SR)AH$6,000 = (AR – $5)24,000$0.25 = AR – $5AR = $5.253. SH = 4 ⨯ Units produced20,000 = 4 ⨯ Units produced Units produced = 5,000PROBLEMS9–171. Materials:AP ⨯ AQ SP ⨯ AQ SP ⨯ SQThe new process saves 0.25 ⨯ 4,000 ⨯ $3 = $3,000. Thus, the net savings at-tributable to the higher-quality material are ($6,000 – $3,000) – $2,300 = $700.Keep the higher-quality material!2. Labor for new process:AR ⨯ AH SR ⨯ AH SR ⨯ SHThe new process gains $3,000 in materials (see Requirement 1) but loses $6,000 from the labor effect, giving a net loss of $3,000. If this pattern is ex-pected to persist, then the new process should be abandoned.3. Labor for new process, one week later:AR ⨯ AH SR ⨯ AH SR ⨯ SHIf this is the pattern, then the new process should be continued. It will save $260,000 per year ($5,000 ⨯52 weeks). The weekly savings of $5,000 is the materials savings of $3,000 plus labor savings of $2,000.9–181. e2. h3. k4. n5. d6. g7. o8. b9. m10. l11. j12. c13. a14. i15. f9–191. Material quantity standards:1.25 feet per cutting board⨯ 67.50 feet for five good cutting boardsUnit standard for lumber = 7.50/5 = 1.50 feetUnit standard for foot pads = 4.0Material price standards:Lumber: $3.00 per footPads: $0.05 per padLabor quantity standards:Cutting: 0.2 hrs. ⨯ 6/5 = 0.24 hours per good unitAttachment: 0.25 hours per good unitUnit labor standard 0.49 hours per good unit Labor rate standard: $8.00 per hourStandard prime cost per unit:Lumber (1.50 ft. @ $3.00) $4.50Pads (4 @ $0.05) 0.20Labor (0.49 hr. @ $8.00) 3.92Unit cost $8.629–19 Concluded2. Standards allow managers to compare planned and actual performance. Thedifference can be broken down into price and efficiency variances to identify the cause of a variance. With this feedback, managers are able to improve productivity as they attempt to produce without cost overruns.3. a. The purchasing manager identifies suppliers and their respective pricesand quality of materials.b. The industrial engineer often conducts time and motion studies to deter-mine the standard direct labor time for a unit of product. They also can de-termine how much material is needed for the product.c. The cost accountant has historical information as well as current infor-mation from the purchasing agent, industrial engineers, and operating personnel. He or she can compile this information to obtain an achievable standard.4. Lumber:MPV = (AP – SP)AQ= ($3.10 – $3.00)16,000 = $1,600 UMUV = (AQ – SQ)SP= (16,000 – 15,000)$3 = $3,000 URubber pads:MPV = (AP – SP)AQ= ($0.048 – $0.05)51,000 = $102 FMUV = (AQ – SQ)SP= (51,000 – 40,000)$0.05 = $550 ULabor:LRV = (AR – SR)AH= ($8.05 – $8.00)5,550 = $277.50 ULEV = (AH – SH)SR= (5,550 – 4,900)$8 = $5,200 U9–201. The cumulative average time per unit is an average. It includes the2.5 hoursper unit when 40 units are produced as well as the 1.024 hours per unit when 640 units are produced. As more units are produced, the cumulative average time per unit will decrease.2. The standard should be 0.768 hour per unit as this is the average time takenper unit once efficiency is achieved:[(1.024 ⨯ 640) – (1.28 ⨯ 320)]/(640 – 320)3. Std. Price Std. Usage Std. CostDirect materials $ 4 25.000 $100.00 Direct labor 15 0.768 11.52 Variable overhead 8 0.768 6.14 Fixed overhead 12 0.768 9.22* Standard cost per unit $126.88* *Rounded4. There would be unfavorable efficiency variances for the first 320 units be-cause the standard hours are much lower than the actual hours at this level.Actual hours would be approximately 409.60 (320 ⨯ 1.28), and standard hours would be 245.76 (320 ⨯ 0.768).9–211. MPV = (AP – SP)AQ= ($4.70 – $5.00)260,000 = $78,000 FMUV = (AQ – SQ)SP= (320,000 – 300,000)$5 = $100,000 UThe materials usage variance is viewed as the most controllable because prices for materials are often market-driven and thus not controllable. Re-sponsibility for the variance in this case likely would be assigned to purchas-ing. The lower-quality materials are probably the cause of the extra usage.2. LRV = (AR – SR)AH= ($13 – $12)82,000 = $82,000 ULEV = (AH – SH)SR= (82,000 – 80,000)$12 = $24,000 UAR ⨯ AH SR ⨯ AH SR ⨯ SHProduction is usually responsible for labor efficiency. In this case, efficiency may have been affected by the lower-quality materials, and purchasing, thus, may have significant responsibility for the outcome. Other possible causes are less demand than expected, poor supervision, lack of proper training, and lack of experience.3. Variable overhead variances:Actual VOH Budgeted VOH Applied VOHFormula approach:VOH spending variance = Actual VOH – (SVOR ⨯ AH)= $860,000 – ($10 ⨯ 82,000)= $40,000 UVOH efficiency variance = (AH – SH)SVOR= (82,000 – 80,000)$10= $20,000 U4. Fixed overhead variances:Actual FOH Budgeted FOH Applied FOHThe volume variance is a measure of unused capacity. This cost is reduced as production increases. Thus, selling more goods is the key to reducing this variance (at least in the short run).5. Four variances are potentially affected by material quality:MPV $ 78,000 FMUV 100,000 ULEV 24,000 UVOH efficiency 20,000 U$ 66,000 UIf the variance outcomes are largely attributable to the lower-quality materi-als, then the company should discontinue using this material.6. (Appendix required)Materials Inventory ................................... 1,300,000MPV ...................................................... 78,000Accounts Payable ............................... 1,222,000Work in Process ....................................... 1,500,000MUV ............................................................ 100,000Materials Inventory .............................. 1,600,0009–21 ConcludedWork in Process ....................................... 960,000LRV ............................................................ 82,000LEV ............................................................. 24,000Accrued Payroll ................................... 1,066,000Cost of Goods Sold .................................. 206,000MUV ...................................................... 100,000LRV ....................................................... 82,000LEV ....................................................... 24,000MPV ............................................................ 78,000Cost of Goods Sold ............................. 78,000VOH Control .............................................. 860,000Various Credits .................................... 860,000FOH Control .............................................. 556,000Various Credits .................................... 556,000Work in Process ....................................... 800,000VOH Control ......................................... 800,000Work in Process ....................................... 480,000FOH Control ......................................... 480,000Cost of Goods Sold .................................. 60,000VOH Control ......................................... 60,000Cost of Goods Sold .................................. 76,000FOH Control ......................................... 76,0009–221. Fixed overhead rate = $2,400,000/600,000 hours*= $4 per hour*Standard hours allowed = 2 ⨯ 300,000 units2. Little Rock plant:Actual FOH Budgeted FOH Applied FOHAthens plant:Actual FOH Budgeted FOH Applied FOHThe spending varian ce is almost certainly caused by supervisor’s salaries (for example, an unexpected midyear increase due to union pressures). It is unlikely that the lease payments or depreciation would be greater than budg-eted. Changing the terms on a 10-year lease in the first year would be unusual (unless there is some sort of special clause permitting increased payments for something like unexpected inflation). Also, the depreciation should be on target (unless more equipment was purchased or the depreciation budget was set before the price of the equipment was known with certainty).The volume variance is easy to explain. The Little Rock plant produced less than expected, and so there was an unused capacity cost: $4 ⨯ 120,000 hours = $480,000. The Athens plant had no unused capacity.9–22 Concluded3. It appears that the 120,000 hours of unused capacity (60,000 subassemblies)is permanent for the Little Rock plant. This plant has 10 supervisors, each making $50,000. Supervision is a step-cost driven by the number of produc-tion lines. Unused capacity of 120,000 hours means that two lines can be shut down, saving the salaries of two supervisors ($100,000 at the original salary level). The equipment for the two lines is owned. If it could be sold, then the money could be reinvested, and the depreciation charge would be reduced by20 percent (two lines shut down out of 10). There is no way to directly reducethe lease payments for the building. Perhaps the company could use the space to establish production lines for a different product. Or perhaps the space could be subleased. Another possibility is to keep the supervisors and equipment and try to fill the unused capacity with special orders orders for the subassembly below the regular selling price from a market not normally served. If the selling price is sufficient to cover the variable costs and cover at least the salaries and depreciation for the two lines, then the special order option may be a possibility. This option, however, is fraught with risks, e.g., the risk of finding enough orders to justify keeping the supervisors and equipment, the risk of alienating regular customers who pay full price, and the risk of violating price discrimination laws. Note:You may wish to point out the value of the resource usage model in answering this question (see Chapter 3).4. For each plant, the standard fixed overhead rate is $4 per direct labor hour.Since each subassembly should use two hours, the fixed overhead cost per unit is $8, regardless of where they are produced. Should they differ? Some may argue that the rate for the Little Rock plant needs to be recalculated. For example, one possibility is to use expected actual capacity, instead of practi-cal capacity. In this case, the Little Rock plant would have a fixed overhead rate of $2,400,000/480,000 hours = $5 per hour and a cost per subassembly of $10. The question is: Should the subassemblies be charged for the cost of the unused capacity? ABC suggests a negative response. Products should be charged for the resources they use, and the cost of unused capacity should be reported as a separate item—to draw management’s attention to the need to manage this unused capacity.9–231. Normal Patient Day:Standard Standard StandardPrice Usage Cost Direct materials $10.00 8.00 lb. $ 80.00 Direct labor 16.00 2 hr. 32.00 Variable overhead 30.00 2 hr. 60.00 Fixed overhead 40.00 2 hr. 80.00 Unit cost $252.00 Cesarean Patient Day:Standard Standard StandardPrice Usage Cost Direct materials $10.00 20.00 lb. $200.00 Direct labor 16.00 4 hr. 64.00 Variable overhead 30.00 4 hr. 120.00 Fixed overhead 40.00 4 hr. 160.00 Unit cost $544.00 2. MPV = (AP – SP)AQ= ($9.50 – $10.00)172,000 = $86,000 FMUV = (AQ – SQ)SPMUV (Normal) = [30,000 – (8 ⨯ 3,500)]$10 = $20,000 UMUV (Cesarean) = [142,000 – (20 ⨯ 7,000)]$10 = $20,000 UMaterials .................................................... 1,720,000MPV ...................................................... 86,000Accounts Payable ............................... 1,634,000Work in Process ....................................... 1,680,000M UV ........................................................... 40,000Materials .............................................. 1,720,000MPV ............................................................ 86,000MUV ............................................................ 40,000Cost of Services Sold ......................... 126,0003. LRV = (AR – SR)AH= ($15.90 – $16.00)36,500 = $3,650 FLEV = (AH – SH)SRLEV (Normal) = [7,200 – (2 ⨯ 3,500)]$16 = $3,200 ULEV (Cesarean) = [29,300 – (4 ⨯ 7,000)]$16 = $20,800 UWork in Process ....................................... 560,000*LEV ............................................................. 24,000LRV ....................................................... 3,650Accrued Payroll ................................... 580,350 *[(2 ⨯ 3,500) + (4 ⨯ 7,000)] ⨯ $16 = $560,000Cost of Services Sold ............................... 20,350LRV ............................................................ 3,650LEV ....................................................... 24,0004. Variable overhead variances:Actual VOH Budgeted VOH Applied VOHFixed overhead variances:Actual FOH Budgeted FOH Applied FOHNote: SH = (2 ⨯ 3,500) + (4 ⨯ 7,000) = 35,000。
管理会计第十章课后习题答案
第十章习题答案1、质量控制分配率：50000/1000=50元/次机器设置分配率：100000/1000=100元/次账款登记分配率：650/25=26元/张其他间接成本分配率：30000/3000=10元/小时（1）作业成本法下，打印机分配的各项费用：质量控制费：25×50=1250元机器设置费：200×100=20000元账款登记费：10×26=260元其他间接成本：300×10=3000元负担费用总额：1250+20000+260+3000=24510元（2）每台打印机负担费用：24510/500=49.02元（3）用直接工时分配：分配率：（50000+100000+650+30000）/3000=60.22元/小时500台打印机分配：60.22×300=18066元（注明：题目中打印机订单生产要求中的“发票数”由“250”改为“10”。
）2、（1）根据传统本量利分析模型，达到公司年营业利润预期目标的产量：Q=（15000000+100000000）/（8500-5100）=33823.53（台）（2）生产批次=50000/500=100产品的单位变动成本保持不变，即5100元/台产品中与每批次相关的长期变动成本=6000000/100=60000元单位产品分摊的长期变动成本=60000/500=120元新产品的固定成本减少到9000000元（=15000000-6000000）达到公司年营业利润预期目标的产量：Q=（9000000+100000000）/（8500-5100-120）=33231.71（台）（3）引进生产线后企业可增加的利润=50000×（8500-5100-120）-9000000=155000000元。
财务会计课后习题答案(英文原版)第10单元
BLOOM'S TAXONOMY TABLE
4.
Describe the procedure for revising periodic depreciation.
5.
Distinguish between revenue and capital expenditures, and explain the entries for these expenditures.
Questions 20, 21, 23
Exercises 10
*10. Explain how to account for the exchange of plant assets.
25, 26, 27
14, 15
11, 12, 13
*Note: All asterisked Questions, Exercises, and Problems relate to material contained in the appendix *to the chapter.
Knowledge Q10-1 Q10-2 Q10-3 Q10-5 Q10-6 Q10-7 Q10-22 Q10-8 P10-4A P10-4B BE10-7 E10-5 Q10-9 Q10-24 Q10-11 BE10-8 BE10-9 E10-6 BE10-10 E10-7 BE10-11 P10-7A P10-8B P10-8A E10-8 P10-7B E10-9 BE10-12 Q10-20 P10-5B BE10-13 Q10-21 P10-7B P10-5A E10-10 P10-7A BE10-14 BE10-15 E10-11 E10-12 E10-13 Communication Group Decision Case Exploring the Web Research Case Financial Interpreting Group Decision Reporting Financial Ethics Case Comp. Analysis Comp. Analysis Sts. Global Focus Cookie Chronicle P10-9A P10-9B P10-5A P10-6A P10-5B P10-6B BE10-3 BE10-4 BE10-5 BE10-6 E10-3 P10-2B E10-4 P10-4B P10-2A P10-4A P10-3A P10-3B Q10-4 E10-1 P10-1A P10-1B BE10-1 BE10-2 E10-2 Comprehension Application Analysis Synthesis Evaluation
国际财务管理系统课后习题问题详解chapter10
CHAPTER 10 MANAGEMENT OF TRANSLATION EXPOSURESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Explain the difference in the translation process between the monetary/nonmonetary method and the temporal method.Answer: Under the monetary/nonmonetary method, all monetary balance sheet accounts of a foreign subsidiary are translated at the current exchange rate. Other balance sheet accounts are translated at the historical rate exchange rate in effect when the account was first recorded. Under the temporal method, monetary accounts are translated at the current exchange rate. Other balance sheet accounts are also translated at the current rate, if they are carried on the books at current value.If they are carried at historical value, they are translated at the rate in effect on the date the item was put on the books. Since fixed assets and inventory are usually carried at historical costs, the temporal method and the monetary/nonmonetary method will typically provide the same translation.2. How are translation gains and losses handled differently according to the current rate method in comparison to the other three methods, that is, the current/noncurrent method, the monetary/nonmonetary method, and the temporal method?Answer: Under the current rate method, translation gains and losses are handled only as an adjustment to net worth through an equity account named the “ cumulativetranslation adjustment ”account. Nothing passes through the income statement. Theother three translation methods pass foreign exchange gains or losses through theincome statement before they enter on to the balance sheet through the accumulatedretained earnings account.currency would be the same as the parent firmAnswer: Three examples underFASB 52, where the foreign entitys functional currency will be the same as the parent firm 's currency, are: i) the foreign entity ' s cash flows directly affect the parents cash flows and are readily available for remittance to theparent firm; ii)the salespricesforthe foreign entity ' s products areresponsive on a short-termbasis to exchange ratechanges,where sales prices are determined through worldwide competition; and, iii) the salesmarket is primarily located in the parent ' s country or sales contracts are denominated in the parent ' s currency.4. Describe the remeasurement and translation process under FASB 52 of a wholly owned affiliate that keeps its books in the local currency of the country in which it operates, which is different than its functional currency.Answer: For a foreign entity that keeps its books in its local currency, which is different from its functional currency, the translation process according to FASB 52 is to: first, remeasure the financial reports from the local currency into the functional currency using the temporal method of translation, and second, translate from the functional currency into the reporting currency using the current rate method of translation.5. It is, generally, not possible to completely eliminate both translation exposure and transaction exposure. In some cases, the elimination of one exposure will also eliminate the other. But in other cases, the elimination of one exposure actually creates the other. Discuss which exposure might be viewed as the most important to effectively manage, if a conflict between controlling both arises. Also, discuss and critique the common methods for controlling translation exposure.Answer: Since it is, generally, not possible to completely eliminate transaction and translation exposure, we recommend that transaction exposure be given first priority since it involves real cash flows. The translation process, on-the- other hand, has no direct effect on reporting currency cash flows, and will3.Identify some instances under FASB 52 when a foreignentity s functionals currency.bothonly have a realizable effect on net investment upon the sale or liquidation of the assets.There are two common methods for controlling translation exposure: a balance sheet hedge and a derivatives hedge. The balance sheet hedge involves equating the amount of exposed assets in an exposure currency with the exposed liabilities in that currency, so the net exposure is zero. Thus when an exposure currency exchange rate changes versus the reporting currency, the change in assets will offset the change inrather a speculative position, since the size of the expected spot rate of exchange for the exposure currency with the reporting currency.If the actual spot rate differs from the expected rate, the “ hedge ” may result inthe loss of real cash flows.liabilities. To create a balance sheet hedge, once transaction exposure has beencontrolled, often means creating new transactionexposure. This is not wise since real cash flow losses can result.A derivativeshedge is not really a hedge, buthedge ” is based on the futurePROBLEMS1. Assume that FASB 8 is still in effect in stead of FASB 52. Con struct a translation exposure report for Centralia Corporation and its affiliates that is thecoun terpart to Exhibit 10.7 in the text. Cen tralia and its affiliates carryinven tory and fixed assets on the books at historical values.Solution: The following table provides a translation exposure report for CentraliaCorporati on and its affiliates un der FASB 8, which is esse ntially the temporal methodof translation. The differenee between the new report and Exhibit 10.7 is thatnonmonetary accounts such as inventory and fixed assets are translated at the historical excha nge rate if they are carried at historical costs. Thus, theseaccounts will not change values when exchange rates change and they do not create tran slati on exposure.Exam in ati on of the table in dicates that un der FASB 8 there is n egative netexposure for the Mexica n peso and the euro, whereas un der FASB 52 the net exposure for these currencies is positive. There is no change in net exposure for theCan adia n dollar and the Swiss franc. Con seque ntly, if the euro depreciates aga instthe dollar from ? 1.1000/$1.00 to ? 1.1786/$1.00, as the text example assumed, exposed assets will now fall in value by a smaller amount tha n exposed liabilities,in stead of vice versa. The associated report ing curre ncy imbala nee will be $239,415,calculated as follows:Report ing Curre ncy Imbala nce=-?3,949,0000 ?1.1786/$1.00 -?3,949,0000?1.1000/$1.00=$239,415.inven tory and fixed assets on the books at historical values.Solution: This problem is the sequel to Problem 1. The solution to Problem 1 showed that if the euro depreciated there would be a reportingcurrency imbalanee of$239,415. Un der FASB 8 this is carried through the in come stateme nt as a foreig nTranslation Exposure Report under FASB 8 for Centralia and Spa nish Affiliates, December 31,2005 (in 000 Currency Units)Corporati on and its MexicanCan adia n DollarMexica n PesoEuroSwiss Fra ncAssetsCashCD200 Ps 6,000 ? 825 SF 0 Acco unts receivable 0 9,000 1,045 0 Inven tory 0 0Net fixed assetsExposed assetsCD200Ps15,000 ? 1,870SF 0LiabilitiesAcco unts payable CD 0 Ps 7,000 ? 1,364 SF 0 Notes payable 017,000 9351,400Lon g-term debt27,0003,520ExposedCD 0Ps51,000 ? 5,819SF1,400liabilitiesNet exposure CD200 (Ps36,000) (? 3,949) (SF1,400)2. Assume that FASB 8 is still in effect in stead of FASB 52.Con struct acon solidated balanee sheet for Centralia Corporationand its affiliatesafter adepreciati onof the euro from ? 1.1000/$1.00to ? 1.1786/$1.00that is thecoun terpart to Exhibit 10.8 in the text. Cen tralia and its affiliatescarryexchange gain to the retained earnings on the balance sheet. The following shows thattable consolidated retained earnings increased to $4,190,000 from $3,950,000 in Exhibit 10.8. This is an increase of $240,000, which is the same as the reporting currency imbalance after accounting for rounding error.Con solidated Bala nee Sheet un der FASB 8 for Cen tralia Corporati on and its Mexica n and Spa nish Affiliates, December 31,2005: Post-Excha nge Rate Cha nge (in 000 Dollars)AssetsCash $ 950 a$ 600 $ 700 $ 2,250 Acco unts receivable 1,450 b900 887 3,237 Inven tory 3,000 1,500 1,500 6,000In vestme nt in Mexica naffiliatec - - -In vestme nt in Spanishaffiliated - - -Net fixed assets 9,000 4,600 4,000 17,600 Total assets $29,087 Liabilities and Net WorthAcco unts payable $1,800 $ 700 b$1,157 $ 3,657 Notes payable 2,200 1,700 1,043 e4,943 Lon g-term debt 7,110 2,700 2,987 12,797Common stock 3,500 c d3,500Reta ined ear nings 4,190 c d4,190Total liabilities and $29,087 net wortha This in cludes CD200,000 the pare nt firm has in a Ca nadia n bank, carried as $150,000.CD200,000/(CD1.3333/$1.00) = $150,000.b$1,750,000 - $300,000 (= Ps3,000,000/(Ps10.00/$1.00)) intracompany loan = $1,450,000.c,d Investment in affiliates cancels with the net worth of the affiliates in theconsolidation.eThe Spanish affiliate owes a Swiss bank SF375,000 ( —SF1.2727/ ? 1.00 = ? 294,649). This is carried on the books,after the exchange rate change, as part of ? 1,229,649 = ? 294,649 + ? 935,000. ? 1,229,649/( ? 1.1786/$1.00) = $1,043,313.3. In Example 10.2, a forward contract was used to establish a derivatives “ hedge”to protect Centralia from a translation loss if the euro depreciated from ? 1.1000/$1.00 to ? 1.1786/$1.00. Assume that an over-the-counter put option on the euro with a strike price of ? 1.1393/$1.00 (or $0.8777/? 1.00) can be purchased for$0.0088 per euro. Show how the potential translation loss can be “ hedged” with an option contract.Solution: As in example 10.2, if the potential translation loss is $110,704, the equivalent amount in functional currency that needs to be hedged is 3,782,468. Ifin fact the euro does depreciate to 1.1786/$1.00 ($0.8485/ 1.00), ? 3,782,468 canbe purchased in the spot market for $3,209,289. At a striking price of1.1393/$1.00, the 3,782,468 can be sold through the put for $3,319,993, yielding agross profit of $110,704. The put option cost $33,286 (= ? 3,782,468 x $0.0088).Thus, at an exchange rate of ? 1.1786/$1.00, the put option will effectively hedge$110,704 - $33,286 = $77,418 of the potential translation loss. At terminal exchangerates of ? 1.1393/$1.00 to ? 1.1786/$1.00, the put option hedge will be lesseffective. An option contract does not have to be exercised if doing so isdisadvantageous to the option owner. Therefore, the put will not be exercised atexchange rates of less than 1.1393/$1.00 (more than $0.8777/ 1.00), in which case the “ hedge” will lose the $33,286 cost of the option.MINI CASE: SUNDANCE SPORTING GOODS, INC.Sundance Sporting Goods, Inc., is a U.S. manufacturer of high-quality sporting goods- -principally golf, tennis and other racquet equipment, and also lawn sports, such as croquet and badminton-- with administrative offices and manufacturing facilities in Chicago, Illinois. Sundance has two wholly owned manufacturing affiliates, one in Mexico and the other in Canada. The Mexican affiliate is located in Mexico City and services all of Latin America. The Canadian affiliate is in Toronto and serves onlyCanada. Each affiliate keeps its books in its local currency, which is also the functional currency for the affiliate. The current exchange rates are: $1.00 =CD1.25 = Ps3.30 = A1.00 = ¥105 = W800. The nonconsolidated balanee sheets for Sundance and its two affiliates appear in the accompanying table.Noncon solidated Bala nee Sheet for Sundance Sport ing Goods, Inc. and Its Mexica n and Can adia n Affiliates, December 31,2005 (in 000 Curre ncy Un its)a The pare nt firm is owed Ps1,320,000 by the Mexica n affiliate. This sum is in cludedin the pare nt ' s accou nts receivable as $400,000, tran slated at Ps3.30/$1.00. The remain der of the pare nt ' s (Mexica n affiliate ' s) acco unts receivable (payable) is denomin ated in dollars (pesos).affiliate is wholly owned by the parent firm. s books at $2,400,000. This represents the (Ps4,500,000) and retained earnings (Ps3,420,000) on the Mexican affiliate translated at Ps3.30/$1.00. affiliate is wholly owned by the parent s books at$3,600,000. This represents and the retained earnings (CD1,600,000) books, translated atCD1.25/$1.00.dThe parent firm has outstanding notes payable of This sum is carried on the parent firm ¥105/$1.00. Other notes payable are denominated in U.S. dollars.eThe Mexican affiliate has sold on account A120,000 of import house. This sum is carried on the Mexican affiliate translated at A1.00/Ps3.30. Other accounts receivable pesos.fThe Canadian affiliate has sold on account W192,000,000 of merchandise to a Koreanimporter. This sum is carried on the Canadian affiliate ' s books as CD300,000, translated at W800/CD1.25. Other accounts receivable are denominated in Canadian dollars.You joined the International Treasury division of Sundance six months ago after spending the last two years receiving your MBA degree. The corporate treasurer has asked you to prepare a report analyzing all aspects of the translation exposure faced by Sundance as a MNC. She has alsoasked youtoaddress in your analysistherelationship between the firm 's translation exposure and its transaction exposure.After performinga forecast of futurespot ratesof exchange, you decide thatyoumust do the following before any sensible report can be written. a.Using the current exchange rates and the nonconsolidated balance sheets for Sundance and itsaffiliates, prepare a consolidated balance sheet for the MNC according to FASB 52.b. i. Prepare a translation exposure report for Sundance Sporting Goods, Inc., and its two affiliates.ii. Using the translation exposure report you have prepared, determine if any reporting currency imbalance will result from a change in exchange rates to which the 文案大全bThe Mexicanparent firm 'It is carried on the sum of the common stock s books,c The Canadian parent firm '(CD2,900,000) firm. It is carried on the the sum of the common stock on the Canadian affiliate ' s¥ 126,000,000 due a Japa nese bank. s books as $1,200,000, translated atmerchandise to an Argentine ' sbooks as Ps396,000, are denominated in Mexicanfirm has currency exposure. Your forecast is that exchange rates will change from$1.00 = CD1.25 = Ps3.30 = A1.00 = ¥105 = W800 to $1.00 = CD1.30 = Ps3.30 = A1.03 =¥105 = W800.c. Prepare a second consolidated balance sheet for the MNC using the exchange rates you expect in the future. Determine how any reporting currency imbalance will affect the new consolidated balance sheet for the MNC.d. i. Prepare a transaction exposure report for Sundance and its affiliates. Determine if any transaction exposures are also translation exposures.ii. Investigate what Sundance and its affiliates can do to control transaction and translationits exposures. Determine if any of the translation exposure should be hedged.Suggested Solution to Sundance Sporting Goods, Inc.Note to Instructor: It is not necessary to assign the entire case problem. Parts a. and b.i. can be used as self-contained problems, respectively, on basic balance sheet consolidation and the preparation of a translation exposure report.a. Below is the consolidated balance sheet for the MNC prepared according to the current rate method prescribed by FASB 52. Note that the balance sheet balances. That is, Total Assets and Total Liabilities and Net Worth equal one another. Thus, the assumption is that the current exchange rates are the same as when the affiliates were established. This assumption is relaxed in part c.Con solidated Bala nee Sheet for Sundance Sport ing Goods, In c. its Mexica n and Can adia n Affiliates,December 31,2005: Pre-Excha nge Rate Cha nge (in 000 Dollars)Sundance, Mexica n Can adia n Con solidatedInc. Affiliate Affiliate Bala neeab,c The in vestme nt in the affiliates can cels with the net worthof the affiliates inthe con solidati on.d The pare nt owes a Japa nese bank ¥126,000,000. This is carried on the books as$1,200,000 (= ¥126,000,000/( ¥105/$1.00)).e The Mexican affiliate has sold on account A120,000 of merchandise to an Argentine import house. This is carried on the Mexican affiliate ' s books as Ps396,000 (= A120,000 x Ps3.30/A1.00).f The Can adia n affiliate has sold on acco unt W192,000,000 of mercha ndise to a Korea nimporter. This is carried on the Canadian affiliate ' s books as CD300,000 (=W192,000,000/(W800/CD1.25)).b. i. Below is presented the translation exposure report for the Sundance MNC. Note, from the report that there is net positive exposure in the Mexican peso, Canadian dollar, Argentine austral and Korean won. If any of these exposure currencies appreciates (depreciates) against the U.S. dollar, exposed assets denominated in these curre ncies will in crease (fall) in tran slated value by a greater amount tha nthe exposed liabilities denomin ated in these curre ncies. There is n egative net exposure in the Japanese yen. If the yen appreciates (depreciates) against the U.S.dollar, exposed assets denomin ated in the yen will in crease (fall) in tra nslatedvalue by smaller amount than the exposed liabilities denominated in the yen.Translation Exposure Report for Sundance Sporting Goods, Inc. and its Mexican and Can adia n Affiliates, December 31,2005 (in 000 Curre ncy Un its)Japanese Mexica n Can adia n Arge ntin Korea nYen Peso Dollar e WonAustralAssetsCash ¥0 Ps 1,420 CD 1,200 A 0 W 00 2,404 1,200 120 192,000Acco unts receivableb. ii.The problem assumes thatCan adia ndollardepreciates from CD1.25/$1.00 to CD1.30/$1.00andthat theArge nti ne austral depreciatesfrom A1.00/$1.00 toA1.03/$1.00.To determ ine the report ingcurre ncy imbala nee in tran slatedvaluecaused by these excha nge rate cha nges, we can use the follow ing formula:Net Exposure Curre ncy i Net Exposure Curre ncy iS new (i / reposing)S old (i / reporting)= Reporting Currency Imbalanee.From the translation exposure report we can determine that the depreciation in the Canadian dollar will cause aCD4,200,000 - CD4,200,000 = -$129231CD1.30 / $1.00 CD1.25 / $1.00reporting currency imbalanee.Similarly, the depreciation in the Argentine austral will cause aIn total, the depreciation of the Canadian dollar and the Argentine austral will cause a report ing currency imbala nee in tran slated value equal to -$129,231 -$3,495= -$132,726.c. The new con solidated bala nee sheet for Sundance MNC after the depreciati on of the Can adia n dollar and the Arge ntine austral is prese nted below. Note that in order for the new consolidated balanee sheet to balanee after the exchange rate change, it is necessary to have a cumulativetranslationadjustmentaccountbalanee of -$133thousand, which is the amount of the reporting currency imbalanee determined in part b. ii (r oun ded to the n earest thousa nd).A120,000A1.03 / $1.00A120,000 A1.00 / $1.00=-$3,495report ing curre ncy imbala nee.Con solidated Bala nee Sheet for Sundance Sport ing Goods, In c. its Mexica n and Can adia n Affiliates, December 31,2005: Post-Excha nge Rate Cha nge (in 000 Dollars)Sundan ce, Inc.(pare nt)Mexica nAffiliateCan adia n AffiliateConsolidat ed Bala nee Sheetb,c The in vestme nt in the affiliates can cels with the net worth of the affiliates inthe con solidati on.d The pare nt owes a Japa nese bank ¥126,000,000. This is carried on the books as$1,200,000 (= ¥126,000,000/( ¥105/$1.00)).e The Mexican affiliate has sold on account A120,000 of merchandise to an Argentine import house. This is carried on the Mexican affiliate ' s books as Ps384,466 (= A120,000 x Ps3.30/A1.03).f The Can adia n affiliate has sold on acco unt W192,000,000 of mercha ndise to a Korea nimporter. This is carried on the Canadian affiliate ' s books as CD312,000(=W192,000,000/(W800/CD1.30)).d. i. The tran sacti on exposure report for Sundan ce, Inc. and its two affiliates isprese nted below. The report in dicates that the Ps1,320,000 acco unts receivable duefrom the Mexica n affiliate is not also a tra nslati on exposure because this is n ettedout in the con solidati on. However, the ¥126,000,000 no tes payable of the pare nt isalso a tran slati on exposure. Additi on ally, the A120,000 acco unts receivable of theMexican affiliate and the W192,000,000 accounts receivable of the Canadian affiliateare both tran slati on exposures.Tran sact ion Exposure Report for Sundance Sport ing Goods, Inc. andd. ii. Since transaction exposure may potentially result in real cash flow losses while translation exposure does not have an immediate direct effect on operating cash flows, we will first address the transaction exposure that confronts Sundance and its affiliates. The analysis assumes the depreciation in the Canadian dollar and the Argentine austral have already taken place.The pare nt firm can pay off the ¥126,000,000 loa n from the Japa nese bank using funds from the cash account and money from accounts receivable that it will collect. Additionally, the parent firm can collect the accounts receivable of Ps1,320,000 from its Mexican affiliate that is carried on the books as $400,000. In turn, the Mexican affiliate can collect the A120,000 accounts receivable from the Argentine importer, valued at Ps384,466 after the depreciation in the austral, to guard against further depreciation and to use to partially pay off the peso liability to the parent. The Canadian affiliate can eliminate its transaction exposure by collecting the W192,000,000 accountsreceivable as soon as possible, which is currently valued at CD312,000.The elimination of these transaction exposures will affect the translation exposure of Sundance MNC. A revised translation exposure report follows.Revised Translation Exposure Report for Sundance Sporting Goods, Inc. and its Mexicanand Ca nadia n Affiliates, December 31,2005 (in 000 Curre ncy Un its)Note from the revised translation exposure report that the elimination of the transaction exposure will also eliminate the translation exposure in the Japanese yen,Argentine austral and the Korean won. Moreover, the net translation exposure in theMexican peso has been reduced. But the net translation exposure in the Canadian dollar has in creased as a result of the Can adia n affiliate ' s collect ion of the won receivable.文案大全The remaining translation exposure can be hedged using a balance sheet hedge a derivatives hedge. Use of a balance sheet hedge is likely transaction exposure, however. Use of a derivatives hedge is actually speculative, and not a real hedge, since the size of the“ hedge ” is based on oneas to the future spot exchange rate. An incorrect estimate will “ hedge ” losing money for the MNC.orto create new's expectation resultin the。
Principles of Corporate Finance 英文第十版习题解答Chap010
CHAPTER 10Project AnalysisAnswers to Problem Sets1. a. Falseb. Truec. True2. a. Cash-flow forecasts overstated.b. One project proposal may be ranked below another simply because cashflows are based on different forecasts.c. Project proposals may not consider strategic -alternatives.3. a. Analysis of how project profitability and NPV change if differentassumptions are made about sales, cost, and other key variables.b. Project NPV is recalculated by changing several inputs to new, butconsistent, values.c. Determines the level of future sales at which project profitability or NPVequals zero.d. An extension of sensitivity analysis that explores all possible outcomesand weights each by its probability.e. A graphical technique for displaying possible future events and decisionstaken in response to those events.f. Option to modify a project at a future date.g. The additional present value created by the -option to bail out of a project,and recover part of the initial investment, if the project performs poorly.h. The additional present value created by the -option to invest more andexpand output, if a project performs well.4. a. Falseb. Truec. Trued. Truee. Falsef. True5. a. Describe how project cash flow depends on the underlying variables.b. Specify probability distributions for forecast -errors for these cash flows.c. Draw from the probability distributions to -simulate the cash flows.6. a. Trueb. Truec. Falsed. False7. Adding a fudge factor to the discount rate pushes project analysts to submit moreoptimistic forecasts.8. We assume that the idea for a new obfuscator machine originates with a plantmanager in the Deconstruction Division. (Keep in mind however that, in addition to bottom-up proposals, such as the obfuscator machine proposal, top-downproposals also originate with divisional managers and senior management.)Other steps in the capital budgeting process include the following:∙Many large firms begin the process with forecasts of economic variables, such as inflation and GDP growth, as well as variables of particular interest tothe industry, such as prices of raw materials and industry sales projections.∙The plant manager, often in consultation with the division manager, prepares the proposal in the form of an appropriation request; the appropriation requesttypically includes an explanation of the need for the expenditure, detailedforecasts, discounted cash flow analysis and other supporting detail such assensitivity analysis.∙ Depending on the size of the investment, the appropriation request isreviewed and approved by the divisional manager, senior management or, in the case of major expenditures, the board of directors.∙ The forecast expenditure is included as part of the annual capital budget, which is approved by top management and the board of directors.∙ Major cost over-runs typically require a supplementary appropriation request, which includes an explanation of the reason why the additional expenditure was not anticipated.∙ When the machine is finally up and running, most firms conduct a postaudit to identify problems and to assess forecast accuracy; the main purpose of the postaudit is to improve the process in the future. 9.a.32F (1.10)0.08)-(1$4,000(1.10)0.08)-(1$5,0001.100.08)-(1$6,000$9,000NP V ⨯+⨯+⨯+-= = $2,584.67=⨯+-=0.100.08)-(1$1,800$9,000NPV G $7,560b.=+++-=32F (1.18)$4,000(1.18)$5,0001.18$6,000$9,000NP V $2,110.19 =+-=0.18$1,800$9,000NPV G $1,000c.The 18% discount rate would give an approximation to the correct NPVs for projects with all (or most) of the inflows in the first year.The present value of $1 to be received one year from now, discounted at 18% is: $0.8475The present value of $1 × (1 – 0.08) (that is, $0.92) to be received one year from now, discounted at 10% is: $0.8364The former calculation overstates the correct answer by approximately 1.3%. However, for cash flows five or ten years in to the future, discounting by 18% understates the correct present value by approximately 23% and 46%, respectively. The error increasessubstantially because the incorrect factor (i.e., 1.18) is compounded, causing the denominator of the present value calculation to be greatly overstated so that the present value is greatly understated.10.Year 0 Years 1-10Investment ¥15 B1. Revenue ¥44.000 B2. Variable Cost 39.600 B3. Fixed Cost 2.000 B4. Depreciation 1.500 B5. Pre-tax Profit ¥0.900 B6. Tax @ 50%0.450 B 7. Net Operating Profit ¥0.450 B 8. Operating Cash Flow¥1.950 B 11.The spreadsheets show the following results: NPVPessimistic Expected OptimisticMarket Size -1.17 3.43 8.04 Market Share -10.39 3.43 17.26 Unit Price -19.61 3.43 11.11 Unit Variable Cost -11.93 3.43 11.11 Fixed Cost -2.71 3.43 9.58The principal uncertainties are market share, unit price, and unit variable cost.12.a.Year 0Years 1-10Investment ¥30 B 1. Revenue ¥37.500 B 2. Variable Cost 26.000 3. Fixed Cost 3.000 4. Depreciation3.000 5. Pre-tax Profit (1-2-3-4) ¥5.500 6. Tax2.750 7. Net Operating Profit (5-6) ¥2.750 8. Operating Cash Flow (4+7) 5.750 NPV = + ¥5.33 B?.02B1.10?.950B ?5B NP V 101t t-=+-=∑=b.Inflows OutflowsUnit Sales Revenues Investment V. Costs F. Cost TaxesPV PV NPV (000‟s) Yrs 1-10 Yr 0 Yr 1-10 Yr 1-10 Yr 1-10 Inflows Outflows 0 0.00 30.00 0.00 3.00 -3.00 0.00 -30.00 -30.00 100 37.50 30.00 26.00 3.00 2.75 230.42 -225.09 5.33 200 75.00 30.00 52.00 3.008.50460.84-420.1840.66Note that the break-even point can be found algebraically as follows:NPV = -Investment + [(PVA 10/10%) ⨯ (t ⨯ Depreciation)] +[Quantity ⨯ (Price – V.Cost) – F.Cost]⨯(1 – t)⨯(PVA 10/10%)Set NPV equal to zero and solve for Q:Proof:1. Revenue ¥31.84 B2. Variable Cost 22.083. Fixed Cost 3.004. Depreciation 3.005. Pre-tax Profit ¥3.76 B6. Tax1.88 7. Net Profit¥1.88 8. Operating Cash Flow¥4.880.013029.9930(1.10)4.88NP V 101t t-=-=-=∑=VP Ft)(1V)(P )(P VA t)D (P VA I Q 10/10%10/10%-+-⨯-⨯⨯⨯-=260,000375,0000003,000,000,0.50260,000)(375,0006.1445676599,216,850,,00030,000,000-+⨯-⨯-=84,91126,08758,824115,0000003,000,000,353,313,34120,783,149=+=+=)rounding to due difference (c. The break-even point is the point where the present value of the cashflows, including the opportunity cost of capital, yields a zero NPV.d. To find the level of costs at which the project would earn zero profit, writethe equation for net profit, set net profit equal to zero, and solve forvariable costs:Net Profit = (R – VC – FC - D) ⨯ (1 – t)0 = (37.5 – VC – 3.0 – 1.5) ⨯ 0.50VC = 33.0This will yield zero profit.Next, find the level of costs at which the project would have zero NPV.Using the data in Table 11.1, the equivalent annual cash flow yielding azero NPV would be:¥15 B/PVA10/10% = ¥2.4412 BIf we rewrite the cash flow equation and solve for the variable cost: NCF = [(R – VC – FC – D) ⨯ (1 – t)] + D2.4412 = [(37.5 – VC –3.0 – 1.5) ⨯ 0.50] + 1.5VC = 31.12This will yield NPV = 0, assuming the tax credits can be used elsewhere in the company.e. DOL = 1 + (fixed costs / profit)Fixed costs rise 1.5 due to additional depreciation of the 15 billion yen investment. Profits increase by 0.4 reflecting the lower variable costs.This gives us a DOL = 1 + ((3 + 1.5 + 1.5) / 3.4) = 2.7613.If Rustic replaces now rather than in one year, several things happen:i. It incurs the equivalent annual cost of the $9 million capital investment. ii. It reduces manufacturing costs.For example, for the “Expected” case, analyzing “Sales” we have (all dollar figures in millions): i.The economic life of the new machine is expected to be 10 years, so the equivalent annual cost of the new machine is:$9/5.6502 = $1.59ii.The reduction in manufacturing costs is:0.5 ⨯ $4 = $2.00Thus, the equivalent annual cost savings is:–$1.59 + $2.00 = $0.41Continuing the analysis for the other cases, we find:Equivalent Annual Cost Savings (Millions)Pessimistic Expected OptimisticSales 0.01 0.41 1.21 Manufacturing Cost -0.59 0.41 0.91 Economic Life 0.03 0.41 0.6014. profitoperating ondepreciati cost fixed 1 DOL ++=Operating profits are unchanged in all scenarios, as we have just shifted the nature of the costs.With $33 million in variable costs, DOL 1.53.01.5)(01=++=With $33 million in fixed costs, DOL 12.53.01.5)(331=++=15. a. sales in change %incomeoperating in change %leverage Operating =For a 1% increase in sales, from 100,000 units to 101,000 units:2.5037.5/0.3753/0.075leverage Operating ==b. profit operating ondepreciati cost fixed 1leverage Operating ++=2.53.01.5)(3.01=++=c. salesin change %incomeoperating in change %leverage Operating =For a 1% increase in sales, from 200,000 units to 202,000 units:1.43/7575)-(75.7510.5)/10.5-(10.65leverage Operating ==Invest in full-scale production: NPV = -1000 + (250/0.10)= +$1,500Stop: NPV = $0[ For full-scale production: NPV = -1000 + (75/0.10)= -$250 ]17. Problem requires use of Excel program; answers will vary. 18. a. Timing option b. Expansion option c. Abandonment option d.Production option19.Working from right to left, the following spreadsheet calculates a weighted average NPV of 119 at the start of Phase 3 trials.Weighted NPV Prob. of outcome NPV with abandonment Resulting NPV with 130 investment; r = 9.6% Phase III results PV if successful Probabilityof Phase III success 39 5% 781 781 Blockbuster 1500 80% 59 20% 295 295 Above average 700 80% 21 40% 52 52 Average 300 80% 0 25% 0 -69 Below Average 100 80%10% 0 -106 Dog 40 80%We can calculate the NPV at the initial investment decision as follows:million $25.6(1.096)119.44 18NP V 2=⨯+-=So the investment remains positive.20. Working from right to left, the following spreadsheet shows that the weightedaverage NPV at the start of the Phase 3 trials increases to $146 million with the higher upside PV.Weighted NPV Prob. of outcome NPV with abandonment Resulting NPV with 130investment; r = 9.6% Phase IIIresultsPV if successful Probabilityof Phase III success 119 25% 478 478 Upside1000 80% 26 50% 52 52 Most likely 300 80%25% 0 -69 downside100 80%We can calculate the NPV at the initial investment decision as follows:million $15.3(1.096)146.44 38NP V 2=⨯+-=The project is still positive but NPV has fallen, showing that the extra $20 millioninvestment is not worthwhile. Decreasing the probability of phase III success to 75% results in the following calculations:Weighted NPV Prob. of outcome NPV with abandonment Resulting NPV with 130investment; r = 9.6% Phase IIIresultsPV if successful Probabilityof Phase III success 110 25% 440 440 Upside1000 75% 20 50% 41 41 Most likely 30075% 25% 0 -73 downside100 75%million $9.75(1.096)130.44 38NP V 2=⨯+-= So the R&D proposal is still not worthwhile.21.a.b. Analyze the decision tree by working backwards. If we purchase the piston planeand demand is high:∙ T he NPV at t = 1 of the …Expand‟ branch is:∙ The NPV at t = 1 of the …Continue‟ branch is:Thus, if we purchase the piston plane and demand is high, we should expand further at t = 1. This branch has the highest NPV.c. Continuing the analysis, if we purchase the piston plane and demand is low: ∙ The NPV of the …Continue‟ branch is: ∙ We can now use these results to calculate the NPV of the …Piston‟ branch at t = 0:∙ Similarly for the …Turbo‟ branch, if demand is high, the expected cash flow at t = 1 is:(0.8 ⨯ 960) + (0.2 ⨯ 220) = $812∙ If demand is low, the expected cash flow is:(0.4 ⨯ 930) + (0.6 ⨯ 140) = $456∙ So, for the …Turbo‟ branch, the combined NPV is:$96(1.10)456).4(0812)(0.6(1.10)30).4(0150)(0.6550NP V 2=⨯+⨯+⨯+⨯+-= Therefore, the company should buy the Piston-engine plane today.d. To determine the value of the option to expand, we first compute the NPV withoutthe option to expand:+⨯+⨯+-=(1.10)50).4(0100)(0.6250NPV$52(1.10)100)](0.6220)(0.4)[(0.4180)].2(0410)(0.6)[(0.82=⨯+⨯+⨯+⨯ $4501.10100).2(0800)(0.8150=⨯+⨯+-$3311.10180).2(0410)(0.8=⨯+⨯$1351.10100).6(0220)(0.4=⨯+⨯$1171.10135)(50.4)(0451)(100(0.6)250=+⨯++⨯+-Therefore, the value of the option to expand is: $117 – $52 = $6522. Problem requires use of Crystal Ball software simulation; answers will vary.。
管理会计Lecture 10课堂习题答案
AYB225 – SOLUTIONS, PRACTICE QUESTIONS, LECTURE 10QUESTION 1The firm is indifferent at the number of units where costs under each option are equal.Let X = the number of units.Then 3.5X = 21,000X = 6000 units.Above the point of indifference, prefer the option with the lower variable cost, i.e. in house (zero variable costs). Below the point of indifference, prefer the option with the lower fixed costs, i.e. outsource (zero fixed costs).In deciding whether to outsource or not, the firm would consider:∙Expected volume. If it was expected to be less than 6000 then outsourcing would be preferred, subject to any qualitative issues that may be relevant, e.g. we lose control of the function; how reliable is the provider of the service etc.∙If greater than 6000, prefer to provide the function ourselves.QUESTION 2CM per constraint (per machine hour):Lever $20/5 = $4Spring $30/5 = $6Pump $10/1 = $10Therefore the firm would produce in the order Pump, Spring then Lever.* Because only 4,500 hours remain, the firm cannot satisfy demand (1,000) for the “least preferred” but can only produce 900 units.QUESTION 3The difference between the two is $250, and outsourcing is the cheaper option.(b) The costs related to the production of the component are:Variable $12Fixed $500 in total related to 1,000 units, i.e. 50c per unit. (This is an approximate per unit figure only, because of the behaviour of fixed costs.)Therefore the incremental cost of producing the component is approx. $12.50, and this represents the minimum selling price it would be prepared to set as a special order price. (In fact, the firm would set the price above that price if it wished to do more than break even on the special order.)(c) The firm is indifferent when the cost of each option is identical. Therefore, let X equal the number of units at which the firm is indifferent.$10,000 + $12X = $9,500 + $12.25 X.25X = $500X = 500/.25 = 2,000Indifference point = 2,000 unitsAbove that point the firm would prefer the option with the lower variable cost, which is “make”. Below that point the firm would prefer the option with the lower fixed cost, which is “buy”.(d) Therefore the decision rule would be:Above an activity level of 2,000, choose MAKEBelow an activity level of 2,000, choose BUYQUESTION 4(a)The question specifically indicates that you are to provide a generalisable solution because of this statement in the question: “Hint: Production output in the coming year may be different from production output in the last year.” This means you should use the “indifference point” approach.Determine the relevant costs of each option:Fixed:You need to analyse the $300,000 fixed manufacturing overhead, using the information given in the question, as follows:Of the $300,000, $150,000 is an allocated cost, therefore it is common to both alternatives, therefore it is not relevant.Of the remaining $150,000, $100,000 is the cost of “make” and not of “buy”, therefore $100,000 is relevant as it is a cost of “make” only. The remaining $50,000 is the division manager’s salary which is incurred under both options, therefore it is not relevant.This means that the relevant fixed costs for the “buy” option are zero.If the firm “makes” it will incur an additional $40,000 (over and above the $50,000), therefore $40,000 is a relevant cost.The relevant fixed costs for make are $140,000, and for buy $0.Calculate indifference point (i.e. level of production where costs of make and buy are equal)Let X = that level of production.Then 3X + 140,000 = 4XX = 140,000At that point all fixed costs are covered, therefore above that point, the only costs to be covered would be variable costs. Therefore, the firm would prefer:∙If production is greater than 140,000 the option with the lower variable costs, which is “make”∙If production is less than 140,000 the option with the lower fixed costs, which is “buy”.If production remains the same as last year (150,000) then the firm would prefer to make. This can be verified as follows (but is not required by the question):If output continues at 150,000, then:Make costs = (150,000 x $3) + $140,000 = $590,000Buy costs = (150,000 x $4) = $600,000Therefore, at 150,000, better off to make by $10,000.(b) Assume that the $50,000 for outside storage charge is part of the $150,000 of general overhead. Does the information on storage present the same cost for each option? If so, it is not relevant to the decision.If the vacated plant (only possible under “buy”) could avoid the cost of $50,000 under that option but not under the other option (which is the case here) it is relevant. In terms of the relevant cost analysis above, the change would be that fixed costs under the “buy” alternative become $50,000 less, i.e. -$50,000. The fixed costs under the “make” option woul d not change.3X + 140,000 = 4X – 50,000X = 190,000If production is greater than 190,000, prefer “make”.If production is less than 190,000 prefer “buy”.DM $4DL $2VOH $1.50 $7.50Make BuyRelevant fixed costs:Inspection etc 2,000 -Machine rent 3,000 -(Allocated costs of $30,000 are the same under both options, therefore not relevant)(a) Using relevant costs only (you would get the same answer if you included the $30,000, i.e. if you used total fixed costs)Make cost:(10,000 x $7.50) + $5,000 = $80,000Buy cost:(10,000 x $8.20) = $82,000Decision: at that level, $2,000 better off to make. Do not accept outside offer.(b)Effect of upgrade (only possible if we “buy”, therefore th is is a relevant cost):Additional contribution margin of $2 per bike ($20 less $18). Additional costs of $16,000. Net effect: (10,000 x $2) - $16,000 = $4,000. This therefore reduces the cost of “buy”.Using the relevant cost analysis above:(Make cost remains the same - $80,000)(Buy cost is $4,000 less, i.e. $82,000 - $4,000 = $78,000)Answer: The “buy” option becomes $2,000 superior.(c) Now the data about the upgrade is not considered, because it is the same under both alternatives. In other words, it is not relevant.Inspection etc costs have changed. They are $200 per batch ($2,000/10 batches), and will now be:8 x $200 = $1,600i.e. they are $400 less than previously (previously $2,000), therefore relevant fixed costs under the make option are now $4,600.Make costs: (6,200 x $7.50) + $4,600 = $51,100Buy costs (6,200 x $8.20) = $50,840Buy option is superior by $260.Revenue lost (500 x $20) 10,000Costs avoided because of zero production:Direct materials 3,000Variable overhead 150Selling costs 100Training course 1,000Saving of fixed overhead 271* 4,521TOTAL COST 5,479#* Calculation of fixed overhead:Total budgeted overhead for the year = 24,000 x $5 = $120,000Amount remaining = 120,000 less 4,000 less 40,000 less 50,000 = $26,000½ x $26,000 = $13,000. This amount is related to weekly capacity, i.e. 13,000/48 or $271 per week.. Use 48 weeks not 52 weeks because the question says that annual normal capacity is 24,000 units, and normal weekly production and sales is 500 units, therefore the firm must be working on a 48-week year.# Depending on the particular circumstances of the firm, this amount could be higher or lower than this estimate. For example, consider two extreme positions:∙Given that the stoppage is for one week only, perhaps some or all of the lost production could be quickly made up in the following week, reducing the cost calculated above, or∙In an extremely competitive environment, there may be additional costs of not being able to supply on time which could have long-term detrimental effects for the firm, making the estimate above too low.TEXT BOOK QUESTIONS11-34 (35–40 min.) Dropping a product line, selling more units.1.The incremental revenue losses and incremental savings in cost by discontinuing the Tables product line follows:Difference:Incremental(Loss in Revenues)and Savings in Costsfrom DroppingTables LineRevenuesDirect materials and direct manufacturing labor Depreciation on equipmentMarketing and distributionGeneral administrationCorporate office costsTotal costsOperating income (loss) $(500,000) 300,00070,000 0 0 370,000 $(130,000)Dropping the Tables product line results in revenue losses of $500,000 and cost savings of $370,000.Hence, Grossman Corporation’s operating income will be $130,000 lower if it drops the Tables line.Note that, by dropping the Tables product line, Home Furnishings will save none of the depreciation on equipment, general administration costs, and corporate office costs, but it will save variable manufacturing costs and all marketing and distribution costs on the Tables product line.2. Grossman’s will generate incremental operating income of $128,000 from selling 4,000 additional tables and, hence, should try to increase table sales. The calculations follow:Incremental Revenues(Costs) and Operating Income Revenues $500,000Direct materials and direct manufacturing labor (300,000)Cost of equipment written off as depreciation (42,000)*Marketing and distribution costs (30,000)†General administration costs 0**Corporate office costs 0**Operating income $128,000*Note that the additional costs of equipment are relevant futu re costs for the “selling more tables decision” because they represent incremental future costs that differ between the alternatives of selling and not selling additional tables.†Current marketing and distribution costs which varies with number of shipments = $70,000 – $40,000 = $30,000. As the sales of tables double, the number of shipments will double, resulting in incremental marketing and distribution costs of (2 $30,000) – $30,000 = $30,000.7 **General administration and corporate office costs will be unaffected if Grossman decides to sellmore tables. Hence, these costs are irrelevant for the decision.3.Solution Exhibit 11-34, Column 1, presents the relevant loss of revenues and the relevant savings in costs from closing the Northern Division. As the calculations show, Grossman’s operating income would decrease by $140,000 if it shut down the Northern Division (loss in revenues of $1,500,000 versus savings in costs of $1,360,000).Grossman will save variable manufacturing costs, marketing and distribution costs, and division general administration costs by closing the Northern Division but equipment-related depreciation and corporate office allocations are irrelevant to the decision. Equipment-related costs are irrelevant because they are past costs (and the equipment has zero disposal price). Corporate office costs are irrelevant because Grossman will not save any actual corporate office costs by closing the Northern Division. The corporate office costs that used to be allocated to the Northern Division will be allocated to other divisions.4. Solution Exhibit 11-34, Column 2, presents the relevant revenues and relevant costs of opening the Southern Division (a division whose revenues and costs are expected to be identical to the revenues and costs of the Northern Division). Grossman should open the Southern Division because it would increase operating income by $40,000 (increase in relevant revenues of $1,500,000 and increase in relevant costs of $1,460,000). The relevant costs include direct materials, direct manufacturing labor, marketing and distribution, equipment, and division general administration costs but not corporate office costs. Note, in particular, that the cost of equipment written off as depreciation is relevant because it is an expected future cost that Grossman will incur only if it opens the Southern Division. Corporate office costs are irrelevant because actual corporate office costs will not change if Grossman opens the Southern Division. The current corporate staff will be able to oversee the Southern Division’s operations. Grossman will allocate some corporate office costs to the Southern Division but this allocation represents corporate office costs that are already currently being allocated to some other division. Because actual total corporate office costs do not change, they are irrelevant to the division.SOLUTION EXHIBIT 11-34Relevant-Revenue and Relevant-Cost Analysis for Closing Northern Division and Opening Southern Division(Loss in Revenues) and Savings in Costs from Closing Northern Division(1)IncrementalRevenues and (Incremental Costs) from Opening Southern Division(2)Revenues $(1,500,000) $1,500,000 Variable direct materials and directmanufacturing labor costs 825,000 (825,000) Equipment cost written off as depreciation 0 (100,000) Marketing and distribution costs 205,000 (205,000) Division general administration costs 330,000 (330,000) Corporate office costs 0 0 Total costs 1,360,000 (1,460,000) Effect on operating income (loss) $ (140,000) $ 40,00011-35(30–40 min.) Make or buy, unknown level of volume.1. The variable costs required to manufacture 150,000 starter assemblies areDirect materials $200,000Direct manufacturing labor 150,000Variable manufacturing overhead 100,000Total variable costs $450,000The variable costs per unit are $450,000 ÷ 150,000 = $3.00 per unit.Let X = number of starter assemblies required in the next 12 months.The data can be presented in both “all data” and “relevant data” formats:All Data Relevant DataAlternative1:Make Alternative2:BuyAlternative1:MakeAlternative2: BuyVariable manufacturing costsFixed general manufacturing overhead Fixed overhead, avoidableDivision 2 manager’s salaryDivision 3 manager’s salary Purchase cost, if bought fromTidnish ElectronicsTotal $ 3X150,000100,00040,00050,000–$340,000+ $ 3X–$150,000–50,000–4X$200,000+ $ 4X$ 3X–100,00040,00050,000–$190,000+ $ 3X–––$50,000–4X$50,000+ $ 4XThe number of units at which the costs of make and buy are equivalent isAll data analysis: $340,000 + $3X = $200,000 + $4XX = 140,000orRelevant data analysis: $190,000 + $3X = $50,000 + $4XX = 140,000Assuming cost minimization is the objective, then•If production is expected to be less than 140,000 units, it is preferable to buy units from Tidnish.•If production is expected to exceed 140,000 units, it is preferable to manufacture internally (make) the units.•If production is expected to be 140,000 units, Oxford should be indifferent between buying units from Tidnish and manufacturing (making) the units internally.2. The information on the storage cost, which is avoidable if self-manufacture is discontinued, is relevant; these storage charges represent current outlays that are avoidable if self-manufacture is discontinued. Assume these $50,000 charges are represented as an opportunity cost of the make alternative. The costs of internal manufacture that incorporate this $50,000 opportunity cost are All data analysis: $390,000 + $3XRelevant data analysis: $240,000 + $3XThe number of units at which the costs of make and buy are equivalent isAll data analysis: $390,000 + $3X = $200,000 + $4XX = 190,000Relevant data analysis: $240,000 + $3X = $50,000 + $4XX = 190,000If production is expected to be less than 190,000, it is preferable to buy units from Tidnish. If production is expected to exceed 190,000, it is preferable to manufacture the units internally.。
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管理会计（高等教育出版社）于增彪（清华大学）改编余绪缨（厦门大学）审校CHAPTER 10ACTIVITY- AND STRATEGIC-BASED RESPONSIBILITY ACCOUNTING QUESTIONS FOR WRITING AND DISCUSSION1. A functional-based responsibility accountingsystem is characterized by four elements: (1)a responsibility center, where responsibilityis assigned to an individual in charge (re-sponsibility is usually defined in financial terms); (2) the setting of budgets and stan-dards to serve as benchmarks for perform-ance measurement; (3) measurement of performance by comparing actual outcomes with budgeted outcomes; and (4) individuals being rewarded or penalized according to management policies.2.In an activity-based responsibility accountingsystem, the focus of control shifts from re-sponsibility centers to processes and teams.Management is concerned with how work is done, not with where it is done. Process im-provement and process innovation are em-phasized. Standards tend to be optimal, dy-namic, and process oriented. Performance measurement focuses on processes and ac-tivities that define the processes. Finally, there tends to be more emphasis on group rewards than on individual rewards.3. A strategic-based responsibility accountingsystem converts an organization’s mission and strategy into operational objectives and measures for four perspectives: the financial perspective, the customer perspective, the process perspective, and the infrastructure perspective. It differs from activity-based re-sponsibility accounting because of the formallinkage to strategy and because it adds two perspectives to the responsibility dimension: the customer perspective and the infrastruc-ture perspective.4.The two dimensions are the cost dimensionand the process dimension. The cost di-mension is concerned with accurate as-signment of costs to cost objects, such as products and customers. Activity-based costing is the focus of this dimension. The second dimension—the process view di-mension—provides information about why work is done and how well it is done. It isconcerned with cost driver analysis, activityanalysis, and performance measurement. Itis this dimension that offers the connectionto the continuous improvement world foundin the advanced manufacturing environment.5.Driver analysis is concerned with identifyingthe root causes of activity costs. Knowingthe root causes of activity costs is the key toimprovement and innovation. Once a man-ager understands why costs are being in-curred, then efforts can be taken to improvecost efficiency.6.Activity inputs are the resources consumedby an activity in producing its output. Activityoutput is the result or product of an activity.Activity output measurement simply meansthe number of times the activity is per-formed.7.Activity analysis is concerned with identifyingactivities performed by an organization, as-sessing their value to the organization, andselecting and keeping only those that arevalue adding. Selecting and keeping value-adding activities bring about cost reductionand greater operating efficiency, thus provid-ing support for the objective of continuousimprovement.8.Value-added activities are necessary activi-ties. Activities are necessary if they aremandated or if they are not mandated andsatisfy three conditions: (1) they cause achange of state, (2) the change of state isnot achievable by preceding activities, and(3) they enable other activities to be per-formed. Value-added costs are costs causedby activities that are necessary and efficient-ly executed.9.Nonvalue-added activities are unnecessaryactivities or those that are necessary but in-efficient and improvable. An example ismoving goods. Nonvalue-added costs arethose costs caused by nonvalue-added ac-tivities. An example is the cost of materialshandling.10.(1) Activity elimination—the identificationand elimination of activities that fail to addvalue. (2) Activity selection—the process ofchoosing among different sets of activitiescaused by competing strategies. (3) Activityreduction—the process of decreasing thetime and resources required by an activity.(4) Activity sharing—increasing the efficien-cy of necessary activities using economiesof scale. 11.Value-added standards represent the abso-lute levels of efficiency for activities. Thecosts that should be incurred for these abso-lute levels are value-added costs. Any differ-ence between the actual costs incurred andthe ideal costs are nonvalue-added costs. 12.Trend reports will reveal the progress madeover time in reducing nonvalue-added costs.13. A kaizen standard is the planned improve-ment for the coming period. The kaizen sub-cycle implements the improvement, checksit, and locks it in and then begins a searchfor additional improvements. The mainten-ance subcycle sets a standard based onprior improvements, executes, and checksthe results to make sure that performanceconforms to the new results. If not, then cor-rective action is taken.14.Benchmarking identifies the best practices ofcomparable internal and external units. Forinternal units, information can be gatheredthat reveals how the best unit achieves itsresults; these procedures can then beadopted by other comparable units. For ex-ternal units, the performance standard pro-vides an incentive to find ways to match theperformance (it may sometimes be possibleto determine the ways the performance isachieved).15.If individuals are asked to reduce costs andare told what the activity driver is, they maydecrease the level of the driver below thatwhich is optimal. Thus, it may be necessaryto also identify the optimal level of the costdriver so that only nonvalue-added costs areeliminated.16.The activity volume variance is a measure ofthe nonvalue-added costs. The unused ca-pacity variance tells how much of the commit-ted resources are not being used. This in-formation is particularly important because ithelps managers know when they can takeactions to reduce nonvalue-added costs. 17.Life-cycle costing is measuring the costsassociated with a product for its entire lifecycle. Life-cycle management is managingthe activities during the development stageto ensure the lowest total life-cycle cost.Budgeting life-cycle costs can help managersadjust the activities during the developmentstage; furthermore, comparing actual life-cycle costs with budgeted costs should ena-ble managers to improve life-cycle costmanagement in the future using the feed-back from actual results.18.Target costing is a cost management me-thod that is used to reduce costs to a levelthat reflects a product’s functions and ma r-ket demands and management’s return re-quirements. Costs are reduced to target byproduct and process redesign activities.Product redesign is aided by reverse engi-neering and value analysis.19.The Balanced Scorecard translates an or-ganization’s vision and strategy into oper a-tional objectives and measures for fourperspectives: financial, customer, process,and learning and growth.20. A strategy is the process of choosing themarket and customer segments, identifyingthe critical internal processes, and selectingthe individual and organizational capabilitiesneeded for the process, customer, and fi-nancial objectives.g measures reflect what has happened.Lead measures reflect what may happen. 22. A testable strategy is a set of linked objec-tives aimed at an overall goal that can berestated into a sequence of cause-and-effecthypotheses.23.Double-loop feedback is information thatdeals with both the effectiveness of strategyimplementation and the validity of the as-sumptions underlying the strategy.24.The three strategic themes of the financialperspective are revenue growth, cost reduc-tion, and asset utilization.25.The five core objectives of the customerperspective are market share, customer re-tention, customer acquisition, customer sa-tisfaction, and customer profitability.26.The long-wave of value creation meansanticipating the emerging and potentialneeds of customers and creating new prod-ucts and processes to satisfy those needs.The short-wave of value creation is produc-ing and delivering existing products to cus-tomers.27.Cycle time is the length of time required toproduce one product; velocity is the numberof units that can be produced in a given pe-riod of time. 28.Manufacturing cycle efficiency is a ratiocomputed by dividing the processing time bythe sum of processing time, move time, in-spection time, and waiting time. The ideal is to increase efficiency by reducing the nonva-lue-added times of moving, inspection, and waiting. 29.Three objectives of the learning and growthperspective are increase employee capabili-ties; increase motivation, empowerment, andalignment; and increase information systemscapabilities.EXERCISES 10–11. e2. d3. b4. c5. a6. b10–2Classification:Situation Activity-Based Functional-Based1 A B2 A B3 A B4 B A5 B A6 B A7 A BComments:Situation 1: In a functional-based system, individuals are held responsible for the efficiency of organizational units, such as Grinding Departments. In an activity-based system, processes are the control points because they are the units of change; they represent the way things are done in an organization. Improvement and innovation mean changing the way things are done, or in other words, changing processes. Since processes, such as procurement, cut across func-tional boundaries, teams are the natural outcome of process management. It is only natural that the managers of purchasing, receiving, and accounts payable be part of a team looking for ways to improve procurement.Situation 2: In a functional-based responsibility system, individuals in charge of responsibility centers are rewarded based on their ability to achieve the financial goals of the responsibility center. Thus, meeting budget promises the ―fat‖ b o-nus. In a continuous improvement environment, process improvement is depen-dent on team performance, so rewards tend to be group based, and gainsharing is often used. Furthermore, there are many facets to process performance other than cost, so the performance measures tend to be multidimensional (e.g., quality and delivery time).10–2 ConcludedSituation 3: In a functional-based system, efforts are made to encourage individ-uals to maximize the performance of the subunit over which they have responsi-bility. The concern of activity-based responsibility accounting is overall organiza-tional performance. The focus is systemwide. It recognizes that maximizing individual performance may not produce firmwide efficiency.Situation 4: In a functional-based system, performance of subunits is usually financial-based and is measured by comparing actual with budgeted outcomes. In an activity-based system, process performance is emphasized. The objective is to provide low-cost, high-quality products, delivered on a timely basis. Thus, both financial and nonfinancial measures are needed.Situation 5: In a functional-based system, budgets and standards are used to control costs. In an activity-based responsibility system, the focus is on activities because activities are the cause of costs. Driver analysis and activity analysis are fundamental to the control process. Driver analysis recognizes that controlling costs requires managers to understand the root causes. Activity analysis is the effort expended to identify, classify, and assess the value content of all activities. Once the value content is known, then costs can be controlled through such means as activity reduction, activity elimination, activity sharing, and activity se-lection.Situation 6: A functional-based system uses currently attainable standards that allow for a certain amount of inefficiency. Achieving standard is the emphasis, and there is no effort to improve on the standards themselves. An activity-based approach strives for the ideal, and so the standard is the ideal. Progress is measured over time with the expectation that performance should be continually improving. Efforts are made to find new ways of doing things and, thus, to find new optimal standards. The objective is to always provide incentives for positive changes.Situation 7: The functional-based system ten ds to ignore a firm’s activities and the linkages of those activities with suppliers and customers. It is internally fo-cused. An activity-based system builds in explicit recognition of those linkages and emphasizes the importance of the value chain. Furthermore, the assessment of the value content of activities is explicitly related to customers. What goes on outside the firm cannot be ignored.10–3MEMOTO: Cambry DayFROM: Colby SorensenRE: Comparison of Activity- and Strategic-Based Responsibility Accounting DATE: July 14, 2004As requested, I am providing in advance a list of some of the most important simi-larities and differences between activity-based and strategic-based responsibility accounting. Once you have had a chance to review this list, we can meet and dis-cuss the steps that must be taken if we are to implement a strategic-based ap-proach.SIMILARITIES:∙Both approaches emphasize the need to support and encourage continuous improvement.∙Both emphasize the importance of process responsibility and financial re-sponsibility.∙Teams are important for both (due to process emphasis).∙Both use financial and nonfinancial performance measures.∙Both base rewards on multidimensional performance and allow gainsharing as a possible incentive structure.∙Bottom line, the strategic-based approach essentially includes the activity-based approach as a subset.DIFFERENCES:∙The strategic-based approach expands the responsibility dimensions from two to four, adding a customer perspective and a learning and growth pers-pective.∙The performance measures selected are balanced between those that drive performance and those that measure outcome, between financial and nonfi-nancial measures, between subjective and objective measures, and between external and internal measures.∙Performance measures are developed for four rather than two perspectives.∙The performance measures are linked to the mission and strategy of the or-ganization. Thus, they articulate and communicate the mission and strategy to employees and help align the interests of individuals with those of the organi-zation.∙Fundamentally, the strategic-based approach provides a much needed guid-ance system to the continuous improvement efforts of an organization. Di-rected continuous improvement increases the probability of competitive suc-cess.10–41. David was concerned about meeting the schedule and staying within the 5percent variance guideline. The first week’s production exceeded the guid e-line for both materials and labor, and he expected the same outcome for the second week. By stopping inspections, no materials waste would be ob-served and recorded for the second week, moving the usage variance back within the 5 percent tolerance level. Accepting all units produced also will re-duce the total labor time reported. Finally, using inspectors as production la-bor and counting their time as inspection labor provides some ―free‖ direct labor time, which would also contribute to the reduction or elimination of an unfavorable labor efficiency variance. Dav id’s behavior is unethical. David (and perhaps others) is deliberately subverting the organization’s legitimate and ethical objective of providing a high-quality product used in the manufac-ture of an airplane—in exchange for a favorable performance rating and, pre-sumably, a good salary increase or bonus. Although no explicit information is provided, the stress test seems to imply an important safety role for the bolts in the airplane structure. If true, then David’s actions become even more questionable.2. There appears to be an overreliance on standards and variances. There alsoappears to be a strong internal focus—David did not give much considera-tion to the effect of his decision on the company’s customers. The reward structure seems to be tied to the ability of David to meet or beat standards, and this provides some incentive to engage in perverse and even unethical behavior. The system certainly works against the goal of zero defects and to-tal quality. An activity-based system would tend to mitigate the problem be-cause it encourages a multidimensional performance measurement. For ex-ample, quality measures are important. Failure to meet measures on one dimension may be offset to some extent by good performance on other di-mensions. A strategic-based approach would mitigate the behavior even more, as it adopts a customer focus, and performance measures relating to such things as customer satisfaction are introduced. Furthermore, more ef-fort is made to link the performance measures with the c ompany’s mission and strategy.Finally, by communicating the strategy through the use of performance measures of various perspectives, a strategic-based approach tends to align individual goals with those of the organization. However, it should be men-tioned that designing a system with perfect incentives is difficult. Ultimately, the firm must rely on the character of its employees to carry out its objec-tives.3. The first week’s experience indicates a fairly high defect rat e—between 7 and8 percent—which was expected to continue for the second week. Apparently,item-by-item inspection is the company’s way of ensuring reliable bolt pe r-formance. Abandoning the inspection process for a week simply to meet in-ternal reporting standards seems like a weak excuse, even if a return to nor-mal practices is expected. All too often, this sort of rationalization leads to repeated violations of norms to meet short-term goals, and it becomes part of the culture—to the point where it doesn’t appear to be wrong anymore. Fu n-damentally, the need for inspection and the high reject rate suggests that the company needs to think about ways of improving its manufacturing process to reduce the number of defective units. This is why an activity- or strategic-based approach may be more suitable because they both have a process fo-cus that emphasizes quality and efficiency. Production of defective units would not be encouraged.10–5Case Nonvalue-Added Cost Root Cause Cost ReductionA $9 per unit1Process design Activity selectionB $300 per setup2Product design Activity reductionC $120 per unit3Plant layout Activity eliminationD $400,000 per year4Multiple* Activity selectionE $250 per unit5Suppliers Activity eliminationF $900,000 per year6Product design Activity sharing1(0.5)$12 – (0.25)$8 + (8 – 7.5)$102(8 – 2)$503(6 – 0)$204$320,000 + (16,000)$55(6.5 – 6)$5006As given*For example, process design, product design, and quality approach or philoso-phy.10–61. Fixed activity rate = SP = $252,000/28,800 = $8.75 per orderCost of unused capacity:SP ⨯ SQ SP ⨯ AQ SP ⨯ AU $8.75The activity volume variance measures the nonvalue-added cost. The unused capacity variance is a measure of the potential to reduce the spending on an activity and, thus, reduce the nonvalue-added costs.10–6 Concluded2. Value-added costs = $8.75 ⨯ 14,400 = $126,000Nonvalue-added costs = $8.75 ⨯ 14,400 = $126,000Note: For fixed activity costs, the practical capacity is currently 28,800 or-ders; thus, 14,400 orders are unnecessary.A value-added cost report would be as follows:Value-Added Nonvalue-Added ActualCosts Costs Costs Purchasing $126,000 $126,000 $252,000 Highlighting nonvalue-added costs shows managers where savings are poss-ible and emphasizes the need for improvement. In this case, reducing orders processed to 14,400 will create unused capacity of 14,400 orders, allowing the company to save $126,000 in salaries.3. First, the value-added standard is nonzero. Second, purchasing enables otheractivities to be performed. Third, there is a change of state—from a state of no materials requested to a state of materials requested. Fourth, the pur-chase state could not have been achieved by a prior activity. Fifth, it is a ne-cessary activity—one essential for the firm to remain in business.Possible reasons for exceeding the value-added standard: suboptimal inven-tory management policies, reorders due to bad parts being delivered by sup-pliers, extra orders due to rework requirements, and additional orders be-cause the wrong types and quantities of materials were ordered.4. By reducing the demand by another 6,000 units, the unused capacity will nowequal 7,200 orders—an amount equivalent to 1.5 purchasing agents. Thus, the number of purchasing agents can be reduced from 6 to 5, saving $42,000.1. Willson CompanyValue- and Nonvalue-Added Cost ReportFor the Year Ended December 31, 2005Value-Added Nonvalue-Added ActualCosts Costs Costs Purchasing parts $ 450,000 $ 180,000 $ 630,000 Assembling parts 2,160,000 234,000 2,394,000 Administering parts 1,980,000 858,000 2,838,000 Inspecting parts 0 1,125,000 1,125,000 Total $4,590,000 $2,397,000 $6,987,000 2. Inspecting parts is nonvalue-added (SQ = 0 is a necessary condition for anonvalue-added activity). Inspection is nonvalue-added because it is a state-detection activity, not a state-changing activity. It also is not essential to ena-ble other activities to be performed. Value-added activities can engender nonvalue-added costs if they are not performed efficiently.10–81. Willson CompanyNonvalue-Added Cost Trend ReportFor the Year Ended December 31, 20062005 2006 Change Purchasing parts $ 180,000 $ 90,000 $ 90,000 F Assembling parts 234,000 72,000 162,000 F Administering parts 858,000 660,000 198,000 F Inspecting parts 1,125,000 675,000 450,000 F Total $2,397,000 $1,497,000 $900,000 F Note: The above amounts were computed for each year, using the following formula: (AQ – SQ)SP.2. A trend report allows managers to assess the effectiveness of activity man-agement. It is a critical document that reveals the success of continuous improvement efforts. It also provides some information about additional op-portunity for improvement. In 2006, activity management reduced the nonvalue-added costs by $900,000, signaling that the actions taken were good. It also shows that additional opportunity for reduction exists—more ef-fort is needed to reduce the $1,497,000 of remaining nonvalue-added costs.1. Activity and driver analysis:Setting up equipment: This is a value-added activity because (1) it causes a change in the state of nature: improperly configured equipment to properly configured equipment, (2) there is no prior activity that could have caused the state change, and (3) it is necessary to enable other activities to be per-formed. However, setting up equipment often takes more time than needed and so has a nonvalue-added component. Most companies strive for zero se-tup time. Thus, the time and associated cost are nonvalue-added because the activity is performed inefficiently. Means should be explored to reduce the time of this activity so that it consumes less resources. Possible root causes include such factors as product design, process design, and equipment de-sign. Knowing the root causes can lead to an improvement in activity effi-ciency. Moving from a departmental manufacturing structure to a cellular manufacturing structure in some cases may eliminate the need for setups, thus eliminating the activity, or flexible manufacturing equipment might be purchased that provides an almost instantaneous setup capability (a change in process technology—and certainly a change in equipment design). In other cases, the activity may be improved by redesigning the product so that a less complicated setup is required.Creating scrap: This is generally viewed as a nonvalue-added activity and should be eliminated. It is nonvalue-added because it causes a nondesired change of state and because it does not enable other value-added activities to be performed. Efforts should be made to find ways of producing that elimi-nate scrap. Possible root causes include poor vendor quality, quality man-agement approach, and manufacturing process used. Knowing the root causes may lead to a supplier valuation program that improves the quality of the parts and materials purchased externally, adoption of a total quality man-agement program, and perhaps the use of automated equipment to cut down on material waste (because of greater precision).Welding subassemblies: This is a value-added activity. It causes a desired state change that could not have been done by preceding activities and enables other activities to be performed. If inefficient, then means should be sought to improve efficiency. The goal is to optimize value-added activity per-formance. Possible root causes include product design, process design, and production technology. Changing either of the two designs could decrease the demand for the welding activity while producing the same or more output.A change in technology—buying more advanced technology, for example—may also increase the efficiency of the activity.Materials handling: This is a nonvalue-added activity. Moving materials and subassemblies from one point in the plant changes location but not the state.But it does enable other activities to be performed, and it is not a repeated ac-tion. If you argue that changing location is a change in state, then moving ma-terials is value-added but with the potential of significant increases in efficien-cy (as with setups, the goal is to minimize the amount of activity performance).Possible root causes include plant layout, manufacturing processes, and ven-dor arrangements. Moving from a departmental to a cellular structure, adopting computer-aided manufacturing, and entering into contracts with suppliers that require just-in-time delivery to the point of production are examples of how knowledge of root causes can be exploited to reduce and eliminate nonvalue-added activities.Inspecting parts: Inspection is a nonvalue-added activity. It is a state-detection activity and is not necessary to enable other activities to be per-formed. This activity should be reduced and eventually eliminated. A possible root cause of inspection is the possibility of poor quality of parts and mate-rials. The company should work with suppliers to ensure high quality (zero-defect parts).2. Behavioral analysis:Setting up equipment: Using the number of setups as a driver may cause a buildup of inventories. Since reducing the number of setups will reduce setup costs, there will be an incentive to have fewer setups. Reducing the number of setups will result in larger lots and could create finished goods inventory.This is in opposition to the goal of zero inventories. On the other hand, if se-tup time is used as the driver, managers will have an incentive to reduce se-tup time. Reducing setup time allows managers to produce on demand rather than for inventory.Creating scrap: Using the number of defective units as a driver should en-courage managers to reduce defective units. Assuming that defective units are the source of scrap, this should reduce scrap costs. Similarly, using pounds of scrap should encourage managers to find ways to reduce scrap. In both cases, the behavioral consequences could be two-edged. If the reduc-tion of scrap (defective units) is achieved by increasing quality/productive ef-ficiency, the effect is compatible with the objective of creating a competitive advantage. If the reduction is achieved by allowing defective units to flow through to finished goods, then the effect will be to alienate customers, not win their favor (customer realization decreases). Neither driver appears to dominate. One solution is to report the trend in warranty activity with the trend in scrap activity. This may discourage any kind of pass-on behavior. Welding subassemblies: Using welding hours should encourage manage-ment to find ways of reducing the welding hours required per product. This would be more likely to induce managers to look at possible root causes such as product design and process design rather than number of welded subassemblies. There is some value in looking for ways to reduce the num-ber of welded subassemblies, perhaps redesigning the product to eliminate welding.Materials handling: Both drivers seem to have positive incentives. Seeking ways to reduce the number of moves or distance moved should lead manag-ers to look at root causes. Reorganizing the plant layout, for example, should reduce either the number of moves or the distance moved. Hopefully, the ac-tivity drivers will lead to the identification of executional drivers that can be managed so that the activity can be reduced and eventually eliminated. Inspecting parts: Hours of inspection can be reduced by working with suppli-ers so that greater incoming quality is ensured. Similarly, the number of de-fective parts can be reduced by working with suppliers so that incoming qual-ity is increased. Hours of inspection, however, can be reduced without increasing quality. This is not true for the number of defective parts. Using the number of defective parts appears to be a better choice.。