Cost Accounting 8e Solution Manual

Description Solution Manual Cost Accounting 8th Raiborn & Kinney Chapter 1: 1. (LO.1) Select the incorrect comparison between financial and management accounting: Financial Accounting Management Accounting a. Primary focus External Internal b.

1. Cost Accounting 8e Solution Manual 15th Edition Pdf
2. Cost Accounting Horngren Solutions Manual
3. Cost Accounting 8e Solution Manual By Rante

Overriding criteria Verifiability GAAP c. Information timeframe Historical Current/future d. Recordkeeping Formal Formal and informal 2. (LO.1) Oversight of auditing standards for public companies is the responsibility of the a. Public Company Accounting Oversight Board.

Securities and Exchange Commission. Financial Accounting Standards Board. Institute of Management Accountants.

3, (LO.1) The acronym IASB stands for a. Internal Accounting Standards Board.

Internal Auditing Standards Board. International Auditing Standards Board. International Accounting Standards Board. (LO.1) Cost accounting can best be described as a. The intersection between financial and management accounting. A system that meets the informational demands of both financial and management accounting. A system that provides product cost information to Internal managers for planning, controlling, decision making and evaluating performance.

All of the above. (LO.2) Statements on Management Accounting (SMA) are directives on the practice of management and cost accounting. Select the incorrect statement concerning SMAs from the following. SMAs are issued by the Cost Accounting Standards Board. SMAs are not legally binding.

SMAs go through a rigorous developmental and exposure process. SMAs describe high-quality or best practices in management accounting. (LO.3) A management accountant who fails to perform professional duties in accordance with relevant standards is acting contrary to which of the following standards?

Competency b. Objectivity d. Confidentiality 7.

(LO.3) The IMA Code of Ethics requires a management accountant to follow the established policies of the organization when facing an ethical conflict. When management accountants fail to resolve an ethical conflict by talking with their immediate supervisor they should a. Communicate the problem to authorities outside the organization.

Contact the next higher managerial level. Notify the audit committee of the board of directors. Contact the chief financial officer. (LO.3) According to the IMA Code of Ethics a practitioner has the responsibility to recognize professional limitations. Under which standard of ethical conduct would this responsibility be included? Competency b. Confidentiality c.

Objectivity 9. (LO.4) Strategic planning includes all of the following except: a.

Top-level management participation. A long-term focus. Analysis of the current month’s actual variances from budget. Identification of long-term key variables including external influences.

(LO.4) The strategy that is being used by a company that seeks to provide superior quality products or more unique services than its competitors is a a. Cost leadership strategy. Differentiation strategy. Customer value strategy. Value chain strategy.

(LO.5) All of the following are staff personnel except: a. Production supervisor. Cost accountant. Corporate controller.

Tax accountant. (LO.5) An organization’s collection of knowledge, skills, and information is referred to as its a. Political capital. Qualitative capital.

Intangible capital. Intellectual capital. (LO.6) All of the following are examples of upstream functions in the value chain except a.

Research and development. (LO.7) Which balanced scorecard perspective focuses on those things that the organization must do well to meet customer needs and expectations? Customer perspective b.

Learning and growth perspective c. Financial perspective d. Internal business perspective 15. (LO.8) Which of the following is a violation of the Foreign Corrupt Practices Act? Paying cash bribes to foreign officials b.

Giving sporting event tickets to foreign officials c. Providing free samples to the families of foreign officials d. All of the above Chapter 2: 1. (LO.1) Select the incorrect statement concerning cost objects. When the cost object is the Production Department, the cost of a production supervisor’s salary would be a direct cost.

A direct cost must be conveniently and economically traceable to the cost object. When the cost object is a Tundra truck, the cost of the truck’s engine is a direct cost. When the cost object is the Toyota Princeton Indiana manufacturing plant the cost of overhead is an indirect cost. (LO.2) Which of the following statements is correct concerning fixed costs? Within the relevant range, total fixed costs always increase when volume increases. A step cost may be fixed or variable. The fixed costs per unit will remain constant provided volume remains within the relevant range.

Within the relevant range, total fixed costs always decrease when volume increases. (LO.2) A utility bill that includes a flat charge for basic service plus a stated rate for each kilowatt hour of usage beyond a specified level is an example of a a.

Variable cost. Independent cost.

(LO.2) In relation to the dollar amount of Tundra truck sales, which of the following classifications is appropriate for the truck tires used in production and for the salaries of production supervisors? Truck Tires Production Supervisor Salaries a.

Variable cost Fixed cost b. Fixed cost Variable cost c.

Variable cost Mixed cost d. Mixed cost Fixed cost 5. (LO.3) The estimated unit cost for a company planning to produce and sell at a level of 12,000 units per month is as follows: Estimated Cost Item Unit Cost Direct material $20 Direct labor 32 Variable manufacturing overhead 6 Fixed manufacturing overhead 12 Variable selling 4 Fixed selling 4 What is the total estimated conversion costs per unit? (LO.3) Which of the following is not a product cost for Tundra trucks? Steering wheel b. Salary of product sales manager d. (LO.4) Which of the following types of firms has the highest degree of conversion causing a major transformation from input to output?

Lee’s Landscaping Company b. Toyota Manufacturing Company c. Wal-Mart Stores d.

All of the above 8. (LO.4) Select the incorrect statement concerning the stages of the production or conversion process. A manufacturing company’s Finished Goods inventory account is similar to a service company’s Supplies inventory account. Firms such as retailers that engage in only low or moderate degrees of conversion ordinarily have only a single inventory account.

The production process occurs in three stages: raw material, work in process, and finished goods. At the point of sale, product costs flow from an inventory account to Cost of Goods Sold expense. (LO.5) Which of the following would not be classified as direct material for a Tundra truck? Cost of the battery b. Cost of the glue used to secure the carpet in the cab of the truck c. Cost of freight paid on the truck windshield d.

Cost of the fuel tank 10. (LO.5) Which of the following would be classified as direct labor for the production of a Tundra truck? Wages paid to assembly line (production) workers b. Bonuses paid to production workers for exceeding production goals c. Production workers’ Social Security taxes d. All of the above 11. (LO.5) Which of the following costs would not be classified as overhead for the production of Tundra trucks?

Salary of plant manager b. Indirect labor costs c. Salary of Toyota Chief Executive Officer d. Depreciation of production machinery 12. (LO.6) All of the following are reasons why overhead costs are allocated to cost objects except: a. To compare alternative courses of action for management planning and decision making. To identify the fixed and variable components of the various overhead costs.

To determine the full cost of the cost object. To motivate the manager in charge of the cost object to manage it efficiently. (LO.7) A Company had the following inventories at the beginning and end of January: January 1 January 31 Finished goods $12,500 $11,700 Work in process 23,500 25,100 Direct material 13,400 12,400 The following additional manufacturing data were available for the month of January: Direct material purchased $18,900 Direct labor 30,000 Actual factory overhead 17,500 What was the total cost of direct material used for January?

(LO.7) B Company had the following inventories at the beginning and end of January: January 1 January 31 Finished goods $125,000 $117,000 Work in process 235,000 251,000 Direct material 134,000 124,000 The following additional manufacturing data were available for the month of January: Direct material used $189,000 Direct labor 300,000 Actual factory overhead 175,000 What was B Company’s cost of goods manufactured for January? (LO.7) C Company had the following inventories at the beginning and end of January: January 1 January 31 Finished goods $125,000 $117,000 Work in process 235,000 251,000 Direct material 134,000 124,000 Assuming the Cost of Goods Manufactured for January was $660,000, what was C Company’s cost of goods sold for January? Chapter 3: 1. (LO.1) All of the following are reasons for using predetermined overhead rates in product costing except: a. To overcome the problem of fluctuations in activity levels that have no impact on fixed overhead costs. To overcome the problem caused by overhead containing both fixed and variable costs. To adjust for variations in actual overhead costs that are unrelated to fluctuations in activity.

To allow management to determine whether a product, product line, or customer is profitable. (LO.2) What is the best method for disposing of significant underapplied factory overhead? Charge the underapplied amount to cost of goods sold b.

Prorate the underapplied amount to cost of goods sold, finished goods, and work in process c. Prorate the underapplied amount to inventory only (work in process and finished goods) d. Charge the underapplied amount to a loss account at the end of the period 3. (LO.2) Select the incorrect statement concerning overapplied overhead. The overhead control account will have a debit balance. The amount of overhead transferred to WIP from the overhead control account exceeded the actual amount of overhead incurred.

Overapplied overhead must be closed at year-end because a single year’s activity level was used to set the predetermined overhead rate. Overapplied overhead may result if the company’s actual utilization of capacity is greater than expected. (LO.3) In determining cost behavior in business, the cost function is often expressed as y = a + bx.

What does the “a” term represent? Total variable costs b. Total fixed costs c. Unit variable cost d. Unit fixed cost 5.

(LO3) M Company derived the following cost equation to explain its monthly manufacturing overhead cost: OH = $80,000 + $12MH, where MH = machine hours The standard time required to manufacture one unit is 4 machine hours. The company applies manufacturing overhead to production on the basis of machine hours and its normal annual production is 50,000 units. What is the estimated variable manufacturing overhead cost for a month in which scheduled production is 5,000 units?

(LO.4) Which method of separating mixed costs ensures the best fitting regression line? High-low method b. Scattergraph method c. Proration method d. Least squares regression method 7. (LO.4) W Company is working on its annual profit plan for the coming year. The company wants to determine the cost behavior pattern of its maintenance costs.

The prior year’s data regarding maintenance hours and costs are as follows. Hours of Maintenance Activity Costs January 480 $ 4,200 February 320 3,000 March 400 3,600 April 300 2,820 May 500 4,350 June 310 2,960 July 320 3,030 August 520 4,470 September 490 4,260 October 470 4,050 November 350 3,300 December 340 3,160 Using the high-low method, estimate the amount of maintenance cost per hour. (LO.4) X Company uses simple regression to separate its selling costs (y) into fixed and variable components based on units sold (x). A computer software program generated the following regression analysis results: Average x 400 Average y 3600 a 684.65 Standard error of a 49.515 b 7.2884 Standard error of b 0.12126 Std error of the estimate 34.469 r2 0.99724 What equation should X Company use to estimate its selling costs? Y = $3,600 + 400x b.

Y = $684.65 + 7.2884x c. Y = $3,600 + 7.2884x d.

Y = $684.65 +.12126x 9. (LO.5) In applying overhead, individual department rates would be used instead of a plant wide rate if a. The manufactured products differ in the resources consumed from the individual departments in the plant.

A company wants to adopt a standard cost system. A company’s manufacturing operations are highly automated. Manufacturing overhead is the largest component of product cost. (LO.6) Which cost accumulation and reporting system treats the costs of all manufacturing components (direct material, direct labor, and both variable and fixed overhead) as product costs? Absorption costing b. Variable costing c.

Mixed costing d. None of the above 11. (LO.6) Which cost accumulation and reporting system reports the total contribution margin? Absorption costing b. Variable costing c.

Mixed costing d. None of the above 12. (LO.6) Which cost accumulation and reporting system is required for external reporting and tax purposes? Absorption costing b.

Variable costing c. Mixed costing d. None of the above 13. (LO.7) The primary difference between absorption and variable costing lies in the treatment of: a. Variable selling and administrative costs. Variable overhead costs.

Fixed overhead costs. Fixed selling and administrative costs.

(LO.7) Which cost accumulation and reporting system provides management an incentive to over-produce (i.e., produce more units than can be sold)? Absorption costing b. Variable costing c. Mixed costing d. None of the above 15. (LO.7) In a period in which there is no change in inventory, which cost accumulation and reporting system will report higher profits?

Absorption costing b. Variable costing c. Mixed costing d. None of the above Chapter 4: 1. (LO.1) Activity-based management (ABM) focuses on improving customer value and enhancing profitability. Which of the following is an impact of implementing ABM to control production processes?

More effective performance evaluation b. More accurate cost determination and control c.

More efficient production processes d. All of the above 2. (LO.1) Select the incorrect statement from the following. An activity is any repetitive action that is performed in fulfillment of a business function. Non-value-added activities increase the time spent on a product but do not increase its worth. The objective of activity-based management is to eliminate all non-value-added activities.

Activity analysis attempts to classify activities as value added or non-value-added. (LO.1) All of the following are non-value-added time except: a. Inspection time.

Processing time. (LO.2) Which of the following correctly computes manufacturing cycle efficiency? Total Cycle Time – Total Value-Added Time. Total Cycle Time / Total Value-Added Time. Total Value-Added Time + Total Non-Value-Added Time. Total Value-Added Time / Total Cycle Time.

(LO.2) The need to rework products because of a poorly designed training program is an example of a non-value-added activity caused by a. Systemic factors. Physical factors. Human factors. None of the above. (LO3) All of the following are examples of batch-level costs except: a. Costs of engineering change orders.

Purchase order costs. Inspection costs. Movement costs. (LO.3) Select the incorrect matching of cost and cost level. Unit level: Direct material b.

Facility level: Equipment maintenance c. Product level: Product development d. Batch level: Setup costs 8.

(LO.4) Which costing system assigns costs within multiple cost pools to products using multiple drivers? Activity-based costing b.

Variable costing c. Traditional costing d. None of the above 9. (LO.4) E Corporation, which makes electronic components for NASA’s space shuttle, uses activity-based costing.

One of its activities is described below: Est. Qty of Required for Activity Cost Driver Cost Driver Cost Rate Current contract (1) Quality control No. Of units 210,000 units $0.14 17,500 units Select the incorrect statement from the following.

$2,450 will be assigned to the contract on which the company is currently working. The company’s annual estimated quality control costs cannot be determined from the information provided. Since the component is being built for the U.S.

Government for use on the space shuttle, it is not unusual for the company to inspect every unit produced. It is likely that the company uses a different cost driver to assign other support costs such as setup costs. The next two questions are based on the following information: P Company is considering using activity-based costing instead of its traditional costing system because it believes its current system may be providing misleading information. The following data shows the budgeted manufacturing overhead. Budgeted Budgeted Activity Cost Driver Activity Cost Materials handling No.

Of parts handled 6,000,000 $720,000 Setup costs No. Of setups 750 315,000 Machining costs Machine hours (MH) 30,000 540,000 Quality control No.

Of batches 500 225,000 Total overhead cost $1,800,000 The company also estimates that it will work 50,000 direct labor hours in the coming year. The following information is provided for one of the company’s products for the coming year: Direct material and Direct Labor Direct materials cost per unit $4.40 Direct labor cost per unit.05 DLH @ $15/DLH.75 Total $5.15 Sales and production data: Expected sales 20,000 units Batch size 5,000 units Setups 2 per batch Total parts per finished unit 5 parts Machine hour required 80 MH per batch 10. (LO.4) If the organization uses a traditional full cost system, the cost per unit of this product for the coming year will be 11. (LO.4) If the organization uses an activity-based cost system, the cost per unit of this product for the coming year will be a. (LO.5) The use of activity-based costing normally results in: a.

Substantially lower unit costs for low-volume products than is reported by traditional product costing. Equalizing setup costs for all product lines. Decreased setup costs being charged to low-volume products. Substantially greater unit costs for low-volume products than is reported by traditional product costing.

(LO.5) Because of the changes that are occurring in the basic operations of many firms, all of the following represent trends in the way indirect costs are allocated except: a. Treating direct labor as an indirect manufacturing cost in an automated factory. Using throughput time as an application base to increase awareness of the costs associated with lengthened throughput time. Preferring plant-wide application rates that are applied to machine hours rather than incurring the cost of detailed allocations.

Using several machine cost pools to measure product costs on the basis of time in a machine center. (LO.5) Activity-Based Costing is appropriate for which of the following organizations? One that produces and sells a wide variety of products. One that produces and sells a single complex product. One that provides a single service to customers.

All of the above 15. (LO.6) A number of barriers must be overcome to implement activity-based costing systems successfully.

Select the barrier that is not matched up properly with its type. Fear of change Individual barrier b. Regulatory agencies Environmental barrier c.

Corporate culture issues Organizational barrier d. All of the above barriers are properly classified. Chapter 5: 1. (LO.1) All of the following would most likely use a job order costing system except: a. A dental practice. An auto repair shop.

A small appliance maker. An architectural firm.

(LO.1) Which of the following costs is not charged to Work in Process in a normal cost system? Actual overhead b. Actual direct materials c. Actual direct labor d. Estimated indirect labor 3. (LO.1) Which of the following product costs would be charged to Work in Process assuming a standard costing system? Actual direct material costs b.

Actual overhead costs c. Actual direct labor costs d. Applied overhead costs 4. (LO.2) Select the incorrect job order costing system characteristic. Costs are accumulated by job. A job may consist of multiple units provided all units are similar. Costs of different jobs cannot logically be averaged so a unique cost must be determined for each job.

2010 vw crafter user manual. Sorry, we've taken a wrong turn. Please return to the previous page to try again or contact if you feel that you have received this message in error. Your request has been blocked.

Jobs are usually produced to distinct customer specifications. (LO.3) Which of the following serves at a subsidiary ledger for the Work in Process account? Standard cost card b.

Material requisition form c. Job requisition form d.

Job order cost sheet 6. (LO.3) Which of the following is not a source document used in job order costing systems? Cost of production report b. Employee time sheet c.

Cost Accounting 8e Solution Manual 15th Edition Pdf

Job cost sheet d. Material requisition form 7. (LO.4) Select the response that represents the correct flow of costs in a job order costing system. Raw materials, work in process, cost of goods sold, finished goods b. Raw materials, work in process, finished goods, cost of goods sold c.

Raw materials, overhead, work in process d. Direct material, finished goods, work in process 8. (LO.4) The journal entry to apply overhead to production would include: a.

A debit to Manufacturing Overhead Control. Credits to various accounts such as Cash, Accumulated Depreciation, and Accounts Payable. A credit to Manufacturing Overhead Control. A credit to Work in Process. (LO.4) The journal entry to transfer production from the Finishing Department to Finished Goods would include a: a.

Credit to Finished Goods. Debit to Cost of Goods Manufactured. Credit to WIP – Finishing. Credit to Cost of Goods Manufactured. (LO.4) M Corporation manufactures a specialty line of jeans using a job-order-cost system.

During May, the following costs were incurred in completing Job M1: direct materials, $13,700; direct labor, $4,800; administrative, $1,400; and selling, $5,600. Overhead was applied at the rate of $25 per machine hour, and Job M1 required 800 machine hours. If Job M1 resulted in 7,000 good jeans, the cost of goods sold per unit would be a. (LO.4) Q Company uses a normal cost system.

The following information is from its financial records for the year: Total manufacturing costs, $2,500,000 Cost of goods manufactured, $2,425,000 Applied overhead, 30% of total manufacturing costs Predetermined OH rate, 80% of direct labor cost Assuming the company’s work in process inventory at January 1 was 75 percent of its December 31 work in process inventory, what is the carrying value of the company’s work in process inventory at December 31? (LO.5) Which of the following costing systems does not involve computing cost variances? Actual costing system b. Normal costing system c. Standard costing system d. All of the above systems involve computing cost variances 13.

(LO.5) Select the incorrect statement concerning standard costs and job order costing. A standard cost system determines product cost by using predetermined norms in the inventory accounts for prices and/or quantities of cost components. Standards can be used in a job order cost system only if a company typically engages in jobs that produce fairly similar products. Under GAAP, standard cost job order systems may not substitute for actual or normal costing systems. Standard cost variances can be computed for actual-to-standard differences regardless of whether standards have been established for both quantities and prices or for prices or rates only.

Cost Accounting Horngren Solutions Manual

(LO.6) Which of the following statements is true concerning job order costing and management decision making? Job order costing assists managers in their planning, controlling, decision making and performance evaluations functions. Job order costing allows managers to trace costs associated with specific current jobs to better estimate costs of future jobs. Job order costing provides a means by which managers can better control the costs associated with their operations. All of the above are true statements. (LO.7) Select the incorrect statement regarding the accounting for product losses.

Normal losses that are anticipated on all jobs are estimated and included in the development of the predetermined OH rate. Normal losses that are associated with a particular job are charged to a loss account in the period they are incurred. Abnormal losses are charged to a loss account in the period they are incurred. The difference between normal and abnormal loss is one of degree and therefore must be determined by management. Chapter 6: 1.

(LO.1) Which of the following would least likely use a process costing system? Manufacturer of custom furniture b.

Manufacturer of soft drinks c. Manufacturer of gasoline d. Manufacturer of paper 2. (LO.1) Which of the following is not a basic objective of process costing? Compute an average cost per unit since units are homogeneous b. Allocate production costs between whole units and partial units c.

Separate production costs into fixed and variable components d. Determine the amount of production costs that should be transferred to the next department 3. (LO.1) Select the incorrect statement regarding equivalent units of production (EUP). Two units 50% complete are equivalent to one unit 100% complete.

Except in very rare instances, only one EUP calculation is needed per department. EUP equals the number of whole units of output that could have been produced during a period from the actual effort expended.

The objective of EUP calculations is to eliminate the costing problem caused by partially completed units. (LO.2) The steps in process costing are listed below: 1 – Calculate physical units to be accounted for 2 – Calculate physical units accounted for 3 – Calculate equivalent units of production (EUP) 4 – Calculate total costs to be accounted for 5 – Calculate the cost per EUP 6 –? What is the missing step? Assign costs to whole and partial units in ending inventory b. Assign costs to whole units produced during the period c. Assign costs to units started and completed during the period d.

Assign costs to units transferred out and units in ending inventory 5. (LO.2) Which of the following is true about the weighted average method of process costing? The calculation of EUP must take into consideration the units in both beginning and ending inventory. The cost per EUP will include prior period costs if the department had beginning inventory. The most common alternative to the weighted average method is the last-in, first-out method.

The weighted average method refers to a method of determining which units were sold and which units remain in inventory. Use the following information for the next three questions.

Z Company employs a process costing system for its manufacturing operations. All direct materials are added at the beginning of the process and conversion costs are added proportionately.

Cost Accounting 8e Solution Manual By Rante

The production quantity schedule for April is reproduced below: Units Work in process on April 1 (60% complete as to conversion costs) 1,000 Units started during April 5,000 Total units to account for 6,000 Units completed and transferred out 4,000 Work in process on April 30 (20% complete as to conversion costs) 2,000 Total units accounted for 6,000 Costs pertaining to the month of April are as follows: Beginning inventory costs: (DM, $54,600; Conversion, $35,560) $ 90,160 Costs incurred during April (DM, $468,000; Conversion $574,060) $1,042,060 6. (LO.2) Using the weighted average method, the equivalent units for direct materials for April are: a.

(LO.2) Using the weighted average method, the equivalent units for conversion costs for April are: a. (LO.2) Using the weighted average method, the equivalent unit materials cost for April is: a. (LO.2) Using the weighted average method, the 4,000 units completed during April will be transferred out at an EUP unit cost of: Use the following information for the next two questions. L Company uses a process cost system to account for its manufacturing operations. All direct materials are added at the beginning of the process and conversion costs are added proportionately.