ACCT 346 Course Discussions

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ACCT 346 Course Discussions
What is the goal of Managerial Accounting and how does Managerial Accounting …

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ACCT 346 Course Discussions

ACCT 346 Course Discussions

All Students Posts – 613 Pages

Discussions Week 1 – 75 Pages

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Ethics and Ethical Behavior – Post 34 Pages

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The Sarbanes-Oxley Act of 2002 (SOX) has emphasized the importance of ethical behavior and codes of conduct. Discuss the costs and benefits of the ethical environment. If a poor ethical environment results in costs to an organization, what are they? Conversely, what are the benefits of a good ethical environment?…

What can companies do to foster an ethical environment? Give examples of what YOUR company does to promote an ethical environment.   How can management go about setting an example of proper ethical behavior for the rest of the company?  How would you keep management accountable?…

Managerial and Financial Accounting – 41 Pages

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Flexibility, timeliness, and forward looking are said to be the prominent traits of modern management accounting, whereas standardization and consistency describe financial accounting. Explain why the focus on these two accounting systems differs.  What is the goal of Managerial Accounting and how does Managerial Accounting differ from Financial Accounting?…

Costs can be classified in regard to how they respond to changes in the activity level. Total variable costs change in proportion to changes in the activity level. If production decreases 20%, variable costs will also decrease 20%. However, the unit variable cost remains the same regardless of the production level. For example, if it costs $5 to produce one unit of Product X, total variable costs are $10,000 if 2,000 units are produced. If production decreases to 1,000 units, total variable costs decrease to $5,000. Notice that while the total variable costs decreased in proportion to the decrease in production, unit variable costs remained the same at $5 per unit…

ACCT 346 Course Discussions

Week 2 – 81 Pages

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Job Order Costing – 40 Pages

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The job cost sheet is used to accumulate the three product costs: direct material, direct labor, and factory overhead. Discuss the source documents for determining these amounts (that is, where do we get these numbers, and how we arrive at the overhead?). Why is overhead the most difficult to assign?…

Problem #1 for EVERYONE to try to work on :
Bonnie Company uses a predetermined overhead rate of $8.00 per machine hour. 60,000 machine hours were worked this year and actual overhead costs of $465,000 were incurred.
What was the amount of under-applied or over-applied overhead?
Indicate if it is over-applied or under applied. WHY?

Process Costing – 41 Pages

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Describe how the process costing system accumulates and assigns costs by comparing and contrasting to the job-order costing system….

What is the difference between Job Order Costing and Process Costing? What system would you use for manufacturing custom made tables? What system would you use if you were manufacturing 100,000 gallons of paint? WHY?  Can you think of different situations which clearly should use one system rather than the other?

If beginning inventory consisted of 22,500 units, ending inventory was 7,500 units, and 33,000 units were started during the period, how many units were completed and transferred out of the department to the next department?…

Discussions Week 3 – 95 Pages

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Cost-Volume-Profit Analysis – 49 Pages

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Based on your ebook readings and review of both the lecture and Becker content, discuss the basic assumptions of CVP analysis and how we can use CVP analysis as managers in making decisions.  Since the break-even point represents the point at which the company makes zero profit, why would a company have any interest in it?  How could managers use the break-even point when introducing a new product?…

This problem uses the ideas we have learned in week 1 and now week 3.
You just started to work for a new company that sells tee shirts that reads ” I Passed Accounting”. Selling price is $10 per shirt; variable cost is $4 per shirt and fixed costs are $60,000. Compute the number of tee shirts to A) break-even; and the number B) to earn a profit of $24,000.

Variable Costing and Full Costing – 46 Pages

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Discuss the difference between variable costing and full costing. Why would income computed under full costing exceed income computed under variable costing if production exceeds sales?… When would a company choose to use a full costing income statement and when would it use a variable costing income statement? What are the ramifications of each?

Why doesn’t GAAP allow variable costing financial statements for external use?

Problem #2 emphasizing the difference between full costing and variable costing:
A company has fixed manufacturing costs of $2,000,000 and produces 600,000 units and sells 500,000 units. There is no beginning inventory. (Of course the ending inventory is the difference of 600,000-500,000 or 100,000 units.)
What differences, using numbers from this problem, not general concepts, would we see in the variable and full costing statements? WHY?(Be sure to review the concepts in the chapter…

Week 4 – 96 Pages

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Activity-Based Costing Week 4 – 50 Pages

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How does activity-based costing differ from the traditional costing approach? When would it give more accurate costs than traditional costing systems?  What are cost allocations? What are 4 main reasons companies allocate costs to products? Choose ONE and explain how this process would benefit management….

PROBLEM #1. Activity Based Costing (ABC):
(EVERYONE should do this problem and post a solution even if others already have.)
Harold Company makes two products and is implementing an Activity Based Costing (ABC) system. Previously, all overhead had been applied on the basis of machine hours. The Company produces 400,000 units of product A and 20,000 units of product B.
The problem is based on the following categories:
Cost Pool
a)Driver and Level
b)Cost in Pool
c) Use of Driver by Product A
d) Use of Driver by Product B
I Equipment Setup
a) 2500 setups
b) $2,000,000
c) 1,350 setups
d) 1,150 setups
II Materials Ordering
a) 50,000 orders
b) $5,000,000
c)20,000 orders
d)30,000 orders
III Quality Control
a)40,000 inspections
b) $900,000
c) 15,000 inspections
d) 25,000 inspections
IV Machining
a) 50,000 machine hours
b) $6,000,000
c) 10,000 machine hours
d) 40,000 machine hours
A) Using ABC what is the cost per machine hour in the Machining pool?
B) Using ABC what is the cost per setup in the Equipment Setup Pool?

ACCT 346 Course Discussions

Activity-Based Costing Week 4 – 50 Pages

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How does activity-based costing differ from the traditional costing approach? When would it give more accurate costs than traditional costing systems?  What are cost allocations? What are 4 main reasons companies allocate costs to products? Choose ONE and explain how this process would benefit management….

PROBLEM #1. Activity Based Costing (ABC):
(EVERYONE should do this problem and post a solution even if others already have.)
Harold Company makes two products and is implementing an Activity Based Costing (ABC) system. Previously, all overhead had been applied on the basis of machine hours. The Company produces 400,000 units of product A and 20,000 units of product B.
The problem is based on the following categories:
Cost Pool
a)Driver and Level
b)Cost in Pool
c) Use of Driver by Product A
d) Use of Driver by Product B
I Equipment Setup
a) 2500 setups
b) $2,000,000
c) 1,350 setups
d) 1,150 setups
II Materials Ordering
a) 50,000 orders
b) $5,000,000
c)20,000 orders
d)30,000 orders
III Quality Control
a)40,000 inspections
b) $900,000
c) 15,000 inspections
d) 25,000 inspections
IV Machining
a) 50,000 machine hours
b) $6,000,000
c) 10,000 machine hours
d) 40,000 machine hours
A) Using ABC what is the cost per machine hour in the Machining pool?
B) Using ABC what is the cost per setup in the Equipment Setup Pool?…

Incremental Cost Analysis Week 4 – 46 Pages

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What is meant by relevant costs?  What is meant by differential costs? How do constraints relate to manufacturing companies? How would you tie all these ideas together with costs that need to be included in the decision making process?…

Problem (#1) for everyone to work on.
Zoom Company’s market for the Model #6549 has changed significantly, and Zoom has had to drop the sales price per unit from $1,000 to $625. There are 1000 units in the work in process inventory that have costs of $670 per unit. Zoom could sell these units in their current state for $280 each. It will cost Zoom $208 per unit to complete these units so that they can be sold for $625.
a) Which of these dollar amounts were not relevant in this problem? WHY?
b) Which amounts are relevant to any decision? WHY?
c) Which costs are “sunk” costs? WHY?
d) If we are dealing with 1000 units, what is the total dollar difference by re-working the units instead of not re-working them? SHARE your calculation…

ACCT 346 Course Discussions

Week 5 – 96 Pages

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Pricing Techniques – Post 47 Pages

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Compare target costing and cost-plus pricing. When is each the most appropriate method to use? Provide an example of each. Why is cost-plus pricing inherently circular for a manufacturing firm?  What are the alternatives when considering a “special order”? What does “incremental revenue” mean?   How do you decide between the alternatives? Give examples of a special order and give examples of a special order coming into your company. What factors do you look at and what factors should you not look at?…

Problem #1
Shanes Company is launching a new line of product. The company invests $4,000,000 in operating assets, such as production equipment, and plans to produce and sell 400,000 units per year.
Shanes wants to make a return on investment of 25% each year.
Shanes needs to know what price to charge for this product.
Use the absorption costing approach to determine the markup necessary make the desired return on investment.
Cost information is provided below.
Required: calculate the selling price…

Capital Budgeting Techniques – 49 Pages

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Suppose a company has five different capital budgeting projects from which to choose but has constrained funds and cannot implement all of the projects. Explain why comparing the projects’ NPVs is better than comparing their IRRs. How is the IRR determined if there are uneven cash flows? Why does the failure to consider soft benefits discourage investment?

Firstly, what is the time value approach to capital budgeting? Give an example of how it would work in the following case:
Assume you are thinking about investing $1000 and that the investment will return to you $1400 (once) five years in the future: Assume you have a 10% Required rate of return. WOULD YOU MAKE THE INVESTMENT?
SHOW ALL MATHEMATICAL BACK UP

Problem #1:
Recently on the Golf Channel there was a film report of a person hitting a hole-in-one and winning $1 million. He went crazy in the film. HOWEVER, it was $50,000 every year paid out over the next 20 years. He wasn’t offered the lump sum.
Questions: A) If the money is valued at 14% what was the REAL PRESENT VALUE of his winnings? (What was it worth that day?) Explain your answer. If you use a TABLE be careful which Table you are using. This is an annuity. NOT a payment once.
(Make sure your answer is logical. Remember he is receiving $50,000 per year. The answer cannot be more than $1,000,000 and it cannot be less than $150,000 just based on logic.)
B) If the money is valued at 6% what was the REAL PRESENT VALUE of his winnings? (What was it worth that day?) Explain your answer.
C) Note that the rule is that the higher the interest rate the Lower the Present Value and the lower the interest rate the Higher the Present Value. (As you should see from your answers to parts A and B) Can you explain why this rule is true?…

ACCT 346 Course Discussions

Week 6 – 90 Pages

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Budgeting – 46 Pages

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How does a company effectively use budgets in the planning and control process? As it is preparing the budget, what is the difference between the top-down and the bottom-up approach to development? Which do you think is more commonly used and why?

How are budgets used in the management roles of Planning and Control? Why are budgets important? Do you use Budgets in your job? What is the difference between Static Budgets and Flexible Budgets? How are static budgets and flexible budgets related? How does a company effectively use budgets in the planning and control process? As it is preparing the budget, what is the difference between the top-down and the bottom-up approach to development? Which do you think is more commonly used and why?…

Standard Costs and Variance Analysis – 44 Pages

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What role do standard costs play in controlling the operations of a business? How are standard costs developed for direct materials, direct labor, and manufacturing overhead? Are there ever costs that we can’t develop standards for related to manufacturing the goods?

Why do we try to get a standard cost for items going into the products we manufacture? What role do standard costs play in controlling the operations of a business? How are standard costs developed for direct materials, direct labor, and manufacturing overhead? Are there ever costs that we can’t develop standards for related to manufacturing the goods? What do we see when we analyze the variances?…

PROBLEM #1 FOR EVERYONE
Talya Company produces Basketballs. The standard cost for each Basketball is:
Direct material, 4 ft @ $6.00/ft = $24.00
Direct labor, 4 hours at $15.00/hr = $60.00
During December 4,000 basketballs were produced. 19,600 ft of leather were purchased at $5.85/ft and 18,600 ft were used in production. Direct labor costs incurred were $270,000 for 20,000 hours.
a)What is the direct material price variance
b) What is the material usage variance?
c) What is the Labor rate variance?
d) What is the labor efficiency variance?
Be sure to indicate if FAVORABLE or UNFAVORABLE. That is crucial…

ACCT 346 Course Discussions

Week 7 – 80 Pages

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Responsibility Centers – 44 Pages

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Compare and contrast the three types of responsibility centers. What is the best way to evaluate a manager’s performance in each type of center? What is the problem with using only financial measures of performance?…

What do each of the “centers” represent?
How do they measure performance?

It is important to understand how managers are evaluated since you may be evaluated by these same methods someday. Discuss your experiences with the way you are evaluated in your company, and how the managers in your company are evaluated.

problem #1:
A) Assume Lisa Inc has net income $7,000,000, interest expense of $1,500,000 and a tax rate of 40%. Calculate the NOPAT.
b)If this (same) company had sales of $10,000,000 what is the company’s profit margin?
C) What do these amounts tell us?…

Financial Statement Analysis – 36 Pages

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Why do managers analyze financial statements? What are they looking for? List three types of decisions that managers can make by analyzing financial statements.

A) What are the differences between the “current ratio” and the “acid-test ratio”? What do these ratios tell management?

B) Suppose net income is much higher than cash flows from operations. Why is this potentially indicative of earnings manipulation?…

problem #1
The Lance Company, provides various services.
Financial information concerning the most recent
year appears below:
Sales $12,000,000
Net operating income $3,300,000
Average operating assets $30,000,000
Ignore the impact of income taxes in your calculation.
Compute the return on investment (ROI) for the company

ACCT 346 Course Discussions