管理会计(英文版)课后习题答案(高等教育出版社)chapter.doc

696969 管理会计（高等教育出版社）管理会计（高等教育出版社） 于增彪（清华大学）于增彪（清华大学） 改编改编 余绪缨（厦门大学）余绪缨（厦门大学） 审校审校 CHAPTER 4 ACTIVITY-BASED COSTING QUESTIONS FOR WRITING AND DISCUSSION 1.Unit costs provide essential information needed for inventory valuation and preparation 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 dollar amounts 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 because of problems with accuracy and timeliness. Waiting until the end of the year to ensure 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 nonuniform. 4.For plantwide rates, overhead is first collected in a plantwide pool, using direct tracing. Next, an overhead rate is computed and used to assign overhead to products. 5.First stage: Overhead is assigned to production 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 over plantwide rates whenever some departments 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 overhead to products in proportion to the amount of the unit-level cost driver used. If the products consume some overhead activities in different proportions than those assigned by the unit-level cost driver, then cost distortions 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 nonunit-level overhead activities in much greater proportions than indicated by a unit- 707070 level cost driver and vice versa for high- volume products. If so, then the low-volume products will receive too little overhead and the high-volume products too much. 9.If some products are undercosted and others are overcosted, a firm can make a number of competitively bad decisions. For example, the firm might select the wrong product mix or submit distorted bids. 10.Nonunit-level overhead activities are those overhead activities that are not highly correlated with production volume measures. Examples include setups, material handling, and inspection. Nonunit- level cost drivers are causal factorsfactors that explain the consumption of nonunit-level overhead. Examples include setup hours, number of moves, and hours of inspection. 11.Product diversity is present whenever products have different consumption ratios for different overhead activities. 12.An overhead consumption ratio measures the proportion of an overhead activity consumed by a product. 13.Departmental rates typically use unit-level cost drivers. If products consume nonunit- level overhead activities in different proportions than those of unit-level measures, then it is possible for departmental rates to move even further away from the true consumption ratios, since the departmental unit-level ratios usually differ from the one used at the plant level. 14.Agree. Prime costs can be assigned using direct tracing and so do not cause cost distortions. Overhead costs, however, are not directly attributable and can cause distortions. For example, using unit-level activity drivers to trace nonunit-level overhead costs would cause distortions. 15.Activity-based product costing is an overhead costing approach that first assigns costs to activities and then to products. The assignment is made possible through the identification of activities, their costs, and the use of cost drivers. 16.An activity dictionary is a list of activities accompanied by information that describes each activity (called attributes) 17.A primary activity is consumed by the final cost objects such as products and customers, whereas secondary activities are consumed by other activities (ultimately consumed by primary activities). 18.Costs are assigned using direct tracing and resource drivers. 19.Homogeneous sets of activities are produced by associating activities that have the same level and that can use the same driver to assign costs to products. Homogeneous sets of activities reduce the number of overhead rates to a reasonable level. 20.A homogeneous cost pool is a collection of overhead costs that are logically related to the tasks being performed and for which cost variations can be explained by a single activity driver. Thus, a homogeneous pool is made up of activities with the same process, the same activity level, and the same driver. 21.Unit-level activities are those that occur each time a product is produced. Batch-level activities are those that are performed each time a batch of products is produced. Product-level or sustaining activities are those that are performed as needed to support the various products produced by a company. Facility-level activities are those that sustain a factorys general manufacturing process. 22.ABC improves costing accuracy whenever there is diversity of cost objects. There are various kinds of cost objects, with products being only one type. Thus, ABC can be useful for improving cost assignments to cost objects like customers and suppliers. Customer and supplier diversity can occur for a single product firm or for a JIT manufacturing firm. 23.Activity-based customer costing can identify what it is costing to service different customers. Once known, a firm can then devise a strategy to increase its profitability by focusing more on profitable customers, converting unprofitable customers to profitable ones where possible, and “firing” customers that cannot be made profitable. 24.Activity-based supplier costing traces all supplier-caused activity costs to suppliers. This new total cost may prove to be lower than what is signaled simply by purchase price. 717171 EXERCISES 41 1. Quarter 1Quarter 2Quarter 3Quarter 4Total Units produced400,000160,00080,000560,0001,200,000 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$20 Overhead81545510 Total$28$35$65$25$30 2.Actual costing can produce wide swings in the overhead cost per unit. The cause 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 unit This 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 costing: Unit cost = $9.70 + $20.00 = $29.70 This cost is close to the actual annual cost of $30.00. 727272 42 1.$13,500,000/3,600,000 = $3.75 per direct labor hour (DLH) 2.$3.75 3,456,000 = $12,960,000 3.Applied overhead$12,960,000 Actual overhead13,600,000 Underapplied overhead$640,000 4.Predetermined rates allow the calculation of unit costs and avoid the problems of nonuniform overhead incurrence and nonuniform production associated with actual overhead rates. Unit cost information is needed throughout the year for a variety of managerial purposes. 43 1.Predetermined overhead rate = $4,500,000/600,000 = $7.50 per DLH 2.Applied overhead = $7.50 585,000 = $4,387,500 3.Applied overhead$ 4,387,500 Actual overhead4,466,250 Underapplied overhead$(78,750) 4.Unit cost: Prime costs$6,750,000 Overhead costs4,387,500 Total$ 11,137,500 Units750,000 Unit cost$14.85 737373 44 1.Predetermined overhead rate = $4,500,000/187,500 = $24 per machine hour (MHr) 2.Applied overhead = $24 187,875 = $4,509,000 3.Applied overhead$ 4,509,000 Actual overhead4,466,250 Overapplied overhead$42,750 4.Unit cost: Prime costs$6,750,000 Overhead costs4,509,000 Total$ 11,259,000 Units750,000 Unit cost$15.01* *Rounded 5.Gandars needs to determine what causes its overhead. Is it primarily labor driven (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. 747474 45 1.Predetermined rates: Drilling Department:Rate= $600,000/280,000 = $2.14* per MHr Assembly Department: Rate= $392,000/200,000 = $1.96 per DLH *Rounded 2.Applied overhead: Drilling Department: $2.14 288,000 = $616,320 Assembly Department: $1.96 196,000 = $384,160 Overhead variances: DrillingAssemblyTotal Actual overhead$602,000$ 412,000$ 1,014,000 Applied overhead616,320384,1601,000,480 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* *Rounded 757575 46 1.Activity rates: Machining = $632,000/300,000 = $2.11* per MHr Inspection = $360,000/12,000 = $30 per inspection hour *Rounded 2.Unit overhead cost = ($2.11 8,000) + ($30 800)/8,000 = $40,880/8,000 = $5.11 47 1.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 briefcase Fina:(1.75 $3,000)/3,000 = $1.75 per briefcase Note: 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. 767676 47Concluded 3.Overhead rate = $21,000/5,000 = $4.20 per MHr Elegant: ($4.20 500)/3,000 = $0.70 per briefcase Fina:($4.20 4,500)/3,000 = $6.30 per briefcase This 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: ElegantFina Machining0.100.90(500/5,000 and 4,500/5,000) Setups0.500.50(100/200 and 100/200) Setup costs are not assigned accurately. Two activity rates are neededone based on machine hours and the other on setup hours: Machine rate: $18,000/5,000 = $3.60 per MHr Setup rate:$3,000/200 = $15 per setup hour Costs assigned to each product: Machining:ElegantFina $3.60 500$ 1,800 $3.60 4,500$16,200 Setups: $15 1001,5001,500 Total$ 3,300$17,700 Units 3,000 3,000 Unit overhead cost$1.10$5.90 777777 48 Activity dictionary: ActivityActivityPrimary/Activity NameDescriptionSecondaryDriver Providing nursingSatisfying patientPrimaryNursing hours careneeds SupervisingCoordinatingSecondaryNumber of nurses nursesnursing activities Feeding patientsProviding mealsPrimaryNumber of meals to patients LaunderingCleaning andPrimaryPounds of laundry bedding anddelivering clothes clothesand bedding ProvidingTherapy treatmentsPrimaryHours of therapy physicaldirected by therapyphysician MonitoringUsing equipment toPrimaryMonitoring hours patientsmonitor patient conditions 787878 49 1.d Cost of labor (0.75 $40,000)$30,000 Forklift (direct tracing)6,000 Total cost of receiving$36,000 2.b 3.a 4.c 5.d Activity rates (Questions 25): Receiving: $36,000/50,000 = $0.72 per part Setup: $60,000/300 = $200 per setup Grinding: $90,000/18,000 = $5 per MHr Inspecting: $45,000/4,500 = $10 per inspection hour 6.a Overhead rate = $231,000/20,000 = $11.55 per DLH Subassembly A Direct materials$850 Direct labor600 Overhead ($11.55 50)578* Total cost$ 2,028 Units100 Unit cost$ 20.28 *Rounded 797979 49Concluded 7.b Subassembly A Direct materials$850.00 Direct labor600.00 Overhead: Setup200.00($200 1) Inspecting40.00($10 4) Grinding100.00($5 20) Receiving14.40($0.72 20) Total costs$1,804.40 Units100 Unit cost$18.04* *Rounded 410 1.Unit-level:Testing products, inserting dies 2.Batch-level:Setting up batches, handling wafer lots, purchasing materials, receiving materials 3.Product-level:Developing test programs, making probe cards, engineering design, paying suppliers 4.Facility-level:Providing utilities, providing space 808080 411 1.Unit-level activities:Machining Batch-level activities:Setups and packing Product-level activities:Receiving Facility-level activities:None 2.Pools and drivers: Unit-level Pool 1: Machining$80,000 Activity driver: Machine hours Batch-level Pool 2: Setups$24,000 Packing30,000 Total cost$54,000 Activity driver: Setups or packing orders Product-level Pool 3: Receiving$18,000 Activity driver: Receiving orders 818181 411Concluded 3.Pool rates: Pool 1: $80,000/40,000 = $2 per MHr Pool 2: $54,000/300= $180 per setup Pool 3: $18,000/600= $30 per receiving order 4.Overhead assignment: Infantry Pool 1: $2 20,000=$40,000 Pool 2: $180 200=36,000 Pool 3: $30 200=6,000 Total$82,000 Special forces Pool 1: $2 20,000=$40,000 Pool 2: $180 100=18,000 Pool 3: $30 400=12,000 Total$70,000 828282 412 1.DeluxePercentRegularPercent Price$900100%$750100% Cost5766460080 Unit gross profit$32436%$15020% Total gross profit: ($324 100,000)$32,400,000 ($150 800,000)$120,000,000 2.Calculation of unit overhead costs: DeluxeRegular Unit-level: Machining: $200 100,000$20,000,000 $200 300,000$60,000,000 Batch-level: Setups: $3,000 300900,000 $3,000 200600,000 Packing: $20 100,0002,000,000 $20 400,0008,000,000 Product-level: Engineering: $40 50,0002,000,000 $40 100,0004,000,000 Facility-level: Providing space: $1 200,000200,000 $1 800,000800,000 Total overhead$25,100,000$73,400,000 Units100,000800,000 Overhead per unit$251$91.75 838383 412Concluded DeluxePercentRegularPercent Price$900100%$750.00100% Cost780*87*574.50*77* Unit gross profit$12013%*$175.5023%* Total gross profit: ($120 100,000)$12,000,000 ($175.50 800,000)$140,400,000 *$529 + $251 *$482.75 + $91.75 *Rounded 3.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. 413 1.JITNon-JIT Salesa$12,500,000$12,500,000 Allocationb750,000750,000 a$125 100,000, where $125 = $100 + ($100 0.25), and 100,000 is the average order size times the number of orders b0.50 $1,500,000 2.Activity rates: Ordering rate = $880,000/220 = $4,000 per sales order Selling rate= $320,000/40= $8,000 per sales call Service rate= $300,000/150 = $2,000 per service call 848484 413Concluded JITNon-JIT Ordering costs: $4,000 200$800,000 $4,000 20$80,000 Selling costs: $8,000 20160,000 $8,000 20160,000 Service costs: $2,000 100200,000 $2,000 50100,000 Total$ 1,160,000$ 340,000 For 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 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 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 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. 858585 414 1.Supplier cost: First, calculate the activity rates for assigning costs to suppliers: Inspecting components: $240,000/2,000 = $120 per sampling hour Reworking products: $760,500/1,500 = $507 per rework hour Warranty work: $4,800/8,000 = $600 per warranty hour Next, calculate the cost per component by supplier: Supplier cost: VanceFoy Purchase cost: $23.50 400,000$ 9,400,000 $21.50 1,600,000$34,400,000 Inspecting components: $120 404,800 $120 1,960235,200 Reworking products: $507 9045,630 $507 1,410714,870 Warranty work: $600 400240,000 $600 7,6004,560,000 Total supplier cost$ 9,690,430$39,910,070 Units supplied400,000 1,600,000 Unit cost$24.23*$24.94* *Rounded The difference is in favor of Vance; however, when the price concession is conside