BUS 630 Managerial Accounting Flashcards
BUS 630 Managerial Accounting
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BUS 630 Week 1 Assignment Dell Inc Paper
Submit a paper on one of the major topics listed below using one of the recommended journal articles found in the syllabus as the basis for the paper and incorporating at least two other related articles of the student’s choice:
Outsourcing Supply Chain Management Cost Cutting Budgeting Options The paper must (a) identify the main issues in the chosen area, (b) apply and reference new learning that has occurred, (c) build upon class activities or incidents that facilitated learning and understanding, and (d) present specific current and/or future applications and relevance to the workplace. The emphasis of the paper should be on application of new learning.
use article;
http://www.sec.gov/Archives/edgar/data/826083/000095013405004423/d22995e10vk.htm
Must be eight- double-spaced pages in length and formatted according to APA style as outlined in the approved APA style guide. Papers with more or less than eight pages in length will have two points deducted from the final score for each page over or under, exclusive of Appendix, References, Exhibits, etc.
Must include an introductory paragraph with a succinct thesis statement.
Must address the topic of the paper with critical thought.
Must conclude with a restatement of the thesis and a conclusion paragraph.
Must use APA style as outlined in the approved APA style guide to document all sources.
Must include, on the final page, a Reference List that is completed according to APA style as outlined in the approved APA style guide.
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BUS 630 Week 1 DQ 1 Theory of Constraints
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Apply the Theory of Constraints to your own working environment (past or present). Explain why your organization doesn’t have unlimited resources (space, inventory, product line, etc). Explain why there are always limits to what your organization can do.
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BUS 630 Week 1 DQ 2 Kranbrack Corporation
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M.K. Gallant is president of Kranbrack Corporation, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Gallant had predicted that the company’s earnings would grow by 20% this year. Unfortunately, sales have been less than expected for the year, and Gallant concluded with two weeks of the end of the fiscal year that it would impossible to ultimately report an increase in earning as large as predicted unless some drastic action was taken. Accordingly, Gallant has ordered that wherever possible, expenditures should be postponed to the new year – including canceling or postponing orders with suppliers, delaying planned maintenance and training, and cutting back on end-of-the-year advertising and travel. Additionally, Gallant ordered the company’s controller to carefully scrutinize all costs that are currently classified as period costs and reclassify as many as possible as product costs. The company is expected to have substantial inventories of work in process and finished goods at the end of the year. Comment on the following questions. Respond to at least two of your fellow students’ postings.
Why would reclassifying period costs as product costs increase this period’s reported earnings?
Do you believe Gallant’s actions are ethical? Why or why not?
Assgnt. The questions in this exercise are based on Dell, Inc. To answer the questions, you will need to download Dell’s 2005 Form 10-K. You do not need to print this document in order to answer the questions.
What is Dell’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion?
What business risks does Dell face that may threaten its ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? (Hint: Focus on pages 7-10 of the 10-K.)
How as the Sarbanes-Oxley Act of 2002 explicitly affected the disclosures contained in Dell’s 10-K report? (Hint: Focus on pages 34-35, 59, and 76-78.)
Is Dell a merchandiser or a manufacturer? What information contained in the 10-K supports your answer?
What are some examples of direct and indirect inventoriable costs for Dell? Why has Dell’s gross margin (in dollars) steadily increased from 2003 to 2005, yet the gross margin as a percentage of net revenue only increased slightly?
What is the inventory balance on Dell’s January 28, 2005 balance sheet? Why is the inventory balance so small compared to the other current asset balances? What competitive advantage does Dell derive from its low inventory levels? Page 27 of Dell’s 10-K reports a figure called the crash conversion cycle. The cash conversion cycle for Dell has consistently been negative. Is this a good sign for Dell or a bad sign? Why?
Describe some of the various types of operating expenses incurred by Dell. Why are these expenses treated as period costs?
List four different cost objects for Dell. For each cost obje
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BUS 630 Week 2 Assignment Basic CVP Analysis Fashion Shoe Company
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Complete the following exercise
(Problem 4-21) and submit to your instructor.
The Fashion Shoe Company operates a chain of women’s shoe shops around the country. The shops carry many styles of shoes that are all sold at the same price. Sales personnel in the shops are paid a substantial commission on each pair of shoes sold (in addition to a small basic salary) in order to encourage them to be aggressive in their sales efforts.
The following worksheet contains cost and revenue data for Shop 48 and is typical of the company’s many outlets:
Per Pair of
Shoes
Selling
price
$
30.00
Variable
expenses:
Invoice
cost
$ 13.50
Sales
commission
4.50
Total variable
expenses
$
18.00
Annual
Fixed
expenses:
Advertising
$ 30,000
Rent
20,000
Salaries
100,000
Total fixed
expenses
$
150,000
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BUS 630 Week 2 DQ 1 Downsizing and Fixed Cost
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Downsizing and Fixed Costs
Industry downsizing has been a major part of the corporate world, even government agencies are downsizing. GovernmentExecutive.com “covers the business of the federal government and its huge departments and agencies - dozens of which dwarf the largest institutions
in the private sector” on its website. Read the assigned Government Executive
article and answer the following questions:
Which industries have substantially reduced fixed cost commitments?
Do you believe this reduction in costs has substantially impaired the ability of these industries to meet the needs of their customers? Respond to at least two of your fellow students’ postings.
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BUS 630 Week 2 DQ 2 Direct Labor Variable or Fixed Cost
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Throughout the corporate world, businesses are transforming labor into a more flexible (and variable) cost. Among such companies are Hewlett-Packard, General Electric, DuPont, Sun Microsystems, and British Airways. Discuss whether direct labor is a fixed or a variable cost. What are the pros and cons of management treating direct labor as a variable cost? Are there ethical issues to be considered here?
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BUS 630 Week 3 Assignment JetBlue Airways
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Complete the following exercise (Research and Application 7-20) and submit to your instructor.
The questions in this exercise are based on JetBlue Airways Corporation. To answer the questions, you will need to download JetBlue’s 10-K/A for the year ended December 31, 2004 (10K/A with a filing date of March 8, 2005). You do not need to print the 10-K/A to answer the questions.
Required:
- What is JetBlue’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion?
- What business risks does JetBlue face that may threaten the company’s ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? (Hint: Focus on pages 17-23 of the 10-K/A.)
- How can the concept of unit-level activities be applies to an airline? More specifically, what are two examples of unit-level activities for JetBlue? What steps has JetBlue taken to manage these unit-level activities more efficiently?
- How can the concept of batch-level activities be applied to an airline? What are two examples of batch-level activities for JetBlue? What steps has JetBlue taken to manage these batch-level activities more efficiently?
• What is one example of a customer-level activity and an organization-sustaining activity for JetBlue?
Noreen, E. W., Brewer, P. B., Garrison R. H. (2011). Managerial accounting for managers (2nd ed.). New York, NY: McGraw Hill. ISBN: 978-0-07-352713-0.
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BUS 630 Week 3 DQ 2 Profitability
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Complete the following exercise and respond to at least two of your fellow students’ postings. Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $28 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers-particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below:
Activity Cost Pool
Activity Measure
Activity for the Year
Cleaning carpets
Square feet cleaned (00s)
20,000 hundred
square feet
Travel to jobs
Miles driven
60,000 miles
Job support
Number of jobs
2,000 jobs
Other (costs of idle capacity and organization-sustaining costs)
None
Not applicable
The total cost of operating the company for the year is $430,000, which includes the following costs:
Wages
$ 150,000
Cleaning supplies
40,000
Cleaning equipment depreciation
20,000
Vehicle expenses
80,000
Office expenses
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BUS 630 Week 4 Assignment Master Budget Exercise
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Complete the following three exercises and submit to your instructor. Be sure to show your work for calculations to earn full credit.
Sales and Production Budgets (8-12): The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Units to be produced
11,000
12,000
14,000
13,000
The selling price of the company’s product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to be “‘uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units.
· Prepare the company’s sales budget and schedule of expected cash collections.
· Prepare the company’s production budget for the upcoming fiscal year.
Direct Materials and Direct Labor Budgets (8-13): The production department of Hareston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Units to be produced
7,000
8,000
6,000
5,000
In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,400 pounds and the beginning accounts payable for the first quarter is budgeted to be $2,940. Each unit requires 2 pounds of raw material that costs $1.40 per pound. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter’s production needs. The desired ending inventory for the fourth quarter is 1,500 pounds. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.60 direct labor-hours and direct labor-hour workers are paid $14.00 per hour.
· Prepare the company’s direct materials budget and schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.
· Prepare the company’s direct labor budget for the upcoming fisca
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BUS 630 Week 4 DQ 1 Behavioral Aspects of Budgeting
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Norton Company, a manufacturer of infant furniture and carriages, is in the initial stages of preparing the annual budget for next year. Scott Ford has recently joined Norton’s accounting staff and is interested to learn as much as possible about the company’s budgeting process. During a recent lunch with Marge Atkins, sales manager, and Pete Granger, production manager. Ford initiated the conversation below. Read the conversation and answer the questions that follow. Respond to at least two of your fellow students’ postings.
Ford:
Since I’m new around here and am going to be involved with the preparation of the annual budget, I’d be interested to learn how the two of you estimate sales and production numbers.
Atkins:
We start out very methodically by looking at recent history, discussing what we know about current accounts, potential customers, and the general state of consumer spending. Then, we add that usual dose of intuition to come up with the best forecast we can.
Granger:
I usually take the sales projections as the basis for my projections. Of course, we have to make an estimate of what this year’s ending inventories will be, which is sometimes difficult.
Ford:
Why does that present a problem? There must have been an estimate of ending inventories in the budget for the current year.
Granger:
Those numbers aren’t always reliable because Marge makes some adjustments to the sales numbers before passing them on to me.
Ford:
What kind of adjustm
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BUS 630 Week 4 DQ 2 Critiquing a Cost Report
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Complete the following exercise: Frank Weston, supervisor of the Freemont Corporation’s Machining Department, was visibly upset after being reprimanded for his department’s poor performance over the prior month. The department’s cost control report is given below:
“I just can’t understand all the red ink,” Weston complained to the supervisor of another department. “When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before, instead, he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just look at this report. Everything is unfavorable.” Direct labor wages and supplies are variable costs; supervision and depreciation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $92,000; the fixed component of the budgeted utilities cost is $11,700.
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BUS 630 Week 5 Assignment FedEx Corporation
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What is FedEx’sstrategy for success in the marketplace? Does the company rely primarily on acustomer intimacy, operations excellence, or product leadership customer valueproposition? What evidence supports your conclusion?
What are FedEx’sfour main business segments? Provide two examples of traceable fixed costs foreach of FedEx’s four business segments. Provide two examples of common costs that are not traceable to the four business segments.
Identify oneexample of a cost center, a profit center, and an investment center for FedEx.
Provide threeexamples of fixed costs that can be traceable or common depending on how FedExdefines its business segments.
Compute themargin, turnover, and return on investment (ROI) in 2005 for each of FedEx’sfour business segments (Hint: page 99 reports total segment assets for eachbusiness segment.)
Assume that FedExestablished a minimum required rate of return of 15% for each of its businesssegments. Compute the residual income earned in 2005 in each of FedEx’s foursegments.
Assume that thesenior managers of FedEx Express and FedEx Ground each have an investmentopportunity that would require $20 million of additional operating assets andthat would increase operating income by $4 million. If FedEx evaluates all of its senior managersusing ROI, would the managers of both segments pursue the investment opportunity? If FedEx evaluates all ofits senior managers using residual income, would the managers of both segmentspursue the investment opportunity?
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BUS 630 Week 5 DQ 1 Variance Analysis in a Hospital
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Complete problem 10-15 in the text and answer the three required questions. John Fleming, chief administrator for Valley View Hospital, is concerned about the costs for tests in the hospital’s lab. Charges for lab tests are consistently higher at Valley View than at other hospitals and have resulted in many complaints. Also, because of strict regulations on amounts reimbursed for lab tests, payments received from insurance companies and governmental units have not been high enough to cover lab costs. Mr. Fleming has asked you to evaluate costs in the hospital’s lab for the past month. The following information is available:
Two types of tests are performed in the lab-blood tests and smears. During the past month, 1,800 blood tests and 2,400 smears were performed in the lab. Small glass plates are used in both types of tests. During the past month, the hospital purchased 12,000 plates at a cost of $28,200. This cost is net of a 6% quantity discount. 1,500 of these plates were unused at the end of the month; no plates were on hand at the beginning of the month.
During the past month, 1,150 hours of labor time were recorded in the lab at a cost of $13,800.
The lab’s variable overhead cost last month totaled $7,820.
Valley View Hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs:
Plates: Two plates are required per lab test. These plates cost $2.50 each and are disposed of after the test is completed.
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BUS 630 Week 5 DQ 2 Perverse Affects of Some Performance Measures
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Complete the following exercise and provide a recommendation for each of the four scenarios presented. There is often more than one way to improve a performance measure. Unfortunately, some of the actions taken by managers to make their performance look better may actually harm the organization. For example, suppose the marketing department is held responsible only for increasing the performance measure “total revenues,” Increases in total revenues may be achieved by working harder and smarter, but they can also usually be achieved by simply cutting prices. The increase in volume from cutting prices almost always results in greater total revenues; however, it does not always lead to greater total profits. Those who design performance measurement systems need to keep in mind that managers who are under pressure to perform may take actions to improve performance measures that have negative consequences elsewhere. For each of the following situations, describe actions that managers might take to show improvement in the performance measure but which do not actually lead to improvement in the organization’s overall performance.
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