CHAPTER 3 The Accounting Cycle QUESTIONS Q3-1. Much more judgement is required for accrual accounting than for cash accounting because there is greater uncertainty at the time events are recorded in the accounting system. There is no uncertainty around the point in time when the cash is paid or collected. Accrual accounting records economic events‚ not cash flows. When an economic event occurs can be ambiguous. It’s less certain when revenue has been earned than when cash is received. It
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Sunk Cost-cost that has already been incurred and cannot be avoided no matter what a manager decides to do. A business segment should only be dropped if a company can avoid more in fixed costs than it loses in: contribution margin Which of the following techniques describe how a bottleneck should be managed: Find ways to increase the capacity of the bottleneck‚ ensure there is minimal lost time at the bottleneck due to breakdowns and set-ups‚ focus business process improvement efforts on the bottleneck
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of per Unit Total Costs. The estimated unit costs for Hoteling Industries‚ when operating at a production and sales level of 10‚000 units‚ are as follows: Cost Item Estimated Unit Cost Direct materials $15 Direct labor 10 Variable factory overhead 8 Fixed factory overhead 5 Variable marketing 4 Fixed marketing 3 Required: (1) Identify the estimated conversion cost per unit. (2) Identify the estimated prime cost per unit. (3) Determine the estimated total variable cost per unit. (4) Compute
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MANAGERIAL AND COST ACCOUNTING LARRY M. WALTHER & CHRISTOPHER J. SKOUSEN DOWNLOAD FREE TEXT BOOKS AT BOOKBOON.COM Managerial and Cost Accounting © 2009 Larry M. Walther‚ under nonexclusive license to Christopher J. Skousen & Ventus Publishing ApS. All material in this publication is copyrighted‚ and the exclusive property of Larry M. Walther or his licensors (all rights reserved). ISBN 978-87-7681-491-5 Download free books at BookBooN.com 2 Managerial and Cost Accounting Contents
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CHAPTER 3 Arbitrage and Financial Decision Making Chapter Synopsis 3.1 Valuing Decisions When considering an investment opportunity‚ a financial manager must systematically compare the costs and benefits associated with the project in order to determine whether it is worthwhile. Determining the cash value today of the costs and benefits is one way to make such a comparison. In a competitive market‚ a good can be bought and sold at the same price‚ so the market price can be used to determine
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CHAPTER 3 Product Costing and Cost Accumulation in a Batch Production Environment ANSWERS TO REVIEW QUESTIONS 3-1 (a) Use in financial accounting: In financial accounting‚ product costs are needed to determine the value of inventory on the balance sheet and to compute the cost-of-goods-sold expense on the income statement. b) Use in managerial accounting: In managerial accounting‚ product costs are needed for planning‚ for cost control‚ and for decision making. c) Use in cost
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professionals may overlook project cost management and how this might affect completing projects within budget. One of the most difficult tasks is cost management within an information technology project. An important factor to consider when analyzing the success of cost management practices on a particular project is estimating the various costs that go into an IT project. Many IT projects have very vague or undefined requirements initially so is one of the trouble with cost management. IT projects
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When looking around the world today at our global civilization there are many problems that leap to our attention and everyone has a vested interest‚ one such example is food. Science has been tinkering with nature for the past one-hundred years trying to come up with solutions to help fight famine‚ and as a result‚ man made products have created ever more problems. The easiest way in which an individual or individuals can create change is to effect change in their local communities‚ so others can
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1. Which of the following statements is CORRECT?a. The constant growth model takes into consideration the capitalgains investors expect to earn on a stock.STATEMENT A is true because the expected growth rate is also the expected capitalgains yield.b. Two firms with the same expected dividend and growth rates must alsohave the same stockprice.c. It is appropriate to use the constant growth model to estimate a stock ’svalue even if itsgrowth rate is never expected to become constant.d. If a stock has
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Jenine Teixeira ACFI 406 9/24/12 Assignment chapter 19 Q: 1‚ 2‚ 11‚ 15 1. Dickison orders one thousand widgets at $5 per widget from International Widget to be delivered within sixty days. After the contract is consummated and signed‚ Dickison orally requests that International deliver the widgets within thirty days rather than sixty days. International agrees. Is the contractual modification binding? A- Both parties are merchants‚ the change of delivery date would affect the
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