A. Cost Containment per Textbook. Cost containment is very prevalent in organizations today. What is the biggest cost-containment strategy in recent years, according to your textbook?

B. Company Cost Containment Measures. What cost containment measures has your company undergone in recent months? Why? What has been their impact on (a) the organization and (b) the employees?

C. Crangle Fixtures As HR director at Crangle Fixtures, your bonus this year is based on your ability to cut employee benefit costs. Your boss has said that it’s okay to shift some of the costs over to employees (right now they pay nothing for their benefits) but that he doesn’t want you to overdo it. In other words, at least one-half of your suggestions should not hurt the employee’s pocket book. What alternatives do you want to explore, and why?

D. Christian Worldview. How could an employer integrate the concept of benefits with an understanding of those same or similar concepts from a Christian worldview, especially when considering that many organizations are seeking ways to contain benefit costs?

Process Cost Journal Entries

The cost of materials transferred into the Rolling Department of Keystone Steel Company is $519,300 from the Casting Department. The conversion cost for the period in the Rolling Department is $112,500 ($67,700 factory overhead applied and $44,800 direct labor). The total cost transferred to Finished Goods for the period was $621,600. The Rolling Department had a beginning inventory of $22,400.

a1. Journalize the cost of transferred-in materials.

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a2. Journalize the conversion costs. If an amount box does not require an entry, leave it blank.

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a3. Journalize the costs transferred out to Finished Goods.

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b. Determine the balance of Work in Process—Rolling at the end of the period.
$

As a cost and management accountant you always advocate about the use of cost volume profit (CVP) analysis and activity based costing in different cost management scenario. That’s why management of the PQR Limited wants you to explain the following issues for their next cost management move for the organisation.

Required:

1. What is a cost driver? What is the cost driver in conventional cost volume profit (CVP) analysis? How is the cost driver measured in conventional CVP analysis?     


2. In activity–based costing, costs are classified into unit level, batch level, product level and facility level. How are these categories typically handled in CVP analysis, where there are only two categories available: fixed or variable?     



3. In an environment where activity–based costing is necessary and appropriate, is the relevance of conventional CVP analysis enhanced or diminished? Explain.     



4. Explain the additional limiting assumption of using CVP analysis under activity–based costing.
    




5. PQR Limited makes major household appliances such as refrigerators, stoves and dishwashers. Sales are heavily dependent upon the number of housing starts and the level of disposable income. Next year the number of housing starts in Victoria is expected to be the same as this year; however, about two-thirds of these starts will be for rental units compared to a historical average of one-third. The remaining housing starts will be for single-family homes and up market units. PQR generally makes two levels of each product: the economy model (fully functional, but with few special features) and the prestige model (with the most popular special features). PQR Limited assumes a product mix of 40 per cent economy and 60 per cent prestige. Describe how the change in the percentage of rental units in housing starts could create a problem with the stable product mix assumption.    

Decompose the Income Statement into labor and facility sustaining cost pools. Divide the cost pools into activity centers at the ratio of 40% for the BOH and 60% for the FOH. Display in the table.

4. Based on the calculation from #3, calculate cost pool rates

50. Total hours worked FOH = 800 hours
50. Total hours worked BOH = 600 hours

5. Calculate an allocation value per menu item for the Facility Sustaining cost pool. The number of menu items sold during the month = 2,000.

6. Last week, 9.75 bottles of 1L Jack Daniel was used. The POS system recorded sales of 102 drinks. If the standard drink size is 1.50 oz, how many potential drinks should have been sold last week?

7. Last week, 9.75 bottles of 1L Jack Daniel was used. The bar pays $25 per bottle and the POS system recorded sales of 98 drinks. If the standard drink size is 1.30 oz and is sold for $6.00 per drink, what is the actual cost % of Jack Daniel?

8. The Night Owl Bar sold 189 of Chivas Regal last month generating sales of $897.75. A bottle of Chivas Regal costs $38.95, with a bottle size of 1.5L. A standard drink size of 1.20 oz is sold for $6.25. The bar sells 32 brands and 9 categories. If the total liquor CM is $17.762.42 and total CM for Whisky category is $1.723.51, what is the profit factor for Whisky category?

Statement of cost of goods manufactured for a manufacturing company

Cost data for Johnstone Manufacturing Company for the month ended March 31 are as follows:

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

1. Prepare a cost of goods manufactured statement for March. Round your answers to the nearest dollar.

   Johnstone Manufacturing Company
   Statement of Cost of Goods Manufactured
   For the Month Ended March 31
   					$
   Direct materials:
   	$
   	$
   			$
   Factory overhead:
   	$
   Total factory overhead
   Total manufacturing costs incurred during March
   Total manufacturing costs					$
   Cost of goods manufactured					$

2. Determine the cost of goods sold for March. Round your answer to the nearest dollar.

   $

As a cost and management accountant you always advocate about the use of cost volume profit (CVP) analysis and activity based costing in different cost management scenario. That’s why management of the PQR Limited wants you to explain the following issues for their next cost management move for the organisation.

Required:

1. What is a cost driver? What is the cost driver in conventional cost volume profit (CVP) analysis? How is the cost driver measured in conventional CVP analysis?      

2. In activity–based costing, costs are classified into unit level, batch level, product level and facility level. How are these categories typically handled in CVP analysis, where there are only two categories available: fixed or variable?                                                                   

3. In an environment where activity–based costing is necessary and appropriate, is the relevance of conventional CVP analysis enhanced or diminished? Explain.      

4. Explain the additional limiting assumption of using CVP analysis under activity–based costing.

Use the information below to determine the firms cost of debt, cost of equity, and WACC.  Use market values to determine the weights.

- The expected return on the market portfolio is 11% and the risk-free rate is 3%.  The firm’s beta is 1.6.

- The firm has most recently paid a dividend of $2. Dividends are expected to grow at a rate of 3% per year, indefinitely.

- The firm has 1.5 million shares of common stock outstanding.

The firm has two bond issues outstanding:

1) 10,000 bonds with 5% coupon, 6% YTM, and face value of $1000 that mature in 8 years

2) 50,000 bonds with 3% coupon, 4% YTM, and face value of $1000 that mature in 12 years.

The firm’s average tax rate is 30%.

What are cost objects, cost pools and allocation bases ? What role do they play in cost allocation? What is the difference between cost allocation bases and cost drivers ?

For the Assembly Department, unit materials cost is $4 and unit conversion cost is $8. All material costs are added at the beginning of the process and conversion costs are applied uniformly throughout the process. If there are 9900 units in ending work in process 65% complete as to conversion costs, the costs to be assigned to the ending inventory are

A.$77220.

B.$118800.

C.$91080.

D. $104940.