亨格瑞管理会计英文第15版练习答案06.docx
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亨格瑞管理会计英文第15版练习答案06
CHAPTER6
COVERAGEOFLEARNINGOBJECTIVES
LEARNINGOBJECTIVE
FUNDA-
MENTALASSIGN-MENT
MATERIAL
CRITICALTHINKINGEXERCISESANDEXERCISES
PROBLEMS
CASES,EXCEL,COLLAB.&INTERNETEXERCISES
LO1:
Useadifferentialanalysistoexamineincomeeffectsacrossalternatives,andshowthatanopportunitycostanalysisyieldsidenticalresults.
24,27,28,29,30,31,42,44
45,46,47,48,
49,50,56,61
LO2:
Decidewhethertomakeortobuycertainpartsorproducts.
A1,B1
25,32,33,34
62,63
65,66,67,68,70
LO3:
Choosewhethertoaddordeleteaproductlineusingrelevantinformation.
B3
36
LO4:
Computetheoptimalproductmixwhenproductionisconstrainedbyascarceresource.
A2,B2
35
51,53
LO5:
Decidewhetherajointproductshouldbeprocessedbeyondthesplit-offpoint.
A3,B4
37,38
54,55
69
LO6:
Decidewhethertokeeporreplaceequipment.
A4,B5
40
57,59
LO7:
Identifyirrelevantandmisspecifiedcosts.
26,39,41
52,58,64
71
LO8:
Discusshowperformancemeasurescanaffectdecisionmaking.
B6
43
60
CHAPTER6
RelevantInformationandDecisionMakingWithaFocusonOperationalDecisions
6-A1(20min)
1.Thekeytothisquestioniswhatwillhappentothefixedoverheadcostsifproductionoftheboxesisdiscontinued.Assumethatall$60,000offixedcostswillcontinue.Then,SunshineStatewilllose$20,000bypurchasingtheboxesfromWeyerhaeuser:
PaymenttoWeyerhaeuser,80,000×$2.10$168,000
Costssaved,variablecosts148,000
Additionalcosts$20,000
2.Somesubjectivefactorsare:
MightWeyerhaeuserraisepricesifSunshineStatecloseddownitsbox-makingfacility?
Willsub-contractingtheboxproductionaffectthequalityoftheboxes?
Isatimelysupplyofboxesassured,evenifthenumberneededchanges?
DoesSunshineStatesacrificeproprietaryinformationwhendisclosingtheboxspecificationstoWeyerhaeuser?
3.Inthiscasethefixedcostsarerelevant.However,itisnotthedepreciationontheoldequipmentthatisrelevant.Itisthecostofthenewequipment.Annualcostsavingsbynotproducingtheboxesnowwillbe:
Variablecosts$148,000
Investmentavoided(annualized)80,000
Totalsaved$228,000
ThepaymenttoWeyerhaeuseris$228,000-$168,000=$60,000lessthanthesavings,soSunshineStatewouldbe$60,000betteroffsubcontractingtheproductionoftheboxes.
6-A2(10min.)
1.Contributionmargins:
Plain=$70-$55=$15
Professional=$100-$75=$25
Contributionmarginratios:
Plain=$15÷$70=21.4%
Professional=$25÷$100=25%
2.PlainProfessional
a.Unitsperhour21
b.Contributionmarginperunit$15$25
Contributionmarginperhour$30$25
Totalcontributionfor20,000hours$600,000$500,000
3.Theplaincircularsawsarethebestuseofthescarcemachinehours.Foragivencapacity,thecriterionformaximizingprofitsistoobtainthegreatestpossiblecontributiontoprofitforeachunitofthelimitingorscarcefactor.Moreover,fixedcostsareirrelevantunlesstheirtotalisaffectedbythechoiceofproducts.
6-A3(15min.)Tableisinthousandsofdollars.
1,2.(a)(b)(a)-(b)(c)(a)-(b)-(c)
Separable
SalesSalesCostsIncremental
BeyondatIncrementalBeyondGainor
Split-OffSplit-OffSalesSplit-Off(Loss)
A23054176190(14)
B33032298300
(2)
C1755412110021
IncreaseinoveralloperatingincomefromfurtherprocessingofA,B,andC5
TheincrementalanalysisindicatesthatProductCshouldbeprocessedfurther,butProductsAandBshouldbesoldatsplit-off.Theoveralloperatingincomewouldbe$44,000,asfollows:
Sales:
$54,000+$32,000+$175,000$261,000
Jointcostofgoodssold$117,000
Separablecostofgoodssold100,000217,000
Operatingincome$44,000
Comparethiswiththepresentoperatingincomeof$28,000.Thatis,$230,000+$330,000+$175,000-($190,000+$300,000+$100,000+$117,000)=$28,000.Theextra$16,000ofoperatingincomecomesfromeliminatingthe$16,000lossresultingfromprocessingProductsAandBbeyondthesplit-offpoint.
6-A4(30-40min.)
Problem6-60isanextensionofthisproblem.Thetwoproblemsmakeagoodcombination.
1.Operatinginflowsforeachyear,oldmachine:
$910,000-($810,000+$60,000)$40,000
Operatinginflowsforeachyear,newmachine:
$910,000-($810,000+$22,000*)$78,000
*$60,000-$38,000
Cashflowstatements(inthousandsofdollars):
KeepReplace
ThreeThree
YearYearsYearsYearYearsYears
12&3Together12&3Together
Receipts,inflowsfromoperations40401207878234
Disbursements:
Purchaseof"old"equipment(90)*--(90)(90)--(90)
Purchaseof"new"equipment:
Totalcostslessproceeds
fromdisposalof"old"
equipment($99,000-$15,000)------(84)--(84)
Netcashinflow(outflow)(50)4030(96)7860
*Assumesthattheoutlayof$90,000tookplaceonJanuary2,2010,orsometimeduring2010.Somestudentswillignorethisitem,assumingcorrectlythatitisirrelevanttothedecision.However,notethatastatementfortheentireyearwasrequested.
Thedifferenceforthreeyearstakentogetheris$60,000-$30,000=$30,000.Noteparticularlythatthe$90,000bookvaluecanbeomittedfromthecomparison.Merelycrossouttheentireline。
althoughthecolumntotalswillbeaffected,thenetdifferencewillstillbe$30,000.
2.Incomestatements(inthousandsofdollars):
KeepReplace
ThreeThree
YearsYearsYearYearsYears
1,2&3Together12&3Together
Sales9102,7309109102,730
Expenses:
Otherexpenses8102,4308108102,430
Operatingofmachine60180222266
Depreciation3090*333399
Totalexpenses9002,7008658652,595
Lossondisposal:
Proceeds("revenue")----(15)--(15)
Bookvalue("expense")----90--90*
Loss----75--75
Totalcharges9002,7009408652,670
Netincome1030(30)4560
*Asinpart
(1),the$90,000bookvaluecanbeomittedfromthecomparisonwithoutchangingthe$30,000difference.Thiswouldmeandroppingthedepreciationitemof$30,000peryear(acumulativeeffectof$90,000)underthe"keep"alternative,anddroppingthebookvalueitemof$90,000inthelossondisposalcomputationunderthe"buy"alternative.
Differenceforthreeyearstogether,$60,000-$30,000=$30,000.
Notethemotivationalfactorshere.AmanagermaybereluctanttoreplacesimplybecausethelargelossondisposalwillseverelyharmtheprofitperformanceinYear1.
3.Thenetdifferenceforthethreeyearstakentogetherwouldbeunaffectedbecausetheitemisapastcost.Youcansubstituteanynumberfortheoriginal$90,000figurewithoutchangingthisanswer.
Forexample,examinehowtheresultswouldchangeinpart
(1)byinserting$1millionwherethe$90,000nowappears(inthousandsofdollars):
Keep:
Replace:
ThreeYearsThreeYears
TogetherTogetherDifference
Receipts,inflowsfromoperations120234114
Disbursements:
Purchaseofoldequipment(1,000)(1,000)0
Purchaseofnewequipment:
Grossprice(99)
Disposalproceedsof"old"15--(84)(84)
Netcashoutflow(880)(850)30
Insum,thismaybeahorriblesituation.Themanagerreallyblundered.Butkeepingtheoldequipmentwillcompoundtheblundertothecumulativetuneof$30,000overthenextthreeyears.
4.Diplomatically,Leeshouldtrytoconveythefollowing.Allofustendtoindulgeintheerroneousideathatwecansoothethewoundedprideofabadpurchasedecisionbyusingtheiteminsteadofreplacingit.Thefallacyisbelievingthatacurrentorfutureactioncaninfluencethelong-runimpactofapastoutlay.Allpastcostsaredownthedrain.Nothingcanchangewhathasalreadyhappened.The$90,000hasbeenspent.Subsequentaccountingfortheitemisirrelevant.Theschedulesinparts
(1)and
(2)clearlyshowthatwemaycompletelyignorethe$90,000originaloutlayandstillhaveacorrectanalysis.Theimportantpointisthatthe$90,000isnotanelementofdifferencebetweenalternativesand,therefore,maybesafelyignored.Theonlyrelevantitemsarethoseexpectedfutureitemsthatwilldifferbetweenalternatives.
5.The$90,000purchaseoftheoriginalequipment,thesales,andtheotherexpensesareirrelevantbecausetheyarecommontobothalternatives.Therelevantitemsarethefollowing(inthousandsofdollars):
ThreeYears
Together
KeepReplace
Operatingofmachine
(3×$60。
3×$22)$180$66
Incrementalcostofnewmachine:
Totalcost$99
Lessproceedsofoldmachine15
Incrementalcost--84
Totalrelevantcosts$180$150
Differenceinfavorofbuying$306-B1(15-20min.)
1.MakeBuy
TotalPerUnitTotalPerUnit
Purchasecost€10,000,000€50
Directmaterial€5,500,000€27.50
Directlabor1,900,0009.50
Factoryoverhead,variable1,100,0005.50
Factoryoverhead,fixed
avoided900,0004.50
Totalrelevantcosts€9,400,000€47.00€10,000,000€50
Differenceinfavorofmaking€600,000€3.00
Thenumericaldifferenceinfavorofmakingis€600,000or€3.00perunit.Therelevantfixedcostsare€900,000,not€3,000,000.
2.BuyandLeave
MakeCapacityIdleBuyandRent
Rentrevenue----€1,150,000
Obtainingofcomponents€(9,400,000)€(10,000,000)€(10,000,000)
Netrelevantcosts€(9,400,000)€(10,000,000)€(8,850,000)
Thefinalcolumnindicatesthatbuyingthecomponentsandrentingthevacatedcapacitywillyieldthebestresultsinthiscase.Thefavorabledifferenceis€9,400,000-€8,850,000=€550,000.
6-B2(15min.)
1.Iffixedmanufacturingcostisappliedtoproductsat$1.00permachinehour,ittakes$.75÷$1.00,or3/4ofanhourtoproduceoneunitofXY-7.Similarly,ittakes$.25÷$1.00or1/4ofanhourtoproduceBD-4.
2.Ifthereare100,000hoursofcapacity:
XY-7:
100,000hours÷3/4=133,333units.
BD-4:
100,000hou