CHAPTER 19
COSTING AND THE VALUE CHAIN
OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL
THINKING CASES
Brief
Exercises
B. Ex. 19.1
B. Ex. 19.2
B. Ex. 19.3
B. Ex. 19.4
B. Ex. 19.5
B. Ex. 19.6
Topic
Value chain components
Capturing market share with target prices
Cost of quality
Cost reduction non-value-added activities
Manufacturing efficiency in a JIT system
Activity-based management cost savings
B. Ex. 19.7
B. Ex. 19.8
B. Ex. 19.9
B. Ex. 19.10
Target costing
Cost of quality
Characteristics of quality
Target costing and cash flows
Exercises
19.1
19.2
Topic
Accounting terminology
Value chain activities
19.3
19.4
19.5
19.6
19.7
19.8
19.9
19.10
19.11
19.12
19.13
19.14
19.15
Learning
Objectives
19-1
19-4
19-7
19-2
19-6
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60 Strong
19.3 A,B
Meiger Mining/Oro Mining
A target costing problem that requires the student to analyze an alternative offered for reaching the desired target cost.
30 Medium
19.4 A,B
Arusetta, Inc./Nazu, Inc.
A cost of quality problem that requires the construction of a categorical cost of quality report. The student is also asked to analyze changes in specific quality costs in light of the implementation of a total quality management program.
40 Medium
19.5 A
Home Depot
Students read Note 1 from Home Depot's annual report to find references to Home Depot's value chain.
30 Medium
19.6 A
Kare Company
40 Medium
Students identify quality costs and calculate quality costs as a percent of sales over two years. Students prepare a graph illustrating the trade-off between prevention and failure costs.
19.7 A
BookWeb, Inc.
50 Strong
Students use activity-based management tools to manage the value chain of a book warehousing operation. Students must identify activities that give rise to non-value-added costs at the company.
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Education.
19.8 A
Kimberly-Clark Corporation
30 Medium
Recent areas of focus for Kimberly-Clark as identified in their annual report are matched with the concepts introduced in the chapter. Students consider how the concepts will help
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It couldn’t effectively deal with the tax collection, flood control, social welfare, and public security. (Original: p. 565; With Sources: p. 883)
Corrections: The Fundamentals, by Burk Foster. Published by Prentice-Hall. Copyright © 2006 by Pearson Education,
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This report was assigned and authorized by Professor Jewell as part of the course work for the BUAD 301 class during the Fall 2014 Semester at California State University, Fullerton. Our group’s report was completed with the contributions of all five members listed above. Research for this report began on October 27, 2014, and was completed
Kroenke, David M. (2013). Using MIS (6th edition). Upper Saddle River, New Jersey, United States of America: Pearson Education, Inc., publishing as Prentice Hall.
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Therefore, MB should work its best to derive a comprehensive category list prior to index development. Finally obtain the target cost through the Target Costing equation. Importance Index (table 4) shows the degree of importance towards customers of each component which may be considered when purchase of a new MB product while Target Cost Index (table 5) is a measure for the deviation of importance (which the component should be given) and component cost. ABC is an ideal instrument to meet this requirement. Therefore, Tartget Costing was used in the AAV production project. However, there are some problems existing in the development of those indexes as well as the way MB was interpreting them. Meanwhile, MB could use achievement ratio and cost reports to monitor the performance of Kaizen Costing. MB then compared the target cost with drifting cost to find out the cost reduction targets for each function group. In order to achieve this, MB should seek to develop certain organizational arrangements (through policies or culture) to foster a spirit of continuous improvement.