Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem 3.59ACT
Unwrapped or How It’s Made
Go to www.YouTube.com and search for clips from the show Unwrapped on the Food Network or How It’s Made on the Discovery Channel. Watch a clip for a product you find interesting.
Basic Discussion Questions
- 1. Describe the product that is being produced and the company that makes it.
- 2. Summarize the production process that is used in making this product.
- 3. What raw materials are used to make this product?
- 4. What indirect materials are used to make this product?
- 5. Describe the jobs of the workers who would be considered “direct labor” in the making of this product.
- 6. Describe the jobs of the workers who would be considered “indirect labor” in the making of this product.
- 7. Define manufacturing overhead. In addition to the indirect materials and indirect labor previously described, what other
manufacturing overhead costs would be incurred in this production process? Be specific and thorough. Make reasonable “guesses” if you do not know for sure. - 8. Would a
job-order costing system or aprocess costing system be used for this production process? Give specific reasons for your choice of which costing system would be most appropriate for this manufacturer.
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2000
i.
ii.
The Organic Bread Company (OBC) makes a range of breads for sale direct to the public. The production
process begins with workers weighing out ingredients on electronic scales and then placing them in a
machine for mixing. A worker then manually removes the mix from the machine and shapes it into loaves
by hand, after which the bread is then placed into the oven for baking.
All baked loaves are then inspected by OBC's quality inspector before they are packaged up and made
ready for sale. Any loaves which fail the inspection are donated to a local food bank.
The standard cost card for OBC's 'Mixed Bloomer', one of its most popular loaves, is as follows:
£
White flour
0.81
Wholegrain flour
0.33
0.20
Yeast
Total
1.34
Budgeted production of Mixed Bloomers was 1,000 units for the quarter, although actual production
was only 950 units. The total actual quantities used and their actual costs were:
White flour
Wholegrain flour
Yeast
Total
450
150
10
610
grams at £1.80 per kg
grams at…
Chapter 3 Solutions
Managerial Accounting (5th Edition)
Ch. 3 - (Learning Objective 1) For which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 3) The amount of manufacturing...Ch. 3 - (Learning Objective 4) Which of the following is...Ch. 3 - (Learning Objective 5) Which of the following is...Ch. 3 - (Learning Objective 5) Assuming the amount of...Ch. 3 - Prob. 8QCCh. 3 - Prob. 9QCCh. 3 - Prob. 10QC
Ch. 3 - Identify product costs, period costs, and product...Ch. 3 - Decide on product costing system (Learning...Ch. 3 - Determine the flow of costs between inventory...Ch. 3 - Understanding key document terms in a job cost...Ch. 3 - Compute a professional billing rate (Learning...Ch. 3 - Prob. 3.6SECh. 3 - Continuation of S3-6: compute total allocated...Ch. 3 - Continuation of S3-7: determine over- or under...Ch. 3 - Prob. 3.9SECh. 3 - Calculate job cost and billing at appliance repair...Ch. 3 - Calculating overallocated or underallocated...Ch. 3 - Prob. 3.12SECh. 3 - Record manufacturing labor costs (Learning...Ch. 3 - Prob. 3.14SECh. 3 - Prob. 3.15SECh. 3 - Understanding key terms (Learning Objectives 1, 2,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Prob. 3.18AECh. 3 - Determine the cost of a job and use it for pricing...Ch. 3 - Compute a predetermined overhead rate and...Ch. 3 - Prob. 3.21AECh. 3 - Prob. 3.22AECh. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Job cost and bid price at a consulting firm...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Identify type of costing system (Learning...Ch. 3 - Understand the flow of costs in a job cost shop...Ch. 3 - Prob. 3.33BECh. 3 - Prob. 3.34BECh. 3 - Prob. 3.35BECh. 3 - Sustainability and job costing (Learning...Ch. 3 - Determine the cost of a job (Learning Objectives...Ch. 3 - Compare bid prices under two different allocation...Ch. 3 - Analyze manufacturing overhead (Learning...Ch. 3 - Record manufacturing overhead (Learning Objectives...Ch. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze T-accounts (Learning Objectives 2, 3, 5, ...Ch. 3 - Prob. 3.43BECh. 3 - Record journal entries (Learning Objectives 2, 3,...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Analyze Manufacturing Overhead (Learning...Ch. 3 - Use job costing at an advertising agency (Learning...Ch. 3 - Use job costing at a consulting firm (Learning...Ch. 3 - Prepare job cost record (Learning Objectives 2, 3,...Ch. 3 - Determine and record job costs (Learning...Ch. 3 - Determine flow of costs through accounts (Learning...Ch. 3 - Job costing or process costing for wedding...Ch. 3 - Discussion Questions 1. Why would it be...Ch. 3 - Unwrapped or How Its Made Go to www.YouTube.com...Ch. 3 - Ethics involved with choice of cost driver...Ch. 3 - Prob. 3.61ACTCh. 3 - Issues with cost of job (Learning Objectives 2, 3,...
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- Answer the following questions using the Answer Report and the Sensitivity Report Below. Support your answers with explanations and the work showed. You run a company that produces three electrical products – clocks, radios, and toasters. You are asked to figure out how many of each of these things should be produced. Here are the Questions Below That Needs To Be Answered 1.) How many of each of the electronic appliances should you make? (Make sure your answer makes sense.) 2.) Which of the constraints are binding? What does the slack for each non-binding constraint represent?arrow_forwardWhich type of cost system, process or job order, would be best suited for each of the following: (A) TV assembler, (B) building contractor, (C) automobile repair shop, (D) paper manufacturer, (E) custom jewelry manufacturer? Give reasons for your answers.arrow_forwardPocket Umbrella, Inc. is considering producing a new type of umbrella. This new pocket-sized umbrella would fit into a coat pocket or purse. Classify the following costs of this new product as direct materials, direct labor, manufacturing overhead, or selling and administrative. Cost of advertising the product Fabric used to make the umbrellas Maintenance of cutting machines used to cut the umbrella fabric so it will fit the umbrella frame Wages of workers who assemble the product Presidents salary The salary of the supervisor of the people who assemble the product Wages of the product tester who stands in a shower to make sure the umbrellas do not leak Cost of market research survey Salary of the companys sales managers Depreciation of administrative office buildingarrow_forward
- Identifying product costs and period costs Classify each cost of a paper manufacturer as either product cost or period cost: Salaries of scientists studying ways to speed forest growth. Cost of computer software to track WIP Inventory. Cost of electricity at the paper mill. Salaries of the company’s top executives. Cost of chemicals to treat the paper. Cost of TV ads. Depreciation on the manufacturing plant. Cost to purchase wood pulp. Life insurance on the CEO.arrow_forwardYou have been asked to install a costing system in a manufacturing company. What practical difficulties will you expect and how will you propose to overcome the same? In view of the difficulties and suggestion to overcome them what main considerations will you keep in mind to introduce the system?arrow_forwardFor each of the following products and services, indicate whether it is more likely produced in a process operation or in a job order operation. 1. Ice cream 2. Tennis balis 3. House painting 4. Granola bars 5. Backpacks 6. Custom swimming pool 7. Smartphones 8 Chocolate syrup 9. Wedding cakearrow_forward
- Click to watch the Tell Me More Learning Objective 1 video and then answer the questions below. 1. Which of the following manufacturers is most likely to use a process cost system? Purse manufacturer Sports drink manufacturer Automobile manufacturer Guitar manufacturer 2. Process and job order cost systems are similar in that both systems _______. record and summarize product costs classify product costs as direct materials, direct labor, and factory overhead allocate factory overhead costs to products All of these choices are correct.arrow_forwardWhat I Know Before we begin this lesson, let us check first your prior knowledge on this module. After taking and checking this short test, take note of the items that you are not able to answer correctly and look for the right answer as you go through this module. Direction: Encircle the letter of the correct answer. 1. What type of cost includes product ingredients and materials? а. fixed b. revenue с. total d. variable 2. What type of cost includes the rental of space? а. fixed b. revenue c. total d. variable 3. What type of cost is the product of the price and the quantity sold? а. fixed b. revenue с. total d. variable 4. What concept is being described when the business will neither earn a profit nor suffer a loss? а. break-even b. loss с. profit d. summit 5. What type of analysis shows equal revenue and total cost? а. break-even b. cost of variable c. profit-loss d. volume of salesarrow_forwardIdentifying product costs and period costs Classify each cost of a paper manufacturer as either product cost or period cost: a. Salaries of scientists studying ways to speed forest growth. b. Cost of computer software to track WIP Inventory. c. Cost of electricity at the paper mill. d. Salaries of the company’s top executives. e. Cost of chemicals to treat the paper. f. Cost of TV ads. g. Depreciation on the manufacturing plant. h. Cost to purchase wood pulp. i. Life insurance on the CEO.arrow_forward
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