Potential customer who could bring considerable business

You have been approached by a potential customer who could bring considerable business. She says, “I’d like to find an alternative vendor for my future orders of 5,000/yr, but their pricing to me must be competitive.”

Your CFO has supplied you with the following information. Current product standard costs are as follows:

$1,400/unit direct material $400/unit direct labor $200/unit variable overhead $200/unit fixed overhead (this figure is the result of budgeted fixed overhead of $2,000,000 and budgeted sales volume of 10,000 units) The board of directors requests a quick but thorough presentation to determine whether taking on this potential customer is a good idea. Assume that your factory is fully operational and that you will not have any learning curve impacts. Answer the board’s following questions based on data from the CFO:

What is meant by budget variance? What is an effective way to incorporate variance analysis into the budget process? What are the differences between labor and material variances? How is a quantity variance different from a rate variance? What are the subcomponents of fixed overhead? What are the subcomponents of variable overhead? What is the lowest possible price you could offer to this potential customer (You know that we have sufficient capacity, without working overtime and without adding any new equipment, to make this order)? Please show the calculations. In terms of capacity, under what conditions would offering this lowest possible price be a bad decision? Why? You have been considering investing in automation to eliminate some factory labor if you get this large order. This technology advancement will cost an added $100,000/yr. to lease (net of taxes), but it will reduce labor cost/unit on the customer’s units by 50%. How would this change the lowest possible price you could offer to this potential customer and at least still break even? Please show the calculations.

Information for a for-profit and for a nonprofit entity

So your new accountant could practice the budgeting process in your for-profit company, you want her to compare budgeting methods for two different kinds of entities.

You give her information for a for-profit and for a nonprofit entity and ask her to complete the following:

Given the assumptions and data in this Excel file (attached): complete next year’s budgeted figures for each entity within the same Excel worksheet (yellow cells) include your reasoning for most of the budgeted figures (green cells) Because of a bad recession, government grants were not cut by 50% but are eliminated completely for next year’s budget and fundraising effortsäóîdespite an increase in expensesäóîdid not improve at all.

Explain what you would recommend that the museum manager do

Implementation perspective

Describe the efforts put forth by BAE in implementing the BSC approach in their organization from an implementation perspective. What efforts did they make to assure employees would be receptive to, and accept the BSC initiative? Describe to what extent you believe their efforts paid off.

Machining and finishing

Zhao Manufacturing Company has two departments, machining and finishing. For a given period the following costs were incurred by the company as a whole: direct material, $200,000; direct labor, $75,000; and indirect production, $80,000. The grand total was $355,000.

The machining department incurred 70% of the direct material costs, but only 33 1/3%ξ of the direct labor costs. As in commonplace, indirect production costs incurred by each department were allocated to products in proportion to the direct-labor costs of products within the departments. Three products were produced.

Product Direct Material Direct Labor Sigma 40% 30% Chi 30% 30% Delta 30% 40% Total for the machining department 100% 100%

Sigma 33.33% 40% Chi 33.33% 40% Delta 33.33% 20% Total for the finishing department 100% 100% The indirect production costs incurred by the machining and finishing departments and allocated to all products therein amounted to machining, $38,000 and finishing, $42,000. 1. Compute the total costs incurred by the machining department and added by the finishing department. 2. Compute the total costs of each product that would be show as finished-goods inventory if all the products were transferred to finished stock on completion. (There were no beginning inventories.)

Accounting Information Systems (AIS

What surprised you most about the things you learned in the Accounting Information Systems (AIS)? You can be general or very specific, but state why it surprised you.

The most reliable for explaining and predicting support costs

Y=$9,000/week + ($6 x direct labor hours); R^2=.10 Y=$20,000/week + ($14 x number of boards completed); R^2=.40 Y=$5,000/week + ($350 x average cycle time); R^2=.80

1. Which of the support cost functions would you expect to be the most reliable for explaining and predicting support costs? Why?

2. Assume that American Micro Devices prices it products by adding a percentage markup to its product costs. Product costs include assembly labor, components, and support costs. Using each of the cost functions, compute the circuit board portion of the support cost of an order that used the following resources: a. Effectively used the capacity of the assembly department for 3 weeks b. Assembly labor hours: 20,000 c. Number of boards: 6,000 d. Average cycle time: 180 hours

3. Which cost driver would you recommend that American Micro Devices use? Why?

4. Assume that the market for this product is extremely cost competitive. What do you think of American Micro Devices pricing method?

Technology used in organizations today

Identify an enterprise technology used in organizations today that is used to manage the value chain.

Describe how your chosen enterprise technology supports value chain management and include an example.

Discuss your opinion about the value of your enterprise technology example and if you think it appropriately addressed optimal management of the value chain.

Medium-sized private company may benefit from going public

1.ξξ Outline three (3) ways in which your medium-sized private company may benefit from going public, providing a rationale for each.

2.ξ Create an argument that the same goals may be achieved if the company remains a privately held entity. Provide support for your argument.

Intel Annual Report

The 2010 Intel Annualξ Report can be foundξ at the following Web site: www.pearsonhighered.com/fraser. Using the annual report, answer the following questions:

(a)Œæ Using the Intel Annual Report, calculate key financial ratios for all years presented. (b)Œæ Using the library, find industry averages to compare to the calculations in (a). (c)Œæ Write a report to the management of Intel. Your reportŒæ should include an evaluŒ_ ation of short-term liquidity, operating efficiency, capital structure and long-term solvency, profitability, marketŒæ measures, and a discussion of any quality of finanŒ_ cial reportingŒæ issues. In addition, strengths and weaknesses shouldŒæ be identified, and your opinion of the investment potential and the creditworthiness of the firm should be conveyedŒæ to management.

Upstream or downstream

Distinguish between an upstream sale of inventory and a downstream sale. Why is it important to know whether a sale is upstream or downstream? How do unrealized intercompany profits on a downstream sale of inventory made during the current period affect the computation of consolidated net income and income to the controlling interest? Explain.

Inventory is resold in the current period

How do unrealized intercompany inventory profits from a prior period affect the computation of consolidated net income when the inventory is resold in the current period? Is it important to know if the sale was upstream or downstream? Why or why not? Explain.

Research and development (R&D) costs

What guidance does the codification provide concerning the disclosure of research and development (R&D) costs?

Accounting cycle

Name the steps in completing the accounting cycle and explain how they impact the financial statements.ξ What happens is a step is missed?ξ Explain.

Affect the financial statements

What are the eight steps in the accounting cycle and how do they affect the financial statements?ξ What happens if one is missing?

Case to a medium to large technology firm

Play the role of a consultant in presenting a case to a medium to large technology firm.ξ A representative from the company, Sonic Technologies has contacted you and asked for you to meet with a group of company executives and to discuss how the BCS approach works in technology organizations.prepare an overview document that you will provide the individuals who participate in your meeting.

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