Prepared by Le Quang Sang

2012

INDIVIDUAL ASSIGNMENT-ACC 302

(Note: individual assignment should be submitted in written paper report)

CHAPTER 1 1. What is strategy? Briefly describe the THREE broad types of strategies that companies may choose to pursue. 2. 3. Briefly describe how managers make use of management accounting information. Describe the value chain and how it can help organizations become more effective.

CHAPTER 2 1. What is the meaning of the term cost object? Give an example of a cost object that would be used in a manufacturing company, a merchandising company, and a service sector company? 2. Describe a variable cost. Describe a fixed cost. Explain why the distinction between variable and fixed costs is important in cost accounting. Explain the difference between an inventoriable cost and a period cost. What potential problems does an inaccurate classification of product and period costs cause?

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CHAPTER 3 1. In a job-costing system, explain why it is necessary to apply indirect costs to production through the use of a manufacturing overhead cost allocation rate. 2. What are two possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method.

CHAPTER 4 1. The president of the Gulf Coast Refining Corporation wants to know why his golfing partner, who is the chief financial officer of a large construction company, calculates his costs by the job, but his own corporation calculates costs by large units rather than by individual barrel of oil. 2. What is the difference between a weighted-average method of process costing and a firstin, first-out method of process costing?

CHAPTER 6 1. What is meant by the term breakeven point? Why should a manager be concerned about the breakeven point?
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Prepared by Le Quang Sang

2012

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Auto Tires has been in the tire business for four years. It rents a building but owns all of its equipment. All employees are paid a fixed salary except for the busy season (April June), when temporary help is hired by the hour. Utilities and other operating charges remain fairly constant during each month except those in the busy season. Selling prices per tire average $75 except during the busy season. Because a large number of customers buy tires prior to winter, discounts run above average during the busy season. A 15% discount is given when two tires are purchased at one time. During the busy months, selling prices per tire average $60. The president of Auto Tires is somewhat displeased with the company's management accounting system because the cost behavior patterns displayed by the monthly breakeven charts are inconsistent; the busy months' charts are different from the other months of the year. The president is never sure if the company has a satisfactory margin of safety or if it is just above the breakeven point. Required: a. What is wrong with the accountant's computations? b. How can the information be presented in a better format for the president?

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Suppose a company decided to automate a production line. Explain what effects this would have on a companys cost structure using CVP terminology. Could these changes have any possible negative effect on the firm? What effect, and why, would a decrease in the tax rate have on a companys breakeven point?

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CHAPTER 7 1. What is the basic difference between absorption costing and variable costing? 2. If production and sales are equal, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?

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If production exceeds sales, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why? CHAPTER 9 1. Describe the benefits to an organization of preparing an operating budget. 2. 3. Discuss the importance of the sales forecast and items that influence its accuracy. Describe some of the drawbacks of using the operating budget as a control device.

Prepared by Le Quang Sang

2012

CHAPTER 10 1. Explain the difference between a static budget and a flexible budget. Explain what is meant by a static budget variance and a flexible budget variance. 2. 3. Give at least three good reasons why a favorable price variance for direct materials might be reported. Give at least three good reasons why an unfavorable efficiency variance for direct manufacturing labor might be reported. Briefly explain the meaning of the variable overhead efficiency variance and the variable overhead spending variance. Explain the meaning of a favorable production-volume variance.

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CHAPTER 11 1. BIG Manufacturing Products has been using FIFO process costing for tracking the costs of its manufacturing activities. However, in recent months, the system has become somewhat bogged down with details. It seems that, when the company purchased Brown Electronics last year, its product lines increased six-fold. This has caused both the accountants and the suppliers of the information, the line managers, great difficulty in keeping the costs of each product line separate. Likewise, the estimation of the completion of ending work-in-process inventories and the associated costs has become very cumbersome. The chief financial officer of the company is looking for ways to improve the reporting system of product costs. Required: What can you recommend to improve the situation? CHAPTER 13 1. Assume you are a sophomore in college and are committed to earning an undergraduate degree. Your current decision is whether to finish college in four consecutive years or take a year off and work for some extra cash. a. Identify at least two revenues or costs that are relevant to making this decision. Explain why each is relevant. b. Identify at least two costs that would be considered sunk costs for this decision. c. Comment on at least one qualitative consideration for this decision. 2. How does a manager go about choosing which of three products to produce and sell when each product uses a single machine with a limited capacity?

Prepared by Le Quang Sang

2012

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A restaurant is deciding whether it wants to update its image or not. It currently has a cozy appeal with an outdated dcor that is still in good condition, menus and carpet that need to be replaced anyway, and loyal customers. Identify for the restaurant management a. those costs that are relevant to this decision, b. those costs that are not differential, c. and qualitative considerations.