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ACC 400 Week 3 Assignment

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ACC 400 Week 3 Assignment E20.1 Listed below are nine technical accounting terms introduced in this chapter: Variable costs Relevant range Contribution margin Break-even point Fixed costs Semivariable costs Economies of scale Sales mix Unit contribution margin Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer “None” if the statement does not correctly describe any of the terms. E21.2 Read the footnote in Appendix A referring to Home Depot ’s decision to close all of its remaining big box stores in China. Write a short paragraph identifying the incremental, sunk, and opportunity costs associated with this decision. Assume that any cost savings will be invested elsewhere in more productive stores. E21.6 The cost to Swank Company of manufacturing 15,000 units of a particular part is $135,000, of which $60,000 is fixed and $75,000 is variable. The company can buy the part from an outside supplier for $6 per unit. Fixed costs will remain the same regardless of Swank’s decision. Should the company buy the part or continue to manufacture it? Prepare a comparative schedule in the format illustrated in Exhibit 21–6 BE22.9 The president of Cold Moo Ice Cream Company, a chain of ice cream stores in the Midwest, was unhappy with the actual six-month profit figures for the company recently prepared by the CFO. The president asked the CFO for a profit breakdown, by store, of the actual six-month results. When the president received the report, he was extremely upset and called the CFO into his office. The president stated, “These reports show that each store in the chain is profitable, but our company results are unprofitable! How can this be?” The CFO pointed out that each store was allowed to set prices for ice cream based on its cost structure. However, the stores’ cost structures did not include headquarters costs or the costs of advertising and delivery of products. What are the three characteristics for operating a successful responsibility accounting system? Consider whether the accounting system at Cold Moo Ice Cream Company includes the three characteristics of a successful responsibility accounting system. How could the responsibility accounting system at Cold Moo be improved? P22.1A Chocolatiers Company produces two products: Solid chocolate and powdered chocolate. Cost and revenue data for each product line for the current month are as follows:

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