costacctg13_solppt_ch01

2009 Pearson Prentice Hall. All rights reserved.1-*

Charles T. HorngrenSrikant M. DatarGeorge FosterMadhav RajanChristopher IttnerCost Accounting A Managerial Emphasis thirteenth edition 2009 Pearson Prentice Hall. All rights reserved.

2009 Pearson Prentice Hall. All rights reserved.

2009 Pearson Prentice Hall. All rights reserved.1-*This presentation includes:

Exercises 1-18, 1-21Problem 1-25


2009 Pearson Prentice Hall. All rights reserved.1-*Exercise 1-21Five-step decision-making process, manufacturingGarnicki Foods makes frozen dinners that it sells through grocery stores. Typical products include turkey dinners, pot roast, fried chicken, and meat loaf.The managers at Garnicki have recently introduced a line of frozen chicken pies. They take the following actions with regard to this decision. Classify each action as a step in the five-step decision-making process (identify the problem and uncertainties, obtain information, make predictions about the future, choose among alternatives, implement the decision, evaluate performance, and learn).


2009 Pearson Prentice Hall. All rights reserved.1-*Garnicki performs a taste test at the local shopping mall to see if consumers like the taste of its proposed new chicken pie product.

b. Garnicki sales managers estimate they will sell more meat pies in their northern sales territory than in their southern sales territory.

c. Garnicki managers discuss the possibility of introducing a new product.

Five-step decision-making processObtain information Make predictions about the futureIdentify the problem and uncertainties


2009 Pearson Prentice Hall. All rights reserved.1-*d. Garnicki managers compare actual costs of making chicken pies with their budgeted costs.

e. Costs for making chicken pies are budgeted.

f. Garnicki decides to make chicken pies.

g. The purchasing manager calls a supplier to check the prices of chicken.

Five-step decision-making processImplement the decision, evaluate performance, and learnMake predictions about the futureMake decisions by choosing among alternativesObtain information


2009 Pearson Prentice Hall. All rights reserved.1-*Problem 1-25Strategic decisions and management accounting A series of independent situations in which a firm is about to make a strategic decision follow.1. For each decision, state whether the company is following a low price or a differentiated productstrategy.2. For each decision, discuss what information the management accountant can provide about thesource of competitive advantage for these firms.



a. Roger Phones is about to decide whether to launch production and sale of a cell phone with standard features.

Low price strategyCost to manufacture and sell the cell phoneProductivity, efficiency and cost advantages relative to competitionPrices of competitive cell phonesSensitivity of target customers to price and qualityThe production capacity of Roger Phones and its competitors


2009 Pearson Prentice Hall. All rights reserved.1-*b. Computer Magic is trying to decide whether to produce and sell a new home computer softwarepackage that includes the ability to interface with a sewing machine and a vacuum cleaner. There isno such software currently on the market.

Differentiated product strategy Cost to develop, produce and sell new softwarePremium price that customers would be willing to pay due to product uniqueness Price of basic softwarePrice of closest competitive softwareCash needed to develop, produce and sell new software


2009 Pearson Prentice Hall. All rights reserved.1-*c. Christina Cosmetics has been asked to provide a store brand lip gloss that will be sold at discount retail stores.

Low price strategy Cost of producing the store-brand lip glossProductivity, efficiency and cost advantages relative to competitionPrices of competitive productsSensitivity of target customers to price and qualityHow the market for lip gloss is growing


2009 Pearson Prentice Hall. All rights reserved.1-*d. Marcus Meats is entertaining the idea of developing a special line of gourmet bologna made with sun dried tomatoes, pine nuts, and artichoke hearts.

Differentiated product strategy Cost to produce and sell new line of gourmet bolognaPremium price that customers would be willing to pay due to product uniquenessPrice of basic meat productPrice of closest competitive product


2009 Pearson Prentice Hall. All rights reserved.1-*Value chain and classification of costs Classify each of the cost items (ah) as one of the business functions of the value chain shown in Exhibit 1-2 (p. 7).

Burger King, a hamburger fast food restaurant, incurs the following costs:Exercise 1-18a. Production

Production

Distribution

d. Marketing

a. Cost of oil for the deep fryer b. Wages of the counter help who give customers the food they order c. Cost of the costume for the King on the Burger King television commercials d. Cost of childrens toys given away free with kids meals


2009 Pearson Prentice Hall. All rights reserved.1-*Value chain and classification of costse. Cost of the posters indicating the special two cheeseburgers for $2 f. Costs of frozen onion rings and French fries

g. Salaries of the food specialists who create new sandwiches for the restaurant chain

h. Cost of to-go bags requested by customers who could not finish their meals in the restaurant

e. Marketing

Production

g. Design of products, services or processes

h. Customer service




**************

costacctg13_solppt_ch01

Documents