Exam 16: Managing Costs and Uncertainty

Dawson Corporation has a sales goal of $500,000 for the coming year.Based on this level of activity,Dawson budgets its total expenses at $450,000.Actual sales are $480,000 and actual costs are $460,000.Dawson Corporation's operations were

Epplin Company The following information is provided for Epplin Company for the month of September: 1,800 units 5 DLHs per unit @ \ 10.00 per DLH 8,900 DLHs @ \ 10.50 per DLH VOH rate per DLH \ .75 Variable OH \ 6,400 FOH rate per DLH \ 1.90 Fixed OH \ 17,500 Budgeted FOH \1 6,910 Refer to Epplin Company.What is the volume variance?

What are the five steps in implementing a system of cost control?

Explain the meaning of the coefficient of determination in cost estimation.

Taylor Corporation Taylor Corporation manufactures and sells baseball bats.For a recent period,its production and sales objectives were each set at 20,000 units.Also,for this period the firm had estimated costs as follows: V ariable prochuction costs \ 3 per unit Variable selling costs \ 2 per unit Committed fixed costs \ 30,000 per period Discretionary fixed costs \ 40,000 per period Refer to Taylor Corporation.For this question only,assume Taylor Corporation actually produced and sold 19,000 baseball bats.At this level of operation,Taylor Corporation's total costs were $170,000.Evaluate Taylor Corporation's success in terms of effectiveness and efficiency.

The higher an organization's capital costs,the greater the opportunity cost of holding idle cash.

Current assets minus current liabilities equals ___________________________.

A coefficient of determination has a value between -1 and +1.

Avoidable costs are usually

Epplin Company The following information is provided for Epplin Company for the month of September: 1,800 units 5 DLHs per unit @ \ 10.00 per DLH 8,900 DLHs @ \ 10.50 per DLH VOH rate per DLH \ .75 Variable OH \ 6,400 FOH rate per DLH \ 1.90 Fixed OH \ 17,500 Budgeted FOH \1 6,910 Refer to Epplin Company.What is the efficiency variance?

Increases in per unit variable costs and total fixed costs should be minimized through the process of ________________________________.

As the economy becomes more and more depressed,a company's management decides to slash spending on research and development.What is the likely effect of this action on net income? Net income will be

Which of the following is likely to be a discretionary cost in most organizations?

A major difference between committed and discretionary fixed costs is that

Supply chain management can reduce the processing time for an organization to obtain raw materials.

What factors influence the total level of discretionary costs in an organization?

A small manufacturing company recently stated its sales goal for a period was $100,000.At this level of activity,its budgeted expenses were $80,000.Its actual sales were $100,000,but its actual expenses were $85,000.This company operated

Taylor Corporation Taylor Corporation manufactures and sells baseball bats.For a recent period,its production and sales objectives were each set at 20,000 units.Also,for this period the firm had estimated costs as follows: V ariable prochuction costs \ 3 per unit Variable selling costs \ 2 per unit Committed fixed costs \ 30,000 per period Discretionary fixed costs \ 40,000 per period Refer to Taylor Corporation.Note that the budget for discretionary fixed costs is $40,000.If actual discretionary fixed costs were $50,000,could cost control have still been effective? Explain.

Which of the following strategies is used to deal with uncertainty related to price risk?

Which of the following strategies is used to deal with uncertainty related to a specific event?