Managerial accounting ch8 solution

By some estimates,! Index development is an important element in the early conceptualization phase of the AAV.

solution manual managerial accounting hansen mowen chapter 9

If the estimated cost is too high, then it may be necessary to modify the product design. Using traditional cost systems, environmental-related costs are often hard to pinpoint because they are usually hidden in support cost pools.

Solution of cost accounting

In a bank, products or services, depending on how you look at it would include checking accounts, savings accounts, all types of loans, etc. In some cases, product design might change, materials used in production might need replacing, or manufacturing processes might require redesign. Under another traditional method, cost-plus, the expected profit margin is added to the expected product cost and selling price is the result of the sum of these two variables. This can be a very interesting and informative exercise for students. From this point on, procedures are quite different. A second downside is that many organizational members may not be involved with implementing the changes. Table 1. However, on average, many months of lost sales will have a much more detrimental effect on the organization than whether target costs are met. Some might be asked to benchmark with many partners and some with few. The total-life-cycle costing approach should therefore lead to more cost-effective products and services. As in the first traditional method described above, product designers do not attempt to achieve a particular cost target. The organization has to be careful not to burn out employees, and design engineers in particular, as they are extremely valuable to the organization. If the estimated cost is too high, then it may be necessary to modify the product design.

The target cost is the difference between the target selling price and target profit margin. As a result, cost had never been a primary consideration.

Table 1.

Solution manual managerial accounting hansen mowen chapter 8

A second downside is that many organizational members may not be involved with implementing the changes. The template is often designed generically and is meant to be superimposed on any organization. Thus, they may consciously try to make sure that they do not achieve the target unless their jobs rest on it. Activity-based costing can help control and reduce environmental costs because it identifies process activities, including activities that cause environmental costs. Consequently, the company should evaluate a price increase for product Y or ways to decrease product- related costs for product Y. This question provides a link to finance classes. Under traditional cost reduction, after market research to determine customer requirements and product specification, engineers and designers determine product design, then the cost to produce the product. Using traditional cost systems, environmental-related costs are often hard to pinpoint because they are usually hidden in support cost pools. If the estimated cost is too high, then it may be necessary to modify the product design. The instructor can make slides of Tables to facilitate discussion. From this point on, procedures are quite different. This equation differs from the other two types of traditional equations relating to cost reduction in the following ways. Time limits can be put in place for the length of time allowed to develop or introduce new products.

The facility uses a JIT production system. Using this approach can lead to substantial cost savings.

Managerial accounting ch8 solution

Under another traditional method, cost-plus, the expected profit margin is added to the expected product cost and selling price is the result of the sum of these two variables. To compare products, the company had to evaluate existing competitive vehicles as well as vehicles under development. If organizational members do not understand what the consultants have done or how the system works, then the system will likely fail after the consultants leave. Additional material that can be introduced during the case discussion is indicated by a check mark. Barket research is not a single event as it is under traditional cost methods. Both the traditional costing method and target costing begin with market research into customer requirements followed by product specification. Stress the fact that accountants were watchdogs in the target costing process. Burnout is probably the biggest issue related to the success or failure of target costing in Japan. Note that a small percentage of costs are incurred during the research, development and engineering stage, but these costs increase significantly during the manufacturing and post-sale service and disposal stages.
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Chapter 8 Solutions