1. Describe the value chain and how it can help organizations become more effective.
2. List the four standards of ethical conduct for management accountants. For each standard, give an example that demonstrates compliance with that standard.
3. What are the differences between direct costs and indirect costs? Give an example of each.
4. Helmer Sporting Goods Company manufactured 100,000 units in 20X5 and reported the following costs:
Sandpaper $ 32,000 Leasing costs-plant $ 384,000
Materials handling 320,000 Depreciation-equipment 224,000
Coolants & lubricants 22,400 Property taxes-equipment 32,000
Indirect manufacturing labor 275,200 Fire insurance-equipment 16,000
Direct manufacturing labor 2,176,000 Direct material purchases 3,136,000
Direct materials, 1/1/X5 384,000 Direct materials, 12/31/X5 275,200
Finished goods, 1/1/X5 672,000 Sales revenue 12,800,000
Finished goods, 12/31/X5 1,280,000 Sales commissions 640,000
Work-in-process, 1/1/X5 96,000 Sales salaries 576,000
Work-in-process, 12/31/X5 64,000 Advertising costs 480,000
Administration costs 800,000
a. What is the amount of direct materials used during 20X5?
b. What manufacturing costs were added to WIP during 20X5?
c. What is cost of goods manufactured for 20X5?
d. What is cost of goods sold for 20X5?
5. Berhannan's Cellular sells phones for $100. The unit variable cost per phone is $50 plus a selling commission of 10%. Fixed manufacturing costs total $1,250 per month, while fixed selling and administrative costs total $2,500.
a. What is the contribution margin per phone?
b. What is the breakeven point in phones?
c. How many phones must be sold to earn pretax income of $7,500?