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Question Managerial Accounting – Performance Management

Question Managerial Accounting – Performance Management

Question
Managerial Accounting – Performance Management

Problem 8-27

Visit the website for one of the following companies, or a different company of your choosing.

Coca-Cola www.coca-cola.com

Bridgestone www.bridgestone.com

Motorola www.motorola.com

Casio www.casio.com

Toyota www.toyota.com

Xerox www.xerox.com

Read about the company’s products and operations. Discuss the pros and cons of absorption

and variable costing as the basis for product costing if the firm uses cost-based pricing.

Problem 17-26

Celestial Artistry Company is developing departmental overhead rates based on direct-labor hours

for its two production departments, Etching and Finishing. The Etching Department employs

20 people and the Finishing Department employs 80 people. Each person in these two departments

works 2,000 hours per year. The production-related overhead costs for the Etching Department are

budgeted at $200,000, and the Finishing Department costs are budgeted at $320,000. Two service

departments, Maintenance and Computing, directly support the two production departments. These

service departments have budgeted costs of $48,000 and $250,000, respectively. The production

departments’ overhead rates cannot be determined until the service departments’ costs are allocated.

The following schedule reflects the use of the Maintenance Department’s and Computing

Department’s output by the various departments.

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