Reference no: EM13860329

Question 1

Big Power Company has two plants where it produces its products. The company has recently conducted a study to determine the costs associated with processing orders at each plant. How can the manager of Big Power Company use this information to manage the costs associated with processing orders?

Your response should be at least 200 words in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. For problems, be sure to answer all questions and provide all requested information.

Question 2

Sterling Corporation reports the following information:

	2009	2010	2011
Units sold	20,000	20,000	20,000
Units produced	20,000	24,000	16,000
Fixed production costs	$1,200,000	$1,200,000	$1,200,000
Variable production costs per unit	$200	$200	$200
Selling price per unit	$400	$400	$400
Fixed selling and administrative expenses	$400,000	$400,000	$400,000

Calculate the profit each year using variable costing. Explain why profit does not fluctuate from year to year using variable costing.

Your response should be at least 200 words in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. For problems, be sure to answer all questions and provide all requested information.

Question 3

Explain why activity-based costing is seldom used for reporting financial results to external users of financial information.

Your response should be at least 200 words in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. For problems, be sure to answer all questions and provide all requested information.

Question 4

The maintenance department of Full Service Company budgets annual costs of $300,000 based on an expected level of activity for 2012. Those costs are allocated to two other departments of Full Service Company. Full Service Company is considering two bases for assigning costs to those departments: square feet occupied by the department and direct labor hours worked by the department. The following information is available:

	Department 1	Department 2
Square feet occupied by the department	20,000	30,000
Direct labor hours worked by the department	30,000	20,000

Calculate the costs allocated to each department using each allocation base. Which allocation base is more useful to management?

Your response should be at least 200 words in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. For problems, be sure to answer all questions and provide all requested information

Question 5

How does variable costing affect the way that management of a business employees the Theory of Constraints?

Your response should be at least 200 words in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. For problems, be sure to answer all questions and provide all requested information.