Reference no: EM131435721
Explain how manufacturing overhead rates are constructed in conventional cost accounting systems. Speak separately about fixed versus variable overhead application rates. What key choices must be made in establishing these rates? In answering this question, you might want to discuss differences (if any) between current IRS (income tax) requirements and internal reporting purposes, and between financial reporting requirements, i.e., applicable GAAP (FASB ASC 330-10-30, previously SFAS No. 151, available using the FASB link and internal reporting purposes.
Your company uses a standard cost system. As such, at the end of each period, it must "clean up" the accounts by disposing of any standard cost variances that occurred for the period. You need to educate members of the board about how the variances for fixed manufacturing overhead are disposed of at the end of the period. In your answer, pay particular attention to the following two financial-reporting issues: The requirements of FAS151
How, under absorption costing, reported earnings can be "managed" by choice of the denominator volume used to establish the fixed overhead application rate.
Search the Internet for the Institute of Management Accountant's Statement of Ethical Professional Practice. Which of the stated "standards" relate directly to the issue of setting (fixed) overhead application rates and the decision as to how any resulting production volume variances are disposed of for financial-reporting purposes? Be specific.
|
World trade continues to increase due to supply and demand
: As world trade continues to increase due to supply and demand, how will ports accommodate this increase in cargo? What are the issues facing ports as they promote themselves and increase cargo? What are some specific solutions that address these issu..
|
|
Describe the process of quantitative analysis
: Describe the process of quantitative analysis. Categorize business problems that can be solved through quantitative analysis. Solve business problems with appropriate quantitative decision-making models.
|
|
Free on board is part of purchase contract
: The seller is in New York and the buyer is in Philadelphia. The 3rd party carrier shipping contract reads F. O. B. Philadelphia. What type of contract is this and who bears the risk of loss? Free On Board (FOB) is a part of purchase contract where th..
|
|
Ethical conduct of our culture versus the foreign culture
: How can a North American company operating abroad balance the different points of view of social responsibility and ethical conduct of our culture versus the foreign culture?
|
|
Constructed in conventional cost accounting systems
: Explain how manufacturing overhead rates are constructed in conventional cost accounting systems. Speak separately about fixed versus variable overhead application rates. What key choices must be made in establishing these rates?
|
|
Emerging trends-what are tangible and intangible benefits
: n 2008, Walgreens, one of the nation’s largest drugstore retailers, opened a state-of-the-art distribution center in Windsor, Connecticut. It is the company’s second facility designed specifically to employ people with disabilities and patterned afte..
|
|
A manufacturer sells product in two regions
: A manufacturer sells a product in two regions. Weekly demand in each region is Normally distributed with mean 1,000 and standard deviation 300. Lead time is one week. Demand in the two regions has a correlation coefficient of -.35. They are consideri..
|
|
The chapter talks about SMART objectives or goals
: The chapter talks about S.M.A.R.T. objectives or goals. "In fiscal 2016, we plan to open approximately 1,800 new stores globally." Walgreens: "Second is to hire a significant number of people with disabilities in our South Carolina distribution cente..
|
|
Determine the number of containers to use for incoming parts
: A manager wants to determine the number of containers to use for incoming parts for a kanban system to be installed next month. The process will have a usage rate of 72 pieces per hour. How many containers should be used? As the system improves, will..
|