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Test Bank for Fundamentals of Cost Accounting, 7th Edition by (Lanen/ Anderson/ Maher), All 18 Chapters Covered, Verified Latest Edition.

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Fundamentals of Cost Accounting, 7th Edition

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Fundamentals Of Cost Accounting, 7th Edition

Test Bank for Fundamentals of Cost Accounting, 7th Edition by (Lanen/ Anderson/ Maher), All 18 Chapters Covered, Verified Latest Edition. Answers Included at the End of each Chapter. Chapter 01 7e 1) Carley Incorporated incurs many types of costs in its operations. Place the number of the appro...

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test bank for fundamentals of cost accounting
fundamentals of cost accounting 7th edition
fundamentals of cost accounting all 18 chapters
fundamentals of cost accounting latest edition

Institution Fundamentals of Cost Accounting, 7th Edition
Course Fundamentals of Cost Accounting, 7th Edition

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,Answers Included at the End of each Chapter.
Chapter 01 7e
1) Carley Incorporated incurs many types of costs in its operations. Place the number of the
appropriate stage in the value chain in Column 2 in the blank next to each cost in Column 1.
Cost Stage in the Value Chain

Transportation costs to ship vans to 1. Customer Service
customers
Labor costs for factory workers 2. Distribution

Overtime costs for scientists working on 3. Research &
new engine technology Development
Utilities cost for the design testing 4. Marketing
center
Costs to survey customers about their 5. Production
satisfaction
Costs to sponsor a sporting event 6. Design

2) SuperMax is an integrated provider of genetically engineered corn. Many types of costs
are incurred in its operations. Place the number of the appropriate stage in the value chain in
Column 2 in the blank next to each cost in Column 1.
Cost Stage in the Value
Chain
Warehouse costs to store seed awaiting 1. Customer Service
shipment to customers
Utility costs for seed mill 2. Distribution

Equipment costs in genetics laboratory 3. Research &
Development
Labor costs to staff help-line call center 4. Marketing

Costs to prepare advertising campaign in 5. Production
national agriculture magazine
Costs to contract with growers to provide 6. Design
seed

Version 1 1

,3) Travon's Limo Service provides transportation services in and around Bentonville. Its
profits have been declining, and management is planning to add a package delivery service that
is expected to increase revenue by $275,000 per year. The total cost to lease additional delivery
vehicles from the local dealer is $60,000 per year. The present manager will continue to
supervise all services. However, labor and utilities costs will increase by 40% and rent and other
costs will increase by 15% when the package delivery service is added.

Travon’s Limo Service
Annual Income Statement
Before Expansion
Sales Revenue $ 960,000

Costs:

Vehicle Leases $ 400,000

Labor 290,000

Utilities 50,000

Rent 100,000

Other Costs 60,000

Manager’s Salary 120,000

Total Costs 1,020,000

Operating Profit (Loss) $ (60,000)

a. Prepare a report of the differential costs and revenues if the delivery service is added.
b. Should management start up the delivery service? Explain your answer.

Version 1 2

, 4) Morris Incorporated is a management consulting firm that specializes in management
training programs. Tackle Manufacturing Incorporated has approached Morris to contract for
management training for a one-year period. Last year's income statement for Morris is as
follows:

Sales Revenue $ 360,000

Costs:

Labor $ 120,000

Equipment Lease 12,000

Rent 24,000

Utilities 8,400

Supplies 23,600

Other Costs 14,400

Manager’s Salary 80,000

Total Costs 282,400

Operating Profit (Loss) $ 77,600

To satisfy the Tackle contract, another part-time trainer will need to be hired at $42,000.
Supplies will increase by 12% and other costs will increase by 15%. In addition, new equipment
will need to be leased at a cost of $2,500.

a. What are the differential costs that would be incurred if the Tackle contract is signed?
b. If Tackle will pay $55,000 for one year, should Morris accept the contract? Explain your
answer.

Version 1 3

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Exam (elaborations)

Test Bank for Fundamentals of Cost Accounting, 7th Edition by (Lanen/ Anderson/ Maher), All 18 Chapters Covered, Verified Latest Edition.

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