COMPREHENSIVE CASE QUESTIONS
1. Prepare an income statement for the Phone Division for March. Include a supporting cost of goods manufactured statement.
2. The Phone Division has been using the same cost accounting system for over 10 years. Explain why its cost accounting system may be outmoded. What factors determine when a new cost accounting system is warranted?
3. Using the method of least squares, calculate two cost formulas: one for overhead using direct labor cost as the driver, and one for material-handling cost using number of moves as the driver. Comment on Jacob Carder's observations concerning the outcomes.
4. How would you describe the cost behavior of the inspection activity? Assume that the quality control manager implements a program that reduces the number of defective units by 50 percent. Because of the improved quality, the demand for inspection hours will also drop by 50 percent. What is the potential monthly reduction in inspection costs? How did knowledge of inspection's cost behavior help?
Attachment:- Case.rar