Description
First assignment:
Need help answering questions, under downloads is a document labeled exam 1. Need help answering those questions. Also there is a notes document as well.
Second assignment:
In the context of this course, please address the issues/questions below for a firm/organization of your choice. When addressing the issues/questions, be sure to do so in the context of this course and your chosen firm/organization. Your primary sources of information should be no older than 2-3 years old.
The firm is jetblue
Project will be graded on the points indicated below. Also, please find suggested page lengths for each section. There is no penalty if you write less or more.
Provide a short background/history of the firm/organization. (10 pts) (1-2 pages)
Discuss which strategic vision the firm/organization evidences. (6 pts) (1/2-1 page)
Discuss which paradigm for creating value the firm/organization evidences. (6 pts) (1/2-1 page)
Discuss the critical success factors and whether or not you believe that the
firm/organization shows evidence of success for these factors. (15 pts) (2-3 page
5From the material reviewed, explain whether the firm/organization shows
evidence in its operations/results of the perspectives of the balanced scorecard. (15 pts)
(2-3 pages)
Discuss which of the activities of the value chain are most important to the
firm/organization. (8 pts) (1-2 pages)
Discuss the concept of customer delivered value in the context of the
firm/organization. (6 pts) (1/2-1 page)
Discuss the cost of controlling quality and the cost of failing to control
quality in the context of the firm/organization. (8 pts) (1-2 pages)
Discuss the firm/organization in the context of the Theory of Constraints. (6 pts) (1-2 pages)
Conclusion, including degree to which organization incorporates concepts (10 pts) (1-2 pages)
Quality of writing, including citing sources; and organization of project (10 pts)
Unformatted Attachment Preview
MBA 640 Exam 1
Spring 1, 2024
Name___________________________
Instructions:
1. When answering the questions, the work that you submit for grading must be your
work. Any plagiarism will result in a grade of zero for the exam. If you have
questions, please consult with the instructor.
2. The evaluation of the work, especially the qualitative questions depends on the
organization of the material and the depth of the answers.
3. PLEASE SHOW COMPUTATIONS FOR QUANITATIVE PROBLEMS, NO
COMPUTATIONS; NO CREDIT.
4. Read each problem carefully and answer completely.
5. Please write your name at the top of the submitted document.
6. Please answer the questions in the context of our class discussions.
7. Please submit exam in one document to Canvas.
(10 pts) 1.
For Papa John’s International, Inc. (PZZA)* define and identify one example of
each of the following:
•
•
•
•
•
•
•
•
•
•
Variable cost
Fixed cost
Product cost
Period cost
Direct cost
Indirect cost
Internal failure cost
Prevention cost
Appraisal cost
External failure cost
*Papa John’s International, Inc. operates and franchises pizza delivery and carryout restaurants
under the Papa John’s trademark in the United States and internationally.
(10 pts) 2.
Explain why you believe that the balanced scorecard is an important critical
strategic management concept. Be sure to explain the various elements of a
balanced scorecard.
(12 pts) 3.
Reinhart Inc. manufactures and sells three products: sinks, mirrors, and vanities.
For the coming year, Reinhart expects to sell 1,000,000 sinks, 400,000 mirrors,
and 600,000 vanities. The company’s fixed costs are $8,000,000. Other
information is as follows:
Sinks
Mirrors
Vanities
Selling price
per unit
$200
100
300
Variable cost
per unit
$80
60
150
Required:
a) Find the breakeven point in sales dollars for each product.
b) If Reinhart sold a total of 2,500,000 units in the sales mix provided above,
determine the earnings after taxes. Reinhart has a tax rate of 20%.
(12 pts) 4.
Cousins Manufacturing Corporation makes an electronic component in two
departments, Machining and Assembly. The capacity per month is 200,000 units
in the Machining Department and 250,000 units in the Assembly Department.
The only variable cost of the product is direct material of $400 per unit. All direct
material cost is incurred in the Machining Department. All other costs of
operating the two departments are fixed costs. Cousins can sell as many units of
this electronic component as it produces at a selling price of $600 per unit.
Required:
a) Cousins, Machining managers believe that they could increase the capacity in
their department by 30,000 units, if they were able to increase fixed costs by
$2,000,000. Should the money be spent? Explain.
b) An outside contractor offers to do assembly for 20,000 units at a cost of
$2,000,000. Should Cousins accept the offer from the subcontractor? Show
calculations.
c) How do your answers in parts (a) and (b) relate to the theory of constraints?
Explain.
(20 pts) 5.
The current manufacturing costing system of Lundell Corporation has two direct
cost categories (direct materials and direct labor). Indirect manufacturing costs
are applied to products using a single indirect cost pool. The indirect
manufacturing cost application is number of direct labor hours; the indirect cost
rate is $150 per direct labor-hour.
Lundell Corporation is changing from a labor-based to a machine-based
manufacturing approach at its aircraft components plant. The plant manager has
set up five activity areas, each with its own supervisor and budget responsibility.
Pertinent data follow:
Activity Area
Cost Driver Used as Indirect
Cost Application Base
Cost per Unit
Application Base
Materials handling
Lathe work
Milling
Grinding
Shipping
Number of parts
Number of turns
Number of machine hours
Number of parts
Number of orders shipped
$ 0.80
0.40
18.00
0.75
2,300.00
Information technology has advanced to the point where all the necessary data for budgeting in
these five activity areas are automatically collected.
The two job orders processed under the new system at the aircraft components plant had the
following characteristics:
Direct materials cost per job
Direct labor cost per job
Number of direct labor-hours per job
Number of parts per job
Number of turns per job
Number of machine hours per job
Number of job orders shipped
Number of units in each job order
Job Order 101
$52,000
$18,000
450
2,000
100,000
800
1
500
Job Order 102
$7,000
$2,000
40
800
20,000
85
1
40
Required
a) Compute the per-unit manufacturing cost of each job under the existing manufacturing
costing system; that is, indirect costs are collected in a single cost pool with labor-hours
as the application base.
b) Assume that Lundell adopts an ABC system. Indirect costs are applied to products using
separate indirect cost pools for each of the five activity areas (materials handling, lathe
work, milling, grinding, and shipping). The application base and rate for each activity
area are described in the problem. Compute the per-unit manufacturing cost of each job
under the ABC approach.
c) Explain the difference between the costs of the two products under the traditional costing
system and activity-based costing.
(16 pts) 6.
Barkov Corporation produces and sells watches. It projects the following
information for next year.
Sales price per unit
Variable production cost per unit
Fixed production costs (total)
Variable selling costs per unit
Fixed selling costs (total)
$
500
200
800,000
50
400,000
Required:
a) Determine the breakeven point in dollars.
b) What will Barkov’s pretax profit be at 4,000 units; and at 5,000 units?
c) Barkov is subject to a tax rate of 25 percent. If the CEO wants an after-tax
profit of $1,000,000, how many units must it sell?
d) Barkov is considering an alternative strategy to reduce fixed production costs
by $100,000; however, this would cause variable production costs to increase
to $240 per unit. What is the new breakeven point in units? Should Barkov
adopt the new strategy?
(20 pts) 7.
Consider the following information for Ekblad, Inc. for the year ended December
31, 2023.
Depreciation expense—Administrative office
Depreciation expense –Plant and equipment
Direct labor—Wages
Direct materials inventory, Dec. 31, 2023
Direct materials inventory, January 1, 2023
Direct materials purchases
Finished goods inventory, Dec. 31, 2023
Finished goods inventory, Jan. 1, 2023
Accumulated depreciation
Heat, light & power – Plant
Indirect labor
Property taxes—Plant
Sales representative’s salaries
Sales revenue
Accounts receivable
Supervisor’s salary-Plant
Supplies—Administrative office
Supplies—Plant
Work-in-Process inventory, Dec. 31, 2023
Work-in-Process inventory, Jan. 1, 2023
Accounts payable
Cash
$50,000
80,000
500,000
30,000
20,000
200,000
20,000
40,000
500,000
60,000
50,000
40,000
200,000
2,000,000
500,000
80,000
20,000
30,000
15,000
40,000
500,000
600,000
Required:
a) Determine the cost of goods manufactured and the operating income.
b) If 200,000 units were sold what is the cost of goods sold per unit?
MBA 640 Exam 1
Spring 1, 2024
Name___________________________
Instructions:
1. When answering the questions, the work that you submit for grading must be your
work. Any plagiarism will result in a grade of zero for the exam. If you have
questions, please consult with the instructor.
2. The evaluation of the work, especially the qualitative questions depends on the
organization of the material and the depth of the answers.
3. PLEASE SHOW COMPUTATIONS FOR QUANITATIVE PROBLEMS, NO
COMPUTATIONS; NO CREDIT.
4. Read each problem carefully and answer completely.
5. Please write your name at the top of the submitted document.
6. Please answer the questions in the context of our class discussions.
7. Please submit exam in one document to Canvas.
(10 pts) 1.
For Papa John’s International, Inc. (PZZA)* define and identify one example of
each of the following:
•
•
•
•
•
•
•
•
•
•
Variable cost
Fixed cost
Product cost
Period cost
Direct cost
Indirect cost
Internal failure cost
Prevention cost
Appraisal cost
External failure cost
*Papa John’s International, Inc. operates and franchises pizza delivery and carryout restaurants
under the Papa John’s trademark in the United States and internationally.
(10 pts) 2.
Explain why you believe that the balanced scorecard is an important critical
strategic management concept. Be sure to explain the various elements of a
balanced scorecard.
(12 pts) 3.
Reinhart Inc. manufactures and sells three products: sinks, mirrors, and vanities.
For the coming year, Reinhart expects to sell 1,000,000 sinks, 400,000 mirrors,
and 600,000 vanities. The company’s fixed costs are $8,000,000. Other
information is as follows:
Sinks
Mirrors
Vanities
Selling price
per unit
$200
100
300
Variable cost
per unit
$80
60
150
Required:
a) Find the breakeven point in sales dollars for each product.
b) If Reinhart sold a total of 2,500,000 units in the sales mix provided above,
determine the earnings after taxes. Reinhart has a tax rate of 20%.
(12 pts) 4.
Cousins Manufacturing Corporation makes an electronic component in two
departments, Machining and Assembly. The capacity per month is 200,000 units
in the Machining Department and 250,000 units in the Assembly Department.
The only variable cost of the product is direct material of $400 per unit. All direct
material cost is incurred in the Machining Department. All other costs of
operating the two departments are fixed costs. Cousins can sell as many units of
this electronic component as it produces at a selling price of $600 per unit.
Required:
a) Cousins, Machining managers believe that they could increase the capacity in
their department by 30,000 units, if they were able to increase fixed costs by
$2,000,000. Should the money be spent? Explain.
b) An outside contractor offers to do assembly for 20,000 units at a cost of
$2,000,000. Should Cousins accept the offer from the subcontractor? Show
calculations.
c) How do your answers in parts (a) and (b) relate to the theory of constraints?
Explain.
(20 pts) 5.
The current manufacturing costing system of Lundell Corporation has two direct
cost categories (direct materials and direct labor). Indirect manufacturing costs
are applied to products using a single indirect cost pool. The indirect
manufacturing cost application is number of direct labor hours; the indirect cost
rate is $150 per direct labor-hour.
Lundell Corporation is changing from a labor-based to a machine-based
manufacturing approach at its aircraft components plant. The plant manager has
set up five activity areas, each with its own supervisor and budget responsibility.
Pertinent data follow:
Activity Area
Cost Driver Used as Indirect
Cost Application Base
Cost per Unit
Application Base
Materials handling
Lathe work
Milling
Grinding
Shipping
Number of parts
Number of turns
Number of machine hours
Number of parts
Number of orders shipped
$ 0.80
0.40
18.00
0.75
2,300.00
Information technology has advanced to the point where all the necessary data for budgeting in
these five activity areas are automatically collected.
The two job orders processed under the new system at the aircraft components plant had the
following characteristics:
Direct materials cost per job
Direct labor cost per job
Number of direct labor-hours per job
Number of parts per job
Number of turns per job
Number of machine hours per job
Number of job orders shipped
Number of units in each job order
Job Order 101
$52,000
$18,000
450
2,000
100,000
800
1
500
Job Order 102
$7,000
$2,000
40
800
20,000
85
1
40
Required
a) Compute the per-unit manufacturing cost of each job under the existing manufacturing
costing system; that is, indirect costs are collected in a single cost pool with labor-hours
as the application base.
b) Assume that Lundell adopts an ABC system. Indirect costs are applied to products using
separate indirect cost pools for each of the five activity areas (materials handling, lathe
work, milling, grinding, and shipping). The application base and rate for each activity
area are described in the problem. Compute the per-unit manufacturing cost of each job
under the ABC approach.
c) Explain the difference between the costs of the two products under the traditional costing
system and activity-based costing.
(16 pts) 6.
Barkov Corporation produces and sells watches. It projects the following
information for next year.
Sales price per unit
Variable production cost per unit
Fixed production costs (total)
Variable selling costs per unit
Fixed selling costs (total)
$
500
200
800,000
50
400,000
Required:
a) Determine the breakeven point in dollars.
b) What will Barkov’s pretax profit be at 4,000 units; and at 5,000 units?
c) Barkov is subject to a tax rate of 25 percent. If the CEO wants an after-tax
profit of $1,000,000, how many units must it sell?
d) Barkov is considering an alternative strategy to reduce fixed production costs
by $100,000; however, this would cause variable production costs to increase
to $240 per unit. What is the new breakeven point in units? Should Barkov
adopt the new strategy?
(20 pts) 7.
Consider the following information for Ekblad, Inc. for the year ended December
31, 2023.
Depreciation expense—Administrative office
Depreciation expense –Plant and equipment
Direct labor—Wages
Direct materials inventory, Dec. 31, 2023
Direct materials inventory, January 1, 2023
Direct materials purchases
Finished goods inventory, Dec. 31, 2023
Finished goods inventory, Jan. 1, 2023
Accumulated depreciation
Heat, light & power – Plant
Indirect labor
Property taxes—Plant
Sales representative’s salaries
Sales revenue
Accounts receivable
Supervisor’s salary-Plant
Supplies—Administrative office
Supplies—Plant
Work-in-Process inventory, Dec. 31, 2023
Work-in-Process inventory, Jan. 1, 2023
Accounts payable
Cash
$50,000
80,000
500,000
30,000
20,000
200,000
20,000
40,000
500,000
60,000
50,000
40,000
200,000
2,000,000
500,000
80,000
20,000
30,000
15,000
40,000
500,000
600,000
Required:
a) Determine the cost of goods manufactured and the operating income.
b) If 200,000 units were sold what is the cost of goods sold per unit?
MBA 640 Concepts Outline
I.
Introduction
A. Accounting Equation
Assets
=
Debt + Equity
Investing
Decisions
Financing
Decisions
Right Amount/
Right Mix
Right Amount/
Right Mix
Overall objective is to create value – Accomplished through:
Generating cash flows that are evaluated in the context of risk and return.
Developing significant market share.
Providing a lifestyle/platform experience.
B. Different types of accounting:
Financial accounting
Managerial accounting
Tax accounting
Government contract accounting (FAR)
“real books”
C. Strategic Vision – know who you are
Cost leadership
Cost differentiation
Focused differentiation
Broad differentiation
D. Balanced Scorecard
Learning and growth perspective
Information system capabilities
Employee capabilities
Employee motivation
Internal business process perspective
Innovation process
Operations process
Post-sales service process
1
Customer perspective
Customer delivered value
STP marketing
Financial perspective
E. Critical success factors
Cost/efficiency
Quality
Time/timeliness
Innovation
-product life cycle
F. Value chain
Research and development
Design
Production
Marketing
Distribution
Customer service
II.
Cost
A. Definitions
Cost
Cost driver
Cost object
Actual versus budgeted
B. 3 Types of Companies
Manufacturing
Merchandising
Service
C. Classification of costs
Direct and indirect costs
Variable and fixed costs
Product and period costs
D. Cost of goods manufactured statement
E. Income statement
2
III.
Cost-Volume-Profit Analysis
A. Quantity at the breakeven point
B. Quantity at the target income level
C. Multiproduct analysis
IV.
Total Quality Management
A. W. Edwards Deming
Japan versus USA
Deming and Baldrige Awards
Customer loyalty and profit
Vendors/Just-in-time inventory systems
B. Analytics for TQM
3 Key Challenges
What data to use
Have the right people to mine the nuggets of gold
How to take insights and turn them into good decisions
C. Simple analytics
Quality control charts
Pareto diagram
Cause and effect diagram
D. Cost of controlling quality
Prevention costs
Appraisal costs
E. Cost of failing to control quality
Internal failure costs
External failure costs
F. Theory of Constraints
Elihu Goldratt
Quantitative analytics
3
V.
Costing systems
A. Why costing systems
B. Types of costing systems
Job order
Process
Operation
C. Types of costing
Actual
Normal
Standard
D. Pre-determined overhead application rate
PDOAR =
Estimated $ Overhead
Estimated Cost Driver Units
Over/Under allocated (supplied) overhead
E. Traditional Costing versus activity based costing
Diagrams Comparison
VI.
Budgeting
A. Budgeting involves all 4 management functions
Planning
Organizing
Directing
Controlling
B. Budgeting concepts
Kaizen budgeting
Zero-based budgeting versus incremental budgeting
Open-book management/ goal congruence
Responsibility
Budgetary slack
C. Master budget
4
VII. Variance Analysis
A. Foundation
Standard information and actual information
Flexible budget and static budget
Outputs and inputs
B. Variances
Direct materials price variance
VP = (AP-SP) x AQ
Direct materials quantity variance
VQ = (AQ-SQ) x SP
Direct labor price variance
VP = (AP-SP) x AQ
Direct labor quantity variance
VQ = (AQ-SQ) x SP
Variable overhead price variance
VP = (AP-SP) x AQ
Variable overhead quantity variance
VQ = (AQ-SQ) x SP
Fixed overhead spending variance
Sp Var = AOI – OB
Fixed overhead production volume variance
PVV = OB – SOA
AP = Actual price per unit of input
SP = Standard price per unit of input
AQ = Actual quantity of inputs
SQ = Standard quantity of inputs (for the actual level of output achieved, how much
input per unit of output should have been used)
AOI = Actual overhead incurred
OB = Overhead budgeted
SOA = Standard overhead applied (for the actual output achieved x how much input
per unit of output should have been used x the predetermined overhead application
rate)
AP for variable overhead =
Actual $ of VOH
Actual Activity Base
5
VIII. Absorption Costing, Variable Costing, Throughput Costing
A. Differences in the three costing systems
When required to use
Why use variable costing
Unit product cost for the three costing systems
B. Templates for absorption costing and variable costing
IX. Special Situations
A. Foundation
Benefits and costs
Quantitative analysis and qualitative analysis
Relevant information and irrelevant informative
B. Make versus buy
C. Special orders
D. Target price/ Target cost
6
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