SOAL UJIAN AKHIR SEMESTER

TAHUN AJARAN 2017/2018

TANGGAL: 5 JUNI 2018

MATA KULIAH : AKUNTANSI MANAJEMEN
DOSEN: TIM DOSEN

JAWABLAH 4 DARI 6 PROBLEM BERIKUT INI!

PROBLEM 1

Ply Corp manufactures doors. Classify each of the following quality costs as prevention costs, appraisal costs,
internal failure costs, or external failure costs.

a. Retesting of reworked products

b. Downtime due to quality problems
c. Analysis of the cause of defects in production
d. Depreciation of test equipment
e. Warranty repairs
f. Lost sales arising from a reputation for poor quality
g. Quality circles
h. Rework direct manufacturing labor and overhead
i. Net cost of spoilage
j. Technical support provided to suppliers
k. Audits of the effectiveness of the quality system
l. Plant utilities in the inspection area
m. Reentering data because of keypunch errors

AACSB: Application of knowledge

PROBLEM 2

Brix, Inc., prepares frozen food for fast-food restaurants. It has two workstations, cooking and assembly. The
cooking station is limited by the cooking time of the food. Assembly is limited by the speed of the workers.
Assembly normally waits on food from cooking. Because the demand has increased in recent months to 2,800
dozen units, management is considering adding another cooking station or else having the cooks start to work
earlier. The monthly cost of operating the cooking station one more hour each day is $2,400. The cost of
adding another cooking station would add an average of $10 per hour. The current operating hours total eight
hours a day, 22 days a month. The contribution margin of the finished products is currently $8 per dozen.
Inventory carrying costs average $2.00 per dozen per month. Either the extra hour or the new cooking station
would increase production by 20 dozen a day, with a long-run increase of 80 dozen units in finished goods
inventory to 280 dozen.

Required:
a. What is the total production per month if the change is made?
b. What is the increase in the expected monthly product contribution for each of the possible changes?
Assume long-run production equals sales.

ACSB: Application of knowledge

PROBLEM 3

Olive branch Company recently acquired an olive oil processing company that has an annual capacity of
2,000,000 liters and that processed and sold 1,400,000 liters last year at a market price of $4 per liter. The
purpose of the acquisition was to furnish oil for the Cooking Division. The Cooking Division needs 800,000 liters
of oil per year. It has been purchasing oil from suppliers at the market price. Production costs at capacity of the
olive oil company, now a division, are as follows:

Direct materials per liter $1.00

Direct processing labor 0.50
Variable processing overhead 0.24
Fixed processing overhead 0.40
Total $2.14

Management is trying to decide what transfer price to use for sales from the newly acquired company to the
Cooking Division. The manager of the Olive Oil Division argues that $4, the market price, is appropriate. The
manager of the Cooking Division argues that the cost of $2.14 should be used, or perhaps a lower price, since
fixed overhead cost should be recomputed with the larger volume. Any output of the Olive Oil Division not sold
to the Cooking Division can be sold to outsiders for $4 per liter.

Required:
a. Compute the operating income for the Olive Oil Division using a transfer price of $4.

b. Compute the operating income for the Olive Oil Division using a transfer price of $2.14.

c. What transfer price(s) do you recommend? Compute the operating income for the Olive Oil Division using
your recommendation.

AACSB: Application of knowledge

PROBLEM 4

Capital Investments has three divisions. Each division's required rate of return is 15%. Planned operating
results for 2015 are as follows:

Division Operating income Investment

A $15,000,000 $100,000,000
B $25,000,000 $125,000,000
C $11,000,000 $ 50,000,000

The company is planning an expansion, which will require each division to increase its investments by
$25,000,000 and its income by $4,500,000.

Required:
a. Compute the current ROI for each division.

b. Compute the current residual income for each division.

c. Rank the divisions according to their current ROIs and residual incomes.

d. Determine the effects after adding the new project to each division's ROI and residual income.
e. Assuming the managers are evaluated on either ROI or residual income, which divisions are pleased with
the expansion and which ones are unhappy?

AACSB: Application of knowledge

PROBLEM 5

Komerica Corp is committed to its quality program. It works with all areas of the company to establish sound
quality programs within reasonable budget guidelines. For 2015, it has budgeted $1,000,000 for prevention
costs and $800,000 for appraisal costs. Internal failure has a budget of $100 per failed item, while external
failure has a total budget of $600,000.

Product Testing has proposed to management a change in the 2015 budget for a new method of testing
products. If management decides to implement the new method, $2 per unit of appraisal costs will be saved, up
to a level of 150,000 tests. No additional savings are expected past the 150,000 level. The new method
involves $95,000 in training costs and $65,000 in yearly testing supplies.

Traditionally, 5% of all completed items have to be reworked. External failure costs average $120 per failed
unit. The company's average external failures are 1% of units sold. The company carries no ending inventories.

Required:
a. What is the adjusted budget for appraisal costs, assuming the new method is implemented and 800,000
units are tested during the manufacturing process in 2015?

b. How much do internal failure costs change, assuming 500,000 units are tested under the new method and
it reduces the amount of unacceptable units in the manufacturing process by 40%?

c. What would be the change in the external failure budget, assuming external failures are reduced by 60%
and the same facts as in part (b)?

AACSB: Application of knowledge

PROBLEM 6

Following a strategy of product differentiation, Ernsting Corporation makes a high-end computer monitor, CM12.
Ernsting Corporation presents the following data for the years 20X3 and 20X4:

20X3 20X4
Units of CM12 produced and sold 5,000 5,500
Selling price $400 $440
Direct materials (pounds) 15,000 15,375
Direct materials costs per pound $40 $44
Manufacturing capacity for CM12 (units) 10,000 10,000
Conversion costs $1,000,000 $1,100,000
Conversion costs per unit of capacity $100 $110
Selling and customer-service capacity (customers) 60 58
Total selling and customer-service costs $360,000 $362,500
Selling and customer-service capacity cost per customer $6,000 $6,250

Ernsting Corporation produces no defective units but it wants to reduce direct materials usage per unit of CM12
in 20X4. Manufacturing conversion costs in each year depend on production capacity defined in terms of CM12
units that can be produced. Selling and customer-service costs depend on the number of customers that the
customer and service functions are designed to support. Ernsting Corporation has 46 customers in 20X3 and 50
customers in 20X4. The industry market size for high-end computer monitors increased 5% from 20X3 to 20X4.

Required:
a. What is the revenue effect of the growth component?
b. What is the cost effect of the growth component?
c. What is the net effect on operating income as a result of the growth component?

AACSB: Application of knowledge