Question #1 (8 points) If a CMA is confronted by an ethical dilemma, what does the IMA Standards of Ethical Behavior for Practitioners of Management Accounting and Financial Management recommend the person do? Be specific in your response. Question #2 (15 points) Consider the following information, prepared based on a capacity of 60,000 units: Category Cost per Unit Variable manufacturing costs $12.00 Fixed manufacturing costs $3.50 Variable marketing costs $4.00 Fixed marketing costs $2.50 Capacity cannot be added and the firm currently sells the product for $25 per unit. Consider each of these scenarios independent of each other. a) The company is currently producing 60,000 units per month. A potential customer has contacted the firm and offered to purchase 10,000 units this month only. The customer is willing to pay $23 per unit. Since the potential customer approached the firm, there will be no variable marketing costs incurred. Should the company accept the special order? Why or why not? Be specific. b) The company is currently producing 45,000 units per month. A potential customer has contacted the firm and offered to purchase 10,000 units this month only. Since the potential customer approached the firm, there will be no variable marketing costs incurred. What is the minimum amount that the firm should be willing to accept for this order? c) The company is considering selling 1,000 units that are in danger of becoming obsolete. What is the minimum price it would be willing to take for the 1,000 units? Question #3 (10 points) List and describe three ways a firm can determine long-run prices. As part of your answers, be sure to describe when each method would be most appropriate and the strengths and weaknesses of each method. Question #4 (44 points) Consider the following information: Q1 Q2 Q3 Beginning inventory (units) 0 J 300 Budgeted units to be produced 3,800 4,200 4,100 Actual units produced 4,000 4,000 Q Units sold A 4,000 R Variable manufacturing costs per unit produced $125 $125 $125 Variable marketing costs per unit sold $40 $40 $40 Fixed manufacturing costs $600,000 $600,000 $600,000 Fixed marketing costs $250,000 $250,000 $250,000 Selling price per unit $400 $400 $400 Variable costing operating income B $90,000 S Absorption costing operating income C K $130,500 Variable costing beginning inventory D $12,500 T Absorption costing beginning inventory E L U Variable costing ending inventory F M $12,500 Absorption costing ending inventory G N $27,500 PVV H O V Allocated fixed manufacturing costs I P $615,000 There are no price, efficiency, or spending variances, and any production-volume variance is directly written off to cost of goods in the quarter in which it occurs. Complete the missing figures from the above Table. Q1 Q2 Q3 A J Q B K R C L S D M T E N U F O V G P H I Question #5 (15 points) a) What is the goal of the EOQ model? b) Why does a firm hold ?safety stock?? c) What costs are a firm trying to balance when it decides on how much safety stock to hold? Question #6 (8 points) What is the justification for using backflush costing? Be specific!
Paper#6198 | Written in 18-Jul-2015Price : $25