Assessment item 3;Assignment 3;Value: 60%;Due date: 13-Oct-2014;Return date: 03-Nov-2014;Submission method options;Alternative submission method;Task;Please note this assignment consists mainly of questions from Horngren, C.T.,...
Assessment item 3;Assignment 3;Value: 60%;Due date: 13-Oct-2014;Return date: 03-Nov-2014;Submission method options;Alternative submission method;Task;Please note this assignment consists mainly of questions from Horngren, C.T., Sundem, G.L., Stratton, W.O. Burgstahler, D., & Shatzberg, J. Introduction to management accounting, (16th edition 2014), however it also has a question from another text by Horngren. Horngren, C. T., Harrison, W. T. & Oliver M.S., (2012). Internal control and cash. Accounting (9th ed.,) Prentice Hall, which is available via Interact as Reading 5.;You are required to complete all questions, in the same sequence as listed below, and submit all necessary workings. Follow the assignment requirements (refer below to the Requirements section) very closely.;Content assessed;Topic 5, 6, 7, 8, 9, and 10.;Question 1;E7-15 E-commerce Control Procedures;Source: Horngren, C. T., Harrison, W. T. & Oliver M.S., (2012). Internal control and cash. Accounting (9th ed., pp. 386 of Reading 5). Prentice Hall. See Reading 5 in the learning materials within Interact.;The following situations suggest a strength or a weakness in e-commerce internal controls.;a. Netproducts sells merchandise over the Internet. Customers input their credit card information for payment.;b. Netproducts maintains employee information on the company intranet. Employees can retrieve information about annual leave, payroll deposits, and benefits, from any computer using their login information.;c. Netproducts maintains trend information about its customers, products, and pricing on the company?s intranet.;d. Tax identification numbers for all vendors are maintained in Netproduct?s database.;Requirement;1. Identify the control that will best protect the company.;;Question 2;E7-18 Preparing a bank reconciliation, D.J. Harrison;Source: Horngren, C. T., & Harrison, W. T. (2012). Internal control and cash. Accounting (9th ed., pp. 387-388 of Reading 5). Prentice Hall. See Reading 5 in the learning materials within Interact.;D.J. Harrison?s checkbook lists the following;Date;Check No.;Item;Check;Deposit;Balance;Nov 1;$ 540;4;622;Java Joe?s;$ 15;525;9;Dividends received;$ 130;655;13;623;Skip?s Market;55;600;14;624;Fill-N-Go;75;525;18;625;Cash;60;465;26;626;Fernwood Golf Course;85;380;28;627;Upstate Realty, Co.;265;115;30;Paycheck;1,210;1,325;Harrison?s November bank statement shows the following;Balance;$ 540;Deposits;130;Debit checks;No;Amount;622;$ 15;623;55;624;115*;625;60;(245);Other charges;Printed checks;$ 35;Service charge;20;(55);Balance;$ 370;*This is the correct amount shown for Check No. 624;Requirements;1. Prepare Harrison?s bank reconciliation as at November 30, 2012.;2. How much cash does Harrison actually have on November 30, 2012?;Answer all parts. Solve using a spreadsheet. Include the normal view and formula view and include an IF function to check balances.;Question 3;1-2 (illustrate your explanation with examples), 1-16, 1-22 (illustrate your explanation with examples), 2-5, 2-9 (illustrate your explanation with examples).;Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., pp. 44, 45 & 85). Pearson.;1-2. ?The emphases of financial accounting and management accounting differ.? Explain;1-16. Name the six primary business functions (excluding support functions) that make up the value chain, and briefly describe each.;1-22. ?The problem with accounting is that accountants never get to become top managers such as CEOs.? Do you agree? Explain. Illustrate your explanation with examples.;2-5. ?It is confusing to think of fixed costs on a per-unit basis.? Do you agree? Why or why not?;2-9. ?Classification of costs into variable and fixed categories depends on the decision situation.? Explain. Illustrate your explanation with examples.;Question 4;1-48 Ethical Issues;Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., p. 49). Pearson.;Suppose you are controller of a medium-sized oil exploration company in western Texas. You adhere to the standards for ethical conduct for management accountants. How would those standards affect your behaviour in each of the following situations?;1. Late one Friday afternoon you receive a geologist?s report on a newly purchased property. It indicates a much higher probability of oil than had previously been expected. You are the only one to read the report that day. At a party on Saturday night, a friend asks about the prospects for the property.;2. An oil industry stock analyst invites you and your wife to spend a week in Tahiti free of charge. All she wants in return is to be the first to know about any financial information your company is about to announce to the public.;3. It is time to make a forecast of the company?s annual earnings. You know that some additional losses will be recognized before the company prepares its final statements. The company?s president has asked you to ignore these losses in making your predictions because a lower-than-expected earnings forecast could adversely affect the chances of obtaining a loan that is being negotiated and that will be completed before actual earnings are announced.;4. You do not know whether a particular expense is deductible for income tax purposes. You are debating whether to research the tax laws or simply assume the item is deductible. After all, if you are not audited, no one will ever know the difference. If you are audited, you can plead ignorance of the law.;;Question 5;2-48 Super Valu Grocery Chain, Variable and Fixed Costing;Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., p. 91). Pearson.;Maintaining a clean shopping environment is a key success factor for Super Valu, a large grocery chain based in Minnesota. Three of the most costly resources to clean a supermarket are labor, equipment, and cleaning supplies. The cost driver of these resources is ?number of times cleaned.? Wages for cleaning laborers (called porters) and rent for cleaning equipment are all the same regardless of the number of times the supermarket is cleaned. Supplies used for each regular daily cleaning and for each special cleaning are about the same.;A typical store has about 48,000 square feet. Regular cleaning is performed each day from midnight until 7.00 AM. Special cleaning of floors and fixtures is performed in the various departments as needed. Special cleaning varies from 10 to 30 times a month depending on the amount of traffic through the store. Thus, the number of times a store is cleaned varies from 40 to 60 times a month.;Suppose that in one of Super Valu?s stores in Minnesota, cleaning was performed 60 times during March. For the month, the cost of labor and rent on equipment was $21,000 and the cleaning supplies used cost $12,000. The sales budget for the next quarter (April through June) and better weather conditions indicate that the store will need to be cleaned 50, 46, and 35 times in April, May and June respectively.;1. Prepare a table that shows how labor cost, rent, cleaning supplies, total cost, and total cost per cleaning changes in response to the number of times the store is cleaned. Show costs for 35, 40, 45, 50, 55, and 60 cleanings. What is the predicted total cost of cleaning the Minnesota store for the next quarter?;2. Prepare a single graph that can be used to predict the fixed, variable, and total cleaning cost of the Super Valu store.;3. Suppose the manager of the Super Valu store can fire an outside cleaning company to clean the store as needed. The charge rate is $720 per cleaning. If the outside cleaning company is hired, Super Valu can lay off the workers who are now cleaning the store, eliminate the need for equipment rent, and stop purchasing cleaning supplies. Will Super Valu save money with the outside cleaning company over the next quarter? Prepare a schedule that supports your answer.;Solve using a spreadsheet. Question 2 includes preparing a spreadsheet graph. Search online for examples and also see the spreadsheet examples in the Spreadsheet Advice section in Interact and the study modules on this topic.;Solve using a spreadsheet. Section 2 includes preparing a spreadsheet graph. Search online for examples and also see the spreadsheet examples in the Spreadsheet Advice section in Interact and the study modules on this topic.;Question 6;5-7, 5-12.;Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., p. 227). Pearson.;5-7. What is the advantage of the contribution approach as compared with the absorption approach?;5-12. ?Basing pricing on only the variable costs of a job results in suicidal underpricing.? Do you agree? Why?;;Question 7;5-31 Straightfoward Absorption Statement, 5-32 Straightforward Contribution Income Statement;Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., p. 228). Pearson.;5-31. The Kerwin Company had the following data (in thousands) for a given period;Sales;$ 780;Direct Materials;180;Direct labor;230;Indirect manufacturing costs;210;Selling and administrative expenses;130;There were no beginning or ending inventories. Compute the (1) manufacturing costs of goods sold, (2) gross profit, (3) operating income, and (4) conversion costs (total manufacturing costs less material costs).;Solve using a spreadsheet. Include the normal view and formula view.;5-32. Masa Ltd., had the following data (in millions of yen) for a given period;Sales;? 990;Direct Materials;250;Direct labo
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