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Business Applications Case EssayChapter 1.5. What does the statement costs tin rotter be assets or expenses mean? 6. Why are the salaries of production workers accumulated in an inventory account instead of being expensed on the income statement? 7. How do product costs affect the monetary statements? How does the classification of product cost (as an asset vs. an expense) affect net income?The following information was taken from the 2008 and 2009 Form 10-Ks for Dell, Inc.Required a. explicate whether each line of information in the table above would best be described as being primarily financial accounting or managerial accounting in nature. b. Provide some additional examples of managerial and financial accounting information that could apply to Dell. c. If you analyze only the data you identify as financial in nature, does it appear that Dells 2009 fiscal year was better or worse than its 2008 fiscal year? Explain. d. If you analyze only the data you determine as manage rial in nature, does it appear that Dells 2009 fiscal year was better or worse than its 2008 fiscal year? ExplainChapter 210. How is the relevant start out of activity related to fixed and variable cost? Give an example of how the definitions of these costs become invalid when volume is outside the relevant range. 12. When would the high-low method be appropriate for estimating variable and fixed costs? When would least-squares regression be the most desirable? 13. Which cost structure has the greater risk? Explain.Chapter 36. When would the customer be willing to pay a premium price for a product or service? What pricing strategy would be appropriate under these tidy sum? 7. What are three alternative approaches to determine the break-even point? What do the results of these approaches show? 8. What is the equation method for determining the break-even point? Explain how the results of this method differ from those of the ploughshare margin approach. Chapter 410. Why are some man ufacturing costs not directly traceable to products? 11. What is the objective of allocating indirect manufacturing overhead costs to the product?Chapter 51. Why did traditional costing systems base allocations on a single companywide cost driver? 2. Why are labor hours ineffective as a companywide allocation base in many industries today? 3. What is the difference between volume-based cost drivers and activity-based cost drivers? 4. Why do activity-based cost drivers provide more spotless allocations of overhead in an automated manufacturing environment? 5. When would it be appropriate to use volume-based cost drivers in an activity-based costing system? ATC 5-4Writing AssignmentAssessing a strategy to control timber cost Lucy Sawyer, who owns and operates Sawyer Toy Company, is a perfectionist.She believes literally in the zero-defects approach to quality control. Her favorite saying is, You cant spend too much on quality. Even so, in 2010 her company growd an embarrassing brea ch of quality that required the national recall of a defective product. She vowed never to repeat the experience and instructed her staff to spend whatever it takes to ensure that products are delivered surplus of defects in 2011. She was somewhat disappointed with the 2011 year-end quality cost report shown here.Although external disaster costs had declined, they remained much higher than expected. The increased inspections had identified defects that were corrected, thereby avoiding another recall however, the external failure costs were still too high. Ms. Sawyer responded by saying, We will have to double our efforts. She authorized hiring additional inspectors and instructed her production supervisors to become more vigilant in identifying and correcting errors. RequiredAssume that you are the chief financial officer (CFO) of Sawyer Toy Company. Ms. Sawyer has asked you to review the companys approach to quality control. Prepare a memo to her that evaluates the existing appro ach, andrecommend changes in expenditure patterns that can improve profitability as well as increase the effectiveness of the quality control system.Chapter 67. What is an opportunity cost? How does it differ from a sink cost? 8. A local bank advertises that it offers a free noninterest-bearing checking account if the depositor maintains a $500 minimum balance in the account. Is the checking account truly free?