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Table of Contents
                            Chapter 10
	Jan
		January
	Cash outflows
	Cash outflows
	Gross margin
		With
			Bell
                        
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Atkinson, Solutions Manual t/a Management Accounting, 6E

materials purchasing, labor hiring and training, and administrative and
discretionary spending plans.

10-7 You should not jump to the conclusion that the university’s hiring and training
plan is likely to be more important because it hires skilled rather than unskilled
labor. A number of factors determine the importance of a labor hiring and
training plan in any organization. However, the two most important are likely
the amount of employee turnover that requires replacement and the amount of
ongoing retraining that the organization must provide. If the university has
reached relatively stable employment, the labor hiring and training plan would
be relatively unimportant since university faculty members are expected to
attend to their own training. If the municipality is continuously hiring new
employees or retraining existing employees to use equipment, it will have a
continuous need for a hiring and training plan.

10-8 The sales plan is based on the demand forecast. The numbers in the demand
forecast must not be less than the numbers in the sales plan. Otherwise the sales
plan is infeasible because it calls for selling more than customers will buy.

10-9 A demand forecast is an estimate of the number of units that customers would
be willing to buy under specified conditions. The intended sales in the sales
plan, a crucial component of the master budget process, cannot exceed the
numbers in the demand forecast. Thus, the demand forecast is used to develop
the sales plan.

10-10 Yes. Employee training does not have a physical relationship with the
organization’s activity level. (However, employee training should enhance
performance potential, supporting achievement of an organization’s strategy.)

10-11 A capital spending plan summarizes an organization’s plans to acquire or sell
long-term capital investments, such as buildings and equipment, that are needed
to meet the organization’s objectives.

10-12 A capacity-related expenditure is any expenditure that an organization cannot
avoid in the short-run. A payment on a long-term lease is a capacity-related
expenditure.

10-13 This is a tricky question. If the cafeteria is committed to preparing a given
amount of food for each student in the residence, whether the student shows up
for meals or not, the food cost is a capacity-related (fixed) cost. However, if the
cafeteria only prepares enough food for students who, on average, actually
show up to eat, the food cost is a variable cost.

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