[4]Product costing provides useful decision-making information in relation to all of thefollowing alternatives, but one. Which one?a) Non-manufacturing firmsbị Management planning, cost control, and performance evaluationc) Financial reportingdj Developing awareness about the company environmental impacts[5]The main distinction between job costing and process costing is:a) The difference in the level of detail required by each systemb) The use made of the costing informationc) An accounting differencedj The cost object on which costs are accumulated[6]In its first month of operations, Margherita Ltd produced 100,000 units. 90,000 unitswere sold. The manufacturing cost per unit was as follows:Direct materials costDirect labour costVariable fixed overhead costFixed overhead costTotal per unit cost£40£20£30£50£140Margherita Ltd's operating income under absorption costing is:a) Lower than variable costing by £500,000b) Higher than variable costing by £600,000c) Higher than variable costing by £500,000d) The same as under variable costingFrom the industries listed below, which one is most likely to use process costing toaccount for production costs?[7]a) Printing shopb) Accounting firmc) Electrical contractord) Steel mill

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[4] Product costing provides useful decision-making information in relation to all of the following alternatives, but one. Which one? a) Non-manufacturing firms bị Management planning, cost control, and performance evaluation c) Financial reporting di Developing awareness about the company environmental impacts

[4] Product costing provides useful decision-making information in relation to all of the following alternatives, but one. Which one? a) Non-manufacturing firms bị Management planning, cost control, and performance evaluation c) Financial reporting di Developing awareness about the company environmental impacts

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter1: Introduction To Managerial Accounting

Section: Chapter Questions

Problem 5E: From the choices presented in parentheses, choose the appropriate term for completing each of the...

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From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: a. A product, sales territory, department, or activity to which costs are traced is called a (direct cost, cost object). b. Advertising costs are usually viewed as (period, product) costs. c. Factory overhead costs combined with direct labor costs are called (prime, conversion) costs. d. Feedback is often used to (improve, direct) operations. e. A sacrifice made to obtain some benefit is a (cost, expense). f. The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory). g. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs.
Which is not a step In activity-based costing? A. identify the activities performed by the organization B. identify the cost driver(s) associated with each activity C. compute a cost rate per production D. assign costs to products by multiplying the cost driver rate by the volume of the cost driver units consumed by the product
Activity-based management includes both process value analysis and activity-based costing. Which of the following features is primarily associated with process value analysis? a. Defining root causes of each activity b. Identifying cost objects and activity drivers c. Calculating activity rate d. Assigning costs to cost objects
Which of the following is a reason a company would implement activity-based costing? A. The cost of record keeping is high. B. The additional data obtained through traditional allocation are not worth the cost. C. They want to improve the data on which decisions are made. D. A company only has one cost driver.
The second stage of customer-based activity-based costing entails the assignment of: a. resource costs to sales departments. b. resources costs to distribution channels. c. customer-related activity costs to products. d. customer-related activity costs to customers.
Which is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B. identify non-value-added costs C. analyze the effect on manufacturing overhead D. identify the correlation between the potential driver and manufacturing overhead
Which is not a task typically associated with ABC systems? A. calculating the overhead application rate for each cost pool B. applying a single cost rate C. identifying a cost driver D. more correctly allocating overhead costs
When might activity-based costing be preferred over using a relative amount of product sales in allocating selling and administrative expenses to products?
Which of the following product situations is better suited to job order costing than to process costing? A. Each product batch is exactly the same as the prior batch. B. The costs are easily traced to a specific product. C. Costs are accumulated by department. D. The value of work in process is based on assigning standard costs.
Can a company gather information for both variable and absorption costing systems?
The following items are associated with a traditional cost accounting information system, an activity-based cost accounting information system, or both (that is, some elements are common to the two systems): a. Usage of direct materials b. Direct materials cost assigned to products using direct tracing c. Direct labor cost incurrence d. Direct labor cost assigned to products using direct tracing e. Setup cost incurrence f. Setup cost assigned using number of setups as the activity driver g. Setup cost assigned using direct labor hours as the activity driver h. Cost accounting personnel i. Submission of a bid, using product cost plus 25 percent j. Purchasing cost incurrence k. Purchasing cost assigned to products using direct labor hours as the activity driver l. Purchasing cost assigned to products using number of orders as the activity driver m. Materials handling cost incurrence n. Materials handling cost assigned using the number of moves as the activity driver o. Materials handling cost assigned using direct labor hours as the activity driver p. Computer q. Costing out of products r. Decision to continue making a part rather than buying it s. Printer t. Customer service cost incurred u. Customer service cost assigned to products using number of complaints as the activity driver v. Report detailing individual product costs w. Commission cost x. Commission cost assigned to products using units sold as the activity driver y. Plant depreciation z. Plant depreciation assigned to products using direct labor hours Required: 1. For each cost system, classify the relevant items into one of the following categories: a. Interrelated parts b. Processes c. Objectives d. Inputs e. Outputs f. User actions 2. Explain the choices that differ between the two systems. Which system will provide the best support for the user actions? Explain. 3. Draw an operational model that illustrates each cost accounting systemwith the items that belong to the system used as examples for each component of the model. 4. Based on the operational models, comment on the relative costs and benefits of the two systems. Which system should be chosen?
What are the two main things that an activity-based costing system attempts to accomplish relative to direct and indirect costs?