Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Chapter 11, Problem 15CADQ
To determine
Explain whether the costs in the case are direct or indirect.
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Students have asked these similar questions
Activity-based costing (ABC) is a costing technique that uses a two-stage allocation process. Which of the following statements best describes these two stages?
Multiple Choice
Direct costs are allocated to the production departments based on a predetermined overhead rate.
The costs are assigned to departments, and then to the products based upon their use of activity resources.
The costs are assigned to activities, and then to the products based upon their use of the activities.
Indirect costs are assigned to activities, and then to the products based upon the direct cost resources used by the activities.
Activity-based costing can be beneficial in allocating selling and
administrative expenses to various products for managerial
decision making. Which of the following would be the best
allocation base for help desk costs?
a. number of sales employees
Ob. number of products sold
c. number of calls
Od. square footage of the help desk office
Support department costs are applied to products as a part of
a.fixed manufacturing costs
b.fixed selling and administrative expenses
c.variable cost of goods sold
d.overhead
Chapter 11 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 11 - Why do companies allocate costs? What are some of...Ch. 11 - What are the three methods of allocating service...Ch. 11 - What are the similarities and differences among...Ch. 11 - What criterion should be used to determine the...Ch. 11 - What is a limitation of the direct method of...Ch. 11 - What is a limitation of the step method of...Ch. 11 - Prob. 7RQCh. 11 - Why would a number of accountants express a...Ch. 11 - Prob. 9RQCh. 11 - What is the basic difference between the...
Ch. 11 - Prob. 11RQCh. 11 - If cost allocations arc arbitrary and potentially...Ch. 11 - Prob. 13CADQCh. 11 - Prob. 14CADQCh. 11 - Prob. 15CADQCh. 11 - Prob. 16CADQCh. 11 - Prob. 17CADQCh. 11 - Prob. 18CADQCh. 11 - What are some of the factors that a company needs...Ch. 11 - Prob. 20CADQCh. 11 - Prob. 21CADQCh. 11 - Prob. 22CADQCh. 11 - How is joint cost allocation like service...Ch. 11 - Prob. 24CADQCh. 11 - In what ways is joint cost allocation similar to...Ch. 11 - Why Are Costs Allocated?Ethical Issues You are the...Ch. 11 - Cost Allocation: Direct Method Caro Manufacturing...Ch. 11 - Allocating Service Department Costs First to...Ch. 11 - Cost Allwat ion: Direct Method University Printers...Ch. 11 - Prob. 30ECh. 11 - Cost Allocation: Step Method
Refer to the data for...Ch. 11 - Cost Allocation: Reciprocal Method
Refer to the...Ch. 11 - Cost Allocation: Reciprocal Method, Two Service...Ch. 11 - Cost Allocation: Reciprocal Method
Refer to the...Ch. 11 - Prob. 35ECh. 11 - Prob. 36ECh. 11 - Prob. 37ECh. 11 - Prob. 38ECh. 11 - Prob. 39ECh. 11 - Prob. 40ECh. 11 - Net Realizable Value Method: Multiple Choice
Oak...Ch. 11 - Sell or Process Further: Multiple Choice
Refer to...Ch. 11 - Net Realizable Value Method Euclid Corporation...Ch. 11 - Estimated Net Realizable Value Method Blasto,...Ch. 11 - Net Realizable Value Method to Solve for Unknowns...Ch. 11 - Net Realizable Value Method Bixel Components...Ch. 11 - Net Realizable Value Method with By-Products...Ch. 11 - Net Realizable Value Method Deming Sons...Ch. 11 - Physical Quantities Method
Refer to the facts in...Ch. 11 - Sell or Process Further
Refer to the facts in...Ch. 11 - Physical Quantities Method The following questions...Ch. 11 - Physical Quantities Method; Sell or Process...Ch. 11 - Physical Quantities Method with By-Product...Ch. 11 - Step Method with Three Service Departments Model,...Ch. 11 - Comparison of Allocation Methods BluStar Company...Ch. 11 - Solve for Unknowns: Direct Method Franks Foods has...Ch. 11 - Solve for Unknowns: Step Method RT Renovations is...Ch. 11 - Cost Allocation: Step Method with Analysis and...Ch. 11 - Prob. 59PCh. 11 - Prob. 60PCh. 11 - Direct, Step, and Reciprocal Methods:...Ch. 11 - Cost Allocation: Step and Reciprocal Methods...Ch. 11 - Allocate Service Department Costs: Direct and Step...Ch. 11 - Prob. 64PCh. 11 - Prob. 65PCh. 11 - Prob. 66PCh. 11 - Prob. 67PCh. 11 - Prob. 68PCh. 11 - Fletcher Fabrication, Inc., produces three...Ch. 11 - Findina Missing Data: Net Realizable Value Spartan...Ch. 11 - Finding Missing Data: Net Realizable Value Blaine,...Ch. 11 - Joint Costing in a Process Costing Context:...Ch. 11 - Find Maximum Input Price: Estimated Net Realizable...Ch. 11 - Effect of By-Product versus Joint Cost Accounting...Ch. 11 - Prob. 75PCh. 11 - Prob. 76P
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- 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.arrow_forwardWhat are the two most frequently used methods of distributing service department costs to production departments?arrow_forwardFor each cost pool, identify an appropriate cost driver. A. order department B. accounts receivable processing C. catering D. raw material inventoryarrow_forward
- 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 productarrow_forwardLean manufacturing uses value streams to produce a family of products that require the same manufacturing sequence. Value-stream costing is an approach often used to determine the unit product costs in a lean manufacturing environment. Which of the following best describes how unit costs are calculated using value-stream costing? a. Value stream costs divided by units shipped b. Value stream costs divided by units produced c. (Total prime costs + overhead costs assigned to the value stream using a plantwide rate) divided by units produced d. Activity-based costing assignments within the value streamarrow_forwardClassify the following cost drivers as structural, executional, or operational. a. Number of plants b. Number of moves c. Degree of employee involvement d. Capacity utilization e. Number of product lines f. Number of distribution channels g. Engineering hours h. Direct labor hours i. Scope j. Product configuration k. Quality management approach l. Number of receiving orders m. Number of defective units n. Employee experience o. Types of process technologies p. Number of purchase orders q. Type and efficiency of layout r. Scale s. Number of functional departments t. Number of planning meetingsarrow_forward
- Activity-based costing is preferable in a system: when multiple products have similar product volumes and costs with a large direct labor cost as a percentage of the total product cost with multiple, diverse products where management needs to support an increase in sales pricearrow_forwardFrenchys has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: What is the predetermined overhead rate for each activity?arrow_forwardDuring production, how are the costs in process costing accumulated? A. to cost of goods sold B. to each individual product C. to manufacturing overhead D. to each individual departmentarrow_forward
- Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation.arrow_forwardCompanies that produce a variety of products need a costing system that allocates costs based on the varying resource demands of each product. Activity-based costing systems identify activities as the cost objects. An activity-based system (ABC) identifies activities as fundamental cost objects. Costs are then assigned to the activities and allocated to the individual products. Unlike simple systems, ABC systems calculate costs of individual activities to cost products. What is activity-based management and how can it be used to improve the profitability of a company. In this discussion, be sure to compare and contrast your understanding of activity-based costing. Identify a simple product and explain the different cost drivers used in making that product.arrow_forwardAI Rawabi company consist of two support departments (Administration and R& D) and two operating departments (Manufacturing & Assembling). The cost of Administration department is allocated based on number of employees and the cost of R& D department is allocated based on research hours. The table below shows the cost details. Allocate the cost of the support departments to the operating departments using step-down method. How much is the Assembling department total cost after cost allocation: Support Departments Operating Departments R&D Manufacturing Assembling Total Cost Admin Cost: Salaries 30000 60000 44000 70000 204000 Supplies 10000 30000 25000 30000 95000 Total 40000 90000 69000 100000 299000 Allocation Base: Research Hours 200 300 450 250 Number of Employees 7 10 9 13 Select one: O a. RO 155775 O b. RO 162090.3 O c. RO 143225 O d. 136909.7arrow_forward
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What is Cost Allocation? Definition & Process; Author: FloQast;https://www.youtube.com/watch?v=hLhvvHvZ3JM;License: Standard Youtube License