Each incorrect answer cancels out each correcr one. Indicate which of the following statements are true(T) or false (F).Indirect costs are those factors whose increase or decrease is not related to changes in the activity, so that in the shortterm they must be considered fixed.Cost Accounting studies the resources or productive factors applied to production, soit requires data expressed in physical units (hours, Kilograms, liters etc...) in addition to their monetary value.The fuelconsumed by commercial venicles must be assigned as indirect manufacturing cost. This is because it is not possible todo it directly. The warehousing costs refer to the set of activities related to the management of purchases andwarehouses, and do not include the acquisition value of this materials.When 50.000 units are produced, the fixed cost is$10 per unit. Therefore, when 100.000 units are produced fixed costs will remain at $10 per unit.The budgeted allocationrate is calculated by dividing the annual budget for indirect costs by the allocation base expected for the year. At break-even point, contribution margin is equal to the fixed costs, which leads to a zero operating income.

1. Indirect costs are those factors whose increase or decrease is not related to changes in the…

Answered: Each incorrect answer cancels out each…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 1P: The cost behavior patterns below are lettered A through H. The vertical axes of the graphs represent...

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Similar questions

In the cost equation Y=a+bx, Y represents which of the following? A. fixed costs B. variable costs C. total costs D. units of production
For which cost concept used in applying (he cost-plus, approach to product pricing are fixed manufacturing costs, fixed selling and administrative expenses, and desired profit allowed for in determining the markup? A. Total cost B. Product cost C. Variable cost D. Standard cost
The cost behavior patterns below are lettered A through H. The vertical axes of the graphs represent total dollars of expense, and the horizontal axes represent production in units, machine hours, or direct labor hours. In each case, the zero point is at the intersection of the two axes. Each graph may be used no more than once. Required: Select the graph that matches the lettered cost described here. a. Depreciation of equipmentthe amount of depreciation charged is computed based on the number of machine hours that the equipment was operated. b. Electricity billflat fixed charge, plus a variable cost after a certain number of kilowatt hours are used. c. City water billcomputed as follows: d. Depreciation of equipmentthe amount is computed by the straight-line method. e. Rent on a factory building donated by the citythe agreement calls for a fixed fee payment, unless 200,000 labor hours are worked, in which case no rent need be paid. f. Salaries of repair workersone repair worker is needed for every 1,000 machine hours or less (i.e., 0 to 1,000 hours requires one repair worker, 1,001 to 2,000 hours requires two repair workers, etc.).
Using the costs listed in the previous problem, classify the costs as either product costs or period costs.
What is the primary difference between the two cost accounting systems regarding the accumulation of costs and the calculation of unit costs?
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
In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?
In what way do the cost of production summaries in Chapter 6, prepared using the weighted average cost method, differ from the cost of production summaries presented in Chapter 5? What is the reason for this difference?
The term relevant range in cost accounting means the range over whicha. Cost may fluctuate.b. Cost relationships are valid.c. Production may vary.d. Relevant costs are incurred.
Which of the following statements is true? Select one: O a. The most complex of the cost estimation methods is the high-low method. O b. Engineering approach approximates cost function by classifying each account as either variable or fixed based on the analyst's knowledge of how the account behaves. C The high-low method of deriving an estimated cost line uses all the data points available. O d. In approximating the cost function, the account analysis classifies costs based upon an industrial engineer's evaluation of production methods, and material, labor, and overhead requirements. O e. The high-low method is used to derive an estimated line of cost behavior by graphically connecting the two cost amounts identified with the highest and lowest volume levels.
Which of the following statements is true? (You may select more than one answer.)a. A common cost is one type of direct cost.b. A sunk cost is usually a differential cost.c. Opportunity costs are not usually recorded in the accounts of an organization.d. A particular cost may be direct or indirect depending on the cost object.
В. Explain the following: Product costs and Period costs and one example of each. Distinguish clearly between Financial Accounting and Management Accounting under 3 (THREE) different factors, which are: i. Stakeholders, ii. Time frame and iii. Regulations. С. Before calculating costs we need to understand how different costs behave. In cost accounting we typically classify costs by three types of behaviour: Fixed costs - costs which don't change as the activity level changes Variable costs - costs which change in direct proportion to changes in the activity level Semi-variable costs- costs which have both fixed and variable elements. Explain the purpose classifying costs into the behavior patterns. D.

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