36. In contrast to the total product and variable cost concepts used in setting seller's prices, the target cost approach assumes that: a. a markup is added to total cost b. selling price is set by the marketplace c. a markup is added to variable cost d. a markup is added to product cost
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
____ 36. In contrast to the total product and variable cost concepts used in setting seller's prices, the target cost approach assumes that:
|
a. |
a markup is added to total cost |
|
b. |
selling price is set by the marketplace |
|
c. |
a markup is added to variable cost |
|
d. |
a markup is added to product cost |
____ 37. The profit margin for Division E is 28% and the investment turnover is 2.8. What is the rate of
|
a. |
20% |
|
b. |
28% |
|
c. |
14% |
|
d. |
78.4% |
____ 38. If variable costs per unit decreased because of a decrease in utility rates, the break-even point would:
|
a. |
decrease |
|
b. |
increase |
|
c. |
remain the same |
|
d. |
increase or decrease, depending upon the percentage increase in utility rates |
____ 39. Nevitt Corp.’s static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, utilities of $5,000, and supervisor salaries of $15,000. A flexible budget for 12,000 units of production would show:
|
a. |
the same cost structure in total |
|
b. |
direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $18,000 |
|
c. |
total variable costs of $136,800 |
|
d. |
direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $15,000 |
____ 40. Which types of inventories does a manufacturing business report on its balance sheet?
|
a. |
Finished goods inventory and work in process inventory |
|
b. |
Direct materials inventory and work in process inventory |
|
c. |
Direct materials inventory, work in process inventory, and finished goods inventory |
|
d. |
Direct materials inventory and finished goods inventory |
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