he following sentences relate to achieving the financial goal of cost minimization. Which of the following statements is FALSE? a. Prioritizing which costs to incur relates to the operating decisions of the firm only. b. Savings is the end product of this financial goal. c. There is a need to determine cost. d. Controling costs involves addressing unfavorable cost variances.

he following sentences relate to achieving the financial goal of cost minimization. Which of the following statements is FALSE? a. Prioritizing which costs to incur relates to the operating decisions of the firm only. b. Savings is the end product of this financial goal. c. There is a need to determine cost. d. Controling costs involves addressing unfavorable cost variances.

Managerial Accounting

15th Edition

ISBN:9781337912020

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

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

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 7DQ: Discuss how financial data prepared on the basis of variable costing can assist management in the...

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Discuss how financial data prepared on the basis of variable costing can assist management in the development of short-run pricing policies.
When making decisions, managers should consider a. revenues that differ between alternatives. b. costs that do not differ between alternatives. c. only variable costs. d. sunk costs in their decisions.
What of the following is NOT a Benefit of Activity Based Management? a.It assists in the budgeting process. b.It aids management in cost cutting and/or cost control and inferentially in product profitability. c.It causes managers to identify non-value added activities and therefore encourages thinking of means of reducing such activities. d.Is more complex than traditional accounting system because it uses multiple cost application rates, one for each activity or cost pool.
Which of the following is not a method used by managers to determine cost behavior? High-low Method Scatterplot Account analysis Regression Analysis Derivation
If the organization operates at an activity level outside the relevant range, any cost predictions based on data from the relevant range may not be very accurate. True or False?
Wrong allocation of common costs lead to A. Inaccurate estimation of cost of products or services B. Under utilization of capacity C. Lower profit margin D. All of the above are correct
When absorption costing is used a. management may be tempted to overproduce in a given period in order to decrease net income. b. for external reporting, variable costing can still be used for internal reporting purposes. c. it facilitates cost-volume-profit analysis. d. and production exceeds sales, absorption costing reports a lower net income than variable costing.
Management may be tempted to overproducea. when using variable costing, in order to increase net income.b. when using variable costing, in order to decrease net income.c. when using absorption costing, in order to increase net income.d. when using absorption costing, in order to decrease net income.
Which of the following is false regarding activity-based costing (ABC)? a. Companies that have a high potential for cost distortions are more likely to benefit from ABC b. Opportunities for continuous improvement are rarely revealed by using ABC. c. The cost of implementing ABC may outweigh the benefits d. Increased accuracy with budgeting resources is often realized
Which of the following is a limitation of the gross profit variance analysis? a. The level of efficiency of asset management department can be computed and shown b. It includes the amount invested in working capital c. Measurement of the impact on gross profit due changes in sales volume cannot be determined d. The gross profit variance analysis is limited only on the product attributable cost
3A Choose the correct answer. A. Standard Costing Involve the a) Fixation of estimated cost b) Determination of standard cost c) Setting of budgeting cost B. The difference between actual Cost and standard cost is known as: a) Variance b) Profit c) Differential Cost C. Standard Costing helps in : a)Measuring efficiency b)Reducing loss c)Controlling cost D. Standard costing cannot be used: a) Where item are more than one b) Where management is inefficient c) Worker are slow d) Where nonstandard products are manufactured E. Basic Standard is established for a: a) Short period b) Current Period c) Indefinite Period
Complete the following statements with one of the terms listed here: You may use a term more than once and some terms may not be used at all. Differential Costs Irrelevant Costs Controllable Costs Marginal Costs Fixed Costs Average Cost Uncontrollable Costs Sunk Costs Variable Costs 1. For decision-making purposes, costs that do not differ between alternatives are 2. Costs that have already been incurred are called 3. Managers cannot influence .........in the short run. 4. Total stay constant over a wide range of production volumes. 5. The. action. is the difference in cost between two alternative courses of 6. The product's is the cost of making one more unit. Total costs decrease when production volume decreases. 7. A product's and ............ not the product's should be used to forecast total costs at different production volumes.