None Apple, Inc. often creates stripped-down versions of successful products to introduce them to adeveloping market at a lower price. This is an illustration of what type of costing? And how would youdefine this type of costing? a. Total costing; cost competition b. Target costing; backward invention c.Cost breakdown analysis; backward invention

Definition of Target Costing:**Target Costing** is a pricing method used by companies to manage…

Answered: Apple, Inc. often creates stripped-down…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 16PB: Wifi Apps has these costs associated with its production and sale of devices that allow visual...

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Activity Based Costing Give your answers to the following questions; Why do product costing systems based on a single, volume based cost driver tend to overcost high volume products? What undesirable strategic effects can such distortion of product costs have? What is meant by activity analysis? Give 3 criteria for determining whether an activity adds value. What is meant by customer profitability analysis as it relates to activity based costing? Give an example of an activity that might be performed more commonly for one customer than another.
a difference in cost-plus pricing and target costing is that target costing starts with the price customers are willing to pay whereas cost-plus pricing starts with the cost. computes the desired markup while cost-plus pricing computes the maximum cost the company is willing to incur. is generally determined after introducing a product and cost-plus pricing is determined before introducing a product. is a simple approach while cost-plus pricing is relatively complex.
Target costing A target cost is 'a product cost estimate derived by subtracting the desired profit margin from a competitive market price. (CIMA, 2005). Required: The target costing is cost management techniques, and discuss the advantages of using this technique within firms.
Which of the following statements is not a characteristic of a target costing system? It is a good system to compare the cost of your products with that of your competitors Assists with ensuring that a business can achieve its desired profit levels Focuses on cost reductions after the product has been designed Focuses on the manufacturing processes to see if improvements can be made from a cost perspective.
Google uses variable costing for several business decisions. How can variable costing income be converted to absorption costing income?
Which of the following is not an application of cost-volume-profit analysis? Setting prices for products and services. Performing strategic “what-if” analyses. Deciding whether to cut a product line. Determining the short-term cost or profit implications of many decisions. Deciding whether to make or buy a given product or service.
Carizick Co manufactures gaming products. It has created a new games console called the QpBox which is about to be launched. Demand for the QpBox is anticipated to be high. The product life cycle of the QpBox is expected to be three years with 300,000 units forecast to be sold during its first year. Sales volumes are expected to decrease by 75,000 units in each subsequent year. Production volumes will be based on expected demand levels. The following costs for the QpBox have been determined: Design and development Pre-launch advertising Advertising in Year 2 Packaging Manufacturing cost $120m $0.5m $0.4m $3 per unit $80 per unit At a recent board meeting, the finance director said that Carizick Co should look to maximise the profitability of the QpBox over its life cycle. The marketing director made the comment that Carizick Co should focus on extending the maturity phase of the life cycle only as this stage is where the QpBox is most profitable. Contract with Zone Co Carizick Co has…
If a company chooses a price to charge for its product by adding up all the expenses necessary to make the product and then adding in a profit, this is known as: a) Target Costing Ob) Skimming Pricing Oc) Cost-Based Pricing Od) Odd-Even Pricing Oe) Penetration Pricing
1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based cost
Q.How might Decorative Doors, Inc., use the new cost information from its activity-based costing system to address the declining market share for interior doors?
how do cost-benefit considerations affect choices by a company about the allocation of indirect costs to products, services, or customers? A. by calssifying immaterial costs as direct costs to products, services, or customers at high cost B. by using a large number of indirect cost pools to create more heterogeneous cost pools at low cost C. by using readily availble allocation bases, even if more appropriate ones bould be developed at high cost D. by neglecting cost considerations and focusing solely on the benefits of allocation indirect costs E. all of the above
What from the upcoming options will be made when using the traditional costing method, relatively to using the ABC costing method? Pick only one answer – Underestimating the products cost with products that have low direct costs, and one-time products that are produced in small series. A tight costing connection between the cost and the factor causing it. All the answers are incorect. A higher cost for implementing and managing the accounts managing system, the general and the costing. Overestimating the products cost with products that have low direct costs, and one-time products that are produced in small series.

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