FUNDAMENTALS OF...(LL)-W/ACCESS>IP<
6th Edition
ISBN: 9781265724412
Author: LANEN
Publisher: MCG
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Textbook Question
Chapter 11, Problem 12CADQ
If cost allocations arc arbitrary and potentially misleading, why do companies, including successful ones, continue to allocate costs?
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Students have asked these similar questions
"Simplification of all costs into only fixed and variable costs distorts the actual cost behavior pattern of a firm. Yet businesses rely on this method of cost classification." Comment
Which of the following costs are irrelevant to business decisions?
Avoidable costs
Costs that differ between alternatives
Sunk costs
Variable costs
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
Chapter 11 Solutions
FUNDAMENTALS OF...(LL)-W/ACCESS>IP<
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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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Why would management be concerned about the accuracy of product costs?arrow_forwardWhy do companies allocate costs? What are some of the advantages and disadvantages to doing so?arrow_forwardWhat is the danger in allocating common fixed costs among product lines or other segmentsof an organization?arrow_forward
- Why do managers consider direct costs to be more accurate than indirect costs?arrow_forwardWhich of the following costs are irrelevant to business decisions? a. Avoidable costs b. Costs that differ between alternatives c. Sunk costs d. Variable costsarrow_forwardManagers often assume a strictly linear relationship between cost and volume. How can thispractice be defended in light of the fact that many costs are curvilinear?arrow_forward
- In Classification Of Cost (Marginal costs) What Is A Business Situational Example of the ff: Marginal costs Differential/Incremental costs Opportunity costs Relevant cost Replacement cost Shutdown cost Capacity cost Sunk costarrow_forwardChallenges with how direct costs are distributed to cost objects in different companies can give rise to skewed competition. choose an alternative True Falsearrow_forwardIf 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?arrow_forward
- Managers often assume a strictly linear relationship between cost and the level of activity.How can this practice be defended in light of the fact that many costs are curvilinear?arrow_forwardWhy do managers consider Direct Coasts to be more accurate than Indirect Costs? How do managers decide whether a cost is a Variable or a Fixed cost? or other important and useful issues/information.arrow_forwardThe contribution margin approach helps managers in short-term decision making because it A. reports costs and revenues at present value B. reports only mixed costs C. treats fixed manufacturing overhead as product costs D. isolates costs by behaviorarrow_forward
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