Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 11, Problem 2E
To determine
Identify the each of the items as fixed cost, variable, or mixed cost.
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Q3
Which of the following is a limitation of activity-based costing?
Costs are accumulated by each major activity
All costs in an activity cost pool pertain to a single activity
Activity-based costing relies on the assumption that the cost in each cost pool is strictly proportional to its cost measure
A variety of activity measures are used
Question 2
Managers must classify all costs as either product costs or period costs to:
Measure operating income for an accounting period.
Predict future costs at an expected level of activity.
O Assign costs to operating segments.
Choose between alternative courses of action.
Q.1.2
The direct method as used by Ultimate Manufacturers is one method that can be
used to re-assign service department cost.
Discuss two other methods that can be used to re-assign service department
overheads.
Chapter 11 Solutions
Survey Of Accounting
Ch. 11 - 1.Define fixed cost and variable cost and give an...Ch. 11 - Prob. 2QCh. 11 - 3.Define the term operating leverage and explain...Ch. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - 6.If volume is increasing, would a company benefit...Ch. 11 - Explain the risk and rewards to a company that...Ch. 11 - 9.Are companies with predominately fixed cost...Ch. 11 - 10.How is the relevant range of activity related...Ch. 11 - Which cost structure has the greater risk?...
Ch. 11 - 14.The president of Bright Corporation tells you...Ch. 11 - Prob. 12QCh. 11 - Prob. 13QCh. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Exercise 2-4A Determining total variable cost The...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prepare an income statement using the contribution...Ch. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Problem 2-19A Context-sensitive nature of cost...Ch. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Prob. 27PCh. 11 - Prob. 28PCh. 11 - Prob. 29PCh. 11 - Prob. 1ATCCh. 11 - Prob. 2ATCCh. 11 - Prob. 3ATCCh. 11 - Prob. 4ATCCh. 11 - Prob. 5ATC
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- 19 The operating expenses is deducted from Gross profit but the company should figure out which are the expenses to be categorized as _____. Variable and Fixed expenses Direct materials, indirect materials Indirect materials and indirect labor Direct labor, indirect laborarrow_forwardCase 1-26 (Algo) Cost Classification and Cost Behavior [LO1-1, LO1-2, LO1-3, LO1-4] The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of 4,100 sets per year. Annual cost data at full capacity follow: Direct labor Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building Administrative office supplies (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $ 89,000 $ 104,000 $ 66,000 $ 22,000 $ 58,000 6,000 2,000 $ $ 12,000 $ 16,000 $ 102,000 $ Required 1 Required 2 Required 3 3,000 $ 106,000 $ 434,000 $ 46,000 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two…arrow_forward#2 One of the steps in applying the average cost method does not exclude: Group of answer choices add the beginning work in process costs to the current period's production costs divide the current period's production costs by the equivalent units subtract the beginning work in process costs from the current period's production costs A and B B and Carrow_forward
- Question 6 Manufacture have established a cost classification called product costs. Define the term "product cost" and note where these costs appears in the financial statements.be specific.arrow_forward24 What is Cost object in Activity based costing? a. It is an item for which cost measurement is required b. It is a factor that causes a change in the cost of an activity c. It is a measure of the quantity of resource consumed by an activity d. None of these Clear my choicearrow_forwardItems on variable costing income statement In the following equations, based on the variable costing income statement, identify the items designated by X: a. Net Sales X = Manufacturing Margin b. Manufacturing Margin X = Contribution Margin c. Contribution Margin X = Income from Operationsarrow_forward
- estion 2 Which of the following way of cost assignment used to assign accumulated cost with an indirect relationship to a cost object? Cost allocation Cost tracing Cost accumulation Cost assignmentarrow_forwardQuestion 4: Match Set A with Set B Set A Set B A. Allocate indirect and overhead costs to unit of products based on what actually used. 1. MOOP costing B. Where costs vary by machine, operation, department, or some other overhead costs. 2. Depreciation C. Start once manufacturing operations, tooling, set-up time and cycle time are estimated. 3. Operation costing 4. PHC costing D. Allocate an amount of money over the recovery life of asset. E. Estimate costs based on future and actual expenditure. 5. ABC costing Set A 1 3 4 5 Set B Your choicearrow_forwardwhich one is correct please confirm? QUESTION 12 Raw material and direct labor costs are examples of ____. a. fixed costs b. variable costs c. capital costs d. overhead costsarrow_forward
- Problem 2.30 Systems Concepts, Traditional versus Activity-Based Cost AccountingSystemsThe following items are associated with a traditional cost accounting information system, anactivity-based cost accounting information system, or both (that is, some elements are commonto the two systems):a. Usage of direct materialsb. Direct materials cost assigned to products using direct tracingc. Direct labor cost incurrenced. Direct labor cost assigned to products using direct tracinge. Setup cost incurrencef. Setup cost assigned using number of setups as the activity driverg. Setup cost assigned using direct labor hours as the activity driverh. Cost accounting personneli. Submission of a bid, using product cost plus 25 percentj. Purchasing cost incurrencek. Purchasing cost assigned to products using direct labor hours as the activity driverl. Purchasing cost assigned to products using number of orders as the activity driverm. Materials handling cost incurrencen. Materials handling cost assigned…arrow_forwardQUESTION 14 A cost that is not easily or conveniently traceable to a cost object is known as: Additional cost Collective cost Indirect cost Conversion costarrow_forward29. Traditionally indirect cost like overheads were distributed to end products on the assumption that the product ______ a. Consumes resources as per the life cycle costing b. Consumes resources in proportion to the production volume c. All of the options d. Consumes resources as per the activities and cost driversarrow_forward
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