Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 17, Problem 17.15Q
“There’s no reason for me to get excited about the choice between the weighted-average and FIFO methods in my process-costing system. I have long-term contracts with my materials suppliers at fixed prices.” Do you agree with this statement made by a plant controller? Explain.
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You mention changes and revisions to the standard cost systems. If you were the Operations manager of a manufacturing firm, what control would you have in place to assure those changes were proper and accurate? What assertions would apply here?
Explain how a plantwide overhead rate, using a unit-based driver, can produce distorted product costs. In your answer, identify two major factors that impair the ability of plantwiderates to assign cost accurately.
In a process costing system, which of the following would be TRUE?
a.There is no need to use time tickets to assign costs to processes.
b.There is no need to track materials to processes.
c.A process costing system is more expensive to maintain because it has more work-in-process accounts.
d.All of these choices are true.
Chapter 17 Solutions
Cost Accounting (15th Edition)
Ch. 17 - Give three examples of industries that use...Ch. 17 - In process costing, why are costs often divided...Ch. 17 - Explain equivalent units. Why are equivalent-unit...Ch. 17 - What problems might arise in estimating the degree...Ch. 17 - Name the five steps in process costing when...Ch. 17 - Name the three inventory methods commonly...Ch. 17 - Describe the distinctive characteristic of...Ch. 17 - Describe the distinctive characteristic of FIFO...Ch. 17 - Prob. 17.9QCh. 17 - Identify a major advantage of the FIFO method for...
Ch. 17 - Identify the main difference between journal...Ch. 17 - The standard-costing method is particularly...Ch. 17 - Why should the accountant distinguish between...Ch. 17 - Transferred-in costs are those costs incurred in...Ch. 17 - Theres no reason for me to get excited about the...Ch. 17 - Prob. 17.16ECh. 17 - Prob. 17.17ECh. 17 - Prob. 17.18ECh. 17 - Prob. 17.19ECh. 17 - Prob. 17.20ECh. 17 - Prob. 17.21ECh. 17 - Prob. 17.22ECh. 17 - Prob. 17.23ECh. 17 - Prob. 17.24ECh. 17 - Prob. 17.25ECh. 17 - Prob. 17.26ECh. 17 - Prob. 17.27ECh. 17 - Prob. 17.28ECh. 17 - Prob. 17.29ECh. 17 - Prob. 17.30PCh. 17 - Prob. 17.31PCh. 17 - Prob. 17.32PCh. 17 - Prob. 17.33PCh. 17 - Prob. 17.34PCh. 17 - Prob. 17.35PCh. 17 - Prob. 17.36PCh. 17 - Prob. 17.37PCh. 17 - Prob. 17.38PCh. 17 - Prob. 17.39PCh. 17 - Prob. 17.40PCh. 17 - Prob. 17.41PCh. 17 - Benchmarking, ethics. Amanda McNall is the...Ch. 17 - Prob. 17.43P
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- Explain how a plantwide overhead rate, using a unit-based driver, can produce distorted product costs. In your answer, identify two major factors that impair the ability of plantwide rates to assign cost accurately.arrow_forwardOverhead application to costs is a critical issue for the costing of your products. We are studying several ways to handle this situation. What would cause an overhead to be overapplied, or underapplied. Discuss the results to your decision making and the financial statements for each of those two situations.arrow_forwardAs we have discussed in previous chapters, product costs are made up of Direct Materials, Direct Labor and Manufacturing Overhead. In making a decision as to whether we should outsource the production of a product, do we take all of the product costs into consideration or do we make adjustment based on the type of cost behaviors? Please give examples.arrow_forward
- If Power Products uses process costing, which of the follow-ing are likely to be true: a. The production processes are high volume.b. The products use different amounts of direct labor.c. The products are created with repetitive processes.d. The products are created to customer specifications.arrow_forwardWhich of the following would be true for a service company? a. ABC helps the company make more informed decisions about services. b. Service companies use only a few activities, so a plantwide overhead allocation is always appropriate. c. Most of the company’s costs are for direct materials and direct labor. Indirect costs are a small proportion of total costs. d. All of the above are true.arrow_forwardTrue or False "Setup costs should not be allocated directly to products via machine hours." The answer is True. The company should allocate setup costs to the batch of products that will run after the setup occurs. My question: Are setup costs allocated indirectly to products via machine hours? Please explain the answer thoroughly with examples.arrow_forward
- 1. Answer the following questions in your own words. a) Distinguish between Production management and Operations Management. b) Distinguish between manufacturing operations and service operations. c) Explain the scope of production and operations management in your own words. d) Define the term plant layout. Discuss the factors influencing the layout. e) Bring out the comparison between product layout and process layout. f) "An ideally laid out plant goes a long way in reducing manufacturing costs through reduced materials handling, reduced personnel and equipment requirements and reduced in-process inventory" – Elaborate.arrow_forwardHello, Have a question. Which of the following are the advantages of the ABC approach relative to using a single predetermined overhead application rate based on direct labor hours? Select all that apply. A. ABC does not help in decision making. B. ABC systems produce more accurate financial information. C. ABC approach is likely to provide better information to manufacturing managers. D. ABC helps in decision making. E. ABC systems produce more accurate product costing information. Thanks...arrow_forwardManagement accountants are frequently asked to analyze various decision situations including the following. a. Alternative uses of plant space to be considered in a make/buy decision. b. Joint production costs incurred, to be considered in a sell-at-split versus a process-further decision. c. Research and development costs incurred in prior months, to be considered in a product- introduction decision. d. The cost of a special device that is necessary if a special order is accepted. e. The cost of obsolete inventory acquired several years ago, to be considered in a keep-versus- disposal decision. The costs described in situations B, C, and E above arearrow_forward
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