Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 4, Problem 4.8Q
Give two reasons why most organizations use an annual period rather than a weekly or monthly period to compute budgeted indirect-cost rates.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In a production budget, the volume of production is the first thing to calculate, but deducting the estimated units in beginning inventory and adding the desired units in ending inventory seems opposite. Can you explain so that we can all understand better?
Why is it relevant to calculate the fixed cost budget?
Management must account for these fixed costs as part of their monthly expenses.
Management usually forecast the fixed costs based on past financial records and take into account potential rate increase of these fixed costs on a monthly basis.
Without budgeting fixed cost into the income statement, you won’t be able to calculate the net profit.
All the above.
1. Match each of the following terms with the appropriate definition.
The difference between
actual and budgeted
revenue or cost caused by
the difference between the
actual number of units sold
or used and the budgeted
number of units.
A budget prepared after an
operating period is
complete in order to help
managers evaluate past
performance; uses fixed
and variable costs in
determining total costs.
The costs that should be
incurred under normal
conditions to produce a
specific product or to
perform a specific service.
The difference between
1. Cost Variance
total overhead cost that
would have been expected
if the actual operating
2. Volume Variance
volume had been
accurately predicted and
3. Price Variance
the amount of overhead
cost that was allocated to
products using the
predetermined standard
overhead rate.
4. Quantity Variance
5. Standard Costs
A planning budget based on
a single predicted amount
6. Fixed Budget
of sales or production
volume; unsuitable for
7. Flexible Budget…
Chapter 4 Solutions
Cost Accounting (15th Edition)
Ch. 4 - Define cost pool, cost tracing, cost allocation,...Ch. 4 - How does a job-costing system differ from a...Ch. 4 - Why might an advertising agency use job costing...Ch. 4 - Describe the seven steps in job costing.Ch. 4 - Give examples of two cost objects in companies...Ch. 4 - Describe three major source documents used in...Ch. 4 - What is the advantage of using computerized source...Ch. 4 - Give two reasons why most organizations use an...Ch. 4 - Distinguish between actual costing and normal...Ch. 4 - Describe two ways in which a house-construction...
Ch. 4 - Comment on the following statement: In a...Ch. 4 - Describe three different debit entries to the...Ch. 4 - Describe three alternative ways to dispose of...Ch. 4 - When might a company use budgeted costs rather...Ch. 4 - Prob. 4.15QCh. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Prob. 4.18ECh. 4 - Prob. 4.19ECh. 4 - Prob. 4.20ECh. 4 - Prob. 4.21ECh. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Prob. 4.24ECh. 4 - Prob. 4.25ECh. 4 - Prob. 4.26ECh. 4 - Prob. 4.27ECh. 4 - Prob. 4.28ECh. 4 - Prob. 4.29ECh. 4 - Prob. 4.30ECh. 4 - Prob. 4.31PCh. 4 - Prob. 4.32PCh. 4 - Prob. 4.33PCh. 4 - Prob. 4.34PCh. 4 - Prob. 4.35PCh. 4 - Prob. 4.36PCh. 4 - Prob. 4.37PCh. 4 - Prob. 4.38PCh. 4 - Prob. 4.39PCh. 4 - Prob. 4.40PCh. 4 - Prob. 4.41P
Knowledge Booster
Learn more about
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
- Which of the following statements is not correct? A. The sales budget is computed by multiplying estimated sales by the sales price. B. The production budget begins with the sales estimated for each period. C. The direct materials budget begins with the sales estimated for each period. D. The sales budget is typically the first budget prepared.arrow_forwardWhich of the following statements is true? I. The direct labor budget begins with the required production in units from the production budget. II. The direct labor budget shows the direct labor-hours required to satisfy the production budget. Multiple Choice O Both statements are true. Neither statement is true. Only statement II is true. Only statement I is true.arrow_forwardWhich of the following is true? a) The direct materials purchases budget is determined from the direct labour budget. b) The only budget providing input into the revenue budget is the sales budget c) The direct materials purchases budget and the capital expenditures budget are both determined from the production budget. d) The selling and administrative expense budget is input into the forecasted cost of goods sold.arrow_forward
- Which of the following expenses would not appear on a selling and administrative expense budget? Indirect labor Depreciation Sales commissions Property taxesarrow_forwardA budget that adjusts to the changes in volume of production or output is called production budget. Select one: O True O Falsearrow_forwardExplain how standard costs and flexible budgets can be used for short-term profit analysis—that is,for financial-control purposes.arrow_forward
- In your own words, Define the following terms they relate to spending budgeted dollars obligated amount pipeline obligation burn ratearrow_forwardWhich of the following elements are used in calculating Costs in a Flexible Budget? a. Budgeted unit costs times actual quantities of output b. Actual unit costs times budgeted quantities of output c. Budgeted unit costs times budgeted quantities of output d. Actual unit costs times actual quantities of outputarrow_forwardThe sales budget is based on assumptions about the ______? A. No. of units to be sold and selling price per unit. B. Timing of cash receipts C. Contribution margin per unit and the number of units to be sold D. Costs of the unit produced and the total fixed costsarrow_forward
- 1.Using a flexible budget, actual results can be compared to what costs should have been at the actual level of activity. True or False 2.Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes. True or False 3.Actual costs are determined by plugging the actual level of activity for the period into the cost formulas used in flexible budgets. True or False 4.If activity is higher than expected, total fixed costs should be higher than expected. If activity is lower than expected, total fixed costs should be lower than expected. True or Falsearrow_forward23) The difference between budgeted sales revenue and break-even sales revenue is the: A) contribution-margin ratio. B) safety margin. C) contribution margin. D) operating leverage. E) target net profit.arrow_forward1. Prepare a performance report that compares static budget and actual costs for the period just ended (i.e., the report that Kellerman likely used when assessing his performancearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY