Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem 9.15Q
“The difference between practical capacity and master-budget capacity utilization is the best measure of management’s ability to balance the costs of having too much capacity and having too little capacity.” Do you agree? Explain.
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Which of the following is not a benefit of budgeting?
a.
It sets some standards to evaluate performance.
b.
It uncovers drawbacks of department performance
c. It reduces the need to track the actual cost activity
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The Zero Base Budget (ZBB) is the budget system that most influences resource allocation management by involving the devolution of decision making power to the lower levels. Identify whether this statement is true or false.
Select one:TrueFalse
Which of the following is not a part of budgeting?A. planningB. finding bottlenecksC. providing performance evaluationsD. preventing net operating losses
Chapter 9 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 9 - Differences in operating income between variable...Ch. 9 - Why is the term direct costing a misnomer?Ch. 9 - Do companies in either the service sector or the...Ch. 9 - Explain the main conceptual issue under variable...Ch. 9 - Companies that make no variable-cost/fixed-cost...Ch. 9 - The main trouble with variable costing is that it...Ch. 9 - Give an example of how, under absorption costing,...Ch. 9 - What are the factors that affect the breakeven...Ch. 9 - Critics of absorption costing have increasingly...Ch. 9 - What are two ways of reducing the negative aspects...
Ch. 9 - Prob. 9.11QCh. 9 - Describe the downward demand spiral and its...Ch. 9 - Will the financial statements of a company always...Ch. 9 - Prob. 9.14QCh. 9 - The difference between practical capacity and...Ch. 9 - In comparing the absorption and variable cost...Ch. 9 - Queen Sales, Inc. has just completed its first...Ch. 9 - King Tooling has produced and sold the following...Ch. 9 - The following information relates to Drexler Inc.s...Ch. 9 - Prob. 9.20MCQCh. 9 - Variable and absorption costing, explaining...Ch. 9 - Throughput costing (continuation of 9-21). The...Ch. 9 - Variable and absorption costing, explaining...Ch. 9 - Throughput costing (continuation of 9-23). The...Ch. 9 - Variable versus absorption costing. The Tomlinson...Ch. 9 - Absorption and variable costing. (CMA) Miami,...Ch. 9 - Absorption versus variable costing. Horace Company...Ch. 9 - Candyland uses standard costing to produce a...Ch. 9 - Capacity management, denominator-level capacity...Ch. 9 - Denominator-level problem. Thunder Bolt Inc., is a...Ch. 9 - Variable and absorption costing and breakeven...Ch. 9 - Variable costing versus absorption costing. The...Ch. 9 - Throughput Costing (continuation of 9-32) 1....Ch. 9 - Variable costing and absorption costing, the Z-Var...Ch. 9 - Comparison of variable costing and absorption...Ch. 9 - Effects of differing production levels on...Ch. 9 - Alternative denominator-level capacity concepts,...Ch. 9 - Motivational considerations in denominator-level...Ch. 9 - Denominator-level choices, changes in inventory...Ch. 9 - Variable and absorption costing and breakeven...Ch. 9 - Downward demand spiral. Market.com is about to...Ch. 9 - Absorption costing and production-volume...Ch. 9 - Operating income effects of denominator-level...Ch. 9 - Variable and absorption costing, actual costing....Ch. 9 - Prob. 9.45PCh. 9 - Cost allocation, responsibility accounting, ethics...Ch. 9 - Absorption, variable, and throughput costing....Ch. 9 - Costing methods and variances, comprehensive. Rob...
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- When would a static budget be effective in evaluating a managers performance?arrow_forwardWhich of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating lossesarrow_forwardExplain why it is better to allocate budgeted support service costs rather than actual support service costs.arrow_forward
- Is a standard cost an estimated cost? What is the primary objective of employing standard costs in a cost system? > What is a budget? > What is the difference between ideal and practical standards? Which standard generally is used in planning? > What is meant by the term management by exception? > What are some advantages of using standard costs? What are some disadvantages?arrow_forward“Budgets meet the cost–benefit test. They force managers to act differently.” Do you agree? Explain.arrow_forwardWhen would a static budget be effective in evaluating a manager performancearrow_forward
- budget performance is abetter critical than past performance for judging managers" do you agree ?explainarrow_forwardTRUE OR FALSE Budgeting systems should be subjected to the cost-benefit approach.arrow_forwardDescribe how non output-based cost drivers can be incorporated into budgeting.arrow_forward
- What assumption is implicitly made about cost behavior when actual results are directly compared to a static planning budget? Why is this assumption questionable?arrow_forwardHow do budgeted cost rates motivate the support-department manager to improve efficiency?arrow_forwardThe following sentences relate to achieving the financial goal of cost minimization. Which of the following statements is FALSE? a. Prioritizing which costs to incur relates to the operating decisions of the firm only.b. Savings is the end product of this financial goal.c. There is a need to determine cost.d. Controling costs involves addressing unfavorable cost variances.arrow_forward
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