Accounting systems that use standards for product costs are called budgeted cost systems.

Q: explain why GAAP requires full absorption costing (instead of variable costing) if absorption…

A: Introduction:- i)Absorption costing:- Under the absorption costing, The following costs included in…

Q: Standard costs differ from budgeted costs in that standard costs are:   a)always expressed in total…

A: Standard costs  -  Standard costs are predetermined costs for evaluating the actual performance of…

Q: What is the primary difference between a static budget and a flexible budget? a. The static budget…

A: The budget can be understood as a quantitative plan that acts as an estimate of future operation.…

Q: Cost accounting is used as a means of fixing a selling price. Select one: True False

A: Cost accounting is a method of managerial accounting which is used to calculate the total production…

Q: . Discuss why the details of material, labor and overhead are important factors used in this…

A: A standard cost system is a system that helps a business measure performance and value inventory.

Q: Purchase​ discounts, freight in and receiving costs   A. are used when setting a cost standard for…

A: Purchase discounts, freight in, and receiving costs are considered as part of the cost of the…

Q: True or False Cost and managerial accounting are not the same things

A: Cost accounting is the process of accounting and controlling the cost of a product,operation or…

Q: tandard costs differ from budgeted costs in that standard costs are:       always expressed in total…

A: FIRSTLY ,We  have to understand the meaning of standard cost and budget cost: A standard cost is an…

Q: Management accounting uses variance analysis to explain what and why something happened in the cost…

A: In costing, Variances is the difference between the budgeted, planned, actual cost. This variance…

Q: Briefly explain two factors that tend to result in product cost distortion under traditional,…

A: Traditional volume based product costing system is a costing system in which total factory overheads…

Q: Can you interpret the effect on revenue , expense and profits if the sale or production differ from…

A: Master Budget shows the estimated results that a company expects to obtain from its operations.

Q: “ A costing system that simply records for the  purpose of fixing sale prices has accomplished only…

A: Costing systems: Costing system refers to the system that is designed to monitor the costs which are…

Q: how the purchasing department manager may achieve a favourable direct material pricing variance…

A: Variance analysis: Variance analysis can be defined as the study of difference between the budgeted…

Q: Why is the form of activity-based costing unacceptable for external financial reports?

A:

Q: Responsibility reports should be simple, show variances between the budgeted and actual amounts of…

A: Responsibility reports is a system of preparation of reports for each level of responsibility in the…

Q: Explain why a costing system that uses a volume-based rate is likely to produce distorted…

A: A traditional volume-based cost allocation systems that use only drivers tend to vary directly with…

Q: TRUE OR FALSE When absorption costing is used for external reporting, variable costing can still be…

A: There are various approaches which can be prepared for reporting purpose. Two of which are variable…

Q: Explain what is meant by the term management by exception. What is the relationship between the…

A: Management by exception: Under this style of management, employees are allowed to take decisions…

Q: Identify the cause of an unfavorable variance in profit. a.Actual labor cost is lower than budget…

A: The variance is the difference between the actual data and standard output of the production.

Q: When standard costs are used in applying the cost-plus approach to product pricing, the standards…

A: False No, the standards should not be based upon normal levels of performance.

Q: Sales commissions incurred based on units of product sold during a given period is an example of a…

A: Please check the step 2

Q: How cost accounting is useful where financial accounting could not be answered. Give any exampleto…

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: How do I identify and explain the classic budgeting error that Harlow apparently incorporated into…

A: Total Cost=Direct material+Direct labor+Variable Overhead+Fixed Overhead

Q: Why do departmental overhead rates sometimes result in inaccurate product costs?

A:

Q: Salary paid to administration staff is an example of a direct cost. TRUE or FALSE?

A: Direct cost: Direct cost is the cost which is directly related to production process.  Indirect cost…

Q: Which of the following statements is false? (You may select more than one answer.)a. A flexible…

A: A flexible budget is: Used for control purpose. Prepared at the end of the period. A static budget…

Q: Comparing a static planning budget to actual costs is not a good way to assess whether variable…

A: Budget: Budget is an effective tool to achieve the financial and operational goals of the business.…

Q: A difference between standard costs used for cost control and budgeted costs       Can exist because…

A: Standard costs refer to the concept of determining the expenses actually incurred while processing a…

Q: Distinguish between the control purpose and the productcosting purpose of standard costing and…

A: Flexible Budget: A flexible budget is a budget that is prepared for different levels of the output.…

Q: explain why actual costing are rarely used in practice

A: Actual costing is a type of costing in which all costs that are incurred actually are considered for…

Q: Budgeting systems should be subjected to the cost-benefit approach

A: Budgeting represents the procedure of preparing a budget by the company in order to estimate the…

Q: What does a flexible budget performance report do that a simple comparison of budgeted to actual…

A: Flexible budget performance report:   A tool used to compare the actual and budgeted results…

Q: Explain how standard costs are established? How do managers evaluate performance using cost variance…

A: Standard costs are those predetermined costs which the company is expected to incur on goods or…

Q: When might a company use budgeted costs rather than actual costs to compute direct-labor rates?

A: Normal Costing:In cost accounting, the accountant finds production cost that is based on the…

Q: Explain the different reasons why a manager might submit a biased budget estimate.

A: A budget is a financial plan made by the company for a definite period such as for months or years.…

Q: sales commissions are regarded as a product costs true false

A: Period Costs are costs which are not assigned to the products but are charged as expenses against…

Q: Direct costs are classified by controllability.    True False Can be true, can be false

A: Direct costs are those costs which are directly incurred for purchase or production of goods in the…

Q: Standard Costing and Variance Analysis Standard cost systems set budgets for the materials, labor,…

A: Standard costing is a costing strategy for establishing performance standards that allow firms to…

Q: Zero-Based Budgeting

A: Budgeting represents the process of developing a plan in order to spend money in the future. The…

Q: To make predictions about costs and income, you must first classify costs by their behavior.…

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: What are the pros/cons of product costing allocation methods and how they influence distortion of…

A: Product costing allocation methods are used to assign or allocate a cost to manufactured/produced…

Q: Why is the form of activity-based costing described in this chapter unacceptable for external…

A: