A cost - based transfer price considers the cost of producing the goods when determining the price. True False

Q: What is target costing and how is it different from the usual process of setting prices?

A: The price of a product is set on the basis of the cost of the product. The price of the product is…

Q: What is the difference between price and cost? Is there any relation connected them? Which one is…

A: PRICE  1. Price is what you pay for purchasing goods or availing the services. Also called sale…

Q: Compare and contrast the differences and similarities between Cost of Goods Sold and Net Profit.

A: Cost of goods sold (COGS) represents the direct cost of producing the goods. These are the direct…

Q: Total _____ costs remain unchanged when activity changes.     Fixed cost     Variable cost…

A: Cost: It refers to the aggregated amount that is spent on manufacturing a product.

Q: Marginal Costing

A: Option a is wrong because marginal costing is not a technique of cost reduction. Cost reduction…

Q: Which of the following statements is true? Multiple Choice Product costs and variable costs are…

A: Product cost means the cost which are incurred to create a product that is intended for sale to the…

Q: Calculation of profit change from changes in sales price, sales volume, variable costs, or fixed…

A: This question deals with profit change from changes in sales price, sales volume, variable costs, or…

Q: What is the Cost of goods sold equation?

A: Cost of goods sold: Cost of goods sold is the total of all the expenses incurred by a company to…

Q: How do I solve for the Cost Of Goods Sold?

A: Cost of goods sold is actual cost of goods that are being sold by the seller to the customers. This…

Q: Throughput margin is equal to revenues minus direct materials and direct labor of the cost of goods…

A: Throughput margin = sales revenue - material cost .

Q: Explain how the lower of cost and net realizable value rule is applied to purchase commitments.

A: Purchase Commitments: It refers to the commitments or contract made by a company with its suppliers…

Q: Are selling and administrative expenses treated as product costs or as period costs under variable…

A: Selling and administrative expenses:   These expenses incurred by the company does not relate to the…

Q: How do managers decide whether a cost is adirect or an indirect cost?

A: Cost refers to the amount of money incurred for acquiring a product or manufacturing a product. Cost…

Q: What do you understand by rate of markup on cost and rate of markup on selling price, illustrate…

A: Answer: Mark-up is nothing but the difference between a good or service’s selling price and its…

Q: Explain the difference between market-based transfer prices and cost-based transfer prices.

A: Market based Transfer Price and Cost Based Transfer Price: Transfer pricing refers to the rules and…

Q: How is target costing different from the usual process of setting prices?

A: The price of a product is set on the basis of the cost of the product. The price of the product is…

Q: Define prime cost and conversion. Why can't prime cost prime cost be added to conversion cost to get…

A: Classification of costs is important to arrive at per head cost. It helps the management to take…

Q: Explain the difference between period costs and product costs.

A: Cost: Cost refers to the expenses incurred by the business to earn revenue from sales, in other…

Q: “Relevant costs for pricing decisions are full costs of the product.” Do you agree? Explain.

A: Pricing Decisions:Pricing decisions are those decisions that are related to ascertain the price of a…

Q: Under variable costing system only those costs of production that vary (variable) with production…

A: Variable costing is also called marginal costing. Under variable costing all variable cost that is…

Q: What are these equations? c.Under absorption costing, what is the cost of goods sold? d.Under…

A: Hey, since there are multiple subparts posted, we will answer the first three subparts. If you want…

Q: What are the main differences between a perpetual system  and a periodic system? In your…

A: In accounting, there may be different methods to record a financial transaction. The selling and…

Q: A price that can't be quickly or efficiently linked to a cost object is referred to as: Additional…

A: The costs that are easily tracked to the product are known as the traceable costs. Special domestic…

Q: How cost accounting covers the problem of Evaluation of alternative while buying

A: Cost accounting system is a framework that guides the firm to calculate their cost and helps in…

Q: Differentiate inventory valuation under variable costing as against absorption costing.

A: Variable costing means that inventory is valued at variable manufacturing cost and fixed cost is…

Q: estion will save this respo I using: cost of good available for cost of goods sold, sales

A: The right answer is option d Gross sales, Sales return &allowances, sales discount

Q: he distinction between indirect and direct costs depends on: Select one: a. whether a cost differs…

A: Direct cost means the cost which can be related with the production of specific goods directly like…

Q: Explain how negotiation between the supplying and buying units may be used to set transfer prices.…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: A transfer of a particular cost from one cost to another

A: Yes, We can transfer of a particular cost from one cost to another.

Q: Explain how the accounting definition of an asset is related to the choice between absorption and…

A: Absorption costing:   Absorption costing is compulsory under Generally Accepted Accounting…

Q: How should mixed costs be classified in cost, volume, and profit analysis?

A: Based on the cost behaviour costs are classified as fixed costs , variable costs and mixed costs.…

Q: tatement is true or false, and correct the false tatement(s): Manufacturing cost is called period…

A: Manufacturing cost is the cost incurred to manufacture units . It includes direct material , direct…

Q: Give the solution: How much is the total cost of goods sold?

A: For an investor or other stakeholders, income statement or statement of profit or loss is an…

Q: The transfer price is a revenue to sales devision and cost to the buying devision. Say true or False…

A: Transfer price is a price at which a transaction of two related divisions of the same corporation…

Q: The three common approaches to setting transfer prices include: the _____ price approach, where the…

A: There are three approaches, cost, market and negotiated.

Q: Describe Estimating Supplier Costs Using Reverse Price Analysis?

A: Reverse pricing analysis is a pricing model which allows its consumers in order to establish the…

Q: Product costs are also called:

A: Product costs are the direct costs associated with the manufacturing of a product and therefore…

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: Identify the relative advantages and disadvantages of basing transfer prices on total costs,…

A: Please find the answers to the above questions below:

Q: Explain why using cost as a transfer price is inappropri-ate when the center producing the product…

A: Profit Center: A profit center may be a part of a business that is expected to form an identifiable…

Q: What does it mean that a cost is a direct, product, and variable cost?

A: The cost represents the value incurred by the corporation in making the product ready to sell in the…

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.