A disadvantage of absorption costing is A.) None of the answers are correct. B.) Both answers are correct. C.) That it is not useful in management's decision-making process. D.) That it might encourage inventory buildup when there is no demand. Please dont give plagiarised answers and give best explanation

A disadvantage of absorption costing is A.) None of the answers are correct. B.) Both answers are correct. C.) That it is not useful in management's decision-making process. D.) That it might encourage inventory buildup when there is no demand. Please dont give plagiarised answers and give best explanation

Name: A disadvantage of absorption costing isA.) None of the answers are cor
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Description: A disadvantage of absorption costing isA.) None of the answers are correct.B.) Both answers are correct.C.) That it is not useful in management's decision-making process.D.) That it might encourage inventory buildup when there is no demand.Please don

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter7: The Conversion Cycle

Section: Chapter Questions

Problem 9MCQ: Which of the following statements regarding traditional accounting is true? a. Traditional...

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Which of the following statements regarding traditional accounting is true? a. Traditional accounting does not provide managers in a JIT setting with timely information. b. The financial orientation allows for effective measuring disparate items. c. Overhead allocations may lead to cost distortions. d. All of the above are true statements. e. A and C are true, but B is not true.
Which of the following is NOT a problem associated with standard cost accounting? a. Standard costing motivates management to produce large batches of products and build inventory. b. Applying standard costing leads to product cost distortions in a lean environment. c. Standard costing data are associated with excessive time lags that reduce its usefulness. d. The financial orientation of standard costing may promote bad decisions. e. All of the above are problems with standard costing.
Which one of the following is not a disadvantage of the specific identification method of inventory costing? a. It allows manipulation of profits b. It does not match expenses against revenues c. It is too expensive to use in complex manufacuring situations d. It is only practical where units are costly and easily distinguishable
A limitation of transfer prices based on actual cost is that they Must be adjusted by some markup. Can lead to suboptimal decisions for the company as a whole Lack clarity and administrative convenience. Charge inefficiencies to the department that is transferring the goods
What is the main criticism of LIFO? A. It presents a balance sheet figure that is out-of-date. B. It artificially creates a higher income. C. It utilizes a unit cost that has no evidence of existence. D. It is often complicated to implement, especially if inventory costs change frequently.
A possible disadvantage of the ABC method is: (a) It does not allocate costs to the way production work occurs (b) It is more expensive to operate than a traditional allocation system (c) It does not help understand the economic impact of management decisions (d) It cannot identify wasteful products and unnecessary costs
S1: Abnormal spoilage is considered a period cost.S2: Backflush costing requires fewer allocations than traditional accounting methods.S3: Lean manufacturing and just-in-time (JIT) systems are both concerned with reduction of inventory levels. Group of answer choices True; False; False True; True; False False; True; True False; False; True False; False; False True; True; True
all of the following are reasons to use backflush costing, except a. Managers tend to use their limited resources on developing more accurate product cost data. b. Complex Ledger systems may be too costly to develop under traditional cost tracking systems. c. Accuracy is critical whem allocationg accurate conversion cost per unit. d. A fairly rough allocation may be sufficient for external reporting purposes.
Which one of the following is a disadvantage of Mass Production system? a. Higher level of inventory at all levels and hence higher inventory cost. b. Larger space requirements. c. Breakdown of one machine will stop an entire production line. d. Higher cost due to frequent set up changes.
The fundamental EOQ model a. provides for fluctuating lead times during reorder cycles. b. is relatively insensitive to errors in demand, procurement costs, and carrying costs. c. focuses on the trade-off between production costs and carrying costs. d. is stochastic in nature. e. is best used in conjunction with a periodic inventory system.
Explain why some management accountants believe that absorption costing may provide an incentive for managers to overproduce inventory.
Why is variable costing not in compliance with generally accepted accounting principles?a. Fixed manufacturing costs are assumed to be period costs.b. Variable costing procedures are not well known in industry.c. Net earnings are always overstated when using variable costing.d. Variable costing ignores the concept of lower of cost or market when valuing inventory.