ABC generally causes the least amount of cost distortion among products because indirect costs are allocated to the products based on

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

A:

Q: When making outsourcing decisions, which of the following is true? a. Expected use of the freed…

A: When making decision on make or buy decision or which are otherwise called as Outsourcing decisions,…

Q: Why are support department costs difficult to apply to products?

A: Given: The difficulty in applying the support department costs on products.

Q: se explain the answer thoroughly.  Is this statement "if all the allocation base in the…

A: Allocation base in the predetermined overhead rate is the percentage of overhead which will be…

Q: Managers often assume a strictly linear relationship between cost and the level of activity.How can…

A: The managers often assume the strictly linear relationship between the cost and the level of…

Q: Which of the following is an example of an indirect cost? Multiple Choice Cost of labor Cost of…

A: Indirect Cost are expenses other than direct expenses are known as indirect  expenses. These cannot…

Q: Management Accounting) If fixed production costs are not allocated to manufactured products, this…

A: SOLUTION FIXED COST INCLUDES THE RENT OR MORTGAGE PAYMENT YOU PAY FOR YOUR FACTORY AND OFFICE…

Q: The traditional (Volume -based cost systems ) tend to : a. under -cost low -volume products and…

A: Explanation: In traditional volume-based cost system, direct material and direct labour cost are…

Q: Explain whether the following statements are valid or not valid: A. Target costing ignores non-value…

A: Target costing is an costing technique in which it was the difference between targeted sales minus…

Q: he following statements is true? bsorption costing treats fixed overhead as an expense in the period…

A: The income statement is prepared using various methods as absorption costing and variable costing.…

Q: If fixed manufacturing overhead costs are released from inventory under absorption costing, what…

A: Absorption Costing: Absorption costing is a method for calculating the full cost or total cost of a…

Q: Which of the following statements is true of activity-based costing? O a. Activities are the cost…

A: Activity based costing is a type of costing system in which all indirect costs or overhead costs are…

Q: What is the danger in allocating common fixed costs among products or other segments of an…

A: The costs which are not allocated to any specific segment in the business organization are called…

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: Please explain the statement below (T/F) thoroughly with examples illustrating the answer.  "In…

A: in Activity-based costing many numbers of cost pools. In activity-based costing, a product margin…

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: When pricing a product or service, managers must consider which of the following? Only period costs…

A: Pricing a product is considered as one of the marketing strategy.

Q: Under full absorption costing, which of the following are included in product costs? Only variable…

A: The absorption costing system is also known as the full costing system. It is allowed to be used by…

Q: As a result of cost distortion, some products will be overcosted while other products will be…

A: Solution: Cost distortions occurs when the overhead costs are not properly allocated,  when the…

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: Which of the following is most likely to be true of the manufacturing overhead costs assigned to a…

A: Answer: Option (a) is the correct answer. An ABC system will assign more manufacturing overhead…

Q: Demonstrate why expressing fixed costs on a per unit of activity basis is misleading and may result…

A: Companies can have two types of costs, fixed costs and variable costs, which together result in…

Q: Which of the following is not considered a product cost? Select one: a. direct labor b. direct…

A: Product cost includes all the cost incurred to manufacture the product.

Q: Which of the following is not a step involved in activity-based costing? Select one O a Compute a…

A: Activity-based costing: It is a method that helps in finding the activities performed by a company…

Q: Marginal Costing refers to product costing methods that exclude ________ from product costs a)…

A: Using marginal costing, only variable costs are included in product cost.

Q: TRUE OR FALSE The general principle in determining the number of cost pools is that a separate cost…

A: Solution: The general principle in determining the number of cost pools is that a separate cost pool…

Q: What are the key reasons for product cost differences between simple costing systems and ABC…

A: Simple costing method is a traditional costing method under which indirect costs are assigned to…

Q: 8) A single indirect-cost rate distorts product costs because A) there is an assumption that all…

A: Answer : Option A " There is an assumption that all support activities affect all products in a…

Q: The cost of labor that is not clearly associated with specific units or batches of product is…

A: Direct Labor cost that labor which is directly related to Production Units/Batches.

Q: Which of the following best defines standard costing?   a. It is the same as actual costing but…

A: The method of calculating the cost of a manufacturing process is known as standard costing. It's a…

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: Explain why some production costs must be assigned to products through an allocation process.

A: Production costs: These are the costs incurred on product manufacturing or delivering services by…

Q: In activity-based costing, some manufacturing costs may be excluded from product costs TRUE FALSE

A: Lets understand the basics. Activity based costing is as the name suggest allocate cost based on the…

Q: Explain why service companies use different activity bases than manufacturing companies to classify…

A: Service companies are those companies which provide services to their clients  such as…

Q: Which of the following is NOT correct about the classifications of costs? Select one: a. On the…

A: Costs in the business can be classified into different types like on the basis of time, on the basis…

Q: Which of the following statements regarding activity-based costing (ABC) is false?   A.   ABC is…

A: Overheads are the indirect cost involved in the production process of the company. It is charged to…

Q: What is the danger in allocating common fixed costs among product lines or other segmentsof an…

A: Fixed cost: It can be defined as the cost that does not vary with an increase or decrease in the…

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…