Answered: "ABC systems may result in…

Business

Accounting

"ABC systems may result in misallocation of indirect costs." Do you agree? Give reasons for your answer

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 11Q: What is a general rule to remember with respect to a sell-or-process-further environment, and what...

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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

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Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making? A. avoidable costs B. unavoidable costs C. sunk costs D. differential costs
______ are the costs associated with not choosing the other alternative. A. Sunk costs B. Opportunity costs C. Differential costs D. Avoidable costs
What advantage does the FIFO cost method have over the average cost method relative to providing information for cost control?
What is the scattergraph method, and why is it used? Why is a scattergraph a good first step in separating mixed costs into their fixed and variable components?
What is a general rule to remember with respect to a sell-or-process-further environment, and what costs are irrelevant to the decision?
Explain how the high-low method is used for cost estimation. What, if any, are the limitations of this approach to cost estimation?
Cost allocation is arbitrary, so there is nothing gained by it. We should report only the costs that we know are direct.” Do you agree? Why? Please be specific in supporting your position.
Which of the following statements is false? (You may select more than one answer.)a. Under some circumstances, a sunk cost may be a relevant cost.b. Future costs that do not differ between alternatives are irrelevant.c. The same cost may be relevant or irrelevant depending on the decision context.d. Only variable costs are relevant costs. Fixed costs cannot be relevant costs.
Which of the following costs can be ignored when making a decision?a. Opportunity costs. b. Differential costs. c. Sunk costs. d. Relevant costs.
An alternative concept of fairness in cost allocation, absent the cause-and-effect basis, includes?
Why is it necessary to distinguish between variable and fixed costs when dealing with mixed costs?
Define opportunity costs and explain why they represent acommon source of error in making cost analyses.