Airco Company is tempted to consider support department costs to be facility-level costs that do not need to be applied to products. Which of the following explains what is misguided about this approach? a.Product costs may be inaccurate because support department services may be used more heavily by some products than others. b.Product costs may be inaccurate because incorrect cost drivers are used. c.Product costs may be inaccurate because straight-line depreciation on factory equipment is treated as a general and administrative expense on the income statement. d.Product costs may be inaccurate because direct labor and direct materials are not correctly accounted for in the product costing system.

Q: Each of the following statements is true EXCEPT: Select one: a. traditional product costing systems…

A: Traditional  costing system  involves  allocation  of overhead and cost. It is a reactive approach.…

Q: Which of the following is not a consideration when a manager is deciding to discontinue a product or…

A: The management can take decision to discontinue the product or product line in case, its leading to…

Q: A downside to absorption casting is: A. not including fixed manufacturing overhead in the cost of…

A: Absorption costing demonstrates that all the expenses related to manufacturing a product are…

Q: When companies use automated production processes, they tend to condense the three manufacturing…

A: Automated production processes means those processes in which there is no manual intervention of…

Q: A by-product is best described as *   a. A product that s produced from materials that would…

A: By product is the product that is manufactured with the primary product but later on separated from…

Q: Which of the following may not be the reason for a change in gross profit to occur?     Increase in…

A: Gross Profit is the profit which is obtained by deducting the purchases and factory expenses from…

Q: Successful adoptions of activity based costing typically occur when companies rely heavily on:…

A: Activity based costing: It can be defined as a method of costing that determines the total…

Q: n not more than 150 words, explain how activity-based costing system will be able to address the…

A: Solution Concept Activity based costing               Under the activity based costing the activity…

Q: Which of the following types of companies would be most likely to benefit from activity-based…

A: activity-based costing -   generally, activity-based costing is used to allocate indirect costs or…

Q: Which of the following statements is false ? a. Volume-based costing has typically resulted in…

A: There are two methods of costing that are in place generally. One is volume based costing and other…

Q: Explain how a plantwide overhead rate, using a unit-based driver, can produce distorted product…

A: The plantwide overhead rate is a standard overhead rate used by a corporation to distribute all…

Q: all of the following are reasons to use backflush costing, except   a. Managers tend to use their…

A: The backflush costing follows the JIT (just-in-time) inventory system which reduces the costs…

Q: When backflush costing is used, managers generally do not use which of the following to keep track…

A: Backflush Costing: Under this system, direct material expenditure incurred in the production…

Q: A significant cost of quality that is not recorded in the accounting records is the * failure cost…

A: Opportunity Cost - Opportunity Cost is the cost that would have been incurred if we have decided to…

Q: Which would NOT be relevant in a make- or- buy decision? a) factory deprciation b) direct materials…

A: The cost can be classified into two categories i.e fixed cost and variable cost. The  FIxed cost…

Q: Please explain thoroughly with examples. Which statement(s) is True/False and why? If none are true,…

A: Cost accounting is the method which followed by a manufacturing business in order to estimate the…

Q: It is ridiculous to suggest that process costing may also be suited to service firms, as services…

A: Process Costing:   It is a method of cost accounting where manufacturing costs are collected and…

Q: A possible disadvantage of the ABC method is: (a) It does not allocate costs to the way production…

A: Definition:   Activity-based method (ABC): The costing method which allocates overheads to the…

Q: Which of the following statements is true: a. Activity based costing can only be used in…

A: Activity-based costing shows the economic cost of the department because it allocates indirect costs…

Q: When applied by service companies, the use of the single and multiple department overhead rate…

A: The correct answer is “False.”

Q: Which of the following is a proper classification of this cost?

A: Answer: Period cost

Q: When making outsourcing decisions, which of the following is true? The expected use of the freed…

A: Decision making for make or buy a product are otherwise called as Outsourcing decisions, in order to…

Q: Qualitative and quantitative factors. Which of the following is not a qualitative factor that Atlas…

A: A make-or-buy decision is a strategic choice made by the management between producing an item…

Q: d in the cost of the product b) that it is not really useful for managerial decisions c) that it…

A: A cost accounting system is a system of accounting that is helpful for the internal management to…

Q: Do you agree with the following statements? Check only those with which you agree. Check All That…

A: Variable Costing refers to those costs which are directly related to the production and changes with…

Q: Which among the following is not a relevant cost for decision making? a. Cost of producing…

A: Relevant Cost refers to the incremental and avoidable cost of implementing a business decision.…

Q: Which of the following statements is not true regarding the use of variable and absorption costing…

A: Absorption costing: It refers to the method of product costing in which the price of the product is…

Q: Celestial Products, Ic., has decided to introduce a new product, which can be manufactured by either…

A: Fixed overhead    Computer assisted Labor intensive Fixed overhead  $ 3,960,000 $ 2,280,000…

Q: One disadvantage of activity-based costing is that it cannot be used for external reporting. This is…

A: ABC or Activity based costing is a technique in which various cost divers are used to calculate the…

Q: Which of the following points about the Activity-based costing (ABC) system is NOT a correct…

A: Using activity based costing, the overheads rate is determined for different activities on the basis…

Q: Which of the following is not true regarding continuous improvement?A. It applies to both service…

A: Continuous Improvement means business or process should be improving on regular or continuous basis.…

Q: A basic belief of variable costing is that period costs should be currently expensed. What is the…

A: A variable cost is one of the important method related to costing. Basically it is a expense of a…

Q: Which among the following is not true about traditional costing system? a. This method allocates…

A: Traditional costing is allocating the factory overhead to products based on the volume of the…

Q: In Al-Waha Water Bottling Company, costs of setting up factory machinery for a new production run…

A: Cost accounting is the accounting procedure followed by a manufacturing business to estimate the…

Q: .A manufacturing company properly classifies and accounts for one product as a by-product rather…

A: Answer -  Option A is incorrect because Any by-product may be developed/further processed into a…

Q: Which of the following would not be considered a cost ofquality?a. Lost sales due to bad publicity…

A:

Q: A basic tenet of variable costing is that period costs should be currently expensed. What is the…

A: Variable costs are those costs which changes with change in level of activity. Under variable…

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: Consider how Break-Even analysis would change (i.e. how is the breakeven point affected) in the…

A: The question is related to Breakeven Point. The Breakeven Point is that level of sales at which…

Q: Which of the following is not a qualitative factor that Atlas Manufacturing should consider when…

A: A make-or-buy decision is a strategic choice made by the management between producing an item…

Q: Which of the following statements is true regarding activity-based costing systems?     ABC…

A: Activity-based costing systems have separate indirect cost allocation rates for each activity.  ABC…

Q: What kinds of challenges occurs in the Cost Control and Cost Reduction in the Manufacturing conce

A: Cost Control is different from cost reduction Cost Control focuses/emphasizes on decreasing the…

Q: Which of the following statement is false?         Multiple Choice   Fixed manufacturing overhead…

A: Under the absorption costing method, the fixed manufacturing overhead is allocated to units produced…

Q: Which of the following statements is not false of costing​ systems?   A. ​Activity-based costing…

A: Introduction: Traditional costing is the more simplest method which typically delivers less accuracy…

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.