All of the following are reasons to use backflush costing, except Managers tend to use their limited resources on developing more 6. a. accurate product cost data. b. Complex ledger systems may be too costly to develop under traditional cost tracking systems. Accuracy is critical when allocating accurate conversion cost d. с. per unit. A fairly rough allocation may be sufficient for external reporting purposes.

All of the following are reasons to use backflush costing, except Managers tend to use their limited resources on developing more 6. a. accurate product cost data. b. Complex ledger systems may be too costly to develop under traditional cost tracking systems. Accuracy is critical when allocating accurate conversion cost d. с. per unit. A fairly rough allocation may be sufficient for external reporting purposes.

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Description: 6. All of the following are reasons to use backflush costing, exceptManagers tend to use their limited resources on developing moreaccurate product cost data.Complex ledger systems may be too costly to develop under traditionalcost tracking systems.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 of the following statements is false ? a. Volume-based costing has typically resulted in undercost for high-volume products and overcost for low-volume products . b. All the statements are false . c . Activity-based costs per unit are always greater than volumebased costs per unit. d. Activity-based costing typically provides less information about product costs while requiring more recordkeeping. e. Different cost allocation methods are constructed so that they typically result in the same or similar estimates of how much it costs to make a product.
Which of the following statements is false? (You may select more than one answer.)a. Activity-based costing systems usually shift costs from low-volume products tohigh-volume products.b. Benchmarking can be used to identify activities with the greatest potential forimprovement.c. Activity-based costing is most valuable to companies that manufacture products thatare similar in terms of their volume of production, batch size, and complexity.d. Activity-based costing systems are based on the assumption that the costs included ineach activity cost pool are strictly proportional to the cost pool’s activity measure.
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 of the following statements is not true regarding the use of variable and absorption costing for performance measurement? a. The net income reported under the absorption method is less reliable for use in performance evaluations because the cost of the product includes fixed costs, which means the level of inventory affects net income. b. The net income reported under the contribution income statement is more reliable for use in performance evaluations because the product cost does not include fixed costs. c. Variable costing isolates contribution margins to aid in decision making. d. The Internal Revenue Service allows either absorption or variable costing as long as the method is not changed from year to year, while U.S. GAAP only allows absorption costing.
Which of the following statements is not true regarding the use of variable and absorption costing for performance measurement? The net income reported under the absorption method is less reliable for use in performance evaluations because the cost of the product includes fixed costs, which means the level of inventory affects net income. The net income reported under the contribution income statement is more reliable for use in performance evaluations because the product cost does not include fixed costs. Variable costing isolates contribution margins to aid in decision making. The Internal Revenue Service allows either absorption or variable costing as long as the method is not changed from year to year, while U.S. GAAP only allows absorption costing.
7. Which of the following costs should not be included in product costs for internal management reports that are used for decision-making? Costs of unit-level activities. Costs of batch-level activities. Costs of product-level activities. Costs of organization-sustaining activities. 8. The following are advantages of applying the value chain analysis in strategic cost management. Which provides the LEAST effect? The identification of EXCESSIVE RESOURCE USAGE in value adding activities and the potential to avoid them The identification of NON-VALUE ADDING ACTIVITIES and the potential to avoid them The identification of COSTS THAT ALLOW PRODUCT DIFFERENTIATION and prioritizing them The identification of EXCESSIVE COMMITTED AND FIXED COSTS, and the potential of avoiding them 9. Aling Rosa is a sari-sari store owner. Along the street where she operates her store, there are three other stores offering similar products at similar prices. What should she do to allow her business to thrive…
Disadvantages of activity-based costing include which of the following? a. It is not acceptable under GAAP for external reporting. b. It can be costly to implement. c. It can be used in activity-based management. d. Both a. and b.
Please explain the answer thoroughly. Is this statement "if all the allocation base in the predetermined overhead rate does not drive overhead costs, it will nevertheless provide reasonably accurate unit product costs because of the averaging process." same as this "If the allocation base does not drive the cost of overhead, overhead cost averaging will yield reasonably accurate unit product costs."? If yes, please let me know if it a true or false with a detailed explanation.
When a traditional, volume-based costing system is used, which of the following products is most likely to suffer from cost distortion? Select one O a. A low-volume, low-complexity product ObA low-volume, high-complexity product O CA low-volume, medium-complexity product O d. none of the given answer O e. A high-volume, medium-complexity product
when backflush costing is used, managers generally do not use which of the following to keep tract of operation? a. complex costing b. computer monitoring c. non financial measures d. personal observations
Which of the following statements is not false of costing systems? A. Activity-based costing systems tend to use fewer cost pools than does a traditional costing system. B. Many traditional costing systems can distort product costs and profitability. C. Activity-based costing systems tend to combine various costs into a single cost pool. D. Traditional costing systems tend to be more costly than activity-based costing systems