“Department indirect-cost rates are never activity-cost rates.” Do you agree? Explain.

Q: ‘Costs maybe classified in a different type of behavioural costs such as variable and fixed costs…

A: solution : concept : variable costs               variable costs are those costs which varies along…

Q: 9) Which of the following statements about normal costing is true?   A) Direct costs and indirect…

A: Introduction:- Under the normal costing :- It assign costs to products based on the materials,…

Q: Which one of the following statements is incorrect? A. The reciprocal method is rarely used in…

A: The following statement is Incorrect:: In the step method, any amount of the allocation base that is…

Q: Are joint cost allocations useful? If they are, for what purpose?

A: Definition: Joint cost: The total costs incurred prior to the split-off point where the joint…

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

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

Q: Sunk costs should always be included when considering the cost of an activity. True or false, and…

A: Sunk cost are those cost which are already incurred by the business , But business cannot recovered…

Q: Why aren’t common fixed costs allocated to segments under the contribution approach?

A: Contribution approach income statement segregates variable and fixed costs. In this approach…

Q: Which of the following is a limitation of activity-based costing? More cost pools Poorer management…

A: Introduction: ABC costing also called as Activity based costing. According to the consumption cost…

Q: The reason for some costs to be mixed in nature is? A. Presence of sunk cost in the cost structure.…

A: Fixed costs are those costs which do not change with change in level of activity like Rent Expense…

Q: _8 following is NOT likely to happen if the costs of are never allocated to operating departments?

A: The right answer is option A. Users department are more likely to outsource their need service…

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: Distinguish between discretionary fixed costs and committed fixed costs.

A: Discretionary fixed costs and committed fixed costs: Both costs are considered as fixed costs but…

Q: State and explain whether the following statements are valid or not valid: A. Target costing…

A: Target costing is a costing management method where it is the difference between targeted sales…

Q: Identify the relative advantages and disadvantages of basing transfer prices on total costs,…

A:

Q: What are the limitations of joint product and departmental cost allocation?

A: The limitations of joint product and departmental cost allocation.

Q: In a homogeneous cost pool, all costs have a similar cause-and-effect relationship with the cost-…

A: The homogeneous cost pool is a collection of different costs whose changes are based on single base.…

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

A: ABC system means Activity Based Costing system in which all indirect costs or overhead costs are…

Q: Which of the following statements is most correct about step costs?  they have the same behaviour…

A: Marginal costing is the one by which the cost of additional unit production is calculated. Under…

Q: In general, what oconditions would lead to greater differences in the amounts allocated to operating…

A: Service departments or cost centers are those departments which provide services to other…

Q: What is one key way to reduce cost-allocation disputes that arise with government contracts?

A:

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: TRUE OR FALSE In activity-based costing systems, costs are not classified as either direct or…

A: Answer:   In activity-based costing systems, costs are not classified as either direct or indirect…

Q: Is activity-based costing always beneficial to an organization? in what situations would itb…

A: Activity based costing is a system of costing in which  allocated on the basis of activity done .it…

Q: The reason for some costs to be mixed in nature is: Presence of sunk cost in the cost structure.…

A: Mixed Cost:- This cost is a combination of the fixed cost and variable cost. It means that one…

Q: how to solve plantwide overhead rate versus departmental rates, effects on pricing decisions?

A: Since there are multiple sub parts in the question, calculation will be given for first three sub…

Q: 18. Which of the following cost allocation methods does not take into consideration that service…

A: The direct method is the simplest of the four. The direct method allocates the costs of each of the…

Q: Why can unitized fixed costs cause errors in decision making?

A: Decision making process: Decision making process requires an understanding of a grasp of illegal…

Q: The only method of allocation of service department costs to producing departments that considers…

A: There are only three methods for allocating  service department  costs to production/producing…

Q: “Under the general guideline for transfer pricing, the minimum transfer price will vary depending on…

A: Transfer Pricing: This refers to a process of pricing in which one sub-unit of an organization…

Q: Why is there often a conflict between the performance evaluation and cost-minimization objectives of…

A: SOLUTION- TRANSFER PRICING   IS THE ACCOUNTING PRACTICE THAT REPRESENTS THE PRICE THAT ONE DIVISION…

Q: An alternative concept of fairness in cost allocation, absent the cause-and-effect basis, includes?

A: A cause and effect allocation basis is the cost allocation method in which the allocation base is…

Q: Classify the following fixed costs as normally being either committed or discretionary:c. Research.

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: ou agree from the following statements- Explain in details with Variable costs are controllable but…

A: Statement is TRUE but not entirely True. Variable costs are controllable cost while fixed costs are…

Q: Classify the following fixed costs as normally being either committed or discretionary:f. Management…

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: Do you agree from the following statements- Explain in details with examples 1.Variable costs are…

A: IntroductionProduction cost may be defined as that type of expenses which occurs during the…

Q: What type of cost is expertise? Is it a fixed cost or a variable cost? Defend your answer.

A: SOLUTION- FIXED COST  ARE THOSE COST WHICH DO NOT CHANGE WITH A REASONABLE LEVEL OF CHANGE .…

Q: what is the definition of fixed, variable, and mixed costs? Are variable costs or fixed costs easier…

A: Introduction: Cost accounting is a type of managerial accounting that capture a firm's production…

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.