Answered: Do you think that the pandemic and…

Do you think that the pandemic and shortages could cause some companies to decide to use a different method of costing? If so, why?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 9CDQ

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

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Do you think that the pandemic and shortages could cause some companies to decide to use a different method of costing? If so, why?

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Why is the direct labor cost category eliminated in many lean manufacturing environments?
Would the pandemic and shortages could cause some companies to decide to use a different method of costing? If so, why and what method would they use?
Explain why a new product costing system may be needed when line managers suggest that an apparently profitable product be dropped.
Prentice Company is considering dropping one of its product lines. What costs of the product linewould be relevant to this decision? What costs would be irrelevant?
What are the different approaches Tesla Motors could take to reduce possible undesirable behavior associated with the use of absorption costing at its Fremont plant?
Why do most companies use normal or standard costing? After all, actual costing gives the actual cost, so the firm could just wait until it knows what the cost will be. What could be some ramification of waiting to observe actual cost?
Which of the following is not a consideration when a manager is deciding to discontinue a product or product line? Whether the product has a positive or negative contribution margin. Determining if direct fixed costs could be avoided if the product or product line is discontinued. If discontinuing the product or product line will affect sales of remaining products. Not having any free capacity.
Why do product costing systems using a single, volume-based cost driver tend to overcost highvolume products? Will there be any undesirable strategic effects from such product cost distortion?
Which one of the following statement is not correct? Group of answer choices -Opportunity costs are only considered when resources are limited. -Break-even analysis is used to determine how many units of a product or a service a business has to sell to cover all its costs. -Both fixed and variable costs influence short-term decision-making. -Short-term decision-making is all about analysing those costs that will change as a result of taking a particular action.
The company director of the marketing department, stated that the company should not adopt activity-based costing because it will result in the costs of some of the products going up but the market will not allow for raising prices. How would you respond?
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 is not an application of cost-volume-profit analysis? Setting prices for products and services. Performing strategic “what-if” analyses. Deciding whether to cut a product line. Determining the short-term cost or profit implications of many decisions. Deciding whether to make or buy a given product or service.