Explain the major reasons for allocating costs.

Q: Distinguish between escapable and inescapable costs. Give an example of each.

A:

Q: Understand thedifferences between directand indirect costs

A: Cost:   It refers to the economic value incurred by an organization for manufacturing a product or…

Q: Distinguish between two methods of allocating common costs.

A: Cost Allocation Method: The cost allocation method is the method by which the costs to be assigned…

Q: Define restructuing costs.

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: Explain the difference between direct costs and indirect cost

A: Direct cost is the cost incurred by the organization while performing their center business process…

Q: costs and are allocated based on

A: Fixed costs allocated = 25% * Total costs 25% * $48000 = $12000

Q: What are the challenges of using the incremental cost allocation method when allocating common costs…

A: Cost Allocation Method:   The cost allocation method is the method by which the costs to be assigned…

Q: Define relevant cost.

A: Relevant cost is a cost which can be changed with change in selection of a alternative decision.…

Q: Describe the conference method for estimating a cost function. What are two advantages of this…

A: Conference method:

Q: Giving examples, distinguish between  Direct costs and indirect costs

A: Direct Costs are the costs that can be directly traced with the goods produced. It generally…

Q: a) Classify each cost element as either fixed, variable, or mixed

A: Cost Accounting: Fixed Cost: The cost which constant for the year and there is no impact of any…

Q: Explain the relationship between the costs of flexible and committed resources, usage of resources,…

A: Cost accounting system: Cost accounting system of an organization consists of procedures and…

Q: What are the two approaches that can be used to adjust for flotation costs?

A: The cost which is arises while issue new stock or shares in the market is commonly known as floating…

Q: relevant and irrelevant cost

A: Relevant and irrelevant costs are categories of costs based on their effect on decision making.

Q: define direct material costs?

A: Cost: Cost refers to the expenses incurred by the business to earn revenue from sales, in other…

Q: tracing and allocating cost to cost object

A: Cost Allocation is the process of identifying various cost pools and allocating them to cost object…

Q: Define the term total costs.

A: Costs: Costs refer to the expenses incurred by the business in the procurement of the materials,…

Q: In order to analyze the c-v-p relationship , what types of costs should be classified ? Why?

A: C-V-P relationship means the cost volume and profit relationship. This is usually done to recognize…

Q: cost

A: A standard fee accounting gadget works with the aid of using monitoring uncooked substances as they…

Q: Describe the concept of the INITIAL DIRECT COSTS?

A: Definition:   Initial direct costs: Initial direct costs refer to the costs that a lessor incurs…

Q: Define direct costs and indirect costs?

A: Direct cost: Direct cost is the cost assigned to the cost object which is directly related to that…

Q: Briefly define total cost and marginal cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: It is important to understand variable and fixed costs, average expenses, and the overall costs.

A: Introduction: We're only responding to the first three subparts, so if you have a question that…

Q: Give an example of cost which is a part of unavoidable cost.

A: Unavoidable fixed costs are fixed costs that cannot be avoided by discontinuing a product line or…

Q: Define the terms sunk cost and differential cost.

A: Differential cost:  Differential cost is the change in total cost due to increase or decrease in…

Q: Name three factors that will affect the classification of a cost as direct or indirect?

A: Cost: Cost refers to the expenses incurred by the business to earn revenue from sales, in other…

Q: Identify each of these costs as fixed, variable, or mixed.

A:

Q: Define the term classification of costs.

A: Classification of cost is the process of grouping of costs according to same characteristic. So,…

Q: Why is it important to establish appropriate cost pools?

A: Activity cost pools are used in activity based costing which attempts to absorb overheads in a more…

Q: Define the term cost per service.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Describe the difference between prime costs and conversion costs?

A: Solution:-  Difference between prime costs and conversion costs as follows under:-

Q: List three methods to measure cost behavior.

A:

Q: Explain how a cost item can be both a direct cost and an indirect cost.

A: Direct Cost:  Direct Cost means Cost which can be directly allocated to Cost centre/Cost unit. It…

Q: Explain the difference between a direct cost and an indirect cost.

A: Direct Cost: A direct cost is a cost that can directly be associated with a particular department or…

Q: Describe the concepts of contribution margin, relevant range, and relevant costs

A: Solution:- Analysis the concepts of contribution margin, relevant range, and relevant costs as…

Q: Explain an example of value added cost.

A: value-added costs: A value-added costs  add to the desirability of the product or services in the…

Q: Define direct material costs with an example?

A: Cost: Cost refers to the expenses incurred by the business to earn revenue from sales, in other…

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.