full (absorption) costing approach
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“In decision making, full (absorption) costing approach has become entirely useless as it leads to wrong decisions”. Provide examples and evaluate the statement.
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- A disadvantage of absorption costing is A.) None of the answers are correct. B.) Both answers are correct. C.) That it is not useful in management's decision-making process. D.) That it might encourage inventory buildup when there is no demand. Please dont give plagiarised answers and give best explanationWhich 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.A possible disadvantage of the ABC method is: (a) It does not allocate costs to the way production work occurs (b) It is more expensive to operate than a traditional allocation system (c) It does not help understand the economic impact of management decisions (d) It cannot identify wasteful products and unnecessary costs
- 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.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.Which of the following statements regarding activity-based costing (ABC) is false? A. ABC is not an appropriate tool for analysing non-manufacturing costs. B. ABC can be used to analyse the profitability of customers. C. ABC evolved as a response to problems with traditional costing systems. D. ABC can be used to measure the cost of cost objects.
- Marginal costing can provide useful information for decision-making. However, there are limitations to its usefulness. Identify and briefly explain three of the limitations.”A downside to absorption costing is: a) not including fixed manufacturing overhead in the cost of the product b) that it is not really useful for managerial decisions c) that it is not allowable under GAAP d) that it is not well designed for cost-volume-profit analysisDemonstrate why expressing fixed costs on a per unit of activity basis is misleading and may result in faulty decisions.
- Which of the following is a limitation of activity-based costing? More cost pools Poorer management decisions Less control over overhead costs Some arbitrary allocations continueCritics of absorption costing have increasingly emphasized its potential for leading to undesirable incentives for managers. Give an example.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