“In accounting for spoiled units, we are dealing with cost assignment rather than cost incurrence.”Explain.

Q: explain why GAAP requires full absorption costing (instead of variable costing) if absorption…

A: Introduction:- i)Absorption costing:- Under the absorption costing, The following costs included in…

Q: Why is ABC usually considered more accurate than traditional costing methods?

A: Activity-based costing: It is a method that helps in finding the activities performed by a company…

Q: Which of the following is false about actual overhead while using normal costing?

A: In  normal cost system, Unit cost is determined  by adding actual direct materials, actual direct…

Q: TRUE OR FALSE A cost function is useful only in an activity-based costing system.

A: Answer:   A cost function is useful only in an activity-based costing system.     The statement…

Q: Which of the following is an example of an indirect cost? Multiple Choice Cost of labor Cost of…

A: Indirect Cost are expenses other than direct expenses are known as indirect  expenses. These cannot…

Q: Briefly explain two factors that tend to result in product cost distortion under traditional,…

A: Traditional volume based product costing system is a costing system in which total factory overheads…

Q: What is the difference between whole units to be accounted for and whole units to be assigned costs?…

A: Difference between whole units to be accounted for and whole units to be assigned costs The whole…

Q: 1. Differentiate between spoiled and defective material, why costing procedure is different for…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Why can full cost accounting lead to wrong management decisions?

A: Full cost accounting says that total costs of the product either it is fixed costs or it is variable…

Q: In a special order situation, any fixed cost associated with the order is irrelevant cost. True…

A: This question deals with the concept of relevant costing. In special order situation, generally all…

Q: On the cost reconciliation part of the production report, the weighted-average method treats…

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: Explain why a costing system that uses a volume-based rate is likely to produce distorted…

A: A traditional volume-based cost allocation systems that use only drivers tend to vary directly with…

Q: TRUE OR FALSE When absorption costing is used for external reporting, variable costing can still be…

A: There are various approaches which can be prepared for reporting purpose. Two of which are variable…

Q: Indirect material cost is that which cannot be conveniently identified with and allocated to cost…

A: Cost: It can be defined as the total amount that is spent by a business in manufacturing a product.

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: Why is it necessary to distinguish between variable and fixed costs when dealing with mixed costs

A: Introduction:- Every Business expenses are classified as either fixed or variable costs. on other…

Q: Some costs that possibly could be traced directly to cost objects are nonetheless classified as…

A: Indirect costs are those costs which cannot be traced or is not cost effective to trace the costs…

Q: As a result of cost distortion, some products will be overcosted while other products will be…

A: Solution: Cost distortions occurs when the overhead costs are not properly allocated,  when the…

Q: 1. Differentiate the treatment of spoilage using the First-in First-Out versus the weighted average…

A: Inventory management refers to the collection of tools, techniques, and strategies for storing,…

Q: Which of the following statement is true under the Standared Costing System a. Standard cost is a…

A: Solution: Standard costing system is the system of cost estimation in the manufacturing process. It…

Q: One disadvantage of activity-based costing is that it cannot be used for external reporting. This is…

A: Introduction Activity based Costing (ABC) is a method of assignment of overhead costs to the…

Q: Describe the concept of management by exception and explain how standard costs help managers apply…

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: How do the cost flows in backflush costing systems differ from those in traditional costing systems?

A:

Q: Explain why all costs are controllable by someone at some time but in the short run some costs may…

A: Cost accounting: The process of identifying, calculating and recording the cost related to the…

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: d in the cost of the product b) that it is not really useful for managerial decisions c) that it…

A: A cost accounting system is a system of accounting that is helpful for the internal management to…

Q: When a traditional, volume-based costing system is used, which of the following products is most…

A: Traditional costing is the allocation of factory overhead to products based on the volume of…

Q: plain how the cost per equivalent unit might be misleading to managers, particularly when a…

A: The term "equivalent units of production" refers to the work-in-process inventory at the end of the…

Q: Why is the term direct costing a misnomer?

A: Direct Costing:The direct costing or variable costing is a method used to allocate the fixed…

Q: Explain the difference between a controllable and a noncontrollable cost.

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

Q: What circumstances might create distortions where estimated costs are not an accurate representation…

A: The estimated costs are the costs determined through the estimation process on past…

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: Explain why unit costs must often be interpreted with caution?

A: Unit cost: Unit cost refers to the average cost per unit which is computed when the total cost of…

Q: explain why actual costing are rarely used in practice

A: Actual costing is a type of costing in which all costs that are incurred actually are considered for…

Q: Differentiate between spoiled and defective material, why costing procedure is different for both?

A: A defective good is a good in which there is a manufacturing fault or defect, but this fault can be…

Q: Which of the following statements is not true regarding the use of variable and absorption costing…

A: Answer:   Option d.

Q: One of the primary uses of a cost of production report is to assist management in controlling…

A: Production Cost Report:   A production cost report is used by the firm to summarise the production…

Q: In activity-based costing, some manufacturing costs may be excluded from product costs TRUE FALSE

A: Lets understand the basics. Activity based costing is as the name suggest allocate cost based on the…

Q: Whether any of the following sentences about abnormal spoiling is true? a. It is considered to be…

A: Spoilage refers to materials or components that have been damaged, which are beyond the capacity of…

Q: ABC generally causes the least amount of cost distortion among products because indirect costs are…

A: Activity-based costing (ABC): Activity-based costing refers to the method of costing where the…

Q: Indirect cost is the cost that cannot be directly attributed to the production as these costs are…

A: Cost is the amount incurred in the regular course of the business. It may be direct or indirect.

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.