In choosing the cost pool, the simplest allocation method is
Q: Unit-based product costing assigns direct labor, direct materials, and overhead to products. Direct…
A: 1 a: Estimated overhead = $720,000 Estimated Direct labor hours = 180,000 Predetermined overhead…
Q: Explain the role of unit cost in task order pricing.
A: Task orders refer to the contract made for specific and separate orders. These are the small…
Q: Describe the two-stage allocation process for assigning support service costs to products in…
A: The method involves identifying and allocating costs to multiple cost objects known as cost…
Q: Features of a job order costing system include all of the following characterisitcs except: A)…
A: When a manufacturer manufactures a variety of products and it wants to determine cost of each job…
Q: Which of the following is the most difficult but most accurate of the commonly used methods for…
A: The cost of support departments is allocated to the production departments. Some a support…
Q: Explain how nonuniform inputs and multiple departments affect process co
A: Solution Concept Process costing is a method of costing where the production process is carried out…
Q: When allocating support department costs, managers must identify cost pools. The choice of cost…
A: Cost pools represents the various cost incurred in the production process of the company that have…
Q: Why are top management support and cross-functional involvement crucial when attempting to implement…
A: Activity based costing system is a form of costing system in which cost is analysed by dividing the…
Q: 1.An activity that has a direct cause-effect relationship with the resources consumed is a(n) Group…
A: In activity based costing the cost are apportioned based on the respective cost drivers
Q: Label each of the following activities as unit-level batch-level, product-level, or facility-level…
A: Following are the cost driver(s) for each activity: Warehouse expense - Product level activities…
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: Assigning indirect costs to departments is completed by ________.
A: Indirect costs are those costs that are not directly related with the production or selling. These…
Q: Under activity-based costing, second stage allocation would involve: O a. Defining activity measures…
A: Steps involved in Activity-based costing - Step 1 - identify and classify the activities involved…
Q: Which of the following is NOT correct about cost center and cost unit? Select one: a. A cost center…
A: Cost accounting is referred to as a branch of accounting that is related to the calculation of total…
Q: omputerised cost
A: The computerized accounting system is an accounting data system that processes financial…
Q: activity-based costing is preferable in a system a) when multiple products have similiar product…
A: To assign overhead costs to products, the methodology which is used is called Activity-Based…
Q: Why does dual cost allocation improve the resulting allocation of service department costs?
A: Dual Cost Allocation segregates total costs into two parts Fixed Costs. Variable Costs. Each…
Q: Match the term with the co decentralized cost center
A: (1) Decentralized = This type of company typically promotes from within Reason: This type of company…
Q: Why is the use of departmental overhead allocation rates considered a refinement over the use of a…
A: Departmental overhead allocation rate: Departmental overhead allocation rates are rates that are…
Q: Compare the total support department costs allocated to each production department under each cost…
A: Calculation of the total support department costs to the Cutting department under the direct method…
Q: explain the cost management information system's two major subsystems
A: The cost management information system's primary goal is to generate outputs for internal users. To…
Q: Of the following systems, which one is most likely to reduce cost distortion to a minimum?…
A: SOLUTION- ACTIVITY BASED COSTING- IT IS METHOD OF ALLOCATING THE COSTS TO THE ACTIVITIES INVOLVING…
Q: Which of the following statements is true with regard to activity-based costing? Multiple Choice…
A: The overhead is applied to the production using various methods as traditional costing and activity…
Q: What factors should be considered in selecting an allocation base to be used in computing a…
A:
Q: Which of the following is referred to as the second stage of cost allocation? O The allocation of…
A: Cost allocation is the assigning and allocating the cost to the specific objects, departments,…
Q: Under activity-based costing, second stage allocation would involve: a. Calculating activity rates O…
A: ABC costing: Here the costs of products are to be allocated by the activities using cost pools. It…
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: Describe the difference between direct and step-down methods to allocate service department costs to…
A: Service departments are those department which provides services to other departments like other…
Q: Which of the following best defines standard costing? a. It is the same as actual costing but…
A: The method of calculating the cost of a manufacturing process is known as standard costing. It's a…
Q: In Activity-based costing, activity measures may include all of the following except: O a. All of…
A: Activity based costing allocates the overhead costs on basis of cost drivers/activity driver
Q: The direct method as used is one method that can be used to re-assign service department cost.…
A: Overhead refers to continuing business expenses that are not directly related to the production of a…
Q: An activity measure Is: Multiple Choice a type of duration driver used in activity-based costing…
A: The activity measure mainly refers to the measure of the volume of activity in an activity. In this…
Q: Which types of overhead allocation methods result in the use of more than one overhead rate during…
A: Some expenses are not directly related to production, are known as overhead costs. Such overhead…
Q: Explain why some production costs must be assigned to products through an allocation process.
A: Production costs: These are the costs incurred on product manufacturing or delivering services by…
Q: Explain briefly why plant-wide, department, and activity-based costing systems show different costs…
A: Plant-wide: Under the plant-wide system, a single rate is used to allocate or assign entire…
Q: activity-based costing
A: Activity based costing refers to the method of costing assigning cost of activity to all the…
Q: Under activity-based costing, second stage allocation would involve: O a. Defining activity measures…
A: Activity-based costing is a method of costing system which focuses on activities. In this method of…
Q: “To ensure unbiased cost allocations, fixed costs should be allocated on the basis of estimated…
A: Cost: It is the monetary value incurred by a company to produce a product or a service.
Q: How to allocate indirect costs to multiple departments using an ABC cost driver?
A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…
Q: The direct method as used by Ultimate Manufacturers is one method that can be used to re-assign…
A: Service department costs are the indirect costs to units produced and therefore these are known as…
Q: Define and explain the two major subsystems of the cost management information system.
A: The Cost Accounting Information System (CAIS) is a monetary accounting system that calculates the…
Q: Which of the following statements is true with regard to activity-based costing? Multiple Cholce…
A: Activity-based costing is a method of costing that identify activities in an business and assigns…
Q: Contrast the productcosts computed under activitybased costing and conventionalcosting methods
A: ABC Costing: The Activity-Based costing system is a way of assigning a cost to the product and…
In choosing the cost pool, the simplest allocation method is
a. Plant-wide allocation
b. Activity center allocation
c. Departmental allocation
d. Traditional approach
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Activity-based management includes both process value analysis and activity-based costing. Which of the following features is primarily associated with process value analysis? a. Defining root causes of each activity b. Identifying cost objects and activity drivers c. Calculating activity rate d. Assigning costs to cost objectsWhen is an activity-based costing system better than a traditional allocation system?Which is not a task typically associated with ABC systems? A. calculating the overhead application rate for each cost pool B. applying a single cost rate C. identifying a cost driver D. more correctly allocating overhead costs
- The following items are associated with a traditional cost accounting information system, an activity-based cost accounting information system, or both (that is, some elements are common to the two systems): a. Usage of direct materials b. Direct materials cost assigned to products using direct tracing c. Direct labor cost incurrence d. Direct labor cost assigned to products using direct tracing e. Setup cost incurrence f. Setup cost assigned using number of setups as the activity driver g. Setup cost assigned using direct labor hours as the activity driver h. Cost accounting personnel i. Submission of a bid, using product cost plus 25 percent j. Purchasing cost incurrence k. Purchasing cost assigned to products using direct labor hours as the activity driver l. Purchasing cost assigned to products using number of orders as the activity driver m. Materials handling cost incurrence n. Materials handling cost assigned using the number of moves as the activity driver o. Materials handling cost assigned using direct labor hours as the activity driver p. Computer q. Costing out of products r. Decision to continue making a part rather than buying it s. Printer t. Customer service cost incurred u. Customer service cost assigned to products using number of complaints as the activity driver v. Report detailing individual product costs w. Commission cost x. Commission cost assigned to products using units sold as the activity driver y. Plant depreciation z. Plant depreciation assigned to products using direct labor hours Required: 1. For each cost system, classify the relevant items into one of the following categories: a. Interrelated parts b. Processes c. Objectives d. Inputs e. Outputs f. User actions 2. Explain the choices that differ between the two systems. Which system will provide the best support for the user actions? Explain. 3. Draw an operational model that illustrates each cost accounting systemwith the items that belong to the system used as examples for each component of the model. 4. Based on the operational models, comment on the relative costs and benefits of the two systems. Which system should be chosen?What are the objectives of a cost management information system?Define and explain the two major subsystems of the cost management information system.
- Describe the concept of a cost center and, using a specific organization, give an example of how this might be used to achieve the strategic goals of the organization.The second stage of customer-based activity-based costing entails the assignment of: a. resource costs to sales departments. b. resources costs to distribution channels. c. customer-related activity costs to products. d. customer-related activity costs to customers.Why is the diect method of support department cost allocation less accurate than the sequential and reciproval services methods?
- How does management determine the order in which support department costs are allocated under the sequential method?Can a company gather information for both variable and absorption costing systems?What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to the products, calculate the overhead application rate for each cost pool, identify the cost pools assign the costs to the products, identify the cost drivers, calculate the overhead application rate for each cost pool, identify the cost pools identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products identify the cost pools, identify the cost drivers, calculate the overhead application rate for each cost pool, assign the costs to the products
