Managers often assume a strictly linear relationship between cost and the level of activity.Under what conditions would this be a valid or invalid assumption?

Q: ‘Costs maybe classified in a different type of behavioural costs such as variable and fixed costs…

A: solution : concept : variable costs               variable costs are those costs which varies along…

Q: Marginal Costing

A: Option a is wrong because marginal costing is not a technique of cost reduction. Cost reduction…

Q: How do managers plan for variable overhead costs?

A: Variable Cost: The cost which fluctuates on the basis of the output level produced. The variable…

Q: True or False Cost and managerial accounting are not the same things

A: Cost accounting is the process of accounting and controlling the cost of a product,operation or…

Q: TRUE OR FALSE Activities become the fundamental cost accumulation point.

A: Answer:   Activities become the fundamental cost accumulation point.   The statement is TRUE

Q: “Management accounting deals only with costs.” Do you agree? Explain?

A: Management accounting is wide field which encompasses cost computation, pricing analysis,process…

Q: Give an example of how a manager can decrease variable costs while increasing fixed costs?

A: Variable Cost: Variable costs are costs which are directly vary with the change in production.…

Q: a. What problems are associated with using the average cost per unit as a performance measure? b.…

A: Average cost per unit only rewards the manager for removing tasks or materials from the process…

Q: Why do managers consider direct costs to be more accurate than indirect costs?

A: Cost: Cost refers to the expense incurred by the business to earn revenue from sales. In other…

Q: How do managers decide whether a cost is adirect or an indirect cost?

A: Cost refers to the amount of money incurred for acquiring a product or manufacturing a product. Cost…

Q: How do managers decide whether a cost is avariable or a fixed cost?

A: Cost refers to the amount of money incurred for acquiring a product or manufacturing a product. Cost…

Q: What are the consequences of broad averaging on costs? Explain?

A: Broad Averaging:Broad averaging is also known as peanut butter cost is a costing approach of…

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: TRUE OR FALSE Net income under variable costing is unaffected by changes in production levels.

A: in variable costing fixed manufacturing overhead are exclude from the cost of production

Q: Which of the following costs has no relationship with the level of output? a) Semi-variable costs.…

A: Semi variable and variable costs has a direct relationship with the level of output. Stepped fixed…

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: Is activity-based costing always beneficial to an organization? in what situations would itb…

A: Activity based costing is a system of costing in which  allocated on the basis of activity done .it…

Q: Why might it be misleading to show the fixed costs on a per unit basis?

A: Fixed Costs are those costs that do not change in aggregate in relation to the level of production…

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: When making decisions, managers should consider a. revenues that differ between alternatives. b.…

A: The explanation for the given options:   a. A manager on the verge of making decisions must consider…

Q: From the standpoint of cost control, why is the FIFO method superior to the weighted-averagemethod?…

A: FIFO method is First in First out method in which inventory which is purchased first will be sold…

Q: Give an example of how a manager can increase variable costs while decreasing fixed costs?

A: Fixed costs refers to those which do not change according to the change in units of productions.…

Q: Costs over which a manager has control are called uncontrollable costs. O noncontrollable costs.…

A: Common costs are not related to specific product. It is not in control of Manager.

Q: Direct costs are classified by controllability.    True False Can be true, can be false

A: Direct costs are those costs which are directly incurred for purchase or production of goods in the…

Q: What criteria might managers use to guide cost-allocation decisions? Which are the dominant…

A: Cost Allocation:The process of assigning the cost to the cost object is cost allocation. The cost…

Q: a cost that is irrelevant when making managerial decision O fixed cost O opportunity cost O…

A: Cost means the amount spent on doing some business or activity.

Q: Do you agree from the following statements- Explain in details with examples 1.Variable costs are…

A: IntroductionProduction cost may be defined as that type of expenses which occurs during the…

Q: A cost that cannot be changed because it arises from a past decision and is irrelevant to future…

A: Definition:

Q: To make predictions about costs and income, you must first classify costs by their behavior.…

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

Q: What is the danger in allocating common fixed costs among product lines or other segmentsof an…

A: Fixed cost: It can be defined as the cost that does not vary with an increase or decrease in the…

Q: Operating leverage refers to the extent to which an organization's cost structure is made up of:…

A: Operating leverage is a ratio of how of change in sales effect the change in operating income. It…

Q: Give an example how manager can decrease variable cost while increasing fixed cost

A: Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to 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.

Q: Explain the behavioral problem that can result when cost-plus prices are based on variable cost.

A: Following is the answer to the given question