Which of the following statements is true regarding CVP analysis? Select one: A. CVP is only useful in a manufacturing context B. CVP cannot be used in service industries C. CVP can be used with multiple products only if the product ratio is fixed and based on a weighted average unit contribution margin D. CVP is useful in all types of business and with any number of products and product mixes E. None of the above

Which of the following statements is true regarding CVP analysis? Select one: A. CVP is only useful in a manufacturing context B. CVP cannot be used in service industries C. CVP can be used with multiple products only if the product ratio is fixed and based on a weighted average unit contribution margin D. CVP is useful in all types of business and with any number of products and product mixes E. None of the above

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter1: Accounting As A Tool For Managers

Section: Chapter Questions

Problem 23MC: Which of the following is not true regarding continuous improvement? It applies to both service and...

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Similar questions

Explain how a plantwide overhead rate, using a unit-based driver, can produce distorted product costs. In your answer, identify two major factors that impair the ability of plantwide rates to assign cost accurately.
What is the scattergraph method, and why is it used? Why is a scattergraph a good first step in separating mixed costs into their fixed and variable components?
Which of the following is not true regarding continuous improvement? It applies to both service and manufacturing companies. It is used to reduce performance costs. It rejects the idea of good enough. It can be applied only to improve processes and products but not services and practices.
Break-even for a multiple product firm. can be calculated by dividing total fixed costs by the contribution margin of a composite unit can be calculated by multiplying fixed costs by the contribution margin ratio of a composite unit can only be calculated when the proportion of products sold is the same for all products can be calculated by multiplying fixed costs by the contribution margin ratio of the most common product in the sales mix
Lean manufacturing uses value streams to produce a family of products that require the same manufacturing sequence. Value-stream costing is an approach often used to determine the unit product costs in a lean manufacturing environment. Which of the following best describes how unit costs are calculated using value-stream costing? a. Value stream costs divided by units shipped b. Value stream costs divided by units produced c. (Total prime costs + overhead costs assigned to the value stream using a plantwide rate) divided by units produced d. Activity-based costing assignments within the value stream
Activity-based costing is preferable in a system: when multiple products have similar product volumes and costs with a large direct labor cost as a percentage of the total product cost with multiple, diverse products where management needs to support an increase in sales price
Which statement is correct? A. Activity-based cost systems are less costly than traditional cost systems. B. Activity-based cost systems are easier to implement than traditional cost systems. C. Activity-based cost systems are more accurate than traditional cost systems. D. Activity-based cost systems provide the same data as traditional cost systems.
Explain how lean manufacturing is able to produce small batches (low-volume products) of differing products (high variety).
Continuous improvement is the governing principle of a lean accounting system. Following are several performance measures. Some of these measures would be associated with a traditional standard-costing accounting system, and some would be associated with a lean accounting system. a. Materials price variances b. Cycle time c. Comparison of actual product costs with target costs d. Materials quantity or efficiency variances e. Comparison of actual product costs over time (trend reports) f. Comparison of actual overhead costs, item by item, with the corresponding budgeted costs g. Comparison of product costs with competitors product costs h. Percentage of on-time deliveries i. First-time through j. Reports of value- and non-value-added costs k. Labor efficiency variances l. Days of inventory m. Downtime n. Manufacturing cycle efficiency (MCE) o. Unused (available) capacity variance p. Labor rate variance q. Using a sister plants best practices as a performance standard Required: 1. Classify each measure as lean or traditional (standard costing). If traditional, discuss the measures limitations for a lean environment. If it is a lean measure, describe how the measure supports the objectives of lean manufacturing. 2. Classify the measures into operational (nonfinancial) and financial categories. Explain why operational measures are better for control at the shop level (production floor) than financial measures. Should any financial measures be used at the operational level? 3. Suggest some additional measures that you would like to see added to the list that would be supportive of lean objectives.
Which of the following statements is false? (You may select more than one answer.)a. Activity-based costing systems usually shift costs from low-volume products tohigh-volume products.b. Benchmarking can be used to identify activities with the greatest potential forimprovement.c. Activity-based costing is most valuable to companies that manufacture products thatare similar in terms of their volume of production, batch size, and complexity.d. Activity-based costing systems are based on the assumption that the costs included ineach activity cost pool are strictly proportional to the cost pool’s activity measure.
The main categories of income statement for a manufacturer includes the following, except a. Direct Labor b. Indirect manufacturing c. Direct materials d. Indirect labor Cost allocation assigns indirect costs to cost objects. Select one: True False Technology influences manager’s role on cost behavior. Select one: True False ABC system determines the following key components, except: a. Resources b. Key activities c. Cost objectives d. Raw materials Each decision of value chain does not influence organization performance. Select one: True False Companies adopt ABC system for the following benefits, except: a. Decrease cost related to bad decisions b. Identify changes in the employee productivity c. Keep pace with technological changes d. Take cost reduction advantages.
Multiple costing is a technique of using two or more costing methods for ascertainment of cost by: a.the same industry for same product b.the same firm for same product c.the several firm for same product d.the several industries for same product Achievement of real and permanent reduction in the unit cost of product is called as: a.Cost control b.Cost reduction c.Cost analysis d.Cost estimation