Why do product costing systems using a single, volume-based cost driver tend to overcost highvolume products? Will there be any undesirable strategic effects from such product cost distortion?

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: Management is considering a one-time-only special order. There is sufficient idle capacity to fill…

A: Introduction:- Management (or management) is the administration of a company, whether for-profit,…

Q: When making outsourcing decisions, which of the following is true? a. Expected use of the freed…

A: When making decision on make or buy decision or which are otherwise called as Outsourcing decisions,…

Q: Why are support department costs difficult to apply to products?

A: Given: The difficulty in applying the support department costs on products.

Q: What qualities of a product have an effect on logistical costs? Examine the influence that these…

A: Logistics is one of the vital part of the supply chain management that has direct relations with the…

Q: Which of the following is not a potential advantage of variable costing relative to absorption…

A: Variable costing is a method in which only variable cost is considered in product cost. Absorption…

Q: Challenges with how direct costs are distributed to cost objects in different companies can give…

A: As the proprietor of a startup or independent company, there are critical perspectives you ought to…

Q: Which of the following is NOT a use of CVP (Cost-Volume-Profit) analysis? a.what is the impact on…

A: SOLUTION- CVP ANALYSIS IS USED TO DETERMINE HOW CHANGES IN COSTS AND VOLUME EFFECTS A COMPANY'S…

Q: Why are cost centers considered to be more appropriate than profit centers for production…

A:

Q: Managers often assume a strictly linear relationship between cost and the level of activity.How can…

A: The managers often assume the strictly linear relationship between the cost and the level of…

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: In a make versus buy decision which of the following factors is not relevant? fixed production…

A: Make or buy decision:   Every company wants to maximize its net income. The best method to increase…

Q: Which of the following statements is false ? a. Volume-based costing has typically resulted in…

A: There are two methods of costing that are in place generally. One is volume based costing and other…

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: Which one of the following is not correct about variable costing systems? Select one: O a. Focuses…

A: Variable costing: Under this method refers to the cost technique under which only variable costs are…

Q: How lean production eliminate the difference between absorption and variable costing

A: Following is the answer to the given question

Q: It is ridiculous to suggest that process costing may also be suited to service firms, as services…

A: Process Costing:   It is a method of cost accounting where manufacturing costs are collected and…

Q: ?Which of the following statements is false Activity-based costing typically provides less…

A: In order to solve in this question, we need to analyse the given statement one-by-one.

Q: Managers often assume a strictly linear relationship between cost and volume. How can thispractice…

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: The flow of goods through a production process cannot be at a faster rate than the slowest…

A: The Theory of Constraints is a method for determining the most significant limiting factor (i.e.,…

Q: Given the weaknesses of cost-based pricing, why wouldany company use this method?

A: Cost-based pricing means setting prices based on the cost of goods and services.  The major…

Q: When making outsourcing decisions, which of the following is true? The expected use of the freed…

A: Decision making for make or buy a product are otherwise called as Outsourcing decisions, in order to…

Q: Why should managers worry about product overcosting or undercosting?

A: A product is said to be over costing when it consumes low level of resources but is reported to have…

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

A: Accounting:   Accounting is the art of recording, classifying and summarizing in a significant…

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

A: Absorption costing: It refers to the method of product costing in which the price of the product is…

Q: What are the key reasons for product cost differences between simple costing systems and ABC…

A: Simple costing method is a traditional costing method under which indirect costs are assigned to…

Q: Why is there often a conflict between the performance evaluation and cost-minimization objectives of…

A: SOLUTION- TRANSFER PRICING   IS THE ACCOUNTING PRACTICE THAT REPRESENTS THE PRICE THAT ONE DIVISION…

Q: A basic belief of variable costing is that period costs should be currently expensed. What is the…

A: A variable cost is one of the important method related to costing. Basically it is a expense of a…

Q: Why do product-costing systems based on a single, volume-based cost driver tend to over-cost…

A: Single volume-based cost driver means the basis of allocation of costs to particular products using…

Q: Which of the following option is correct regarding difference in activity-based costing when…

A: Simple costing and activity based costing does not yield in similar since the cost drivers will…

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

A: Answer:   Option d.

Q: Would the pandemic and shortages could cause some companies to decide to use a different method of…

A: The costing methods is the methods that helps the coampiens to identify the amount spent on the…

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: Which of the following is not a potential advantage of variable costing relative absorption costing?…

A: Cost volume profit analysis is calculated by dividing the fixed cost by the unit contribution…

Q: A basic tenet of variable costing is that period costs should be currently expensed. What is the…

A: Variable costs are those costs which changes with change in level of activity. Under variable…

Q: characteristic of a lean production layout?

A:

Q: Why do product-costing systems based on a single, volume-based cost driver tend to overcost…

A:

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: What are the pros/cons of product costing allocation methods and how they influence distortion of…

A: Product costing allocation methods are used to assign or allocate a cost to manufactured/produced…

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: Briefly explain the potential negative consequences in pricing decisions from using a traditional,…

A:

Q: TRUE OR FALSE Companies that use just-in-time processing techniques will have significant…

A: A just-in-time inventory system is an inventory management system wherein the company makes the…

Q: What is the differential cost to produce product Zeta?

A: Given information is: Cost of producing Alpha = $23 per unit Additional cost of producing Zeta = $25…