Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Textbook Question
Chapter 1, Problem 26Q
Why have companies such as Harley-Davidson stopped tracking direct labor cost as a separate cost category?
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Which of the following is NOT true ?
a.
The salary of the factory manager is considered to be an indirect cost of producing one unit of product.
b.
An indirect cost cannot be easily traced to a particular cost object.
c.
The classification of a cost as direct or indirect does not depend on the cost object.
d.
A direct cost can be easily traced to a particular cost object.
Which of the following is not one of the indicators of adoption of Activity Based Costing for a business?
A. product diversity increases
• B. the proportion of manufacturing overhead costs not related directly to production volume increases
• C. the proportion of manufacturing overhead costs decreases
• D. the proportion of direct labour costs decreases
Under variable costing, which of the following costs would not be included in finished goods inventory?
a. electricity used by factory machinery
b. steel costs for a machine tool manufacturer
c. salary of factory supervisor
d. wages of machine operator
Chapter 1 Solutions
Principles of Cost Accounting
Ch. 1 - How does the cost accounting function assist in...Ch. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5QCh. 1 - Prob. 6QCh. 1 - How is cost accounting information used by...Ch. 1 - Why is unit cost information important to...Ch. 1 - For a manufacturer, what does the planning process...Ch. 1 - How is effective control achieved in a...
Ch. 1 - Define responsibility accounting.Ch. 1 - What criteria must be met for a unit of activity...Ch. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - What actions should a CMA take when the...Ch. 1 - Prob. 16QCh. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - How is cost accounting related to: financial...Ch. 1 - How does the computation of cost of goods sold for...Ch. 1 - How would you describe the following accounts:...Ch. 1 - Prob. 22QCh. 1 - What is the difference between a perpetual...Ch. 1 - What are the basic elements of production cost?Ch. 1 - How would you define the following costs: direct...Ch. 1 - Why have companies such as Harley-Davidson stopped...Ch. 1 - Distinguish prime cost from conversion cost. Does...Ch. 1 - In what way does the accounting treatment of...Ch. 1 - How do cost of goods sold and cost of goods...Ch. 1 - How are nonfactory costs and costs that benefit...Ch. 1 - What is a mark-on percentage?Ch. 1 - Prob. 32QCh. 1 - When is process costing appropriate, and what...Ch. 1 - What are the advantages of accumulating costs by...Ch. 1 - What is a job cost sheet, and why is it useful?Ch. 1 - What are standard costs, and what is the purpose...Ch. 1 - If the factory operations and selling and...Ch. 1 - Study the performance report for Barbaras Bistro...Ch. 1 - Note that Barbaras Bistro in Figure 1-2 prepares...Ch. 1 - Cost of goods soldmerchandiser The following data...Ch. 1 - The following data were taken from the general...Ch. 1 - Prob. 5ECh. 1 - Explain in narrative form the flow of direct...Ch. 1 - The following data are taken from the general...Ch. 1 - The following data are taken from the general...Ch. 1 - The following inventory data relate to Edwards,...Ch. 1 - The following is a list of manufacturing costs...Ch. 1 - Leen Production Co. uses the job order cost system...Ch. 1 - Gerken Fabrication Inc. uses the job order cost...Ch. 1 - Cycle Specialists manufactures goods on a job...Ch. 1 - Prepare a performance report for the dining room...Ch. 1 - The following data were taken from the general...Ch. 1 - The following data were taken from the general...Ch. 1 - Statement of cost of goods manufactured; income...Ch. 1 - The adjusted trial balance for Appleton...Ch. 1 - The post-closing trial balance of Custer Products,...Ch. 1 - Selected account balances and transactions of...Ch. 1 - OReilly Manufacturing Co.s cost of goods sold for...Ch. 1 - Glasson Manufacturing Co. produces only one...Ch. 1 - Sultan, Inc. manufactures goods to special order...Ch. 1 - Spokane Production Co. obtained the following...Ch. 1 - Bangor Products Co. obtained the following...Ch. 1 - Potomac Automotive Co. manufactures engines that...Ch. 1 - Required Ethics Mary Branson is the Division...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Why is the direct labor cost category eliminated in many lean manufacturing environments?arrow_forwardExplain why service companies use different activity bases than manufacturing companies to classify costs as fixed or variable.arrow_forwardWhat are the similarities in and differences between the manufacturing cost flows for job-order firms and process firms?arrow_forward
- Which among the following is not a direct cost? a. Labour b. Raw material c. Factory wages d. Selling overheads fastarrow_forwardHow do I find the "actual variable costs" in a list of transactions? It would be direct labor, direct material, variable manufacturing overhead, variable selling expense, and variable administrative expense, but what does that look like in a list of transactions for a business. How do I identify those costs?arrow_forwardDescribe how a large retailer such as Lowes would assign overhead costs to products.arrow_forward
- In recent years, why has labor become such a small part of product costs and how can its use in overhead allocation perpetrate errors in decision-making?arrow_forwardWhich of the following statements is false? (You may select more than one answer.)a. In recent years, most companies have experienced increasing manufacturing overhead costs in relation to direct labor costs.b. Activity-based costing systems may use direct labor-hours and/or machine-hoursto assign unit-level costs to products.c. Facility-level costs are not caused by particular products.d. Product-level costs are larger for high-volume products than for low-volumeproducts.arrow_forwardWhy do overhead costs often shift from high-volume products to low-volume products when acompany switches from a conventional costing method to activity-based costing?arrow_forward
- What are the answers to Total Manufacturing cost for both Garcon Co. and Pepper Co.?arrow_forwardWhich of the following is NOT correct about the classifications of costs? Select one: a. On the basis of time of computation, costs are classified into historical costs and pre-determined costs. b. Costs are classified as product costs or period costs according to their behaviour with respect to physical capacity usage of the company. c. Costs are classified into direct costs and indirect costs on the basis of their identifiability with cost units or jobs or processes or cost centres. d. Costs behave differently when level of production rises or falls, and based on this, the costs are classified as fixed, variable, or mixed costs.arrow_forwardWhat are the differences between a company using absorption costing and variable costing when they give managers a bonus for meeting an annual income target?arrow_forward
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