SURVEY OF ACCOUNTING 360DAY CONNECT CAR
5th Edition
ISBN: 9781260591811
Author: Edmonds
Publisher: MCG
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Chapter 11, Problem 2E
To determine
Identify the each of the items as fixed cost, variable, or mixed cost.
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Question 6.1
For each item listed, select the appropriate purpose of cost allocation from the list below. A purpose may be used more than once.
A - To provide information for economic decisions
B - To motivate managers and other employees
C - To measure income and assets for reports to external parties
D - To justify costs or compute reimbursement amounts
Required
To encourage simpler product design
To cost inventories for reporting on a company's tax return
To encourage the sales department to focus on high-margin products
To evaluate a make or buy decision
To cost inventories for the balance sheet
To decide whether to add or delete a product line
To decide on an appropriate selling price for a special-order product
To cost a product at a fair price for government contracts
CS_3_LA_QA2
2A: Compute the unit product cost for Year 1, Year 2, and Year 3.
Unit Product Cost
Year 1
Year 2
Year 3
2B: Prepare an income statement for Year 1, Year 2, and Year 3.
O’Brien Company
Variable Costing Income Statement
Year 1
Year 2
Year 3
Variable expenses:
Total variable expenses
Fixed expenses:
Total fixed expenses
CS_3_QA2_PIR:
Req 2A: Compute the unit product cost for Year 1, Year 2, and Year 3.
Unit Product Cost
Year 1
Year 2
Year 3
Req 2B: Prepare an income statement for Year 1, Year 2, and Year 3.
O’Brien Company
Variable Costing Income Statement
Year 1
Year 2
Year 3
Variable expenses:
Total variable expenses
Fixed expenses:
Total fixed expenses
Chapter 11 Solutions
SURVEY OF ACCOUNTING 360DAY CONNECT CAR
Ch. 11 - 1.Define fixed cost and variable cost and give an...Ch. 11 - Prob. 2QCh. 11 - 3.Define the term operating leverage and explain...Ch. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - 6.If volume is increasing, would a company benefit...Ch. 11 - Explain the risk and rewards to a company that...Ch. 11 - 9.Are companies with predominately fixed cost...Ch. 11 - 10.How is the relevant range of activity related...Ch. 11 - Which cost structure has the greater risk?...
Ch. 11 - 14.The president of Bright Corporation tells you...Ch. 11 - Prob. 12QCh. 11 - Prob. 13QCh. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Exercise 2-4A Determining total variable cost The...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prepare an income statement using the contribution...Ch. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Problem 2-19A Context-sensitive nature of cost...Ch. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Prob. 27PCh. 11 - Prob. 28PCh. 11 - Prob. 29PCh. 11 - Prob. 1ATCCh. 11 - Prob. 2ATCCh. 11 - Prob. 3ATCCh. 11 - Prob. 4ATCCh. 11 - Prob. 5ATC
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- Q2) Product costing is the process of: A. accumulating the costs of a production process.B. assigning costs to a firm's products.C. placing a value on fixed assets owned by a producer.D. accumulating the costs of a production process AND assigning costs to a firm's products.arrow_forwardPractice 2: a: Define standard costs. b: under what conditions should previously established standard costs be revised? c: explain why the determination of standard cost amounts should not be the sole responsibility of a company's cost accountant.arrow_forwardEX 15-5 Concepts and terminology Obj. 1, 2, 4 From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: Advertising costs are usually viewed as (period, product) costs. Feedback is often used to (improve, direct) operations. Payments of cash or the commitment to pay cash in the future for the purpose of generating revenues are (costs, expenses). A product, sales territory, department, or activity to which costs are traced is called a (direct cost, cost object). The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory). Factory overhead costs combined with direct labor costs are called (prime, conversion) costs. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor EX 15-7 Classifying costs in a service company Obj. 2 A partial list of the costs for Wisconsin and Minnesota Railroad, a short hauler of freight,…arrow_forward
- Kindly answer questions 1-3: 1.) Discretionary costs are costs that must be incurred because of past decision, contractual agreement, and government regulations. a. true b. false 2.) Product costs: a. are always expensed in the same period in which they are incurred. b. are inventoriable costs. c. vary directly with changes in cost driver. d. are always charged to an asset account in the same period in which they are incurred. 3. Controllable costs are cost items which can be regulated depending on the level of management one is in. a. True b. False b. Falsearrow_forwardpart 4 5 6 Question 6.1 For each item listed, select the appropriate purpose of cost allocation from the list below. A purpose may be used more than once. A - To provide information for economic decisions B - To motivate managers and other employees C - To measure income and assets for reports to external parties D - To justify costs or compute reimbursement amounts Required To encourage simpler product design To cost inventories for reporting on a company's tax return To encourage the sales department to focus on high-margin products To evaluate a make or buy decision To cost inventories for the balance sheet To decide whether to add or delete a product line To decide on an appropriate selling price for a special-order product To cost a product at a fair price for government contractsarrow_forward20. Select which of the following requires a separate measurement of cost. a.Number b.Activity c.Area d.Volume 21. Select the objective of cost accounting which helps the management in doing the business efficiently. a.Guide to business policy b.Cost control and reduction c.Determination of selling price d.Ascertainment of timearrow_forward
- UESTION 2 Period costs are best described as those costs: A. Incurred periodically (i.e. not on a regular basis). B. Incurred as a result of activities that occur inside the production building. C. That increase as a result of a change in volume for a particular period. D. Incurred as a result of activities that occur outside of the production building.arrow_forwardStatement 1: Cost Accounting relates to the conventional costing methods and techniques in accumulating the cost of a product, process, project or service, including both product and period cost in accumulating cost.Statement 2: Cost Accounting aims to reflect the correct complete financial picture/information of the entity to the different shareholders. a. Statement 1 is False, Statement 2 is True b. Statement 1 is True, Statement 2 is False c. Both statements are true d. Both statements are falsearrow_forward60. Statement 1: Cost Accounting relates to the conventional costing methods and techniques in accumulating the cost of a product, process, project or service, including both product and period cost in accumulating cost.Statement 2: Cost Accounting aims to reflect the correct complete financial picture/information of the entity to the different shareholders. a• Statement 1 is False, Statement 2 is True b• Statement 1 is True, Statement 2 is False c• Both statements are true d• Both statements are falsearrow_forward
- 3.Activity based costing (ABC) is a method of allocating the indirect costs of sales commissions to products. A. true b. falsearrow_forwardRequirement 1: Please describe the basic objectives in the use of standard costs. Requirement 2: Please describe a nonmanufacturing business that could benefit from the use of standards. Also, explain how standards would help that business control its operations.arrow_forwardQuestion 3 Activity-based costing system may not be beneficial to all business segments.Provide the situation whereby ABC may yield maximum benefit when implemented. Answer should not be less than 500 words. thank you.arrow_forward
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Cost Classifications - Managerial Accounting- Fixed Costs Variable Costs Direct & Indirect Costs; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=QQd1_gEF1yM;License: Standard Youtube License