COST ACCOUNTING
COST ACCOUNTING
LATEST Edition
ISBN: 9781323440834
Author: Horngren
Publisher: Pearson Custom Publishing
Question
Chapter 14, Problem 14.1Q
To determine

To explain: The given statement.

Expert Solution & Answer
Check Mark

Answer to Problem 14.1Q

The comment of the division president is a disagree comment. A president will not only focus on the customer but also see the cost allocation issues with the accountant.

Explanation of Solution

Costing:

Costing is a technique used in cost accounting to determine the cost of a product. With the optimum use of costing a company can reduce the cost burden and increase the profit margin.

  • Only focus on the customer and not on the cost allocation issues it affect the business decision adversely.
  • The cost accounting information is very important for the cost planning and also for the cost reduction.
  • With the figures of cost accounting the company can ascertain the amount spend on the manufacturing of product so that make and buy decision can easily take.

Thus, the statement given by the division president is not correct.

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Students have asked these similar questions
Elmhurst Corporation is considering changes to its responsibility accounting system. Which of the following statements is/are correct for a responsibility accounting system. i. In a cost center, managers are responsible for controlling costs but not revenue. ii. The idea behind responsibility accounting is that a manager should be held responsible for those items that the manager can control to a significant extent. iii. To be effective, a good responsibility accounting system must help managers to plan and to control. iv. Costs that are allocated to a responsibility center are normally controllable by the responsibility center manager. 1. I and II only are correct. 2. II and III only are correct. 3. I, II, and III are correct. 4. I, II and IV are correct.
Which of the following statements is true? A cost center is a responsibility center. The basic objective of responsibility accounting is to charge each manager with those costs and/or revenues over which he has control. Under a responsibility accounting system, fewer expenses are charged against managers; the higher one moves upward in an organization.
In the field of cost accounting, one of the most critical decisions made by a manager is the type of technology that the organization will use to produce its products or deliver its services. Why?
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Similar questions
  • Taylor Speedy has prepared the following list of statements about managerial accounting, financial accounting, and the functions of management. Identify each statement as true or false. Financial accounting centers on providing information to internal users. Staff positions are directly involved in the companys primary revenue-generating activities. Preparation of budgets is part of financial accounting. Managerial accounting applies only to merchandising and manufacturing companies. Both managerial accounting and financial accounting deal with many of the same economic events.
    In a team of two or three students, interview the manager/owner of a local business. In this interview, ask the manager/owner the following questions: A. Does the business collect and use cost information to make decisions? B. Does it have a specialist in cost estimation who works with this cost data? If not, who is responsible for the collection of cost information? Be as specific as possible. C. What type of cost information does the business collect and how is each type of information used? D. How important does the owner/manager believe cost information is to the success of the business? Then, write a report to the instructor summarizing the results of the interview. Content of the memo must include date of the interview, the name and title of the person interviewed, name and location of the business, type of business (service, merchandising, manufacturing) and brief description of the goods/services provided by the business, and responses to questions A-D.
    Aaron McKinney is a cost accountant for Majik Systems Inc. Martin Dodd, Vice President of Marketing, has asked Aaron to meet with representatives of Majik Systems major competitor to discuss product cost data. Martin indicates that the sharing of these data will enable Majik Systems to determine a fair and equitable price for its products. Would it be ethical for Aaron to attend the meeting and share the relevant cost data? Explain your answer.
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