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Concept explainers
Concept introduction:
Cost control is the process of classifying expenses to increase the profit of the business. Manager compares expected overhead and actual overhead. Based on the result, the manager takes the controlling actions to control the cost.
Requirement 1:
Cost control activities by Apple and Google.
Concept introduction:
Manufacturing companies are those who produce products and services.
Services companies are those who deliver the services.
Merchandising companies are those who are involved in various trading and commerce activities.
Requirement 2:
To explain:
Whether G and A are inclusive service, merchandising or manufacturing activities.
Concept introduction:
Activity-based costing is the method of accounting which identifies and assigns costs based on overhead activities later it will assign those costs to the products.
Requirement 3:
To explain:
Activity-based costing is useful for Apple and Google.
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Chapter 4 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
- Which of the following is a reason a company would implement activity-based costing? A. The cost of record keeping is high. B. The additional data obtained through traditional allocation are not worth the cost. C. They want to improve the data on which decisions are made. D. A company only has one cost driver.arrow_forwardWhy would a business that uses traditional costing systems consider implementing activity-based costing? Discuss the following in your answer: Problems with traditional costing systems in a modern manufacturing environment. Whether the benefits of activity-based costing always outweigh the costs.arrow_forwardYou have been asked to install a costing system in a manufacturing company. What practical difficulties will you expect and how will you propose to overcome the same? In view of the difficulties and suggestion to overcome them what main considerations will you keep in mind to introduce the system?arrow_forward
- Hi! Can you please differentiate the cost flow in a Service, Merchandising and Manufacturing Business? Thank you?arrow_forwardValue chain classifications Match each of the following cost items with the value chain business function where you would expect the cost to be incurred: Cost Item Answer Business Function a. Research and development b. Design c. Production d. Marketing e. Distribution t Customer service 1. Labor time to repair products under warranty 2. TV commercial spots 3. Labor costs of filling customer orders 4. Testing of competitor's product 5. Direct manufacturing labor costs 6. Development of order tracking system for the Internet 7. Printing cost of new product brochures 8. Hours spent designing childproof bottles 9. Training costs for representatives to staff the customer call center 10. Installation of robotics equipment in manufacturing plantarrow_forwardHow might Enviro-Tech use the new cost information from its activity-based costing system to better manage its business?arrow_forward
- How might Sander’s managers use the new cost information from its activity-based costing system to better manage its business?arrow_forwardRefer to the given notes in images. Part 1: Understanding Activity-Based Costing Discuss why ABC is important for organizations in today's business environment. Highlight the limitations of traditional costing methods. Please answer both parts with full details explanation and don't copy from other websites no plagiarism. Expect help. ^^$#+×=>>arrow_forwardActivity based costing is utilized by manufacturing companies that assist them in determining product profitability. How can ABC be used to track customer profitability and is it important to determine this by customer? What type of activities would you suggest that could be tracked by customer?arrow_forward
- Which of the following is NOT a reason for companies to assign costs to products or services? O to help determine pricing to determine the best supplier of raw materials to help understand proftabilityarrow_forwardCompanies can choose from different costing methods: process/product costing and activity-based costing. Think about a company, what are the differences between the two costing methods, and how do these apply to your company?arrow_forwardList three nonmanufacturing businesses in which process costing could be used. For example, a public accounting firm could use process costingto accumulate the costs of processing clients’ tax returns.arrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
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