REVEL for Horngren's Cost Accounting: A Managerial Emphasis -- Access Card (16th Edition) (What's New in Accounting)
REVEL for Horngren's Cost Accounting: A Managerial Emphasis -- Access Card (16th Edition) (What's New in Accounting)
16th Edition
ISBN: 9780134789705
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 4, Problem 4.1Q

Define cost pool, cost tracing, cost allocation, and cost-allocation base.

Expert Solution & Answer
Check Mark
To determine

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.

To explain: cost pool, cost tracking, cost allocation and cost allocation base.

Answer to Problem 4.1Q

  • Cost pool: The cost accountant make individual group of all the indirect cost used in an item.
  • Cost tracking: Cost tracking means the historical record of all the information of cost as it is useful to decide the selling price.
  • Cost allocation: The process of assigning the cost to the cost object is cost allocation.
  • Cost allocation basis: It is a factor on which the cost accountant allocates the overhead cost.

Explanation of Solution

  • In cost pool, the production department makes groups of the individual cost to simplify the cost accounting process.
  • Cost tracing is a method in which the cost accountant records each and every cost related to the product, so that it is easy to determine the selling price of the product.
  • Cost allocation is simply to allocate cost for the specific cost object.
  • Cost allocation basis is to allocate cost on the basis of units for example the cost allocation basis is number of machine hours.
Conclusion

Thus, the meaning of cost pool, cost tracking, cost allocation and cost allocation base is explained above.

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Chapter 4 Solutions

REVEL for Horngren's Cost Accounting: A Managerial Emphasis -- Access Card (16th Edition) (What's New in Accounting)

Ch. 4 - Comment on the following statement: In a...Ch. 4 - Describe three different debit entries to the...Ch. 4 - Describe three alternative ways to dispose of...Ch. 4 - When might a company use budgeted costs rather...Ch. 4 - Prob. 4.15QCh. 4 - Which of the following does not accurately...Ch. 4 - Sturdy Manufacturing Co. assembled the following...Ch. 4 - For which of the following industries would...Ch. 4 - ABC Company uses job-order costing and has...Ch. 4 - Under Stanford Corporations job costing system,...Ch. 4 - (10 min) Job costing, process costing. In each of...Ch. 4 - Actual costing, normal costing, accounting for...Ch. 4 - Job costing, normal and actual costing. Atkinson...Ch. 4 - Budgeted manufacturing overhead rate, allocated...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Job costing, consulting firm. Frontier Partners, a...Ch. 4 - Time period used to compute indirect cost rates....Ch. 4 - Accounting for manufacturing overhead. Creative...Ch. 4 - Job costing, journal entries. The University of...Ch. 4 - Journal entries, T-accounts, and source documents....Ch. 4 - Job costing, journal entries. Donald Transport...Ch. 4 - Job costing, unit cost, ending work in process....Ch. 4 - Job costing; actual, normal, and variation from...Ch. 4 - Job costing; variation on actual, normal, and...Ch. 4 - Proration of overhead. The Ride-On-Wave Company...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Service industry, job costing, law firm. Kidman ...Ch. 4 - Service industry, job costing, two direct- and two...Ch. 4 - Proration of overhead. (Z. Iqbal, adapted) The Zaf...Ch. 4 - Normal costing, overhead allocation, working...Ch. 4 - Proration of overhead with two indirect cost...Ch. 4 - General ledger relationships, under- and...Ch. 4 - Overview of general ledger relationships. Estevez...Ch. 4 - Allocation and proration of overhead. Resource...Ch. 4 - (2530 min.) Job costing, ethics. Joseph Underwood...Ch. 4 - Job costingservice industry. Market Pulse performs...
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