Explain whether the given statement is correct.

Question

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Answer 1

Question

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

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Answer 2

Question

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

Answer 6

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

Answer 7

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Answer 8

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.