FUNDAMENTALS OF COST ACCT.(LL) >CUSTOM<
5th Edition
ISBN: 9781259912733
Author: LANEN
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 8, Problem 16CADQ
To determine
Determine the need to treat prior period costs differently for evaluation purposes from direct material costs purchased from another firm.
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Students have asked these similar questions
When allocating support department costs, managers must identify cost pools. The choice of cost pools is:
Question 2 options:
not influenced by the allocation base.
not important, because all support department costs will eventually be allocated anyway.
influenced by the design of the accounting information system.
determined by whether a company uses IFRS or ASPE.
“To ensure unbiased cost allocations, fixed costs should be allocated on the basis of estimated long-run use by user-department managers.” Do you agree? Why?
A difference between standard costs used for cost control and budgeted costs
Can exist because budgeted costs should be verified first by actual activities while standard cost are based on project costs.
Can exist because standard cost must be determined after the budget is prepared.
Can exist because established budgeted costs involve employee participation and standard cost do not
Can exist because standard costs represent what costs should have been while budgeted cost represent expected actual costs.
Chapter 8 Solutions
FUNDAMENTALS OF COST ACCT.(LL) >CUSTOM<
Ch. 8 - What are the characteristics of industries most...Ch. 8 - A manufacturing company has records of its...Ch. 8 - If costs increase from one period to another, will...Ch. 8 - What are the five steps to follow when computing...Ch. 8 - What is the distinction between equivalent units...Ch. 8 - Which method, weighted-average or FIFO, better...Ch. 8 - It has been said that a prior departments costs...Ch. 8 - The more important individual unit costs are for...Ch. 8 - Assume that the number of units transferred out of...Ch. 8 - The management of a liquid cleaning product...
Ch. 8 - We have discussed two methods for process costing,...Ch. 8 - A friend owns and operates a consulting firm that...Ch. 8 - The controller of a local firm that uses a...Ch. 8 - Throughout the chapter, we treated conversion...Ch. 8 - Consider a manufacturing firm with multiple...Ch. 8 - Prob. 16CADQCh. 8 - Would process costing work well for a service...Ch. 8 - Compute Equivalent Units: Weighted-Average Method...Ch. 8 - Compute Equivalent Units: FIFO Method Refer to the...Ch. 8 - Compute Equivalent Units: Weighted-Average Method...Ch. 8 - Compute Equivalent Units: FIFO Method Refer to the...Ch. 8 - Compute Equivalent Units Magic Company adds...Ch. 8 - Equivalent Units: Weighted-Average Process Costing...Ch. 8 - Compute Equivalent Units: Ethical Issues Aaron...Ch. 8 - Equivalent Units and Cost of Production By...Ch. 8 - Compute Costs per Equivalent Unit:...Ch. 8 - Prob. 27ECh. 8 - Compute Equivalent Units: FIFO Method Materials...Ch. 8 - Compute Equivalent Units and Cost per Equivalent...Ch. 8 - Cost Per Equivalent Unit: Weighted-Average Method...Ch. 8 - Compute Costs per Equivalent Unit:...Ch. 8 - Prob. 32ECh. 8 - Compute Costs per Equivalent Unit: FIFO Method...Ch. 8 - Prob. 34ECh. 8 - Compute Costs per Equivalent Unit:...Ch. 8 - Assign Costs to Goods Transferred Out and Ending...Ch. 8 - Prob. 37ECh. 8 - Assign Costs to Goods Transferred Out and Ending...Ch. 8 - Prepare a Production Cost Report: FIFO Method...Ch. 8 - Prepare a Production Cost Report: Weighted-Average...Ch. 8 - Prepare a Production Cost Report: Weighted-Average...Ch. 8 - Prepare a Production Cost Report: FIFO Method...Ch. 8 - Cost of Production: Weighted-Average and FIFO...Ch. 8 - Operation Costing: Ethical Issues Brokia...Ch. 8 - Prob. 45ECh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49PCh. 8 - Prob. 50PCh. 8 - Prob. 51PCh. 8 - Prepare a Production Cost Report and Show Cost...Ch. 8 - Prob. 53PCh. 8 - Prob. 54PCh. 8 - Prepare a Production Cost Report: Weighted-Average...Ch. 8 - Prob. 56PCh. 8 - Prob. 57PCh. 8 - Prob. 58PCh. 8 - Prob. 59PCh. 8 - Process Costing and Ethics: Increasing Production...
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Similar questions
- When allocating service department costs to production departments, why is the standard cost that the service department was expected to incur, rather than the actual cost that was incurred, used in the allocation?arrow_forwardWhich 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 is the diect method of support department cost allocation less accurate than the sequential and reciproval services methods?arrow_forward
- Which of the following statements is not an Objective of the cost management system Select one: a. Identify and evaluate new activities that can improve performance. b. Determine efficiency and effectiveness of major activities. c. Publish the annual financial statements. d. Measure the cost of resources consumed.arrow_forwardOf the several uses of standard costing, one of the most controversial is using these standards for performance evaluation of an individual, team, or unit. Consider the labor efficiency variance and assume it is one of the measures for a company’s performance evaluation of a business unit. When might or might not variance from such a standard be an appropriate measure? How would this metric’s effectiveness as a performance measure be affected by a decrease in demand or changes in production volume? Would its effectiveness be different for a service unit than a manufacturing unit? In the event that it is not effective as a performance measure, does it have a strong purpose?arrow_forwardWhich of the following is not a characteristic of a lean accounting system? Multiple Cholce Costs in the system are organized according to value streams. The system includes both financial and nonfinancial performance indicators. It is most appropriate for firms operating in dynamic and competitive environments. The system incorporates the use of standard costs and standard cost variances. The overall intent of the system is to more accurately reflect improvements associated with lean manufacturing.arrow_forward
- Which of the following points about the Activity-based costing (ABC) system is NOT a correct observation: a. Under ABC the unit cost of a product will necessary be less than the unit cost under traditional full (absorption) costing. b. Activities are considered resource drivers because they eat up resources necessary for the activities to happen. c. ABC may generate results that are not suitable for external reporting under IFRS/GAAP. d. Batch-level activities produce costs that may be in proportion to the number of units produced.arrow_forwardWhich of the following is/ are considered as the uses of standard costing? Statement 1: Establishing standards that reflect efficient operating conditions Statement 2: Helping managers understand what needs to be done to improve current and future performance. Statement 3: Achieving significant revenue reductions. Group of choices: Statements 1 and 2 Statements 1 and 3 Statements 1, 2 and 3 Statements 2 and 3arrow_forwardWhy would management take extra effort to ensure approximate budgets for direct labor, direct materials, and manufacturing overhead? Please provide relevant information and terminology to support your response?arrow_forward
- Which of the following statement is true under the Standared Costing System a. Standard cost is a predetermined or estimated cost to either produce a good/service or perform an activity within the organisation b. Standard cost is a control technique that helps to report variances by comparing pre-set standards to actual costs to facilitate action c. Both a and b are incorrect d. Both a and b are correctarrow_forward7. Which of the following costs should not be included in product costs for internal management reports that are used for decision-making? Costs of unit-level activities. Costs of batch-level activities. Costs of product-level activities. Costs of organization-sustaining activities. 8. The following are advantages of applying the value chain analysis in strategic cost management. Which provides the LEAST effect? The identification of EXCESSIVE RESOURCE USAGE in value adding activities and the potential to avoid them The identification of NON-VALUE ADDING ACTIVITIES and the potential to avoid them The identification of COSTS THAT ALLOW PRODUCT DIFFERENTIATION and prioritizing them The identification of EXCESSIVE COMMITTED AND FIXED COSTS, and the potential of avoiding them 9. Aling Rosa is a sari-sari store owner. Along the street where she operates her store, there are three other stores offering similar products at similar prices. What should she do to allow her business to thrive…arrow_forwardWhere should firms do most of their quality spending? Group of answer choices a. Inspection costs b. Internal Failure costs c. External Failure costs d. Prevention costsarrow_forward
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