Cost Accounting
15th Edition
ISBN: 9780133428834
Author: Horngren
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem 9.15Q
“The difference between practical capacity and master-budget capacity utilization is the best measure of management’s ability to balance the costs of having too much capacity and having too little capacity.” Do you agree? Explain.
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“The difference between practical capacity and master-budget capacity utilization is the best measure of management’s ability to balance the costs of having too much capacity and having too little capacity.” Do you agree? Explain.
Which of the following is not a benefit of budgeting?
a.
It sets some standards to evaluate performance.
b.
It uncovers drawbacks of department performance
c. It reduces the need to track the actual cost activity
d. It formalizes a manager's planning efforts
The Zero Base Budget (ZBB) is the budget system that most influences resource allocation management by involving the devolution of decision making power to the lower levels. Identify whether this statement is true or false.
Select one:TrueFalse
Chapter 9 Solutions
Cost Accounting
Ch. 9 - Differences in operating income between variable...Ch. 9 - Why is the term direct costing a misnomer?Ch. 9 - Do companies in either the service sector or the...Ch. 9 - Explain the main conceptual issue under variable...Ch. 9 - Companies that make no variable-cost/fixed-cost...Ch. 9 - The main trouble with variable costing is that it...Ch. 9 - Give an example of how, under absorption costing,...Ch. 9 - What are the factors that affect the breakeven...Ch. 9 - Critics of absorption costing have increasingly...Ch. 9 - What are two ways of reducing the negative aspects...
Ch. 9 - Prob. 9.11QCh. 9 - Describe the downward demand spiral and its...Ch. 9 - Will the financial statements of a company always...Ch. 9 - Prob. 9.14QCh. 9 - The difference between practical capacity and...Ch. 9 - Prob. 9.16ECh. 9 - Prob. 9.17ECh. 9 - Prob. 9.18ECh. 9 - Prob. 9.19ECh. 9 - Prob. 9.20ECh. 9 - Prob. 9.21ECh. 9 - Prob. 9.22ECh. 9 - Prob. 9.23ECh. 9 - Capacity management, denominator-level capacity...Ch. 9 - Prob. 9.25ECh. 9 - Prob. 9.26ECh. 9 - Prob. 9.27ECh. 9 - Prob. 9.28PCh. 9 - Prob. 9.29PCh. 9 - Prob. 9.30PCh. 9 - Prob. 9.31PCh. 9 - Motivational considerations in denominator-level...Ch. 9 - Prob. 9.33PCh. 9 - Prob. 9.34PCh. 9 - Prob. 9.35PCh. 9 - Prob. 9.36PCh. 9 - Prob. 9.37PCh. 9 - Prob. 9.38PCh. 9 - Prob. 9.39PCh. 9 - Prob. 9.40PCh. 9 - Prob. 9.41PCh. 9 - Prob. 9.42P
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- Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating lossesarrow_forwardWhen would a static budget be effective in evaluating a managers performance?arrow_forwardExplain why it is better to allocate budgeted support service costs rather than actual support service costs.arrow_forward
- Which of the following is not a part of budgeting?A. planningB. finding bottlenecksC. providing performance evaluationsD. preventing net operating lossesarrow_forwardIs a standard cost an estimated cost? What is the primary objective of employing standard costs in a cost system? > What is a budget? > What is the difference between ideal and practical standards? Which standard generally is used in planning? > What is meant by the term management by exception? > What are some advantages of using standard costs? What are some disadvantages?arrow_forward“Budgets meet the cost–benefit test. They force managers to act differently.” Do you agree? Explain.arrow_forward
- Describe how non output-based cost drivers can be incorporated into budgeting.arrow_forwardWhat assumption is implicitly made about cost behavior when actual results are directly compared to a static planning budget? Why is this assumption questionable?arrow_forwardThe following sentences relate to achieving the financial goal of cost minimization. Which of the following statements is FALSE? a. Prioritizing which costs to incur relates to the operating decisions of the firm only.b. Savings is the end product of this financial goal.c. There is a need to determine cost.d. Controling costs involves addressing unfavorable cost variances.arrow_forward
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