Chapter 2—Cost Terminology and Cost Behaviors MULTIPLE CHOICE 1. The term "relevant range" as used in cost accounting means the range over which a. | costs may fluctuate. | b. | cost relationships are valid. | c. | production may vary. | d. | relevant costs are incurred. | ANS: B PTS: 1 DIF: Easy OBJ: 2-2 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement‚ Reporting 2. Which of the following defines variable cost behavior
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Cost Behavior Cost behavior is term for describing whether a cost changes when the level of output changes. The cost can vary proportionately with the changes in the level of activity or unaffected by changes in the level of activity. Costs can be variable‚ fixed‚ or mixed. A cost that does not change in total as output changes is a fixed cost. A variable cost‚ on the other hand‚ increases in total with an increase in output and decreases in total with a decrease in output. Understanding how costs
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CHAPTER 14: PROCESS COSTING AND THE COST ACCOUNTING CYCLE Multiple Choice c 1. ABC Company made the following journal entry. Work in Process Inventory $200‚000 Direct Labor $188‚000 Direct Labor Rate Variance 12‚000 From this entry we can tell that ABC uses a. job-order costing. b. process costing. c. standard costing. d. normal costing. d 2. CDE Company
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WHAT ARE COSTS AND PROFITS? HUNGRY HELEN’S COOKIE FACTORY • Helen‚ the owner of the cookie factory‚ buys flour‚ sugar‚ flavorings‚ and other cookie ingredients. • She also buys the mixers and the ovens and hires workers to run the equipment. • She then sells the resulting cookies to consumers. 2 TOTAL REVENUE‚ TOTAL COST‚ AND PROFIT • The amount that Helen receives for the sale of its output (cookies) is its total revenue. • The amount that the firm pays to buy inputs (flour‚ sugar‚ workers
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Cost Allocation Paper Cost Accounting Abstract This article’s focus is how cost accounting allocates costs of a manufacturing plant. All things are hypothetical. The conclusions of this report regarding costing of commercial services provided by Goodyear Tire should be recognized as a theory of the way Goodyear Tire conducts business activities‚ rather than suggestions of how Goodyear Tire should conduct business. Goodyear Tire is a publically traded company‚ which has many different
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Sunk Cost-cost that has already been incurred and cannot be avoided no matter what a manager decides to do. A business segment should only be dropped if a company can avoid more in fixed costs than it loses in: contribution margin Which of the following techniques describe how a bottleneck should be managed: Find ways to increase the capacity of the bottleneck‚ ensure there is minimal lost time at the bottleneck due to breakdowns and set-ups‚ focus business process improvement efforts on the bottleneck
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use of a single burden rate. Burden costs of the testing rooms as well as other costs such as admin were grouped into a single cost pool and then divided by the total labor dollars. This resulted to a single burden rate of 145% of direct labor dollars (cost driver). This method is not appropriate for Seligram because the information on the case present that direct labor hours and machine hours vary by product line and activity. In addition‚ the burden cost of the main and test room also significantly
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Name: Class: Cost Accounting Date: 02.12.2012 Quiz 5 1) Absorption costing: A) expenses marketing costs as cost of goods sold B) treats direct manufacturing costs as a period cost C) includes fixed manufacturing overhead as an inventoriable cost D) is required for internal reports to managers 2) Variable costing: A) expenses administrative costs as cost of goods sold B) treats direct manufacturing costs as a product cost C) includes fixed manufacturing overhead as an inventoriable
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Chapter 6--Process Costing Student: ___________________________________________________________________________ 1. A process is a series of activities or operations‚ which are linked to perform a specific objective. True False 2. The cost flows for a process-costing system are totally different from those of a job order costing system. True False 3. Process systems are characterized by a larger number of homogeneous products passing through a series of processes. True False
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Cost accumulation systems Name Tutor Course College Date Generally‚ cost accumulation is the organized collection of cost data through a set of procedures and systems. According to an accounting business‚ they used a periodic cost accumulation system. This system only provides limited cost information during a certain period. The system requires end year adjustments to arrive at the cost of goods manufactured. In most cases‚ it is not considered a complete cost accumulation since the costs
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