Which of the following is false regarding activity-based costing (ABC)? a. Companies that have a high potential for cost distortions are more likely to benefit from ABC b. Opportunities for continuous improvement are rarely revealed by using ABC. c. The cost of implementing ABC may outweigh the benefits d. Increased accuracy with budgeting resources is often realized
Q: variable
A: Performance evaluation based on income could be best achieved by using variable costing method in…
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Q: Which of the following is NOT true of variable costing? a. Profits may increase though sales…
A: Variable costing is a concept used in managerial and cost accounting in which the fixed…
Q: Which of the following is not a true statement about variable costs? O a. Total cost is known to…
A: Variable Cost Variable cost which is described as the cost which are incurred to the business entity…
Q: Which of the following is not a potential advantage of variable costing relative to absorption…
A: Variable costing is a method in which only variable cost is considered in product cost. Absorption…
Q: 2. Which of the following statements is false? (You may select more than one answer.)a. The planning…
A: False Statements: a. Discretionary Fixed Cost is the cost which can be increase/decrease upto a…
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A: SOLUTION- CVP ANALYSIS IS USED TO DETERMINE HOW CHANGES IN COSTS AND VOLUME EFFECTS A COMPANY'S…
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A: Introduction: ABC costing also called as Activity based costing. According to the consumption cost…
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A: The managers often assume the strictly linear relationship between the cost and the level of…
Q: A downside to absorption casting is: A. not including fixed manufacturing overhead in the cost of…
A: Absorption costing demonstrates that all the expenses related to manufacturing a product are…
Q: TRUE OR FALSE When absorption costing is used, management may be tempted to overproduce in each…
A: Under the absorption costing method, fixed overhead is considered as a product cost which is…
Q: Which of the following is NOT true about the cause-and-effect criterion when estimating a cost…
A: The cause and effect analysis is one of the factors for making cost allocation decisions. The cost…
Q: Which of the following types of companies would be most likely to benefit from activity-based…
A: activity-based costing - generally, activity-based costing is used to allocate indirect costs or…
Q: Which of the following statements is false ? a. Volume-based costing has typically resulted in…
A: There are two methods of costing that are in place generally. One is volume based costing and other…
Q: when backflush costing is used, managers generally do not use which of the following to keep tract…
A: Backflush costing refers to the method of product costing which is generally used in a Just - In…
Q: all of the following are reasons to use backflush costing, except a. Managers tend to use their…
A: The backflush costing follows the JIT (just-in-time) inventory system which reduces the costs…
Q: When backflush costing is used, managers generally do not use which of the following to keep track…
A: Backflush Costing: Under this system, direct material expenditure incurred in the production…
Q: Managers often assume a strictly linear relationship between cost and volume. How can thispractice…
A: Cost: Cost can be defined as the cash and cash equivalent which is incurred against the products…
Q: Management may be tempted to overproduce a. when using variable costing, in order to increase net…
A: Answer: Management may be tempted to overproduce Correct answer is option (c ) c. when using…
Q: d in the cost of the product b) that it is not really useful for managerial decisions c) that it…
A: A cost accounting system is a system of accounting that is helpful for the internal management to…
Q: Do you agree with the following statements? Check only those with which you agree. Check All That…
A: Variable Costing refers to those costs which are directly related to the production and changes with…
Q: Which of the following statements is not true regarding the use of variable and absorption costing…
A: Absorption costing: It refers to the method of product costing in which the price of the product is…
Q: CLEAR MY CHOICE Which of the following statements is false? O a. Volume-based costing has typically…
A: Volume based costing and activity based costing are two type of costing methods that are used for…
Q: One disadvantage of activity-based costing is that it cannot be used for external reporting. This is…
A: ABC or Activity based costing is a technique in which various cost divers are used to calculate the…
Q: What is the basic difference between variable costing and absorption costing? a. Variable costing…
A: Absorption costing: Absorption costing is also called traditional costing. This method of costing…
Q: Wrong allocation of common costs lead to A. Inaccurate estimation of cost of products or…
A: Common costs are those costs that are incurred for two or more products simultaneously. Common costs…
Q: Explain the implementation issues with Activity Based Costing including: -lack of clear…
A: Activity-based costing (ABC) is costing method of assigning direct expenses and indirect expenses to…
Q: Why do product costing systems using a single, volume-based cost driver tend to overcost highvolume…
A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With…
Q: Why do product-costing systems based on a single, volume-based cost driver tend to over-cost…
A: Single volume-based cost driver means the basis of allocation of costs to particular products using…
Q: Which among the following is not true about traditional costing system? a. This method allocates…
A: Traditional costing is allocating the factory overhead to products based on the volume of the…
Q: Which of the following statements is not true regarding the use of variable and absorption costing…
A: Answer: Option d.
Q: Q.a.Do you agree from the following statements- Explain in details with examples (i) Variable costs…
A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…
Q: Which of the following is not a potential advantage of variable costing relative absorption costing?…
A: Cost volume profit analysis is calculated by dividing the fixed cost by the unit contribution…
Q: T, F. In a make or buy short-run decision situation, the critical element to consider is whether the…
A: As posted multiple independent questions we are answering only first question kindly repost the…
Q: Throughput costing • Treats all cost as period cost except for direct materials • Is very suitable…
A: Variable Costing: Variable Costing is technique of costing which does not considers the fixed cost…
Q: Which of the following statements is true? O a. Activity-based costing typically provides less…
A: Volume based costing represents the product costing where factory overhead is allocated to the…
Q: A basic tenet of variable costing is that period costs should be currently expensed. What is the…
A: Variable costs are those costs which changes with change in level of activity. Under variable…
Q: Which of the following can signal the need for a new product costing system? Select one: O a.…
A: Please find the answer to the above question below:
Q: Which of the following statements concerning performance evaluation tools used in decentralized…
A: Performance evaluation means when actual performance is being compared with the budgeted numbers and…
Q: Production managers are not concerned about the capacity because capacity creation does not require…
A: Production managers are those who are mainly involved in the production planning.
Q: Why do product-costing systems based on a single, volume-based cost driver tend to overcost…
A:
Q: All of the following are reasons to use backflush costing, except Managers tend to use their limited…
A: When the costing is done after completion of production that is known as backflush costing.
Q: TRUE OR FALSE Companies that use just-in-time processing techniques will have significant…
A: A just-in-time inventory system is an inventory management system wherein the company makes the…
Q: Which of the following statements is not false of costing systems? A. Activity-based costing…
A: Introduction: Traditional costing is the more simplest method which typically delivers less accuracy…
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- Continuous improvement is the governing principle of a lean accounting system. Following are several performance measures. Some of these measures would be associated with a traditional standard-costing accounting system, and some would be associated with a lean accounting system. a. Materials price variances b. Cycle time c. Comparison of actual product costs with target costs d. Materials quantity or efficiency variances e. Comparison of actual product costs over time (trend reports) f. Comparison of actual overhead costs, item by item, with the corresponding budgeted costs g. Comparison of product costs with competitors product costs h. Percentage of on-time deliveries i. First-time through j. Reports of value- and non-value-added costs k. Labor efficiency variances l. Days of inventory m. Downtime n. Manufacturing cycle efficiency (MCE) o. Unused (available) capacity variance p. Labor rate variance q. Using a sister plants best practices as a performance standard Required: 1. Classify each measure as lean or traditional (standard costing). If traditional, discuss the measures limitations for a lean environment. If it is a lean measure, describe how the measure supports the objectives of lean manufacturing. 2. Classify the measures into operational (nonfinancial) and financial categories. Explain why operational measures are better for control at the shop level (production floor) than financial measures. Should any financial measures be used at the operational level? 3. Suggest some additional measures that you would like to see added to the list that would be supportive of lean objectives.When absorption costing is used a. management may be tempted to overproduce in a given period in order to decrease net income. b. for external reporting, variable costing can still be used for internal reporting purposes. c. it facilitates cost-volume-profit analysis. d. and production exceeds sales, absorption costing reports a lower net income than variable costing.Management may be tempted to overproducea. when using variable costing, in order to increase net income.b. when using variable costing, in order to decrease net income.c. when using absorption costing, in order to increase net income.d. when using absorption costing, in order to decrease net income.
- The 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.What of the following is NOT a Benefit of Activity Based Management? a.It assists in the budgeting process. b.It aids management in cost cutting and/or cost control and inferentially in product profitability. c.It causes managers to identify non-value added activities and therefore encourages thinking of means of reducing such activities. d.Is more complex than traditional accounting system because it uses multiple cost application rates, one for each activity or cost pool.1. Which of the following is a disadvantage of the Variable Costing method? A. The data available does not easily relate to CVP[Cost - volume - profit] applications. B. The data is not applicable to short-term decision-making situations. C. Much time and effort must be expended to allocate fixed costs to various segments. D. It cannot be used for external reporting purposes. E. All of the above are disadvantages of variable costing.
- Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.Wrong allocation of common costs lead to A. Inaccurate estimation of cost of products or services B. Under utilization of capacity C. Lower profit margin D. All of the above are correctTRUE OR FALSE When absorption costing is used, management may be tempted to overproduce in each period to increase net income.
- A basic belief of variable costing is that period costs should be currently expensed. What is thebasic rationale behind this procedure?a. Period costs are uncontrollable and should not be charged to a specific product.b. Period costs are generally immaterial in amount and the cost of assigning the amountsto specific products would outweigh the benefits.c. Allocation of period costs is arbitrary at best and could lead in erroneous decisions bymanagement.d. Period costs will occur whether or not production occurs and so it is improper toallocate these costs to production and defer a current cost of doing business.When using the general methods to estimate cost behavior, A. It is a good idea to use multiple methods so results can be compared B. Managers often apply their own best judgement as a first step in the estimation process C. Results are likely to differ from method to method D. Large differences in methods suggest that the cost cannot be estimated.Which of the following is NOT a problem associated with standard cost accounting? a. Standard costing motivates management to produce large batches of products and build inventory. b. Applying standard costing leads to product cost distortions in a lean environment. c. Standard costing data are associated with excessive time lags that reduce its usefulness. d. The financial orientation of standard costing may promote bad decisions. e. All of the above are problems with standard costing.