Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 5, Problem 5.9Q
“Department indirect-cost rates are never activity-cost rates.” Do you agree? Explain.
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Check out a sample textbook solutionStudents have asked these similar questions
Consider the following statements concerning costs.
1.
A committed cost cannot vary with the decision.
2.
An outlay cost cannot vary with the decision.
Are the above statements true or false?
Classify the following fixed costs as normally being either committed or discretionary:c. Research.
“All overhead costs are relevant in NPV analysis.” Do you agree? Explain.
Chapter 5 Solutions
Cost Accounting (15th Edition)
Ch. 5 - What is broad averaging, and what consequences can...Ch. 5 - Why should managers worry about product...Ch. 5 - What is costing system refinement? Describe three...Ch. 5 - What is an activity-based approach to designing a...Ch. 5 - Describe four levels of a cost hierarchy.Ch. 5 - Why is it important to classify costs into a cost...Ch. 5 - What are the key reasons for product cost...Ch. 5 - Prob. 5.8QCh. 5 - Department indirect-cost rates are never...Ch. 5 - Prob. 5.10Q
Ch. 5 - Prob. 5.11QCh. 5 - Prob. 5.12QCh. 5 - Activity-based costing is the wave of the present...Ch. 5 - Increasing the number of indirect-cost pools is...Ch. 5 - The controller of a retail company has just had a...Ch. 5 - Prob. 5.16ECh. 5 - ABC, cost hierarchy, service. (CMA, adapted)...Ch. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Prob. 5.20ECh. 5 - Prob. 5.21ECh. 5 - Prob. 5.22ECh. 5 - Prob. 5.23ECh. 5 - Prob. 5.24ECh. 5 - Prob. 5.25ECh. 5 - Prob. 5.26ECh. 5 - Prob. 5.27ECh. 5 - Prob. 5.28ECh. 5 - Prob. 5.29ECh. 5 - Prob. 5.30PCh. 5 - Prob. 5.31PCh. 5 - Prob. 5.32PCh. 5 - Prob. 5.33PCh. 5 - Prob. 5.34PCh. 5 - Prob. 5.35PCh. 5 - Prob. 5.36PCh. 5 - Prob. 5.37PCh. 5 - Prob. 5.38PCh. 5 - Prob. 5.39PCh. 5 - Prob. 5.40PCh. 5 - Prob. 5.41PCh. 5 - Prob. 5.42P
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- What is the purpose of assigning facility costs to value streams, using a fixed price?arrow_forwardWhat is a potential disadvantage of the reciprocal method? a. It is the most complex method of cost allocation. b. Both fixed and variable costs are allocated based on the computed cost base. c. It considers the support department cost as its own department cost. d. All the above.arrow_forwardCost allocation bases are ideally based on a cause and effect basis. That is not always easy when allocating fixed costs. Why might this be so?arrow_forward
- “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?arrow_forwardWhich of the preceding costs is variable? Fixed? Mixed? Explain.arrow_forwardQ. a) What is meant by an activity base when dealing with variable costs? Give several examples of activity bases.b) Only variable costs can be differential costs. Do you agree? Explain.c) Does the concept of the relevant range apply to fixed costs? Explain.arrow_forward
- Do you agree from the following statements- Explain in details with examples 1.Variable costs are controllable but fixed costs are not. 1.Sunk costs are irrelevant cost while making any decision.arrow_forwardWhy is the diect method of support department cost allocation less accurate than the sequential and reciproval services methods?arrow_forwardWhy would standard cost be a more appropriate transfer cost between cost centers than actual cost?arrow_forward
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