PAPER 75

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.

Cost allocation is arbitrary, so there is nothing gained by it. We should report only the costs that we know are direct.” Do you agree? Why? Please be specific in supporting your position.

A possible disadvantage of the ABC method is: (a) It does not allocate costs to the way production work occurs (b) It is more expensive to operate than a traditional allocation system (c) It does not help understand the economic impact of management decisions (d) It cannot identify wasteful products and unnecessary costs

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.

If the organization operates at an activity level outside the relevant range, any cost predictions based on data from the relevant range may not be very accurate. True or False?

Which statement is incorrect concerning the constraint on relevant and reliable information? *     A. Information may be relevant but so unreliable in nature or representation that its recognition may be potentially misleading.   B. The balance between benefit and cost is a pervasive constraint which means that the benefits derived from the information should exceed the cost of providing it.   C. If there is undue delay in the reporting of information, it may lose its relevance and reliability.   D. In achieving a balance between relevance and reliability, the overriding consideration is how best to satisfy the economic decision-making needs of users.

all of the following are reasons to use backflush costing, except   a. Managers tend to use their limited resources on developing more accurate product cost data.  b. Complex Ledger systems may be too costly to develop under traditional cost tracking systems. c. Accuracy is critical whem allocationg accurate conversion cost per unit. d. A fairly rough allocation may be sufficient for external reporting purposes.

1)What is cost behavior analysis? and Why is cost behavior analysis important to management? 2)“Break-even analysis is of limited use to management because a company cannot survive by just breaking even.” Do you agree? Agree or not agree, please describe your line of reasoning.

Demonstrate why expressing fixed costs on a per unit of activity basis is misleading and may result in faulty decisions.

What is the Answer? ✅

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.

Prime indicators of problems with a conventional costing system include company profits being eroded and production managers not being able to make sense of product costs. Prime indicators of problems with a conventional costing system include company profits being eroded and production managers not being able to make sense of product costs. True False

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Which of the following is a disadvantage of outsourcing? Group of answer choices A. freeing up capacity B. freeing up capital C. transferring production and technology risks D. limiting ability to upsize or downsize production

Complete the following statements with one of the terms listed here: You may use a term more than once and some terms may not be used at all. Differential Costs Irrelevant Costs Controllable Costs Marginal Costs Fixed Costs Average Cost Uncontrollable Costs Sunk Costs Variable Costs 1. For decision-making purposes, costs that do not differ between alternatives are 2. Costs that have already been incurred are called 3. Managers cannot influence .........in the short run. 4. Total stay constant over a wide range of production volumes. 5. The. action. is the difference in cost between two alternative courses of 6. The product's is the cost of making one more unit. Total costs decrease when production volume decreases. 7. A product's and ............ not the product's should be used to forecast total costs at different production volumes.