unit 1 db acct

Activity Based Costing Give your answers to the following questions;  Why do product costing systems based on a single, volume based cost driver tend to overcost high volume products? What undesirable strategic effects can such distortion of product costs have?  What is meant by activity analysis? Give 3 criteria for determining whether an activity adds value.  What is meant by customer profitability analysis as it relates to activity based costing? Give an example of an activity that might be performed more commonly for one customer than another.

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Marginal costing is usually deployed when decisions about volume are being made. Discuss the situations when businesses need instead to work with a full unit cost and explore too the problems associated with deriving full unit costs.

Which of the following statements is not false of costing​ systems?   A. ​Activity-based costing systems tend to use fewer cost pools than does a traditional costing system.   B. Many traditional costing systems can distort product costs and profitability.   C. ​Activity-based costing systems tend to combine various costs into a single cost pool.   D. Traditional costing systems tend to be more costly than​ activity-based costing systems

Which of the following statements about activity-based costing (ABC) is false? Group of answer choices In activity-based costing, cost drivers are what cause costs to be incurred. Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products. Activity-based costing is useful for allocating marketing and distribution costs. Activity-based costing differs from traditional costing systems in that it allocates costs according to the rates at which a product consumes different activities.

Which of the following statements is false? (You may select more than one answer.)a. Activity-based costing systems usually shift costs from low-volume products tohigh-volume products.b. Benchmarking can be used to identify activities with the greatest potential forimprovement.c. Activity-based costing is most valuable to companies that manufacture products thatare similar in terms of their volume of production, batch size, and complexity.d. Activity-based costing systems are based on the assumption that the costs included ineach activity cost pool are strictly proportional to the cost pool’s activity measure.

Carizick Co manufactures gaming products. It has created a new games console called the QpBox which is about to be launched. Demand for the QpBox is anticipated to be high. The product life cycle of the QpBox is expected to be three years with 300,000 units forecast to be sold during its first year. Sales volumes are expected to decrease by 75,000 units in each subsequent year. Production volumes will be based on expected demand levels. The following costs for the QpBox have been determined: Design and development Pre-launch advertising Advertising in Year 2 Packaging Manufacturing cost $120m $0.5m $0.4m $3 per unit $80 per unit At a recent board meeting, the finance director said that Carizick Co should look to maximise the profitability of the QpBox over its life cycle. The marketing director made the comment that Carizick Co should focus on extending the maturity phase of the life cycle only as this stage is where the QpBox is most profitable. Contract with Zone Co Carizick Co has…

Which of the following statements about activity-based costing is not true?A. activity-based costing is useful for allocating distribution costs.B. activity-based costing is useful for allocating marketing costs. C. activity-based costing is more likely to result in major differences from traditional costing systems for firms that produce just one product, rather than multiple products.D. in activity-based costing, it is cost drivers that cause costs to be incurred.

Marginal costing is a technique that distinguishes between variable costs and fixed costs. In this approach to costing, only the variable costs of production are charged to cost units. Marginal costing and the concept of contribution are fundamental to the breakeven analysis or 'cost-volume-profit' (CVP) technique. Required:     (a) Explain the concept of contribution and its importance to the CVP technique.   (b) Describe the nature of each of the 'dropping a product or service' and 'special contract' decisions for which the CVP technique can be useful.  (c) Critically evaluate the CVP technique and explain the limitations of its use in the context of both the different interpretations offered by the economist's model of CVP and other limitations.

Which of the following statements about activity-based costing (ABC) is false? Group of answer choices Activity-based costing differs from traditional costing systems in that products are not cross-subsidized. Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products. Activity-based costing is useful for allocating marketing and distribution costs. In activity-based costing, cost drivers are what cause costs to be incurred.

The following statements refer to organisations that use service costing:(i) The service provided will be a homogenous product.(ii) The cost of materials is relatively small compared to labour, expenses and overheads.(iii) A problem with service costing is the difficulty in defining a realistic cost unit.(iv) Inventory levels are generally high in-service costing industries.Which of the above statements are correct?a) (i) and (ii)b) (ii) and (iii)c) (ii) and (iv)d) (i) and (iv)

How important is it to trace costs appropriately?  Explain. As you are beginning to think about the importance of tracing costs appropriately, please consider the differences between variable costing and absorption costing.  What implications does each of these have on such things as financial reporting of profit and pricing your products for the marketplace?

When a traditional, volume-based costing system is used, which of the following products is most likely to suffer from cost distortion? Select one. a. A low-volume, low-complexity product b. A high-volume, medium-complexity product CA low-volume, medium-complexity product d.A low-volume, high-complexity product

Which of the following can signal the need for a new product costing system? Select one: O a. Complex products have high reported profitability while more basic high-volume products show small margins or even losses. O b. Line managers do not believe reported product costs. O c. All of the given answers. od Overhead rates are high and increasing.

Which of the following statements about activity-based costing (ABC) is false? Group of answer choices Activity-based costing is useful for allocating marketing and distribution costs. Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only multiple products rather than single product. Activity-based costing differs from traditional costing systems in that it allocates costs according to the rates at which a product consumes different activities. In activity-based costing, all overhead costs are accumulated into a single cost pool and a single cost driver is identified to allocate costs to the cost objects.

a difference in cost-plus pricing and target costing is that target costing starts with the price customers are willing to pay whereas cost-plus pricing starts with the cost.   computes the desired markup while cost-plus pricing computes the maximum cost the company is willing to incur.   is generally determined after introducing a product and cost-plus pricing is determined before introducing a product.   is a simple approach while cost-plus pricing is relatively complex.