Cost allocation bases are ideally based on a cause and effect basis. That is not always easy when allocating fixed costs. Why might this be s

Q: What is meant by an activity base when dealing with variable costs? Give several examples of…

A:

Q: Why would someone use variable costing over absorption Costing ?

A: The variable costing method is the method that only includes the variable costing whereas,…

Q: “In accounting for spoiled units, we are dealing with cost assignment rather than cost…

A: Explain the reason in accounting for spoiled units are done with cost assignment rather than cost…

Q: Problems with a fixed cost that is incurred only if an activity is undertaken at a positive level…

A: If there is a conduct of any activity at any positive level then it incurs an amount of fixed cost…

Q: "ABC systems may result in misallocation of indirect costs." Do you agree? Give reasons for your…

A: ABC system means Activity Based Costing system in which all indirect costs or overhead costs are…

Q: activity-based costing systems have a tendency to distort product costs. True or False?

A: The overhead is applied to the production on the basis of predetermined overhead rate. The…

Q: Cost allocation is arbitrary, so there is nothing gained by it. We should report only the costs that…

A: Cost allocation refers to the process of distributing the single cost among various companies,…

Q: Why can unitized fixed costs cause errors in decision making?

A: Decision making process: Decision making process requires an understanding of a grasp of illegal…

Q: Only variable costs can be differential costs. Do you agree? Explain

A: Answer

Q: cost constraint'

A: There are certain financial information ascertainment of which is very expensive. So reporting of…

Q: Why functional (or volume)- based costing approaches may produce distorted costs.

A: In a functional-based cost accounting system, costs are allocated to cost objects using unit-based…

Q: Differences in operating income between variable costing and absorption costing are due solely to…

A: Absorption costing: It refers to the method of product costing in which the price of the product is…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.