Each incorrect answer cancels out each correcr one. Indicate which of the following statements are true(T) or false (F).Indirect costs are those factors whose increase or decrease is not related to changes in the activity, so that in the shortterm they must be considered fixed.Cost Accounting studies the resources or productive factors applied to production, soit requires data expressed in physical units (hours, Kilograms, liters etc...) in addition to their monetary value.The fuelconsumed by commercial venicles must be assigned as indirect manufacturing cost. This is because it is not possible todo it directly. The warehousing costs refer to the set of activities related to the management of purchases andwarehouses, and do not include the acquisition value of this materials.When 50.000 units are produced, the fixed cost is$10 per unit. Therefore, when 100.000 units are produced fixed costs will remain at $10 per unit.The budgeted allocationrate is calculated by dividing the annual budget for indirect costs by the allocation base expected for the year. At break-even point, contribution margin is equal to the fixed costs, which leads to a zero operating income.

1. Indirect costs are those factors whose increase or decrease is not related to changes in the…

Answered: Each incorrect answer cancels out each…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A Product's cost is the sum of its direct-material cost, its direct-labor cost, and its overhead cost, which is the accumulation of all the resource costs driven to the product by the various cost drivers selected for the ABC. True or False?
1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based cost
Question: In cost accounting, what is the primary purpose of calculating the predetermined overhead rate? A) To allocate indirect costs to products based on a predetermined formula.B) To determine the actual overhead costs incurred during a specific production period.C) To calculate variable costs associated with each unit of production.D) To assess fixed costs that remain constant regardless of production levels.
Which of the following is NOT correct about the classifications of costs? Select one: a. On the basis of time of computation, costs are classified into historical costs and pre-determined costs. b. Costs are classified as product costs or period costs according to their behaviour with respect to physical capacity usage of the company. c. Costs are classified into direct costs and indirect costs on the basis of their identifiability with cost units or jobs or processes or cost centres. d. Costs behave differently when level of production rises or falls, and based on this, the costs are classified as fixed, variable, or mixed costs.
How do you explain the phrase," Fixed overheads consist of costs which arenot subject to change with the change in the volume of productive activity."
Which of the following statements is true? Select one: a. The most complex of the cost estimation methods is the high-low method. b. In approximating the cost function, the account analysis classifies costs based upon an industrial engineer's evaluation of production methods, and material, labor, and overhead requirements. c. The high-low method is used to derive an estimated line of cost behavior by graphically connecting the two cost amounts identified with the highest and lowest volume levels. d. Engineering approach approximates cost function by classifying each account as either variable or fixed based on the analyst's knowledge of how the account behaves. e. The high-low method of deriving an estimated cost line uses all the data points
Which of the following statements is FALSE? a. There is a cause-and-effect relationship between the cost driver and the amount of cost. b. Over the long run all costs have cost drivers. c. Volume of production is a cost driver of direct manufacturing costs. d. Fixed costs have cost drivers over the short run.
Which of the following is NOT true ? a. The salary of the factory manager is considered to be an indirect cost of producing one unit of product. b. An indirect cost cannot be easily traced to a particular cost object. c. The classification of a cost as direct or indirect does not depend on the cost object. d. A direct cost can be easily traced to a particular cost object.
PLEASE ANSWER ALL Write “True” if the statement is true and write “False” if the statement is false. Fixed cost is constant in total amount regardless of changes in activity level within the relevantrange. Cost function is an express that mathematically links costs, their behavior, and their cost driver. As volume decreases within the relevant range, variable cost per unit remains the same andfixed cost per unit increases.
What is the key difference between Absorption Costing and Marginal Costing? A Absorption Costing treats Manufacturing Overhead as a period cost. B Marginal Costing treats Fixed Manufacturing Overhead as a period cost. C Absorption Costing only considers variable costs to calculate net income. D Marginal Costing only considers variable costs to calculate net income.
The contribution margin approach helps managers in short-term decision making because it A. reports costs and revenues at present value B. reports only mixed costs C. treats fixed manufacturing overhead as product costs D. isolates costs by behavior

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