General Account Is variable costing appropriate in a capital intensive environmentwhere robotic equipment performs most of the conversion of rawmaterials to a final product such as in a BMW plant?

No, variable costing is generally less appropriate in a capital-intensive environment like a BMW…

Answered: Is variable costing appropriate in a…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 1CMA

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What challenges might managers at Neuro Instruments encounter in achieving the target cost? How might they overcome these challenges?
In calculating the incremental costs of making a component part in-house, the firm should consider which costs in the case where the plant has excess capacity? O incremental fixed costs and variable costs O incremental fixed costs only Ovariable costs only O incremental fixed costs and sunk costs Ovariable costs and sunk costs
When operating in a constrained environment, which products should be produced? A. products with the highest contribution margin per unit B. products with the highest contribution margin per unit of the constrained process C. products with the highest selling price D. products with the lowest allocated joint cost
In detail discuss what are the advantages and disadvantages of using FIFO for process costing. In periods when costs are increasing how will FIFO affect reported net income? What about in periods of declining costs? Explain.
Why would a business that uses traditional costing systems consider implementing activity-based costing? Discuss the following in your answer: Problems with traditional costing systems in a modern manufacturing environment. Whether the benefits of activity-based costing always outweigh the costs.
What is the best reponse to this post? ob costing is a way for businesses to manage the costs and profitability of a specific job or project. This type of cost accounting is most beneficial to companies that make custom/unique products. An industry that may choose job costing is a construction company. They may specialize in a particular service, such as installing water pipes underground, but each project will vary in size, length, location, etc. They would use this method because each project would vary widely, so you could not spread the costs evenly for each one. Process costing is a way of evenly spreading costs for their products because all products are either mass-produced or very similar. An example of a company that would use process costing is a paper company. They produce one product in large quantities to allocate the costs evenly for each batch produced. The main difference between the two is how the overhead is assigned to the product, where job costing is more for…
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You have been asked by management to classify the costs associated with the start-up of this new product line. Using the cost information provided below, classify each cost under the appropriate heading according to the chart provided below. Note that some costs may be classified under more than one heading. For example, a cost may be a fixed cost and a period cost. Name of cost Variable Cost Fixed Cost Direct Materials Direct Labor Factory Overhead Period Cost Prime Cost Conversion Cost Carlson “New Product” Cost Information Cost Amount Cost Type Depreciation on Building (annual) $ 10,000 Direct Labor Cost (per unit) $ 75 Direct Materials Cost (per unit) $ 60 Factory Utilities (per unit) $ 8 Indirect Materials (per unit) $ 4 Interest on Investments (annual) $3,000 Machinery Rental (monthly) $ 6,000 Marketing (annual) $ 35,000 Rent from Tenant (annual) $40,000…
Process costing is normally used when: Select one: a. large numbers of different products are manufactured. O b. the fixed costs of manufacturing exceed the variable cost of manufacturing. O c. large numbers of nearly identical products are manufactured. O d. small numbers of nearly identical products are manufactured.
East Company manufactures VCRs using a completely automated production process. West Company also manufactures VCRs, but its products are assembled manually. How will these two firms’ cost structures differ?Which company will have a higher operating leverage factor?
ABC systems get more accurate as more activities are identified and analyzed. Critique the following statement: “A company should look to break its production process into as many activities as possible in order to determine the most accurate unit costs possible”. Why do you agree or disagree with that statement? Give several reasons.
Which of the following is NOT true about a resource cost driver under Activity based costing? O a. Sales orders are used to assign the cost of machines O b. Resource cost driver is used to assign the cost of the resource to an activity OC. Number of purchased orders placed will determine the cost of purchasing the materials O d. Number of times machines are set up will determine their cost of setting up

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Is variable costing appropriate in a capital intensive environment where robotic equipment performs most of the conversion of raw materials to a final product such as in a BMW plant?