Which of the following factor is irrelevant regarding a special order
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26. Which of the following factor is irrelevant regarding a special order?
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- May you explain why rearrange and restructure operations costs were not included?What would cost of good sold be if under or overapplied overhead were closed to cost of goods sold?A basic belief of variable costing is that period costs should be currently expensed. What is thebasic rationale behind this procedure?a. Period costs are uncontrollable and should not be charged to a specific product.b. Period costs are generally immaterial in amount and the cost of assigning the amountsto specific products would outweigh the benefits.c. Allocation of period costs is arbitrary at best and could lead in erroneous decisions bymanagement.d. Period costs will occur whether or not production occurs and so it is improper toallocate these costs to production and defer a current cost of doing business.
- 23. Which of the following costs is relevant to a make-or-buy decision of a particular part of a product? a.The direct labor costs used to manufacture the part b.The depreciation on the plant used to manufacture the part c.The fixed annual rent paid for the office building d.The salary of the sales manager who sells the productUnderapplied factory overhead would result if a. the plant were operating at less than normal capacity b. factory overhead costs incurred were less than costs charged to production c. factory overhead costs incurred were greater than costs charged to production d. factory overhead costs incurred were unreasonably large in relation to units produced5
- A fixed cost is a cost that does not vary in the short run with a specified activity. The defining characteristic of a fixed cost is that it depends on the amount of a resource that is acquired rather than the amount that is used. For this reason fixed costs are often called capacity-related costs. Write 300 to 400 words that explain the difference between fixed costs and variable costs. The example may be of a company you’ve worked with or another company that has these types of costsIf the actual overhead costs incurred are in excess of the applied overhead costs, the difference is called what? a) Predetermined overhead rate b) Underapplied overhead c) Overapplied overhead d) Gross marginThe opportunity cost of making a component part in factory with excess capacity for which is no alternative use is: A. Zero B. Total production costs of the component C. Total variable cost of the component D. Fixed manufacturing costs of the component
- 27) Which among the following cost encourage management to focus on life cycle costing? a. All the options listed b. Maintenance costs c. Repair costs d. Warranty costsAirco Company is tempted to consider support department costs to be facility-level costs that do not need to be applied to products. Which of the following explains what is misguided about this approach? a.Product costs may be inaccurate because support department services may be used more heavily by some products than others. b.Product costs may be inaccurate because incorrect cost drivers are used. c.Product costs may be inaccurate because straight-line depreciation on factory equipment is treated as a general and administrative expense on the income statement. d.Product costs may be inaccurate because direct labor and direct materials are not correctly accounted for in the product costing system.23. Overapplied overhead would result if a• The plant is operated at less than normal capacity. b• Overhead cost incurred were less than costs charged to production. c• Overhead costs incurred were reasonably small in relation to units produced. d• Overhead costs incurred were greater than costs charged to production.
