Why is the form of activity-based costing unacceptable for external financial reports?

Q: In recent years, why has labor become such a small part of product costs and how can its use in…

A: Overhead allocation is the process of distributing indirect costs or overhead expenses to specific…

Q: Why is ABC usually considered more accurate than traditional costing methods?

A: Activity-based costing: It is a method that helps in finding the activities performed by a company…

Q: Why are support department costs difficult to apply to products?

A: Given: The difficulty in applying the support department costs on products.

Q: For what purpose should the managerial accountant be careful to not use joint cost allocations?

A: Joint costs: The total costs incurred prior to the split-off point, where the joint products are…

Q: Explain the Problems in Cost Accounting Measurements?

A:

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: What is the most important purpose of the cost of production report? Why?

A: Production report is the report which is made by the manufacturing company which makes the goods or…

Q: What is the danger in allocating common fixed costs among products or other segments of an…

A: The costs which are not allocated to any specific segment in the business organization are called…

Q: Explain why a costing system that uses a volume-based rate is likely to produce distorted…

A: A traditional volume-based cost allocation systems that use only drivers tend to vary directly with…

Q: What are the differences between cost accounting and cost management?

A: Cost Accounting: Cost accounting refers that branch of accounting, which records and analyzes the…

Q: Discuss the differences between lean accounting and traditional cost accounting.

A:

Q: Which among the following is not a relevant cost for decision making? a. Cost of producing…

A: Relevant Cost refers to the incremental and avoidable cost of implementing a business decision.…

Q: Why do departmental overhead rates sometimes result in inaccurate product costs?

A:

Q: What circumstances might create distortions where estimated costs are not an accurate representation…

A: The estimated costs are the costs determined through the estimation process on past…

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: What is the most significant function of a cost of production report, and why is it important? What…

A: The significance and use of a cost of production report:

Q: in which cases is it preferable to prepare the income statement based on marginal costing? Justify…

A: Income statement refers to the statement which is being prepared by the business in order to…

Q: Discuss how traditional methods of allocating overhead to products may not provide a good measure of…

A: The overhead costs are allocated to production using various methods as traditional costing and…

Q: One of the primary uses of a cost of production report is to assist management in controlling…

A: Production Cost Report:   A production cost report is used by the firm to summarise the production…

Q: What is cost management, and how does it differ from management accounting and cost accounting?

A: Cost accounting and management accounting are two different forms of accounting, that is being…

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: What is the danger in allocating common fixed costs among product lines or other segmentsof an…

A: Fixed cost: It can be defined as the cost that does not vary with an increase or decrease in the…

Q: What are the pros/cons of product costing allocation methods and how they influence distortion of…

A: Product costing allocation methods are used to assign or allocate a cost to manufactured/produced…

Q: Disadvantages of activity-based costing include which of the following? a. It is not acceptable…

A: Answer; d. Both a. and b.

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.