Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 12, Problem 28QRA
Grandview Manufacturing Company employs
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Please explain why the option is correct and why the other options are incorrect
Which of the following statement is true under the Standared Costing System
a.
Standard cost is a predetermined or estimated cost to either produce a good/service or perform an activity within the organisation
b.
Standard cost is a control technique that helps to report variances by comparing pre-set standards to actual costs to facilitate action
c.
Both a and b are incorrect
d.
Both a and b are correct
You mention changes and revisions to the standard cost systems. If you were the Operations manager of a manufacturing firm, what control would you have in place to assure those changes were proper and accurate? What assertions would apply here?
Chapter 12 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 12 - Prob. 1RQCh. 12 - Explain the significance of the purchase order to...Ch. 12 - What segregation of duties would you recommend to...Ch. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - When perpetual inventory records are maintained,...
Ch. 12 - What is meant by a bill and hold scheme?Ch. 12 - What charges and credits may be disclosed in the...Ch. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - A well-prepared balance sheet usually includes a...Ch. 12 - Darnell Equipment Company uses the LIFO method of...Ch. 12 - Prob. 17RQCh. 12 - Prob. 18RQCh. 12 - Prob. 19RQCh. 12 - Prob. 20RQCh. 12 - Prob. 21QRACh. 12 - Prob. 22QRACh. 12 - Prob. 23QRACh. 12 - Prob. 24QRACh. 12 - Prob. 25QRACh. 12 - Prob. 26QRACh. 12 - Prob. 27QRACh. 12 - Grandview Manufacturing Company employs standard...Ch. 12 - Prob. 29AOQCh. 12 - Prob. 29BOQCh. 12 - The document issued by a common carrier...Ch. 12 - Which of the following should be included as a...Ch. 12 - Prob. 29EOQCh. 12 - Prob. 29FOQCh. 12 - Instead of taking a physical inventory count on...Ch. 12 - Prob. 29HOQCh. 12 - Prob. 29IOQCh. 12 - Prob. 29JOQCh. 12 - Prob. 29KOQCh. 12 - Prob. 29LOQCh. 12 - Prob. 30OQCh. 12 - Adapted AICPA Task-Based Simulation For each of...Ch. 12 - Prob. 32OQCh. 12 - Prob. 33OQCh. 12 - Prob. 34AOQCh. 12 - Prob. 34BOQCh. 12 - Prob. 34COQCh. 12 - Prob. 34DOQCh. 12 - Prob. 34EOQCh. 12 - Prob. 35OQCh. 12 - Prob. 36PCh. 12 - Prob. 37PCh. 12 - Prob. 38PCh. 12 - Prob. 39PCh. 12 - Prob. 40PCh. 12 - Prob. 41PCh. 12 - Prob. 42PCh. 12 - Prob. 43ITCCh. 12 - Prob. 44ECCh. 12 - Western Trading Company is a sole proprietorship...
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- Which of the following would be classified as an external failure cost on a quality cost report? Multiple Choice O Reentering data because of keying errors. Customer returns arising from quality problems. Test and inspection of in-process goods. Rework labor and overhead.arrow_forwardIdentify the compliance and/or regulatory issues influencing the the cost of the products made. For example, strict regulations on product pricing, tariffs imposed on raw materialsarrow_forwardWhat features of the cost accounting system would be expected to prevent the omission ofrecording materials used in production?arrow_forward
- A number of activities that are part of a company's quality control system are listed below: Required: 1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost. Prevention Appraisal Cost Internal Failure External Failure Cost Activities Cost Cost a. Product testing b Product recalls C. Rework labor and overhead d. Quality circles e Downtime caused by defects f. Cost of field servicing g. Inspection of goods Quality engineering h. i. Warranty repairs j Statistical process control k. Net cost of scrap Depreciation of test equipment m. Returns and allowances arising from poor quality n. Disposal of production defects O. Technical support to suppliers р. Systems development q. Warranty replacements r. Field testing at customer site Quality training S.arrow_forwardExplain why the Accounting Department should be responsible for producing quality cost reports.arrow_forwardCost accounting is an area of accounting concerned with cost determination, cost control and cost analysis. Which of the following is a description of cost control? a. Refers to the use of cost data by management in decision making. b. None of the above c.Refers to the comparison of standards set for costs per unit and with the figures per actual operations so that remedial measures may be adopted if needed. d.Refers to the accumulation of cost data by products, process or services to be able to arrive at a unit cost.arrow_forward
- The basis used for allocating manufacturing overhead (such as machine hours or direct labor hours) should closely align with O a. estimation techniques used in other areas of financial reporting. O b. the GAAP rules for allocating overhead. O C. the incurrence of overhead costs. d. the way that competitors allocate overhead.arrow_forwardAccountarrow_forwardWhich would be classified as an external failure cost on a quality cost report?a. Reentering data because of keying errorsb. Customer returns due to quality problemsc. Test and inspection of in-process goodsd. Rework labor and overhead.arrow_forward
- A number of activities that are part of a company's quality control system are listed below: Required: 1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost. 2-a. Which type of costs are incurred to keep poor quality of conformance from occurring? 2-b. Which type of costs are incurred because poor quality of conformance has occurred? Complete this question by entering your answers in the tabs below. Required 1 Required 2a Required 2b Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost. Activities a. Product testing b. Product recalls c. Rework labor and overhead d. Quality circles e. Downtime caused by defects f. Cost of field servicing g. Inspection of goods h. Quality engineering i. Warranty repairs j. Statistical process control…arrow_forwardWhen materials are received, employees count and inspect them and record the items’ quantity and cost on a receiving report. True or False?arrow_forwardWhich of the following statements is false? Cost allocations such as activity-based costing allow manager to evaluate profitability of their products. A budget is a quantitative plan for acquiring and using financial and other resources over a specific forthcoming time period. A detailed activity-based costing system is costly to implement. Using different allocation base does not affect manufacturing overhead costs allocated to each product.arrow_forward
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY