Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 16, Problem 16.15Q
Why might managers seeking a monthly bonus based on attaining a target operating income prefer the sales method of accounting for byproducts rather than the production method?
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Managers have some flexibility in setting the estimated useful lives of depreciable assets. Explain how this could allow managers to manipulate earnings. Would depreciation be considered a variable cost or a fixed cost? Explain how a change in sales price, variable cost, or fixed cost affects breakeven in units and breakeven in sales.
Which tool can be used to easily calculate the change in profit resulting from a change in sales price, sales volume, variable costs, or fixed costs?
Chapter 16 Solutions
Cost Accounting (15th Edition)
Ch. 16 - Give two examples of industries in which joint...Ch. 16 - What is a joint cost? What is a separable cost?Ch. 16 - Distinguish between a joint product and a...Ch. 16 - Why might the number of products in a joint-cost...Ch. 16 - Provide three reasons for allocating joint costs...Ch. 16 - Why does the sales value at splitoff method use...Ch. 16 - Prob. 16.7QCh. 16 - Distinguish between the sales value at splitoff...Ch. 16 - Give two limitations of the physical-measure...Ch. 16 - How might a company simplify its use of the NRV...
Ch. 16 - Why is the constant gross-margin percentage NRV...Ch. 16 - Managers must decide whether a product should be...Ch. 16 - Prob. 16.13QCh. 16 - Describe two major methods to account for...Ch. 16 - Why might managers seeking a monthly bonus based...Ch. 16 - Prob. 16.16ECh. 16 - Prob. 16.17ECh. 16 - Prob. 16.18ECh. 16 - Prob. 16.19ECh. 16 - Prob. 16.20ECh. 16 - Prob. 16.21ECh. 16 - Prob. 16.22ECh. 16 - Prob. 16.23ECh. 16 - Prob. 16.24ECh. 16 - Joint costs and decision making. Jack Bibby is a...Ch. 16 - Joint costs and byproducts. (W. Crum adapted)...Ch. 16 - Prob. 16.27PCh. 16 - Prob. 16.28PCh. 16 - Prob. 16.29PCh. 16 - Prob. 16.30PCh. 16 - Prob. 16.31PCh. 16 - Prob. 16.32PCh. 16 - Prob. 16.33PCh. 16 - Prob. 16.34PCh. 16 - Prob. 16.35PCh. 16 - Prob. 16.36PCh. 16 - Methods of joint-cost allocation, comprehensive....
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- PLEASE ANSWER ALL Write “True” if the statement is true and write “False” if the statement is false. The relevant range of activity is the activity level at which the company makes the highestamount profits. Fixed costs per unit decline as the activity level increase within the relevant range of activity. A period cost is defined as the cost incurred when asset is used up or sold for the purpose ofgenerating revenue. Opportunity costs could be defined as the revenue lost when one alternative is not taken infavor of another alternative.arrow_forwardA company accepts incremental business at a special price that exceeds the variable cost. What other issues must the company consider in deciding whether to accept the business?arrow_forwardWhich of the following is not a revenue driver factor which affects sales volume for a manufacturing firm? Multiple Choice Price changes. Customer service. Delivery dates. Productivity. Discounts.arrow_forward
- What concept relates to the proportionate savings in costs gained when levels of production are increased: A) Accounting profit. B) Economies of scale. C) Marginal costs. D) Barriers to entry. E) Economic profit. The benefit lost when choosing one option precludes receiving the benefits from an alternative option was referred to as: A) Irrelevant costs. B) Lost costs. C) Alternative costs. D) Opportunity costs. E) Sunk costs.arrow_forwardDifferential revenue represents – Group of answer choices The differences in revenues expected from alternative courses of action. The difference between actual revenue and budgeted revenue The difference between revenues and variable manufacturing costs The difference between operating revenues and non-operating revenuesarrow_forwardCalculation of profit change from changes in sales price, sales volume, variable costs, or fixed expenses may be done using which tool?arrow_forward
- In the cost-volume-profit analysis, income taxes a.increase the sales volume required to break even. b.are treated as a variable cost. c.are treated as a fixed cost. d.increase the sales volume required to earn a desired profit.arrow_forwardDoes using cost volume profit sensitivity analysis have any drawbacks or possible negative impacts on the company?arrow_forwardWhat is the rationale behind treating period costs as current expenses? a. Period costs are uncontrollable b. Period costs are immaterial c. Allocation of period costs is arbitrary at best and could lead to erroneous decisions d. Period costs will occur whether or not production occurs and so it is improper to allocate these costs to production and defer a current cost of doing businessarrow_forward
- The measure that reflects an organization's variable and fixed cost relationship and indicates how a percentage change in sale from the current level will impact from the current level will impact profits is called the a. break-even point. b. contribution margin. ç. degree of operating leverage. d gross margin. e. margin of safety.arrow_forwardWhich of the following is NOT correct about Contribution concept? Select one: a. Contribution can be calculated by using total values or per-unit values. b. Contribution helps to recover fixed costs of the company. c. Contribution is the difference between sales and fixed costs. d. At break-even point, contribution is equal to fixed costs.arrow_forwardWhat analysis ensures that the income for the firm will cover its variable costs? a. ratio analysis b. financial analysis c. cost volume profit analysis d. sales analysisarrow_forward
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Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY