EBK HORNGREN'S COST ACCOUNTING
16th Edition
ISBN: 9780134475950
Author: Datar
Publisher: PEARSON CO
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Question
Chapter 2, Problem 2.46P
To determine
Cost:
Cost refers to the expenses incurred by the business to earn revenue from sales, in other words cost is the amount given in order to get something.
To identify: Weather to include or exclude the cost for the purpose of (1) pricing and product mix decision, (2) determining the appropriate charge for a government contract, and (3) for preparing financial statement.
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Students have asked these similar questions
In your own understanding, please answer the following:
1. What are the importance of knowing, analyzing and assessing the financial statement in the decision making of internal and external users in the organization?
2. Explain briefly how do you understand the concept of Cost of Good Sold.
Which of the following is NOT a period cost?
Select one:
O a.
manufacturing costs.
Ob general and administrative costs.
Oc marketing costs.
Od. research and development costs.
Which of the following is NOT one of the questions management accountants might attempt to help answer in
the formulation of strategy?
Select one:
a.
What substitute products exist in the marketplace?
Ob. Who are our most important customers?
Does the strategy comply with GAAP (Generally Accepted Accounting Principles)?
Od.
Will adequate cash be available to implement the strategy?
The relationship of theory to measurement is very important. Measurement is the assignment of
numbers to the attributes or properties of objects being measured. There are several valuation
approaches in accounting. Based on your research, discuss arguments for and arguments against the use
of historical cost, general price-level adjustment, exit value (net realizable value), and replacement cost (
entry value). Using the FASB Codification or any credible peer reviewed source, discuss one old, current
or proposed accounting standard for each of the valuation approaches historical cost, general price-
level adjustment, exit value (net realizable value).
Chapter 2 Solutions
EBK HORNGREN'S COST ACCOUNTING
Ch. 2 - Define cost object and give three examples.Ch. 2 - Define direct costs and indirect costs.Ch. 2 - Prob. 2.3QCh. 2 - Name three factors that will affect the...Ch. 2 - Define variable cost and fixed cost. Give an...Ch. 2 - What is a cost driver? Give one example.Ch. 2 - What is the relevant range? What role does the...Ch. 2 - Explain why unit costs must often be interpreted...Ch. 2 - Prob. 2.9QCh. 2 - What are three different types of inventory that...
Ch. 2 - Distinguish between inventoriable costs and period...Ch. 2 - Define the following: direct material costs,...Ch. 2 - Describe the overtime-premium and idle-time...Ch. 2 - Define product cost. Describe three different...Ch. 2 - What are three common features of cost accounting...Ch. 2 - Prob. 2.16MCQCh. 2 - Comprehensive Care Nursing Home is required by...Ch. 2 - Frisco Corporation is analyzing its fixed and...Ch. 2 - Year 1 financial data for the ABC Company is as...Ch. 2 - The following information was extracted from the...Ch. 2 - Computing and interpreting manufacturing unit...Ch. 2 - Direct, indirect, fixed, and variable costs....Ch. 2 - Classification of costs, service sector. Market...Ch. 2 - Classification of costs, merchandising sector....Ch. 2 - Classification of costs, manufacturing sector. The...Ch. 2 - Variable costs, fixed costs, total costs. Bridget...Ch. 2 - Variable and Fixed Costs. Consolidated Motors...Ch. 2 - Variable costs, fixed costs, relevant range. Gummy...Ch. 2 - Prob. 2.29ECh. 2 - Cost drivers and functions. The representative...Ch. 2 - Total costs and unit costs, service setting....Ch. 2 - Total and unit cost, decision making. Gayles...Ch. 2 - Inventoriable costs versus period costs. Each of...Ch. 2 - Computing cost of goods purchased and cost of...Ch. 2 - Cost of goods purchased, cost of goods sold, and...Ch. 2 - Flow of Inventoriable Costs. Renkas Heaters...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Interpretation of statements (continuation of...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Terminology, interpretation of statements...Ch. 2 - Labor cost, overtime, and idle time. David...Ch. 2 - Missing records, computing inventory costs. Ron...Ch. 2 - Comprehensive problem on unit costs, product...Ch. 2 - Prob. 2.46PCh. 2 - Cost classification; ethics. Paul Howard, the new...Ch. 2 - Prob. 2.48P
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Similar questions
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- В. Explain the following: Product costs and Period costs and one example of each. Distinguish clearly between Financial Accounting and Management Accounting under 3 (THREE) different factors, which are: i. Stakeholders, ii. Time frame and iii. Regulations. С. Before calculating costs we need to understand how different costs behave. In cost accounting we typically classify costs by three types of behaviour: Fixed costs - costs which don't change as the activity level changes Variable costs - costs which change in direct proportion to changes in the activity level Semi-variable costs- costs which have both fixed and variable elements. Explain the purpose classifying costs into the behavior patterns. D.arrow_forward1 To decide on an appropriate selling price for a special-order product” is an example of which cost allocation. Select one: a.To motivate managers and other employees b. To provide information for economic decisions c. To justify costs or compute reimbursement amounts d. To measure income and assets for reports to external partiesarrow_forwardAn analyst must be familiar with the concepts involved in determining income. The amount of in- come reported for a company depends on the recognition of revenues and expenses for a given time period. In certain cases, costs are recognized as expenses at the time of product sale; in other situations, guidelines are applied in capitalizing costs and recognizing them as expenses in future periods. Explain the rationale for recognizing costs as expenses at the time of product sale. What is the rationale underlying the appropriateness of treating costs as expenses of a period instead of assigning the costs to an asset? Explain. Under what circumstances is it appropriate to treat a cost as an asset instead of as an expense? Explain. Certain expenses are assigned to specific accounting periods on the basis of systematic and rational allocation Identify the conditions necessary to treat a cost as a loss.arrow_forward
- Which of the following statements is/are FALSE: I. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories: distribution & selling costs; administrative expenses; other operating expenses (or income). IV. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows. V. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset's useful life and increase the asset's capacity is capitalised.…arrow_forward1. Multiple-Choice Question - FIFO When using FIFO, A) Identical costs go to the balance sheet and the income statement. B) Management uses average costs to assign to the balance sheet and the income statement. C) Older costs go to the income statement; newer costs go to the balance sheet. D) Older costs go to the balance sheet; newer costs go to the income statement. Explain for the answer chosen please.arrow_forwardCost accounting depends entirely on historical information. Select one: True Falsearrow_forward
- How cost accounting is useful where financial accounting could not be answered. Give any exampleto support your answer.arrow_forwardIdentify two ways in which a contribution margin income statement differs in format from a traditional income statement. Which is more useful for decision making and why?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
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