Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Textbook Question
Chapter 25, Problem 1CMA
In differential cost analysis, which one of the following best fits the description of a sunk cost?
- a. Direct materials required in the manufacture of a table
- b. Purchasing department costs incurred in acquiring material
- c. Cost of the forklift driver to move the material to the manufacturing floor
- d. Cost of a large crane used to move materials
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Which of the following correctly describes the term cost driver?
a.The primary factor which is correlated with the amount of cost incurred to produce a product
b.The total material, labor, and overhead cost of a completed job
c.The inflation rate which causes costs to rise
d.The initial purchase price of direct materials
In a make or buy decision, the relevant costs include variable manufacturing costs as well as
A. Depreciation costs
B. General office cost
C. Avoidable fixed costs
D. Factory management cost
Which of the following correctly describes the term cost driver?
a.
The inflation rate which causes costs to rise
b.
The primary factor which is correlated with the amount of cost incurred to produce a product
c.
The initial purchase price of direct materials
d.
The total material, labor, and overhead cost of a completed job
Chapter 25 Solutions
Financial And Managerial Accounting
Ch. 25 - Explain the meaning of (A) differential revenue,...Ch. 25 - A company could sell a building for 250,000 or...Ch. 25 - A chemical company has a commodity-grade and...Ch. 25 - A company accepts incremental business at a...Ch. 25 - A company fabricates a component at a cost of...Ch. 25 - Prob. 6DQCh. 25 - In the long run, the normal selling price must be...Ch. 25 - Although the cost-plus approach to product pricing...Ch. 25 - How does the target cost method differ from...Ch. 25 - Prob. 10DQ
Ch. 25 - Lease or sell Plymouth Company owns equipment with...Ch. 25 - Prob. 2BECh. 25 - Make or buy A company manufactures various-sized...Ch. 25 - Replace equipment A machine with a book value of...Ch. 25 - Process or sell Product J19 is produced for 11 per...Ch. 25 - Prob. 6BECh. 25 - Product cost markup percentage Green Thumb Garden...Ch. 25 - Prob. 8BECh. 25 - Differential analysis for a lease or sell decision...Ch. 25 - Prob. 2ECh. 25 - Differential analysis for a discontinued product A...Ch. 25 - Differential analysis for a discontinued product...Ch. 25 - Prob. 5ECh. 25 - Decision to discontinue a product On the basis of...Ch. 25 - Make-or-buy decision Somerset Computer Company has...Ch. 25 - Make-or-buy decision for a service company The...Ch. 25 - Machine replacement decision A company is...Ch. 25 - Differential analysis for machine replacement...Ch. 25 - Sell or process further Calgary Lumber Company...Ch. 25 - Sell or process further Dakota Coffee Company...Ch. 25 - Decision on accepting additional business...Ch. 25 - Accepting business at a special price Box Elder...Ch. 25 - Prob. 15ECh. 25 - Product cost method of product pricing La Femme...Ch. 25 - Product cost method of product costing Smart...Ch. 25 - Target costing Toyota Motor Corporation (TM) uses...Ch. 25 - Target costing Instant Image Inc. manufactures...Ch. 25 - Product decisions under bottlenecked operations...Ch. 25 - Prob. 21ECh. 25 - Total cost method of product pricing Based on the...Ch. 25 - Variable cost method of product pricing Based on...Ch. 25 - Differential analysis involving opportunity costs...Ch. 25 - Differential analysis for machine replacement...Ch. 25 - Differential analysis for sales promotion proposal...Ch. 25 - Prob. 4PACh. 25 - Prob. 5PACh. 25 - Product pricing using the cost-plus approach...Ch. 25 - Differential analysis involving opportunity costs...Ch. 25 - Differential analysis for machine replacement...Ch. 25 - Differential analysis for sales promotion proposal...Ch. 25 - Differential analysis for further processing The...Ch. 25 - Prob. 5PBCh. 25 - Product pricing using the cost-plus approach...Ch. 25 - Analyze Pacific Airways Pacific Airways provides...Ch. 25 - Service yield pricing and differential equations...Ch. 25 - Prob. 3MADCh. 25 - Service yield pricing and differential analysis...Ch. 25 - Aaron McKinney is a cost accountant for Majik...Ch. 25 - Prob. 3TIFCh. 25 - Prob. 4TIFCh. 25 - Accepting service business at a special price If...Ch. 25 - Prob. 6TIFCh. 25 - In differential cost analysis, which one of the...Ch. 25 - Prob. 2CMACh. 25 - Prob. 3CMACh. 25 - Oakes Inc. manufactured 40,000 gallons of Mononate...
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- Which of the following is a prime cost? A. indirect materials B. direct labor C. administrative expenses D. factory depreciation expensesarrow_forwardWhich is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B. identify non-value-added costs C. analyze the effect on manufacturing overhead D. identify the correlation between the potential driver and manufacturing overheadarrow_forwardWhich of the following is a conversion cost? A. raw materials B. direct labor C. sales commissions D. direct material usedarrow_forward
- Which of the following costs would be included in the cost of a manufactured product according to the variable costing concept: (A) rent on factory building, (B) direct materials, (C) property taxes on factory building, (D) electricity purchased to operate factory equipment, (E) salary of factory supervisor, (F) depreciation on factory building, (G) direct labor?arrow_forwardWhich of the following is a conversion cost? raw materials direct materials administrative expenses factory depreciation expensesarrow_forwardWhich of the following is an example of a cost that varies in proportion to changes in the activity base? Depreciation on machinery Packaging cost Factory rent Insurance costarrow_forward
- When factory overheads are added to prime cost then the result will be. a. Cost of material consumed b. Cost of sales c. Works cost d. Cost of productionarrow_forwardDraw a diagram illustrating how direct, indirect, sales and administration costs contribute to the overall cost of a product in a manufacturing company (a) Outline the characteristics ofvariable, fixed. mixed and step costs, and write a note on a potential cause of particular cost behaviour. (b) (c) Discuss the salient features of both the engineering and historical cost estimation techniques, especially with regard to the cost activity base.arrow_forwardWhat are conversion costs? A) A fixed cost. per unit. B) Raw Material and Direct Labor. C) Raw Material and Variable Cost. D) Direct Labor & Manufacturing overhead.arrow_forward
- Which of the following is NOT true about a resource cost driver under Activity based costing? O a. Sales orders are used to assign the cost of machines O b. Resource cost driver is used to assign the cost of the resource to an activity OC. Number of purchased orders placed will determine the cost of purchasing the materials O d. Number of times machines are set up will determine their cost of setting uparrow_forwardWhich of the following is a part of Prime Cost? a. Direct Labour b. Indirect Wages c. Rent of Factory d. Depreciation on Plantarrow_forwardWhich of the following would be included in the cost of a product manufactured according to variable costing? a.direct materials b.sales commissions c.interest expense d.office supply costsarrow_forward
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