Chapter 4, Problem 4.9SE

Determine the usefulness of refined costing systems in various situations (Learning Objective 3)

In each of the following situations, determine whether the company would be more likely or less likely to benefit from refining its costing system.

1. 1. In bidding for jobs, managers lost bids they expected to win and won bids they expected to lose.
2. 2. The company operates in a very competitive industry.
3. 3. The company produces few products, and the products consume resources in a similar manner.
4. 4. The company has very few indirect costs.
5. 5. The company produces high volumes of some of its products and low volumes of other products.
6. 6. The company has reengineered its production process but has not changed its accounting system.