Explain whether the given statement is correct.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

I am looking for help with this general accounting question using proper accounting standards.

Cariman contracts delivery drivers to service customers. Cariman owns the vans and pays for the gas. With reference to the following independent situations for Cariman, determine where (a) responsibility and (b) controllability lie. Suggest what might be done to solve the problem or to improve the situation: (20 marks)a) In the manufacturing plant the production manager is not happy with the material that the purchasing manager has been purchasing. In May the production manager stops requesting materials from the supply warehouse, and starts purchasing them directly from a different materials supplier. Actual materials costs in May are higher than budgeted.b) Overhead costs in the manufacturing plant for June are much higher than budgeted. Investigation reveals a utility rate hike in effect that was not figured into the budget.

provide correct option please accounting question

Answer 2

Question

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

Answer 6

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.

Answer 7

Chapter 5, Problem 1Q

To determine

Explain whether the given statement is correct.

Answer 8

Expert Solution & Answer

Explanation of Solution

Under-costing a product increase the profit earned from the product. Cost of product not charged to itself and it is borne by the other products in the firm.

Under-costing a product is worse because it make the manager to believe the product makes more profit than the other products and limited resource in firm are shifted into production, promote and sale the product even the other product make more profit. Cost distortion makes firms not to discontinue the unprofitable product because the cost date shows these products are making profits.