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

General Accounting

Required Determine whether the following items included in Wong Company’s January Year 1 bank reconciliation will require adjusting or correcting entries on Wong’s books. When an entry is required, record it in general journal format. Note: If no entry is required for a transaction or event, select "No journal entry required" in the first account field. Service charges of $50 for the month of January were listed on the bank statement. The bank charged a $250 check drawn on Wing Restaurant to Wong’s account. The check was included in Wong’s bank statement. A check of $62 was returned to the bank because of insufficient funds and was noted on the bank statement. Wong received the check from a customer and thought it was good when it was deposited into the account. A $990 deposit was recorded by the bank as $980. Four checks totaling $810 written during the month of January were not included with the January bank statement. A $75 check written to OfficeMax for office supplies was…

Total assets at the year end?

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.