COST MANAGMENT WITH CONNECT ACCESS
8th Edition
ISBN: 9781307273823
Author: BLOCHER
Publisher: MCG/CREATE
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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.
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The following is a list of balances relating to Phiri Properties Ltd during 2024.
The company maintains a memorandum debtors and creditors ledger in which the individual account of customers and suppliers are maintained.
These were as follows:
Debit balance in debtors account 01/01/2024
66,300
Credit balance in creditors account 01/01/2024
50,600
Sunday credit balance on debtors ledger
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257,919
Goods sold on credit
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Cash paid to suppliers
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5,922
3,651
277
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Credit balances in debtors ledgers 31/12/2024. 815
Debit balances in creditors ledger 31/12/2024.698
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Soln
Chapter 5 Solutions
COST MANAGMENT WITH CONNECT ACCESS
Ch. 5 - Prob. 1QCh. 5 - Firms sell products with high costs at high...Ch. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Identify the general levels of cost hierarchy in...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - What are product-level activities? Give two...
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Prob. 15QCh. 5 - Tasty Beverage Co. produces soft drinks,...Ch. 5 - Montross Lumber processes wood to be shipped to...Ch. 5 - Orange Inc. grows and ships cabbage. It costs...Ch. 5 - Williams Performance Co. manufactures sports cars....Ch. 5 - Stackhouse Computing produces high-performance...Ch. 5 - Haywood Printing is processing a job with the...Ch. 5 - Locke Data Processing reported expenses of $5...Ch. 5 - The materials handling charge for ABC Corp. is...Ch. 5 - Role of Activity-Based Costing in Implementing...Ch. 5 - Activity Levels and Cost Drivers Shroeder Machine...Ch. 5 - Activity Levels and Cost Drivers Steve’s Slop...Ch. 5 - Activity-Based Costing in the Fashion Apparel...Ch. 5 - Activity-Based Costing Hakara Company has been...Ch. 5 - ABC and Job Costing Working with Unknowns North...Ch. 5 - High-Value-Added and Low-Value-Added Activities...Ch. 5 - Prob. 31ECh. 5 - Product-Line Profitability; ABC Supermart Food...Ch. 5 - Product-Line Profitability Analysis Studemeir...Ch. 5 - Customer Profitability Analysis; Luxury Hotel...Ch. 5 - Prob. 35ECh. 5 - Customer Profitability Analysis Garner Industries...Ch. 5 - Tools for Successful ABC/M Implementation The...Ch. 5 - Activity-Based Costing; Value Chain Analysis...Ch. 5 - Resource and Activity-Based Cost Drivers EyeGuard...Ch. 5 - Activity-Based Costing; Customer Group Cost...Ch. 5 - Volume-Based Costing versus ABC Eastern Chemical...Ch. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - Activity-Based Costing Miami Valley Architects...Ch. 5 - Volume-Based Costing versus ABC ADA Pharmaceutical...Ch. 5 - Time-Driven Activity-Based Costing (TDABC) In a...Ch. 5 - Prob. 47PCh. 5 - Personnel Planning; TDABC Recent competitive...Ch. 5 - Customer Profitability Analysis Ellie Mosk, CEO of...Ch. 5 - Ethics; Cost System Selection Aero Dynamics...Ch. 5 - Research Assignment; Environmental Sustainability...
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