5th Edition

ISBN: 9781259565403

Author: William N. Lanen Professor, Shannon Anderson Associate Professor, Michael W Maher

Publisher: McGraw-Hill Education

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Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies wh…

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Textbook Question

Chapter 7, Problem 10CADQ

Why do most companies use normal or standard costing? After all, actual costing gives the actual cost, so the firm could just wait until it knows what the cost will be.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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Chapter 7, Problem 9RQ

Chapter 7, Problem 11CADQ

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Chapter 7 Solutions

Fundamentals of Cost Accounting

Ch. 7 - What are characteristics of companies that are...Ch. 7 - Direct labor-hours and direct labor dollars are...Ch. 7 - What is the purpose of having two manufacturing...Ch. 7 - How does the accountant know what to record for...Ch. 7 - How is job costing in service organizations (for...Ch. 7 - What are the costs of a product using normal...Ch. 7 - Prob. 7RQ Ch. 7 - What are three common sources of improprieties in...Ch. 7 - In the context of job costing, what are projects?...Ch. 7 - Why do most companies use normal or standard...

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Why do most companies use normal or standard costing ? After all, actual costing gives the actual cost, so the firm could just wait until it knows what the cost will be.

Solution Summary: The author explains the need to use normal or standard costing along with actual or fluctuation in actual cost.

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Chapter 7 Solutions