Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem 9.24E
Capacity management, denominator-level capacity concepts. Match each of the following numbered descriptions with one or more of the denominator-level capacity concepts by putting the appropriate letter(s) by each item:
- a. Theoretical capacity
- b. Practical capacity
- c. Normal capacity utilization
- d. Master-budget capacity utilization
- 1. Measures the denominator level in terms of what a plant can supply
- 2. Is based on producing at full efficiency all the time
- 3. Represents the expected level of capacity utilization for the next budget period
- 4. Measures the denominator level in terms of demand for the output of the plant
- 5. Takes into account seasonal, cyclical, and trend factors
- 6. Should be used for performance evaluation in the current year
- 7. Represents an ideal benchmark
- 8. Highlights the cost of capacity acquired but not used
- 9. Should be used for long-term pricing purposes
- 10. Hides the cost of capacity acquired but not used
- 11. If used as the denominator-level concept, would avoid the restatement of unit costs when expected demand levels change
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Capacity management, denominator-level capacity concepts. Match each of the following numbered descriptions with one or more of the denominator-level capacity concepts by putting the appropriate letter(s) by each item: a. Theoretical capacity b. Practical capacity c. Normal capacity utilization d. Master-budget capacity utilization 1. Measures the denominator level in terms of what a plant can supply 2. Is based on producing at full efficiency all the time 3. Represents the expected level of capacity utilization for the next budget period 4. Measures the denominator level in terms of demand for the output of the plant 5. Takes into account seasonal, cyclical, and trend factors 6. Should be used for performance evaluation in the current year 7. Represents an ideal benchmark 8. Highlights the cost of capacity acquired but not used 9. Should be used for long-term pricing purposes 10. Hides the cost of capacity acquired but not used 11. If used as the denominator-level concept, would avoid…
Indicate whether the item below is used as key performance indicators for the areas of (A) Financial, (B) Customer, (C) Internal Process, or (D) Learning and Growth performance. Choose the one best choice.
Quantity variance on a cost report *(A) Financial(B) Customer(C) Internal Process(D) Learning and Growth performance.
What is a standard cost?
Group of answer choices
The total number of units times the budgeted amount expected
Any amount that appears on a budget
The total amount that appears on the budget for product costs
The amount management thinks should be incurred to produce a good or service
Chapter 9 Solutions
Cost Accounting (15th Edition)
Ch. 9 - Differences in operating income between variable...Ch. 9 - Why is the term direct costing a misnomer?Ch. 9 - Do companies in either the service sector or the...Ch. 9 - Explain the main conceptual issue under variable...Ch. 9 - Companies that make no variable-cost/fixed-cost...Ch. 9 - The main trouble with variable costing is that it...Ch. 9 - Give an example of how, under absorption costing,...Ch. 9 - What are the factors that affect the breakeven...Ch. 9 - Critics of absorption costing have increasingly...Ch. 9 - What are two ways of reducing the negative aspects...
Ch. 9 - Prob. 9.11QCh. 9 - Describe the downward demand spiral and its...Ch. 9 - Will the financial statements of a company always...Ch. 9 - Prob. 9.14QCh. 9 - The difference between practical capacity and...Ch. 9 - Prob. 9.16ECh. 9 - Prob. 9.17ECh. 9 - Prob. 9.18ECh. 9 - Prob. 9.19ECh. 9 - Prob. 9.20ECh. 9 - Prob. 9.21ECh. 9 - Prob. 9.22ECh. 9 - Prob. 9.23ECh. 9 - Capacity management, denominator-level capacity...Ch. 9 - Prob. 9.25ECh. 9 - Prob. 9.26ECh. 9 - Prob. 9.27ECh. 9 - Prob. 9.28PCh. 9 - Prob. 9.29PCh. 9 - Prob. 9.30PCh. 9 - Prob. 9.31PCh. 9 - Motivational considerations in denominator-level...Ch. 9 - Prob. 9.33PCh. 9 - Prob. 9.34PCh. 9 - Prob. 9.35PCh. 9 - Prob. 9.36PCh. 9 - Prob. 9.37PCh. 9 - Prob. 9.38PCh. 9 - Prob. 9.39PCh. 9 - Prob. 9.40PCh. 9 - Prob. 9.41PCh. 9 - Prob. 9.42P
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