EBK COST ACCOUNTING
15th Edition
ISBN: 9780133812763
Author: Rajan
Publisher: VST
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Textbook Question
Chapter 9, Problem 9.5Q
“Companies that make no variable-cost/fixed-cost distinctions must use absorption costing, and those that do make variable-cost/fixed-cost distinctions must use variable costing.” Do you agree? Explain.
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Students have asked these similar questions
Costing Method.
How does the two method ( WACO - FIFO) differ?
Which of the following statements is true? *
A. The traditional approach to costing uses many different cost drivers.
B. Costs that are indirect to products are by definition traceable to directly to products.
C. Costs that are indirect to products are traceable to some activity.
D. All of the above statements are true.
What is the key different in accounting for costs between absorption and variable costing? Give a detailed example.
Chapter 9 Solutions
EBK COST ACCOUNTING
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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- The advantages of standard costing exceeds its disadvantages. True or false? Explain furtherarrow_forwardFirms may choose to use absorption costing or variable costing for external financial reporting purposes. True or False True Falsearrow_forwardPlease explain the statement below (T/F) thoroughly with examples illustrating the answer. "In activity-based costing, a product margin may exclude costs from some of the company’s activity cost pools."arrow_forward
- Why is it necessary to distinguish between variable and fixed costs when dealing with mixed costs?arrow_forward'Direct costs are treated differently under the ABC method than under the traditional full costing method.' Is the above statement true or false? A. True B. Falsearrow_forwardWhich of the following statements is true? (You may select more than one answer.)a. A common cost is one type of direct cost.b. A sunk cost is usually a differential cost.c. Opportunity costs are not usually recorded in the accounts of an organization.d. A particular cost may be direct or indirect depending on the cost object.arrow_forward
- Differentiate between the adoption of “Variable costing” and “absorption costing” in business.arrow_forwardWhat is absorption costing and marginal costing in the context of overhead costs? Discuss the following in your answer: • The difference between absorption costing and marginal costing. • Two reasons for absorption costing.arrow_forwardHow does absorption costing differ from variable costing? When will absorption-costing operating income exceed variable-costing operating income?arrow_forward
- What is the scattergraph method, and why is it used? Why is a scattergraph a good first step in separating mixed costs into their fixed and variable components?arrow_forwardWhy would managers prefer variable costing over absorption costing?arrow_forwardWhat is the primary difference between variable costing and absorption costing?arrow_forward
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