Related Accounting Q&AFind answers to questions asked by students like you. Show Q: Should a company allocate its common fixed costs to business segments when computing the break-even… A: Click to see the answer Q: Should a company allocate its common fixed costs to business segments when computing the break-even… A: Break-even point is that point at which the business does not earn any profits nor incur any losses.… Q: Which of the following is not a consideration when a manager is deciding to discontinue a product or… A: The management can take decision to discontinue the product or product line in case, its leading to… Q: Which of the following costs are irrelevant to business decisions? Avoidable costs Costs that… A: Sunk costs are irrelevant to business decisions. Q: Assume that a company has decided not to allocate any support department costs to producing… A: Cost allocation means assigns cost to different heads or departments. It is a good tool that can be… Q: “A company should not allocate costs that are fixed in the short run to customers.” Do you agree?… A: Cost Allocation:The process of assigning the cost to the cost object is cost allocation. The cost… Q: Which one of the following statement is not correct? O Both fixed and variable costs influence… A: The incorrect statement is "opoortunity costs are only considered when resources are limited" This… Q: Which of these costs is considered as the most important cost because if it is not met, an… A: A company income statement will report the net income as the total revenue in excess of the total… Q: Which item is usually not relevant to a decision by the divisional manager to reduce t transfer… A: Solution: "Fixed divisional overhead" is usually not relevant to a decision to reduce the transfer… Q: Cost: Allocated corporate overhead Decision: Closing a money-losing department… A: Direct material represents the material involved in the production process of the company. Q: Which is the best definition of start-up costs? a. All activities associated with organizing a new… A: Costs are that worth of money which is utilized to pay for the expenses. Costs are incurred to start… Q: What is the danger in allocating common fixed costs among products or other segments of an… A: Click to see the answer Q: What is the danger in allocating common fixed costs among products or other segments of an… A: The costs which are not allocated to any specific segment in the business organization are called… Q: In making short-term business decisions, what should you do? Use a traditional costing approach.… A: Business decision refers to large part of conducting business is making decisions. Q: When closing overapplied manufacturing overhead to Cost of Goods Sold, which of the following would… A: When closing overapplied manufacturing overhead to Cost of Goods Sold, Gross profit will increase.… Q: Why does the company's net income increase when the new costing system is applied? Is the controller… A: Generally accepted accounting principles (GAAP) refer to a common set of accounting principles,… Q: Companies need to engage in target costing.... only if costs are primarily variable. at the… A: Target costing is one of the management techniques where the prices are determined by the market… Q: Which of the following costs is not relevant when considering the closure of a department within a… A: The decision to close a department is based on contribution and not on net profit /loss due to the… Q: "Simplification of all costs into only fixed and variable costs distorts the actual cost behavior… A: Introduction:- There are four basic cost behavior patterns as follows:- fixed costs variable costs… Q: Discuss the circumstances that would require a business to change from traditional costing to ABC… A: The difference between the traditional method (using one cost driver) and the ABC method (using… Q: Discuss the circumstances that would require a business to change from traditional costing to ABC… A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new… Q: Which item is usually not relevant to a decision by the divisional manager to reduce the transfer… A: The opportunity cost are relevant cost by the manager to reduce the transfer price to meet a price… Q: Which of the following statements is true regarding a company's segment margin? * It is primarily… A: The following statement is True regarding the company segment margin::: It is primarily used to make… Q: Prime indicators of problems with a conventional costing system include company profits being eroded… A: Product cost refers to the cost or expense which is incurred for creating the product and this cost… Q: Which of the following costs are irrelevant to business decisions? a. Avoidable costs b. Costs that… A: Irrelevant cost: Irrelevant cost does not affect the decision making since they are not in the… Q: Discuss the circumstances that would require a business to change from traditional costing to ABC… A: Traditional costing is the practice of allocating the factory overhead to products depending on the… Q: If a division manager's compensation is based upon the division's net income, the manager may decide… A: Answer: If a division manager's compensation is based upon the division's net income, the manager… Q: What questions should managers answer when considering dropping a product or segment? A: Definition: Drop or Keep Decision: When a product or segment of a business is costing more money… Q: What questions should managers answer when considering dropping a product or segment? A: Drop or Keep Decision: When a product or segment of a business is costing more money than earning,… Q: What is the danger in allocating common fixed costs among product lines or other segmentsof an… A: Fixed cost: It can be defined as the cost that does not vary with an increase or decrease in the… Q: Which of the following statements is true regarding a company's segment margin? It is primarily used… A: Solution: The true statement regarding a company's segment margin is that "It is primarily used to… Q: In a cost-volume-profit analysis, explain what happens at the break-even point and why companies do… A: Break even point sales are the units sold where business earns no profit no loss. Q: In a cost-volume-profit analysis, explain what happens at the break-even point and why companies do… A: Break-even point: It is that point in the business when all its costs have been recovered.… Q: A possible disadvantage of the ABC method is: (a) It does not allocate costs to the way production… A: Definition: Activity-based method (ABC): The costing method which allocates overheads to the… Q: statement below. The point where total sales revenue equals total cost Drag answer here Fixed… A: The contribution margin is computed as excess of sales revenue over variable expenses. The break… Q: Cost accounting looks at the company as a whole and not at the various units, jobs or processes.… A: Cost Accounting is used to ascertain the cost of a product or service in detail. The indirect costs… Q: Cost accounting looks at the company as a whole and not at the various units, jobs or processes.… A: Cost accounting helps to classify, analyze, record, control the costs of production or costs of… Q: Break-even analysis is concerned with determining a point at which the company can minimize total… A: Break-even point is the point reached by the company where the revenues and costs of the firm are in… Q: “I’m going to focus on the customers of my business and leave cost-allocation issues to my… A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With the… Q: “I’m going to focus on the customers of my business and leave cost-allocation issues to my… A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With the… Q: Management of the company has sought your advice to do the following: A) Compute the operating… A: Here we will use the concept of costing, relevant costing and cost volume profit analysis to answer… What are avoidable costs?In logistics, an avoidable cost is the cost of an activity that can be avoided if that activity is not performed, resulting in a monetary savings. Avoidable costs are typically variable costs, while most fixed costs are unavoidable. Avoidable costs can include things such as labor costs or packaging.
What is the opportunity cost of making a component part?Explanation: The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is zero. Opportunity cost relates to the benefit that is forgone for not choosing an alternative.
What is the opportunity cost of making a component part in a factory given no alternative use of the capacity *?The opportunity cost of making a component part in a factory given no alternative use of the factory. If there is no alternative, there is no opportunity costs. Opportunity costs occur only if there are at least two alternatives where a decision must be drawn.
Which of the following costs are always relevant in decision making?variable costs. Variable costs are relevant for decision making as they change when a decision is made.
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Costs that can be eliminated in whole or in part if a particular business segment is discontinued
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