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Cost and Management Accounting for Profitability

Authored by Jaskiran Arora

Professional Development

University

Used 46+ times

Cost and Management Accounting for Profitability
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10 questions

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1.

OPEN ENDED QUESTION

15 mins • Ungraded

Many companies that previously applied costs to final products based on direct-labor hours have changed to another cost drivers. What are these other cost drivers and why has there been this shift?

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2.

OPEN ENDED QUESTION

5 mins • Ungraded

"I cannot be bothered with setting up my monthly budget on a spreadsheet. It just takes too long to be worth the effort." Comment.

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3.

OPEN ENDED QUESTION

5 mins • Ungraded

Media Image

Cavaliers Company manufactures two sizes of its frying pan, a Tiny and a Huge model. Three activities have been identified as cost drivers and the related costs pooled together to arrive at the following information:


Required:

Assuming activity‑based costing is used, allocate each cost pool to each model.

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4.

OPEN ENDED QUESTION

5 mins • Ungraded

There are two major reasons why unit costs should be analyzed with care in decision making. What are they?

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5.

OPEN ENDED QUESTION

5 mins • Ungraded

Total manufacturing costs or full costs are far more widely used in practice than the contribution margin approach. Why?

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6.

OPEN ENDED QUESTION

5 mins • Ungraded

Texas Company produces and sells 22,000 units of a single product. Costs associated with this level of production are as follows:


Direct materials $15

Direct manufacturing labor 45

Variable manufacturing overhead 25

Fixed manufacturing overhead 40

Total $125


The product normally sells for $160 per unit. Texas Company has received a special order to sell 2,000 units at $120 per unit. Texas Company has excess production capacity.


Required:


Compute the amount by which the operating income of Texas Company would change if the order were accepted.

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7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A one-time-only special order decision

has no role in segregating special and regular customers

must involve unused plant capacity to avoid lost profits on regularly priced items

allows a company to sell products at prices that only cover fixed costs

involves selling products at a percentage over retail price due to the short time period involved

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