Why is the flexible budget variance the same amount as the spending variance for fixed manufacturing overhead?

Why is the flexible budget variance the same amount as the spending variance for fixed manufacturing overhead? There is no efficiency variance for...

What are the steps in developing a budgeted fixed overhead rate ?

What are the steps in developing a budgeted fixed overhead rate ? 1.Choose the period to use for the budget, 2.Select the cost-allocation base to...

How does standard costing differ from actual costing?

How does standard costing differ from actual costing? Standard costing assigns predetermined estimated values to each of your materials, labor, overhead....

How does the planning of fixed overhead costs differ from the planning of actual costing ?

How does the planning of fixed overhead costs differ from the planning of actual costing ? At the start of an accounting period, a larger percentage...

Describe three reasons for an unfavorable direct manufacturing labor efficiency variance ?

Describe three reasons for an unfavorable direct manufacturing labor efficiency variance ? Longer time to make each jacket due to poor quality jackets,...

List three causes of a favorable direct materials price variance?

List three causes of a favorable direct materials price variance? Purchasing officer negotiated more skillfully than was planned in the budget,  Purchasing...

List four reasons for using standard costs.

List four reasons for using standard costs. (i) cost management, (ii) pricing decisions, (iii) budgetary planning and control, and (iv) financial...

Describe the steps in developing a flexible budget?

Describe the steps in developing a flexible budget? Step 1. Identify actual output, based on budgeted selling price and actual quantity of output. Step...

Why might managers find a flexible-budget analysis more informative than a static-budget analysis?

Why might managers find a flexible-budget analysis more informative than a static-budget analysis? Flexible has more detailed analysis on variance....

Distinguish between a favorable variance and an favorable variance?

Distinguish between a favorable variance and an favorable variance? A favorable variance (denoted F) is a variance that has the effect of increasing...

What are two possible sources of information a company might use to compute the budgeted amount?

What are two possible sources of information a company might use to compute the budgeted amount? Two sources of information about budgeted amounts...

What is the relationship between management by exception and variance analysis?

What is the relationship between management by exception and variance analysis? Management by exception is the practice of concentrating on areas...

What are the main costs and limitations of implementing ABC systems?

What are the main costs and limitations of implementing ABC systems? The main costs and limitations of ABC are the measurements necessary to implement...

Describe four signs that help indicate when ABC systems are likely to provide the most benefits?

Describe four signs that help indicate when ABC systems are likely to provide the most benefits? 1. Significant amount of Indirect costs are allocated...

Describe four decisions for which ABC information is useful ?

Describe four decisions for which ABC information is useful ? 1. Pricing and product mix decisions, 2. Cost reduction and process improvement decisions, 3....

Why is it important to classify costs into a cost hierarchy?

Why is it important to classify costs into a cost hierarchy? Cost pools will be homogenous/ to get closer to true costs, peanut butter costin...

What is an activity based approach to designing a costing system?

What is an activity based approach to designing a costing system? An activity-based approach refines a costing system by focusing on individual activities...

Define costing refinement? Describe three guidelines for costing refinement ?

Define costing refinement? Describe three guidelines for costing refinement ? The use of simple costing system that reduces the use of broad averages...

Why should managers worry about product overcosting or undercosting ?

Why should managers worry about product overcosting or undercosting ? -Overcosting may result in competitors entering a market and taking market share...

What is broad averaging and what consequences can it have on costs.

What is broad averaging and what consequences can it have on costs. Simple costing approach to allocate overhead costs in an easy inexpensive way....

When might a company use budgeted costs rather than actual costs to compute direct-labor rates.

When might a company use budgeted costs rather than actual costs to compute direct-labor rates. To compute direct labor rates because it may be difficult...

Three alternative ways to dispose of underallocated or overallocated costs.

Three alternative ways to dispose of underallocated or overallocated costs. 1. Proration based on the total amount of indirect costs allocated (before...

Describe three different debit entries to work in process control T account under normal costing.

Describe three different debit entries to work in process control T account under normal costing. (a) direct materials used (credit to Materials...

Distinguish between actual and normal job costing.

Distinguish between actual and normal job costing. Actual costing and normal costing differ in their use of actual or budgeted indirect cost rates:...

Give two reasons why most organizations use an annual period rather than a weekly or monthly period to compute budgeted indirect costs ?

Give two reasons why most organizations use an annual period rather than a weekly or monthly period to compute budgeted indirect costs ? 1. The numerator...

Describe three major source documents used in job costing systems?

Describe three major source documents used in job costing systems? 1. Job cost sheet, a document that records and accumulates all costs assigned...

Describe the seven steps of job costing?

Describe the seven steps of job costing? (1) identify the job that is the chosen cost object, (2) identify the direct costs of the job (3) select...

How does job costing differ from process- costing ?

How does job costing differ from process- costing ? In a job-costing system, costs are assigned to a distinct unit, batch, or lot of a product or service....

Define:cost pool, cost tracing, cost allocation, and cost allocation base.

Define:cost pool, cost tracing, cost allocation, and cost allocation base. Cost pool -- A grouping of individual indirect cost items. Cost tracing...

List six step in estimating a cost function.

List six step in estimating a cost function. 1. choose dependent variable. 2. identify independent variables. 3.collect data on variables. 4.Plot...

When using the the high-low method should you base the high and low observation on the dependent variable or cost driver?

When using the the high-low method should you base the high and low observation on the dependent variable or cost driver? Cost drive...

Describe three criteria for evaluation cost functions and cost drivers.

Describe three criteria for evaluation cost functions and cost drivers. 1)Economic plausibility. 2)Goodness of fit. 3)Slope of regression lin...

What two assumptions are frequently made when estimating a cost function?

What two assumptions are frequently made when estimating a cost function? 1)Variation in the single level of a single activity (cost driver) explain...

Give example of allocation bases used to allocate support- department cost pools to operating cost pools.

Give example of allocation bases used to allocate support- department cost pools to operating cost pools. 1. Number of employees 2.Square feet of...

Describe three alternative linear cost functions.

Describe three alternative linear cost functions. Variable Cost Function- when total cost change in relation to the change in the level of activity...

What role does the Cost Accounting standards Board ?

What role does the Cost Accounting standards Board ? All contracts with U.S. Companies must comply with Cost accounting standards issued by C.A.S...

Describe how dual-rate method is useful to decision managers in making decisions.

Describe how dual-rate method is useful to decision managers in making decisions. It provides information to the managers about fixed and variable...

How do budgeted cost rates motivate the support-department managers to improve efficiency.

How do budgeted cost rates motivate the support-department managers to improve efficiency. Because the supplier department bears the risk of an unfavorable...

Distinguish among the three methods of allocating the costs of support departments to operating departments.

Distinguish among the three methods of allocating the costs of support departments to operating departments. Direct- allocates each support departments...

What is conceptually the most defensible method for allocating support department costs? Why?

What is conceptually the most defensible method for allocating support department costs? Why? Reciprocal method. Because it fully recognizes the...

Distinguish between two methods of allocating costs.

Distinguish between two methods of allocating costs. Stand-alone- uses information pertaining to each user of a cost object as a separate entity...

Describe how companies are increasingly facing revenue allocation decisions.

Describe how companies are increasingly facing revenue allocation decisions. Companies are increasingly selling products or services for a single...

What is the difference between a linear and nonlinear cost function. Give an example of each.

What is the difference between a linear and nonlinear cost function. Give an example of each. Linear cost function is when within a relevant ranges...

"High correlation between two variables...cause and the others is the affect?" do you agree explain?

"High correlation between two variables...cause and the others is the affect?" do you agree explain? No. Just because two variables have high correlation...

Name four approaches to estimating a cost function.

Name four approaches to estimating a cost function. 1. Industrial engineering method. 2. Conference Method. 3. Account analysis method. 4. Quantitative...

Describe the conference method for estimating a cost function. What are two advantages of this method?

Describe the conference method for estimating a cost function. What are two advantages of this method? This method estimates cost functions through...

Define learning curve. Outline two models that can be used when incorporating learning into the estimation of cost functions.

Define learning curve. Outline two models that can be used when incorporating learning into the estimation of cost functions. A learning curve is...

Discuss four frequently encountered problems when collecting cost data on variables included in a cost function.

Discuss four frequently encountered problems when collecting cost data on variables included in a cost function. 1.fixed costs are allocated as if...

Distinguish between the single-rate and dual rate method ?

Distinguish between the single-rate and dual rate method ? Single rate method- allocates costs in each pool to 1 cost object making no distinction...

Define Opportunity Cost.

Define Opportunity Cost. The contribution to income that is forgone (rejected) by not using a limited resource in its next-best alternative us...

Can the constant in the cost function be used as an estimate for fixed cost (when calculating maintenance, etc.)?

Can the constant in the cost function be used as an estimate for fixed cost (when calculating maintenance, etc.)? The cost function is an estimate...

Describe the account analysis method for estimating a cost function.

Describe the account analysis method for estimating a cost function. It estimates cost functions by classifying cost accounts in the subsidiary ledger...

Name 4 approaches to estimating a cost function ?

Name 4 approaches to estimating a cost function ? 1. Industrial engineering method 2. Conference method 3. Account analysis method 4. Quantitative...

Describe three alternative linear cost functions ?

Describe three alternative linear cost functions ? 1. Variable Cost Function: A cost function in which total costs change in proportion to the changes...

What two assumptions are frequently made when estimating a cost function?

What two assumptions are frequently made when estimating a cost function? 1. Variations in the level of a single activity (the cost driver) explain...

Define Cost-Volume-Profit Analysis ?

Define Cost-Volume-Profit Analysis ? CVP analysis examines the behavior of total revenues, total costs, and operating income as changes occur in the...

Define Operating Leverage ?

Define Operating Leverage ? The effects that fixed costs have on changes in operating income as changes occur in units sold and contribution marg...