Describe three criteria for evaluation cost functions and cost drivers.
1)Economic plausibility.
2)Goodness of fit.
3)Slope of regression line.
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Cost Accounting
- Why is the flexible budget variance the same amount as the spending variance for fixed manufacturing overhead?
- What are the steps in developing a budgeted fixed overhead rate ?
- How does standard costing differ from actual costing?
- How does the planning of fixed overhead costs differ from the planning of actual costing ?
- Describe three reasons for an unfavorable direct manufacturing labor efficiency variance ?
- List three causes of a favorable direct materials price variance?
- List four reasons for using standard costs.
- Describe the steps in developing a flexible budget?
- Why might managers find a flexible-budget analysis more informative than a static-budget analysis?
- Distinguish between a favorable variance and an favorable variance?
- What are two possible sources of information a company might use to compute the budgeted amount?
- What is the relationship between management by exception and variance analysis?
- What are the main costs and limitations of implementing ABC systems?
- Describe four signs that help indicate when ABC systems are likely to provide the most benefits?
- Describe four decisions for which ABC information is useful ?
- Why is it important to classify costs into a cost hierarchy?
- What is an activity based approach to designing a costing system?
- Define costing refinement? Describe three guidelines for costing refinement ?
- Why should managers worry about product overcosting or undercosting ?
- What is broad averaging and what consequences can it have on costs.
- When might a company use budgeted costs rather than actual costs to compute direct-labor rates.
- Three alternative ways to dispose of underallocated or overallocated costs.
- Describe three different debit entries to work in process control T account under normal costing.
- Distinguish between actual and normal job costing.
- Give two reasons why most organizations use an annual period rather than a weekly or monthly period to compute budgeted indirect costs ?
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