Question

7. Product-cost subsidiration means that A) when one product is overcasted, it results in more than one other products overcasted when company underests more than one of its products, it will overcost more than one of its other products when a company undercosts one of its products, it will overcost at least one of its other products D) when one product is overcosted it results in all other products being overcosted 8. Refining a cost system involves which of the following? A) classifying as many costs as Indirect costs as is feasible 1) creating as many cost pools as possible to capture all costs dentalying the activities involved in a process and understanding how those activities consume indirect resources D) Seeking an easier and more cost effective way to calculate average costs 9. ABC systems create A) one large cost pool Bhomogeneous activity-related cost pools C) activity-cost pools with a broad focus D) activity-cost pools containing many direct costs 10. Overcosting a particular product may result in: A) pricing the product too high B) pricing the product too low- C) operating efficiencies D) understating total product costs 11. Which of the following statements best describes conversion costs? A) Conversion costs are all manufacturing and nonmanufacturing costs. B) Conversion costs are all manufacturing costs other than direct materials costs. C) Conversion costs are all nonmanufacturing costs including marketing costs. D) Conversion costs are all nonmanufacturing costs other than fixed selling and distribution costs. 12. Which if the following are not conversion costs? A) the cost of direct laborers who assemble the parts of an automobile B) the cost of tires on an automobile C) the cost of depreciation on an automobile assembly plant D) the cost of electricity metered to run the tools on the automobile assembly line

Answer 1

subsidization means 7) product cost Ars) optionc product cost cross subisidization means it a Company under cost one of its products , it will over cost at least one of its other products. If a company overcosts one of its products, it will onder cost at least one of its other products. involves which of the 8) Refining a cost system following ? Ans; option; c identifying the activities understand how those involved activities in process Ee Consume indirect Sesource Guadelines for refining a cost system: 1) Disect cost tracing 2) indirect cost pools should be expanded until each pool is homogenous 3) Cost allocation bases should be determined for each cost pool.

breast a) ABC system Create Ans) option: &, homogenous activity related cost poole. ABC costing pools the indirect costs in to a homogenous cost pools é these cost pools have specific cost abeiress 10) over casting a particular product Result in? Dow) option &A, pricing the product too high over costing of a product makes the product costlies than competitive products which eventually results in loss of a market share O which statement describes conversion cost? An1) option: B. Conversion costs are all manufacturing costs other than direct material costs is not a cost? conversion 12) which Ans) ophon B, the cost of fiores on an automobile Conversion cost = direct labour cost + manufacturing overheads It excludes direct material cost is direct material, it is not since cost of tire Conversion cost