Exam 5: Estimating the Cost of Producing Services

Management accountants form and use cost ________ so that they do not have to allocate each cost to the cost object(s)individually.

Indirect costs of a cost object are costs related to the cost object that managers and management accountants can trace to it in an economically feasible way.

When calculating the budgeted rate for direct professional time,the numerator is:

A cost ________ is anything for which an estimation of costs is sought.

__________________ captures the extent to which the service provider customises its services and interacts with its customers.

When designing costing systems,managers and management accountants must compare the benefits derived from allocating costs with the costs incurred in making these allocations.

Fairness and ability-to-bear are more problematic criteria than cause-and-effect or benefits received,and are thus less frequently used.

A major difference between job costing and process costing is the extent of ___________ used to calculate the unit costs of products or services.

What does output-cost cross-subsidisation mean? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Before identifying the purposes for which costs are to be allocated,managers and management accountants must decide on how to allocate them.

Managers use a(n)_____________ system when the output comprises many homogenous (identical or almost identical)units.

Over-costed outputs lead to overpricing,causing these outputs to lose market share to competitors producing similar outputs.

Where management uses a single cost-driver rate to allocate indirect production costs to outputs,___________ cost data are often the result.

In what type of resource-cost pool do all of the costs have the same or a similar cause-and-effect relationship with a single cost driver?

A cost _______ causes a change in the cost of an activity and has an effect on costs.

A(n)________ driver is used to allocate costs from an activity-cost pool to a cost object.

If you identify as many direct costs as is economically feasible,this increases the amount of costs classified as indirect,thereby minimising the extent to which costs have to be allocated rather than traced.

A cost driver causes a change in the cost of an activity and has an effect on costs.Managers use cost drivers to allocate overhead costs to cost objects.

In a process-costing system,individual jobs differ in the extent to which they use quantities of production resources,so it would be incorrect to use average production costs for different jobs.

Multiple operations are usually conducted within a(n):