Exam 5: Estimating the Cost of Producing Services

What system to manager use when the output comprises many homogenous (identical or almost identical)units? _ _

(Short Answer)

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Question 61

Few production systems are a hybrid because they rarely have some custom-order production features and some mass-production features.

(True/False)

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Question 62

When identical or similar units of products or services are mass-produced rather than processed as individual jobs,managers use process costing to calculate an average production cost for all units produced.

(True/False)

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Question 63

A(n)_________________system is a hybrid costing system applied to batches of similar,but not identical,products.

(Multiple Choice)

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Question 64

Whether a management accountant classifies overtime premium as direct or indirect depends on the circumstances.

(True/False)

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Question 65

In a heterogeneous resource-cost pool,all of the costs have the same or a similar cause-and-effect relationship with a single cost driver.

(True/False)

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Question 66

What type of reporting is costing important for? _ _

(Short Answer)

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Question 67

How does Schmenner classify services? _ _

(Essay)

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Question 68

A local solicitor employs 15 full-time professionals.The budgeted compensation per employee is $100 000.The maximum billable hours for each client are 400.Clients always receive their full amount of time.All professional labour costs are included in a single direct-cost category and are traced to jobs on a per-hour basis.Any other costs are included in a single indirect-cost pool,allocated according to professional labour-hours.Budgeted indirect costs for the year are $600 000 and the firm had 30 clients. Required: a.What is the direct-labour-cost rate per hour? b.What is the indirect-cost rate per hour? _ _

(Essay)

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Question 69

When management accountants use ______________ systems,they separate costs into cost categories according to when they are introduced into the process.

(Multiple Choice)

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Question 70

The actual cost-driver rate measures the budgeted capacity utilisation.

(True/False)

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Question 71

Costing systems typically fall neatly into either job-costing or process-costing categories.

(True/False)

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Question 72

In a(n)_______________ 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 Choice)

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Question 73

Normal costing is a costing system that traces actual direct costs to a cost object and allocates indirect costs based on the budgeted cost-driver rate.

(True/False)

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Question 74

Within each operation,all product units are treated ______________,using identical amounts of the operation's resources.

(Multiple Choice)

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Question 75

With over-costing,an output consumes a high level of resources but is reported to have a low cost per unit.

(True/False)

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Question 76

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

(Multiple Choice)

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Question 77

The way in which a manager estimates costs depends on the nature of the outputs,the processes underlying them and the purpose for which the manager is estimating the costs.

(True/False)

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Question 78

The difference between the normal wage rate and the overtime rate is called a(n):

(Multiple Choice)

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Question 79

What type of costs is related to the cost object that managers and management accountants can trace to it in an economically feasible (cost-effective)way?

(Multiple Choice)

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Question 80

What system to manager use when the output comprises many homogenous (identical or almost identical)units? _ _

Few production systems are a hybrid because they rarely have some custom-order production features and some mass-production features.

When identical or similar units of products or services are mass-produced rather than processed as individual jobs,managers use process costing to calculate an average production cost for all units produced.

A(n)_________________system is a hybrid costing system applied to batches of similar,but not identical,products.

Whether a management accountant classifies overtime premium as direct or indirect depends on the circumstances.

In a heterogeneous resource-cost pool,all of the costs have the same or a similar cause-and-effect relationship with a single cost driver.

What type of reporting is costing important for? _ _

How does Schmenner classify services? _ _

When management accountants use ______________ systems,they separate costs into cost categories according to when they are introduced into the process.

The actual cost-driver rate measures the budgeted capacity utilisation.

Costing systems typically fall neatly into either job-costing or process-costing categories.

In a(n)_______________ 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.

Normal costing is a costing system that traces actual direct costs to a cost object and allocates indirect costs based on the budgeted cost-driver rate.

Within each operation,all product units are treated ______________,using identical amounts of the operation's resources.

With over-costing,an output consumes a high level of resources but is reported to have a low cost per unit.

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

The way in which a manager estimates costs depends on the nature of the outputs,the processes underlying them and the purpose for which the manager is estimating the costs.

The difference between the normal wage rate and the overtime rate is called a(n):

What type of costs is related to the cost object that managers and management accountants can trace to it in an economically feasible (cost-effective)way?

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

Exam 5: Estimating the Cost of Producing Services

What system to manager use when the output comprises many homogenous (identical or almost identical)units? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Few production systems are a hybrid because they rarely have some custom-order production features and some mass-production features.

When identical or similar units of products or services are mass-produced rather than processed as individual jobs,managers use process costing to calculate an average production cost for all units produced.

A(n)_________________system is a hybrid costing system applied to batches of similar,but not identical,products.

Whether a management accountant classifies overtime premium as direct or indirect depends on the circumstances.

In a heterogeneous resource-cost pool,all of the costs have the same or a similar cause-and-effect relationship with a single cost driver.

What type of reporting is costing important for? _____________________________________________________________________________________________ _____________________________________________________________________________________________

How does Schmenner classify services? _____________________________________________________________________________________________ _____________________________________________________________________________________________

When management accountants use ______________ systems,they separate costs into cost categories according to when they are introduced into the process.

The actual cost-driver rate measures the budgeted capacity utilisation.

Costing systems typically fall neatly into either job-costing or process-costing categories.

In a(n)_______________ 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.

Normal costing is a costing system that traces actual direct costs to a cost object and allocates indirect costs based on the budgeted cost-driver rate.

Within each operation,all product units are treated ______________,using identical amounts of the operation's resources.

With over-costing,an output consumes a high level of resources but is reported to have a low cost per unit.

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

The way in which a manager estimates costs depends on the nature of the outputs,the processes underlying them and the purpose for which the manager is estimating the costs.

The difference between the normal wage rate and the overtime rate is called a(n):

What type of costs is related to the cost object that managers and management accountants can trace to it in an economically feasible (cost-effective)way?

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

What system to manager use when the output comprises many homogenous (identical or almost identical)units? _ _

What type of reporting is costing important for? _ _

How does Schmenner classify services? _ _