Question
Topic 10 - Activity-Based-Costing (ABC) C213: Accounting for Decision Makers Questions What are the advantages and disadvantages of using an ABC system? What are the
Topic 10 - Activity-Based-Costing (ABC)
C213: Accounting for Decision Makers
Questions
- What are the advantages and disadvantages of using an ABC system?
- What are the advantages and disadvantages of using the Traditional Costing method?
- Under what circumstances is it more appropriate to use an ABC instead of Traditional Costing?
- What are two characteristics of a good management accounting measure?
- A company is considering buying a new truck or keeping their old truck.The cost of the new truck is $60,000.The cost of the old truck was $45,000.The company has $60,000 in the bank that they are earning $600 per year in interest. If they purchase the new truck, they will withdraw the $60,000 from the bank to pay for the new truck and will no longer earn the interest.
- The cost of the new truck is considered a(n) differential, sunk or opportunity cost? Circle the correct answer.
- The cost of the old truck is considered a(n) differential, sunk or opportunity cost? Circle the correct answer.
- The interest lost if the company purchases the new truck is considered a(n) differential, sunk, or opportunity cost? Circle the correct answer.
- Which of the three amounts is irrelevant when considering whether to purchase the new truck or keep the old truck: (i) The cost of the new truck, (ii) The cost of the old truck, or (iii) The interest lost if the new truck is purchased?
- Indicate where each of the situations below is an (i) ethical internal dilemma and/or (ii) an ethical external dilemma.
- Padding expense accounts
- Bid rigging to give business to favored suppliers
- Theft in the workplace
- Taking kickbacks on purchase contract
- Adjusting inspection reports to reflect higher quality of product.
- Using company assets for personal use.
- Withholding unfavorable information
- Inflating profits on financial reports
- During its first month of operations, a manufacturer incurs the following costs related to activities with the factory:
Direct Materials $50,000
Direct Labor $40,000
Manufacturing Overhead $60,000
What amount should be reported as cost of goods sold on the income statement if 10,000 units are produced and 7,000 units are sold?
- Stewart Manufacturing produces and sells die cast race cars. The variable cost (VC) for each die cast car is $6 and the total fixed costs (FC) are $600,000.Calculate the following:
| VC Per Unit | Total VC | FC Per Unit | Total FC | |
| Stewart sells and produces 1,000 units | ||||
| Stewart sells and produces 2,000 units | ||||
| Stewart sells and produces 5,000 units |
| VC Per Unit | Total VC | FC Per Unit | Total FC | |
| Stewart sells and produces 1,000 units | ||||
| Stewart sells and produces 2,000 units | ||||
| Stewart sells and produces 5,000 units |
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Cornerstones of Managerial Accounting
Authors: Maryanne Mowen, Don Hanson, Dan Heitger, David McConomy, Bradley Witt, Jeffrey Pittman
3rd Canadian edition
176530886, 176721231, 978-0176721237
