A key ethical issue in cost allocation involves costing in an international context, because the choice of a cost allocation method can affect: Multiple Choice Management reward systems. The firm's financial statements. Taxes in domestic and foreign countries. The fair share of cost by a governmental unit. Management fraud.

A key ethical issue in cost allocation involves costing in an international context, because the choice of a cost allocation method can affect: Multiple Choice Management reward systems. The firm's financial statements. Taxes in domestic and foreign countries. The fair share of cost by a governmental unit. Management fraud.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter11: Strategic Cost Management

Section: Chapter Questions

Problem 20E

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Similar questions

Which of the following is not a qualitative decision that should be considered in an outsourcing decision? A. employee morale B. product quality C. company reputation D. relevant costs
What of the following is NOT a Benefit of Activity Based Management? a.It assists in the budgeting process. b.It aids management in cost cutting and/or cost control and inferentially in product profitability. c.It causes managers to identify non-value added activities and therefore encourages thinking of means of reducing such activities. d.Is more complex than traditional accounting system because it uses multiple cost application rates, one for each activity or cost pool.
Management accountants advocate that marginal costing is superior to absorption costing when assisting management with decision-making. In light of the above statement, discuss in detail the advantages of marginal costing as the basis of management reporting. Justify whether management accounting is required in non-profit organisations.
Which of the following is not a qualitative decision that should be considered in an outsourcing decision? relevant costs company reputation product quality employee morale
Elmhurst Corporation is considering changes to its responsibility accounting system. Which of the following statements is/are correct for a responsibility accounting system. i. In a cost center, managers are responsible for controlling costs but not revenue. ii. The idea behind responsibility accounting is that a manager should be held responsible for those items that the manager can control to a significant extent. iii. To be effective, a good responsibility accounting system must help managers to plan and to control. iv. Costs that are allocated to a responsibility center are normally controllable by the responsibility center manager. 1. I and II only are correct. 2. II and III only are correct. 3. I, II, and III are correct. 4. I, II and IV are correct.
Responsibility centers. Elmhurst Corporation is considering changes to its responsibility accounting system. Which of the following statements is/are correct for a responsibility accounting system. In a cost center, managers are responsible for controlling costs but not revenue. The idea behind responsibility accounting is that a manager should be held responsible for those items that the manager can control to a significant extent. To be effective, a good responsibility accounting system must help managers to plan and to control. Costs that are allocated to a responsibility center are normally controllable by the responsibility center manager. I and II only are correct. II and III only are correct. I, II, and III are correct. I, II and IV are correct.
Which TWO of the following problems associated with performance measurement in a public sector organisation are true? There are usually multiple objectives which makes it difficult to prioritise a primary objective O These organisations often provide services for which it is difficult to define a cost unit These organisations are not often subjected to strong political influences over their activities Lack of a profit measure leads to lack of focus and difficulty in measuring performance
The cost of quality are costs incurred to prevent, or costs arising as a result of, the production of low-quality product. These costs focus on conformance quality and are incurred in all business functions of the value chain. Discuss four categories of quality costs, give examples of individual cost of quality items in each category that companies in different economic sectors need to cover and explain how they might impact on companies’ performance.
Assume that a company has decided not to allocate any support department costs to producing departments. Describe the likely behavior of the managers of the producing departments. Would this be good or bad? Explain why allocation would correct this type of behavior.
The costs referred to as “controllable costs” are a. Costs which management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers. b. Costs which are likely to respond to the amount of attention devoted to them by a specified manager. c. Costs which are governed mainly by past decisions that established the present levels of operating and organizational capacity and which only change slowly in response to small changes in capacity. d. Costs which fluctuate in total in response to small changes in the rate of utilization of capacity.
In which of the following situations is a company most likely to benefit from implementing ABC? When the company operates in an environment where the risk of cost distortion is high. When the company already has the necessary accounting and technological expertise in place. When the company has very few competitors. When the company produces and sells a single product.
Cost effectiveness is a factor that needs to be kept in high consideration in decision making. To achieve this, effective cost ascertaiment approaches may be necessary. keeping in mind that changes are taking place in the business environment due to globalization and technology innovation. Discuss the above statement in line with the overall cost accounting philosophy.