Which of the following is a false statement about scrap and by-products? Select one: a. Both scrap and by-products are incidental outputs to the joint process. b. Management’s goal is to produce both scrap and by-products. c. Both by-products and scrap are salable. d. A by-product has a higher sales value than does scrap.

Which of the following is a false statement about scrap and by-products? Select one: a. Both scrap and by-products are incidental outputs to the joint process. b. Management’s goal is to produce both scrap and by-products. c. Both by-products and scrap are salable. d. A by-product has a higher sales value than does scrap.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 1DQ: Why would management be concerned about the accuracy of product costs?

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Similar questions

1. By-products are Select one: a. not sufficient alone, in terms of sales value, for management to justify undertaking the joint process. b. the primary reason management undertook the production process. c. also known as scrap. d. items resulting from a joint process that have no further value. 2. Which of the following is a false statement about scrap and by-products? Select one: a. Both scrap and by-products are incidental outputs to the joint process. b. Management’s goal is to produce both scrap and by-products. c. Both by-products and scrap are salable. d. A by-product has a higher sales value than does scrap. 3. The definition of a sunk cost is Select one: a. a cost that relates to money poured into theground. b. considered the original cost of an item. c. also known as an opportunity cost. d. a cost that cannot be recovered regardless of what happens.
Why would management be concerned about the accuracy of product costs?
First: Activity-based management seeks to eliminate waste by allocating costs to products that waste resources. Second: In activity-based costing, nonmanufacturing costs as well as manufacturing costs may be assigned to products. a. Only the first statement is true b. Only the second statement is true c. Both statements are true d. Both statements are false
Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.
Which of the three methods for allocating costs of products can lead to significant product cost distortions?
When deciding whether to sell as is or process a product further, managers should ignore which of the following? a. The costs of processing the product thus far b. The cost of processing further c. The revenue if the product is sold as is d. The revenue if the product is processed further
As a result of cost distortion, some products will be overcosted while other products will be undercosted. True False
Which of the following statements is true? An avoidable fixed production cost incurred before the split-off point in a joint process is relevant in a sell or process further decision. It is profitable to continue processing joint products after the split-off point if their total revenues exceed the joint costs. Which of the following statements is true? Consistency demands that a cost that is relevant in one decision be regarded as relevant in other decisions as well. Variable costs are always relevant costs in decisions.
i.“Differential Costs” are considered as relevant, where as “sunk Cost ” is considered asirrelevant for decision making purposes. Explain ii. Why opportunity cost is measured and relate with the evaluation of alternative, can it bean opportunity loss? iii. Which one either spoiled goods or defective goods are less economical for the companyand why?
Which of the following statements is false? Multiple Choice Examples of selling costs include shipping, sales commissions, and costs of finished goods warehouses. Discretionary fixed costs may be altered in the short term by current managerial decisions. A particular cost may be direct or indirect depending on the cost object. All sunk costs should be ignored in making a decision. Some of the conversion costs are period costs.
Which of the following statements best describes a by-product? Multiple Choice A product created along with the main product whose sales value does not cover its cost of production. A product that is produced from material that would otherwise be scrap. A product that usually produces a small amount of revenue when compared to the main product's revenue. A product that has a lower unit selling price than the main unit. A product that has a selling price similar to that of the main product.
1.- A limitation of using the physical output method in allocating joint costs to joint products is that it treats low-value products that are large in size as if they were valuable. II.- Joint costs include direct materials, direct labor, and manufacturing overhead. Only statement Il is true O Only statement I is true O Both statements are false O Both statements are true