Answer the following questions using the information below:
Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
The accounting records show the Mossman Job consumed the following resources:

-Which of the following is NOT a sign that a "smoothing out" costing system exists?
A)Operations managers don't use the data originated by the cost system.
B)Products that a company is well suited to make and sell show large profits.
C)New product variations have been added, but the cost system has not been upgraded.
D)The company loses bids they believe were priced competitively.

Question

Answer the following questions using the information below:
Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
  The accounting records show the Mossman Job consumed the following resources:
 
-Which of the following is NOT a sign that a "smoothing out" costing system exists?
A)Operations managers don't use the data originated by the cost system. 
B)Products that a company is well suited to make and sell show large profits. 
C)New product variations have been added, but the cost system has not been upgraded. 
D)The company loses bids they believe were priced competitively.

Quizplus · Accepted Answer

A "smoothing out" costing system typically results in inaccurate cost data, leading to operations managers not using it (A), outdated systems not reflecting new product variations (C), and losing bids due to mispricing (D). However, if products show large profits (B), it suggests the costing system might be accurately reflecting costs, which is not a sign of a "smoothing out" system.

Answer the Following Questions Using the Information Below