Question 1

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.

Accepted Answer

Normal costing uses actual direct costs and applies overhead costs based on a predetermined rate, rather than using actual overhead costs, making the statement accurate.

Question 2

When do managers use a job-costing?
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Accepted Answer

The answer of When do managers use a job-costing?
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Question 3

By using a matrix initially to match a service category with a type of costing system,managers and management accountants are able to refine the design of the system to suit the requirements of their organisation.

Accepted Answer

The statement is true. By matching service categories with a type of costing system, managers and management accountants can tailor the system to their organization's needs. This enables them to refine the design of the system, allowing them to achieve better cost control and decision-making abilities.

Question 4

Schmenner classifies services into four categories-professional service,service shop,mass service and service factory.

Accepted Answer

Schmenner indeed classified services into these four categories based on the degree of customization and interaction in the service delivery process.

Question 5

Compare job-costing and process-costing systems.
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Accepted Answer

The answer of Compare job-costing and process-costing systems.
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Question 6

What is normal costing?
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Accepted Answer

The answer of What is normal costing?
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Question 7

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

Accepted Answer

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

Question 8

Schmenner classifies services according to two dimensions: degree of variation and relative throughput time.

Accepted Answer

Schmenner's classification of services is based on two dimensions: degree of customization or variation and relative throughput time.

Question 9

The throughput time for a service transaction as compared with others in the industry is known as:

Accepted Answer

Relative throughput time measures the time it takes for a service transaction to go through the entire process, from initiation to completion, in comparison to other transactions in the same industry. This metric is an important measure of process efficiency and competitiveness. Option A is incorrect because process time only measures the time taken for a particular step in the process, while relative throughput time measures the time taken for the entire process. Option C is incorrect because the degree of variation measures the variability in process performance, and option D is not a recognized term in process improvement.

Question 10

An operation-costing system is a hybrid costing system applied to batches of similar,but not identical,products.

Accepted Answer

An operation-costing system combines features of both job-order costing and process costing. It is used when batches of similar products undergo a sequence of operations, but each batch may not be identical. The cost of each operation is accumulated separately and then allocated to the batches based on the number of operations performed or some other activity measure. This system provides a compromise between the detailed tracking of costs in a job-order system and the efficiency of a process costing system.

Question 11

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

The answer of What system to manager use when the...

Question 12

The budgeted cost-driver rate measures actual capacity utilisation.

Accepted Answer

The budgeted cost-driver rate is an estimated rate used to allocate indirect costs to cost objects. It is calculated by dividing the budgeted indirect costs by the estimated level of cost driver activity. It does not measure actual capacity utilization, but rather estimates the cost of utilizing a certain level of capacity. Actual capacity utilization can be compared to the estimated level of cost driver activity to analyze variances and make adjustments in future periods.

Question 13

Degree of variation captures the extent to which the service provider customises its services and interacts with its customers.

Accepted Answer

Degree of variation refers to the level of customization and interaction between the service provider and the customer. So, the statement is true.

Question 14

Are job costing and process costing mutually exclusive?
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Accepted Answer

The answer of Are job costing and process costing mutually...

Question 15

Variation time as the measure of the time that a molecule in a production process takes 'from when the molecule is ready to have value added to it until it is a part of the finished product'.

Accepted Answer

Variation time refers to the variability or inconsistency in the time it takes for a process or operation to be completed, rather than specifically measuring the time from when a molecule is ready to have value added to it until it becomes part of the finished product.

Question 16

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

Accepted Answer

The actual cost-driver rate measures the actual capacity utilisation, not the budgeted one.

Question 17

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

Accepted Answer

The budgeted rate for direct professional time is calculated by dividing the budgeted cost of professional time by the budgeted number of professional hours. Therefore, the numerator would be the budgeted cost of professional time.

Question 18

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

Accepted Answer

The budgeted rate for direct professional time is calculated by dividing the budgeted cost of professional time by the budgeted number of professional hours. Therefore, the denominator is the budgeted number of professional hours.

Question 19

__________________ captures the extent to which the service provider customises its services and interacts with its customers.

Accepted Answer

Degree of variation captures the extent to which the service provider customises its services. It implies that the services of the service provider are tailored to the unique requirements of the customer. Throughput time, process time, and wait time refer to different aspects of service delivery and are not directly related to the level of customisation and interaction with customers.

Question 20

Where managers use cost information about outputs to guide pricing decisions,they are likely to __________ outputs that they have under-costed,resulting in increased demand for these outputs while profit will fall.

Accepted Answer

If managers use cost information to guide pricing decisions and they have under-costed certain outputs, they are likely to underprice these outputs. This will result in increased demand for these outputs, but since profit margins will also be reduced due to underpricing, profit will fall.

Quiz 5: Estimating the Cost of Producing Services

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.

When do managers use a job-costing? _ _

By using a matrix initially to match a service category with a type of costing system,managers and management accountants are able to refine the design of the system to suit the requirements of their organisation.

Schmenner classifies services into four categories-professional service,service shop,mass service and service factory.

Compare job-costing and process-costing systems. _ _

What is normal costing? _ _

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

Schmenner classifies services according to two dimensions: degree of variation and relative throughput time.

The throughput time for a service transaction as compared with others in the industry is known as:

An operation-costing system is a hybrid costing system applied to batches of similar,but not identical,products.

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

The budgeted cost-driver rate measures actual capacity utilisation.

Degree of variation captures the extent to which the service provider customises its services and interacts with its customers.

Are job costing and process costing mutually exclusive? _ _

Variation time as the measure of the time that a molecule in a production process takes 'from when the molecule is ready to have value added to it until it is a part of the finished product'.

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

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

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

__________________ captures the extent to which the service provider customises its services and interacts with its customers.

Where managers use cost information about outputs to guide pricing decisions,they are likely to __________ outputs that they have under-costed,resulting in increased demand for these outputs while profit will fall.

Quiz 5: Estimating the Cost of Producing Services

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.

When do managers use a job-costing? _____________________________________________________________________________________________ _____________________________________________________________________________________________

By using a matrix initially to match a service category with a type of costing system,managers and management accountants are able to refine the design of the system to suit the requirements of their organisation.

Schmenner classifies services into four categories-professional service,service shop,mass service and service factory.

Compare job-costing and process-costing systems. _____________________________________________________________________________________________ _____________________________________________________________________________________________

What is normal costing? _____________________________________________________________________________________________ _____________________________________________________________________________________________

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

Schmenner classifies services according to two dimensions: degree of variation and relative throughput time.

The throughput time for a service transaction as compared with others in the industry is known as:

An operation-costing system is a hybrid costing system applied to batches of similar,but not identical,products.

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

The budgeted cost-driver rate measures actual capacity utilisation.

Degree of variation captures the extent to which the service provider customises its services and interacts with its customers.

Are job costing and process costing mutually exclusive? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Variation time as the measure of the time that a molecule in a production process takes 'from when the molecule is ready to have value added to it until it is a part of the finished product'.

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

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

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

__________________ captures the extent to which the service provider customises its services and interacts with its customers.

Where managers use cost information about outputs to guide pricing decisions,they are likely to __________ outputs that they have under-costed,resulting in increased demand for these outputs while profit will fall.

When do managers use a job-costing? _ _

Compare job-costing and process-costing systems. _ _

What is normal costing? _ _

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

Are job costing and process costing mutually exclusive? _ _