Ma6. How should variable overhead costs incurred to self-construct an asset be recorded?They should be assigned to the cost of inventory production.They should be recorded as a one-time special assessment in a separate assetaccount.They should be written off as a loss for the period.They should be included in the cost of the asset.

Introduction:- Self-constructed assets refer to a company builds under its own management. The cost…

Answered: How should variable overhead costs…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter27: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 3CMA: In measuring the cost of quality, which one of the following is considered an appraisal cost? a....

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Prepare the abnormal loss/gain statement, clearly showing the amount transferred to the costing profit and loss account.
In measuring the cost of quality, which one of the following is considered an appraisal cost? a. Rework cost b. Product testing cost c. Warranty claims cost d. Equipment maintenance cost
What is the usual method of handling the cost of losses that occur normally during processing?
Which of the following is not a factor in computing depreciation for a period? present value residual value method of cost allocation service life
Which of the following cost includes determining how much to order, cost of invoices, clerical labor cost, costs of processing orders, temporary storage, inspection and return of poor quality products? a. Sunk Cost b. Ordering Cost c. Depreciation d. Carrying Cost
Which of the following statements is true? Direct costs are allocated to cost objects using a predetermined overhead rate. Period costs are allocated to inventory in order to determine the amount to be reported on the balance sheet. Indirect costs are allocated to cost objects using a predetermined overhead rate. Indirect costs are traced to costs objects based on the cost object identified on the purchase and requisition orders.
Kindly answer questions 1-3: 1.) Discretionary costs are costs that must be incurred because of past decision, contractual agreement, and government regulations. a. true b. false 2.) Product costs: a. are always expensed in the same period in which they are incurred. b. are inventoriable costs. c. vary directly with changes in cost driver. d. are always charged to an asset account in the same period in which they are incurred. 3. Controllable costs are cost items which can be regulated depending on the level of management one is in. a. True b. False b. False
Explain how the accounting definition of an asset is related to the choice between absorption and variable costing.
Determine the following is best described as a fixed, variable, or mixed cost with respectto product units. Depreciation expense of warehouse.
Which of the following expenditures cannot be included in R&D costs? a. indirect costsb. intangibles purchased from othersc. personnel costsd. contract services performed for others
Which among the following does not hold good for Historical cost accounting? a. Historical cost is relevant for making economic decisions b. Sufficient provision for depreciation is made in historical cost accounting c. Historical cost accounting survives test of time. d. Historical cost is less subject to manipulation.
" When the predetermined overhead rate is based on the level of activity at capacity, an item called the Cost of Unused Capacity might appear to be treated as a period expense on income statements prepared for internal management use." Please explain the statement (True/False) thoroughly with examples. What does "Cost of Unused Capacity" mean?

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How should variable overhead costs incurred to self-construct an asset be reca They should be assigned to the cost of inventory production. They should be recorded as a one-time special assessment in a separate ass account. They should be written off as a loss for the period.