Which of the following statements is true regarding CVP analysis? Select one: A. CVP is only useful in a manufacturing context B. CVP cannot be used in service industries C. CVP can be used with multiple products only if the product ratio is fixed and based on a weighted average unit contribution margin D. CVP is useful in all types of business and with any number of products and product mixes E. None of the above

Which of the following statements is true regarding CVP analysis? Select one: A. CVP is only useful in a manufacturing context B. CVP cannot be used in service industries C. CVP can be used with multiple products only if the product ratio is fixed and based on a weighted average unit contribution margin D. CVP is useful in all types of business and with any number of products and product mixes E. None of the above

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 10DQ: What is the scattergraph method, and why is it used? Why is a scattergraph a good first step in...

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"Simplification of all costs into only fixed and variable costs distorts the actual cost behavior pattern of a firm. Yet businesses rely on this method of cost classification." Comment
Organizations are motivated to use multiple indirect cost pools instead of a single indirect cost pool when Select one: O a. Multiple Indirect cost pools are needed to conform to external reporting requirements b. manufacturing overhead costs are difficult to control c. the cost drivers for the multiple indirect cost pools are different from the cost driver of the single indirect cost pool d. none of the options
Which of the following statements is false? (You may select more than one answer.)a. Activity-based costing systems usually shift costs from low-volume products tohigh-volume products.b. Benchmarking can be used to identify activities with the greatest potential forimprovement.c. Activity-based costing is most valuable to companies that manufacture products thatare similar in terms of their volume of production, batch size, and complexity.d. Activity-based costing systems are based on the assumption that the costs included ineach activity cost pool are strictly proportional to the cost pool’s activity measure.
Which of the following statements is true of ABC systems? A) ABC systems are time-driven cost systems. B) ABC systems classify some direct costs as indirect costs and some indirect costs as direct costs. C) ABC systems provide valuable information to managers beyond accurate product costs. D) ABC systems assume all costs are variable costs.
8) A single indirect-cost rate distorts product costs because A) there is an assumption that all support activities affect all products in a uniform way B) it recognizes specific activities that are required to produce a product C) competitive pricing is ignored D) it assumes all costs are product costs
ABC systems get more accurate as more activities are identified and analyzed. Critique the following statement: “A company should look to break its production process into as many activities as possible in order to determine the most accurate unit costs possible”. Why do you agree or disagree with that statement? Give several reasons.
What is the scattergraph method, and why is it used? Why is a scattergraph a good first step in separating mixed costs into their fixed and variable components?
TRUE OR FALSE The general principle in determining the number of cost pools is that a separate cost pool should be used for the cost of an activity if the pattern of demand for it varies across products in proportions different from those reflected in existing cost pool drivers.
Which one of the following is not an assumption of CVP analysis? The behavior of costs and revenues are linear within the relevant range. Sales mix remains constant. All units produced are sold. All costs are variable costs.
Which of the following statements regarding service organisations is incorrect?Select onea. Many techniques used in manufacturing firms can be adapted to suit service industriesb.Service costing is relevant for assessing service profitability.c.Direct materials are frequently a comparatively small part of the total cost.d. Resources used in all service firms are predominantly variable.
15) Which of the following statements is true of ABC systems? A) ABC systems are time-driven cost systems. B) ABC systems classify some direct costs as indirect costs and some indirect costs as direct costs. C) ABC systems provide valuable information to managers beyond accurate product costs. D) ABC systems assume all costs are variable costs. Dlongo follou on JWhotaAnn
Which of the following statements regarding activity-based costing (ABC) is false? A. ABC is not an appropriate tool for analysing non-manufacturing costs. B. ABC can be used to analyse the profitability of customers. C. ABC evolved as a response to problems with traditional costing systems. D. ABC can be used to measure the cost of cost objects.