Cost And Management Accountıng

Yanıt Açıklaması: Product-cost cross-subsidization is the term used to define the situation in which over-costing in one or more products results in under-costing in other products.

Yanıt Açıklaması: Idle time refers to wages paid for an unproductive time caused by several ordinary and extraordinary reasons.

Yanıt Açıklaması: Ideal standards reflect the peak operating efficiency without any production disruptions.

Yanıt Açıklaması: Many managers prefer currently achievable standards to the ideal standards. Because these standards reflect the production process that is as efficient as possible under normal conditions.

Yanıt Açıklaması: Management accounting relates to the provision of appropriate information for decision-making, planning, controlling and performance evaluation.

Yanıt Açıklaması: These assumptions can be grouped under the following headings (Horngren, Foster and Datar, 2001, p:60): Expenses must be classified as fixed and variable. It must be assumed that total fixed expenses aren’t affected by the rise in the volume of activity and that variable expenses can change regarding the rise in the volume of activity. In other words, the cost function is assumed to be linear. Since the sales price is supposed to be fixed, the total revenue function is accepted to be linear. It is assumed that there will be no change in the product mix in case multiple products are sold. It is assumed that the efficiency of production factors are constant. There is a complete synchronization between sales and inventories. Tangible fixed assets are constant despite various production volumes. Risks and uncertain conditions are ignored. No extraordinary income or expenditure has emerged. The analysis method is accepted as accurate for the short-term. Thus, it is implementable.

Yanıt Açıklaması: The correct answer is C. Direct labor costs incurred in a manufacturing company are tracked by 720 Direct Labor Expenses account.

Yanıt Açıklaması: It should be Job Costing or process costing

Yanıt Açıklaması: Authoritative / Participative Budgeting: “Authoritative (imposed) budgeting” is a top-down process of budgeting, in which managers set the goals and communicate to subordinates. However, “participative budgeting” represents a bottom-up approach that involves all levels of people in the company in the budgeting process. Authoritative budgeting is better for decision-making control but does not provide a commitment of subordinates. On the other hand, participative budgeting provides more realistic goals, because subordinates have in-depth knowledge of what can be done in the field. Additionally, they become more motivated and less fearful about reaching the targets. However, management should ensure that the goals determined by employees are in line with the long-term goals of top management. As also understood from the information given, the statements about Authoritative / Participative Budgeting in the options I and II are correct, so the answer is A. The statement in the option III is not correct because of the fact that authoritative budgeting is better for decision-making control but does not provide a commitment of subordinates. The statement in the option IV is not correct because of the fact that participative budgeting provides more realistic goals, because subordinates have in-depth knowledge of what can be done in the field.

Yanıt Açıklaması: The difference is that for labor cost, purchasing and consumption incur at the same time.

Yanıt Açıklaması: Market - skimming pricing strategies can be implemented by the following: • Market skimming • Award pricing • Image - creating pricing • Retaining pricing

Yanıt Açıklaması: Short-term budgets determine the goals to reach in the short-term period, which is usually a 12 months period

Yanıt Açıklaması: As cost information is used within the decisionmaking process and to measure activity, various cost information concepts have emerged. Costs for decision making can be classified as follows: • Relevant cost • Sunk cost • Opportunity cost • Marginal cost • Differential cost

Yanıt Açıklaması: Direct labor costs incurred in a service company are tracked by 740 Cost of Production of Services account and indirect labor costs incurred in a service company are tracked again by 740 Cost of Production of Services account.

Yanıt Açıklaması: Payroll is not a salary or wage. Payroll or payroll register is a process. The process includes calculating wages, withholding taxes and other deductions.

Yanıt Açıklaması: Kaizen standards are exactly the opposite of fixed standards because they require continuous updating by their nature. These standards are continuous-improvement standards that reflect planned improvements year-by-year.

Yanıt Açıklaması: Decision making is a flexible action. In decision making, the manager’s judgment, intuition, mood, and personal values can also be effective. Decisionmaking problem basically involves three stages: Introducing all alternatives that may be the basis of the decision, Sorting alternatives through their significance, Selecting and evaluating the most optimal alternative

Yanıt Açıklaması: Standard cost is the cost determined by careful analyses that states how much something cost to the company under normal conditions.

Yanıt Açıklaması: Direct labor costs incurred in a manufacturing company are tracked by 720 Direct Labor Expenses account.

Yanıt Açıklaması: Classification According to Subject of Standard divides standards into "quantity standard" and "price standard" According to the answer to the question “what should be the …. of inputs to use in producing one unit”, the name of the standard is determined. If the answer specifies the needed quantity of resource consumption the standard is “quantity standard”; however, if the answer gives the price information on inputs, it is “price standard” that the company sets.