Questions from Cost Accounting

Q: By using economic value-added, we avoid managers focusing on

By using economic value-added, we avoid managers focusing on short-term gains like they would with accounting income. Do you agree with this statement?

Q: What are the advantages of using an ROI-type measure rather

What are the advantages of using an ROI-type measure rather than the absolute value of division profits as a performance evaluation technique for business units?

Q: How does EVA differ from residual income?

How does EVA differ from residual income?

Q: What are the dangers of using only business unit measures to evaluate

What are the dangers of using only business unit measures to evaluate the performance of business unit managers?

Q: A company prepares the master budget by taking each division manager’s estimate

A company prepares the master budget by taking each division manager’s estimate of revenues and costs for the coming period and entering the data into the budget without adjustment. At the end of the...

Q: “If every division manager maximizes divisional income, we will maximize

“If every division manager maximizes divisional income, we will maximize firm income. Therefore, divisional income is the best performance measure.” Comment.

Q: When using the weighted-average method of process costing, total

When using the weighted-average method of process costing, total equivalent units produced for a given period equal: a. The number of units started and completed during the period plus the number of u...

Q: By using economic value-added, we avoid managers focusing on

By using economic value-added, we avoid managers focusing on short-term gains like they would with accounting income. Do you agree with this statement?

Q: Assume that all of the information is the same as in Integrative

Assume that all of the information is the same as in Integrative Case 15-43, but instead of receiving only one outside bid, Logistics receives two. The new bid is from World Services for $195 per hund...

Q: What are the limitations of market-based transfer prices? What

What are the limitations of market-based transfer prices? What are the limitations of cost-based transfer prices?