Questions from Cost Accounting

Q: How is the accounting rate of return computed? How does this

How is the accounting rate of return computed? How does this rate differ from the discount rate and the internal rate of return? Appendix 2: Accounting Rate of Return The accounting rate of return (A...

Q: What information provided by a variable costing income statement is used in

What information provided by a variable costing income statement is used in computing the break-even point? Is this information on an absorption costing income statement? Explain your answer.

Q: How is “break-even point” defined? What are

How is “break-even point” defined? What are the differences among the formula, graph, and income statement approaches for computing breakeven?

Q: A friend of yours, attending another university, states she learned

A friend of yours, attending another university, states she learned that CVP is a short-run-oriented model and is, therefore, of limited usefulness. Your professor, however, has often discussed CVP in...

Q: What is the contribution margin ratio? How is it used to

What is the contribution margin ratio? How is it used to calculate the break-even point?

Q: Why is CVP analysis generally used as a short-run tool

Why is CVP analysis generally used as a short-run tool? Would CVP ever be appropriate as a long-run model?

Q: How is the “bag” assumption used in CVP analysis for

How is the “bag” assumption used in CVP analysis for a multiproduct firm? What additional assumption must be made in multiproduct CVP analysis that doesn’t pertain to a single-product CVP situation?

Q: A multiproduct company has a sales mix of nine widgees to three

A multiproduct company has a sales mix of nine widgees to three squigees. Widgees have a contribution margin ratio of 45 percent, and squigees have a contribution margin ratio of 80 percent. If the sa...

Q: Define and explain the relationship between margin of safety and degree of

Define and explain the relationship between margin of safety and degree of operating leverage.

Q: What is a special order decision? Under what circumstances would a

What is a special order decision? Under what circumstances would a company refuse to accept a special order?