Questions from Cost Accounting


Q: Give an example of how, under absorption costing, operating income

Give an example of how, under absorption costing, operating income could fall even though the unit sales level rises.

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Q: What properties should transfer-pricing systems have?

What properties should transfer-pricing systems have?

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Q: “All transfer-pricing methods give the same division operating income

“All transfer-pricing methods give the same division operating income.” Do you agree? Explain.

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Q: What is a management control system?

What is a management control system?

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Q: The McGrath Company has prepared a sales budget of 42,000

The McGrath Company has prepared a sales budget of 42,000 finished units for a 3-month period. The company has an inventory of 13,000 units of finished goods on hand at December 31 and has a target fi...

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Q: Describe three criteria you would use to evaluate whether a management control

Describe three criteria you would use to evaluate whether a management control system is effective.

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Q: What is the relationship among motivation, goal congruence, and effort

What is the relationship among motivation, goal congruence, and effort?

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Q: “Organizations typically adopt a consistent decentralization or centralization philosophy across all

“Organizations typically adopt a consistent decentralization or centralization philosophy across all their business functions.” Do you agree? Explain.

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Q: What are the three methods for determining transfer prices?

What are the three methods for determining transfer prices?

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Q: The Yucatan Co. in Mexico has a division that manufactures bicycles

The Yucatan Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2018 are 95,000 units. Yucatan’s target ending inventory is 7,000 units, and its beginning inven...

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