Questions from Cost Accounting


Q: Explain why standard costing should not be used to report results in

Explain why standard costing should not be used to report results in year-end financial statements. Why would managers use standard costing?

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Q: Describe some of the characteristics of a flexible budget.

Describe some of the characteristics of a flexible budget.

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Q: Assume variable manufacturing overhead is allocated using machine-hours. Give

Assume variable manufacturing overhead is allocated using machine-hours. Give three possible reasons for a favorable variable overhead efficiency variance.

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Q: What needs to be calculated to explain a variable flexible-budget

What needs to be calculated to explain a variable flexible-budget variance? Explain what an €8,000 unfavorable flexible-budget variance indicates.

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Q: How does the treatment of fixed production overhead differ under variable costing

How does the treatment of fixed production overhead differ under variable costing and absorption costing?

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Q: Do companies in either the service sector or the merchandising sector make

Do companies in either the service sector or the merchandising sector make choices about absorption costing versus variable costing?

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Q: Explain linear cost function and give an example.

Explain linear cost function and give an example.

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Q: Virtual Company produces gadgets for the coveted small appliance market. The

Virtual Company produces gadgets for the coveted small appliance market. The following data reflect activity for the year 2020: Virtual Co. uses a normal-costing system and allocates overhead to work...

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Q: Why is a linear cost function useful?

Why is a linear cost function useful?

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Q: What criteria are used by managers in the classification of costs into

What criteria are used by managers in the classification of costs into variable and fixed components?

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