Questions from Cost Accounting

Q: Would the budgeting plans for a company that uses a just-

Would the budgeting plans for a company that uses a just-in-time (JIT) inventory system be different from those for a company that does not? Why?

Q: Government agencies are limited in spending by budget categories, not just

Government agencies are limited in spending by budget categories, not just by an overall spending limit. What purpose does this serve? What problems does it create?

Q: In some organizations (firms, universities, government agencies), spending

In some organizations (firms, universities, government agencies), spending appears to increase as the end of the budgeting period approaches, even if there are no seasonal differences. What might caus...

Q: What is the difference between the planning and the control functions of

What is the difference between the planning and the control functions of the budget? What problems do these differences create?

Q: Refer to Question 15-14. What type of responsibility center

Refer to Question 15-14. What type of responsibility center would you recommend the company make Alpha Division? Beta Division? Explain your reasons.

Q: Refer to the Business Application item “Transfer Pricing at Weyerhaeuser.”

Refer to the Business Application item “Transfer Pricing at Weyerhaeuser.” Why might the company use market prices instead of costs for product transfers?

Q: Actual revenues are greater than budgeted for December, so our revenue

Actual revenues are greater than budgeted for December, so our revenue variance is favorable.” Give an example of when this would be “good” news and when it could be “bad” news.

Q: Many companies argue that they do not pay their managers a bonus

Many companies argue that they do not pay their managers a bonus because they believe their employees will work hard for a “fair” wage and do not need to be motivated with a bonus. Why would managers...

Q: A computer company always sells the processing unit and monitor together as

A computer company always sells the processing unit and monitor together as a bundled package. Is there any benefit to computing a sales mix variance under these circumstances?

Q: “A process control chart will tell managers when to investigate variances

“A process control chart will tell managers when to investigate variances.” Do you agree?