Questions from General Accounting

Q: In what ways is the application of ABC to service industries the

In what ways is the application of ABC to service industries the same as its application to manufacturing companies?

Q: What is the relevance of the classification of levels of activity to

What is the relevance of the classification of levels of activity to ABC?

Q: How does a company decide whether to use a job order or

How does a company decide whether to use a job order or a process cost system?

Q: Ger Corporation manufactures two products with the following characteristics.

Ger Corporation manufactures two products with the following characteristics. If Ger’s machine hours are limited to 2,000 per month, determine which product it should produce.

Q: (a) Describe the philosophy and approach of just-in

(a) Describe the philosophy and approach of just-in time processing. (b) Identify the major elements of JIT processing.

Q: In the long run, will net income be higher or lower

In the long run, will net income be higher or lower under variable costing compared to absorption costing?

Q: How does the replacement of manual labor with automated equipment affect a

How does the replacement of manual labor with automated equipment affect a company’s cost structure? What implications does this have for its operating leverage and break-even point?

Q: (a) What is the major rationale for the use of

(a) What is the major rationale for the use of variable costing? (b) Discuss why variable costing may not be used for financial reporting purposes.

Q: Distinguish between a traditional income statement and a CVP income statement.

Distinguish between a traditional income statement and a CVP income statement.

Q: Describe the features of a CVP income statement that make it more

Describe the features of a CVP income statement that make it more useful for management decision making than the traditional income statement that is prepared for external users.