Question

In: Accounting

True or False Indirect costs are usually included in the costs that are allocated to activity...

True or False

Indirect costs are usually included in the costs that are allocated to activity cost pools in an activity-based costing system

In the first-stage allocation in an ABC system, some costs may be allocated to a special cost pool that are not subsequently allocated to products or customers.

The activity variance for revenue is favorable if the revenue in the flexible budget exceeds the revenue in the static planning budget.

A favorable spending variance occurs when the cost in the flexible budget exceeds the amount of that actual cost (i.e. the corresponding cost in the actual results).

If the required rate of return is 15% and the internal rate of return of a potential investment 10%, the company should deem the investment acceptable.

When cash flows are uneven and vary from year to year, the net present value method is harder to calculate than the internal rate of return method.

In capital budgeting computations, discounted cash flow methods assume that all cash flows occur at the beginning of a period.

Solutions

Expert Solution


Related Solutions

True or False: 1) Direct labor costs are usually included in the costs that are allocated...
True or False: 1) Direct labor costs are usually included in the costs that are allocated to activity cost pools in an activity-based costing system. True or False: 2) In activity-based costing, a product margin may exclude costs from some of the company's activity cost pools.
Using Activity based costing, why are indirect costs allocated while direct costs are not allocated?
Using Activity based costing, why are indirect costs allocated while direct costs are not allocated?
Which of the following statements are true regarding activity-based costing? A) Costs are allocated based on...
Which of the following statements are true regarding activity-based costing? A) Costs are allocated based on a pre-determined overhead rate for each cost pool B) Transitioning from traditional costing methods to Activity-Based Costing is a relatively simple process that most companies complete quickly. C) Activity-Based Costing results in a different amount of total overhead applied than under traditional costing methods. D) Activity-Based costingoriginated in the early 1900's Using traditional costing rather than Activity-Based Costing might lead to which of the...
You have explained to Helen the importance of understanding how indirect costs can be allocated to...
You have explained to Helen the importance of understanding how indirect costs can be allocated to the cost of finished goods and the problems of using a cost of goods manufactured statement to apply these costs and appropriately cost and price her products. Divine Denim has 2 production departments (Cutting and Machining), and 3 support departments (Administration, IT and Design). The IT Department's costs are allocated based on the number of computers. The Administration Department's costs are allocated based on...
In the past, the Roils Royally Engine Division (Roils) allocated indirect manufacturing costs based on direct...
In the past, the Roils Royally Engine Division (Roils) allocated indirect manufacturing costs based on direct labour hours. Recently, management has decided to pilot a system of time-driven activity-based costing (TDABC) to allocate these costs. The division produces three engine models: Basic, Sport, and Heavy Duty. Roils employs 300 employees to perform indirect labour functions, consisting of machine setups, engine inspections and shipping. Each employee is paid $50,000 per year on average, including benefits. On average, each employee works 1,600...
Which of the following statements about the direct/indirect cost classification is NOT true? a. Indirect costs...
Which of the following statements about the direct/indirect cost classification is NOT true? a. Indirect costs are always traced. b. Indirect costs are always allocated. c. The design of operations affects the direct/indirect classification. d. The direct/indirect classification depends on the choice of cost object 15) Which is true on variable costs? a. increase in total when the actual level of activity increases b. are always indirect costs c. include most personnel costs and depreciation on machinery d. can always...
Part B: True/False Questions An expense item allocated by the home office to a branch is...
Part B: True/False Questions An expense item allocated by the home office to a branch is recorded by the branch by a debit to an expense account and a credit to the Home Office account. The balance of the Allowance for Overvaluation of Inventories: Branch ledger account is deducted from the balance of the Investment in Branch account in the separate balance sheet of the home office. A debit to the Home Office ledger account and a credit to the...
Discuss the difference between direct costs and allocated costs and why allocated costs are important to...
Discuss the difference between direct costs and allocated costs and why allocated costs are important to include in project costs. Further, and regarding allocated costs, disucss how an organization determines costs to be allocated and the basis of the allocation methodology (i.e. choice of the cost allocation base).
True or False: Any organized rhythm without a pulse is defined as pulseless electrical activity (PEA). True False...
True or False: Any organized rhythm without a pulse is defined as pulseless electrical activity (PEA). True False True or False: Synchronized cardioversion is appropriate for treating an unknown wide complex tachycardia. True False True or False: The right side of the heart is responsible for pulmonary circulation. True False True or False: Any bradycardia less than 60 beats per minute is a pathologic event. True False True or False: The most effective treatment for ventricular fibrillation is defibrillation. True...
some neurotransmitters can have hormonal activity true or false
some neurotransmitters can have hormonal activity true or false
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT