Question

In: Accounting

1) Jon and Marshall is a CPA firm. Which of the following would be an appropriate driver for a client audit?

 

1) Jon and Marshall is a CPA firm. Which of the following would be an appropriate driver for a client audit?

a. Number of hours billed

b. Number of tax returns filed

c. Number of the new CPAs hired during the year

d. All of the above

2) Jasmine Inc. manufactures plant-based meat products. They have always used a predetermined overhead rate based on labor hours. The production manager is switching to Activity-Based Costing and is assigning costs based on Processing and Packaging cost pools.

This switch would be expected to result in all of the following except:

a. More accurate pricing

b. Overcosting of high volume, low complexity products

c. Increased profitability from elimination of unprofitable products

d. Identification of activities that could be eliminated to improve profitability

 

Solutions

Expert Solution

Question 1

The appropriate cost driver would be Number of Hours Billed

Option A is the Correct Answer.

Question 2

Activity Based Costing System is the one which systematically allocated costs on the basis of various costs drivers and their usage in various products or services. So there is proper distribution of overheads being done

On analysis of various options given

Option B is the correct answer.

ekkarill92 answered 2 years ago
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