Chapter 5 book Flashcards
1
Q
the cost measurement system reports a cost for a product that is below the cost of the resources the product consumes
A
product undercosting
2
Q
the cost measurement system reports a cost for a product that is above the cost of the resources the product consumes
A
product overcosting
3
Q
if a company undercosts one of its products, it will overcost at lease one of its other products
or
if a company overcosts one of its products, it will undercost at least one of its other products
A
product-cost cross-subsidization
4
Q
- identify the products that are the chosen cost objects
- identify the direct costs of the products
- select the cost allocation bases to use for allocating indirect (or overhead) costs to the products
- identify the indirect costs associated with each cost allocation base
- compute the rate per unit of each cost allocation base
- compute the indirect costs allocated to the products
- compute the total cost of the products by adding all direct and indirect costs assigned to the products
A
Plastims simple costing system
5
Q
A
