Cost Accounting

Question 1

Joint Cost Allocation method

Answer 1

Acceptable joint cost allocation methods include sales value at split-off, physical measures, and constant gross margin. Flexible budget amounts are not used for joint cost allocation.

Question 2

The basic difference between a master budget and a flexible budget is that a master budget is

Answer 2

A master, also called a static, budget is developed for planning and resource allocation purposes. Therefore, it is based on one specific level of activity.
A flexible budget, as its name implies, can be developed for any activity level within the range that the firm has the capacity to produce.

Question 3

Prevention cost

Answer 3

Prevention costs are those that try to include proactive efforts to prevent defects before the products are produced. In this problem these include employee training, preventive maintenance, and supplier education expense for a total of $57,000

Question 4

Conformance and non-conformance

Answer 4

(CPA and CIE) Conformance costs are prevention and appraisal, and non-conformance costs are internal and external failure.

Question 5

Balance Scorecard

Answer 5

Customer, Internal Business, Learning and Growth and Financial

Question 6

Systemic risk

Answer 6

Systematic risk is also known as market risk or nondiversifiable risk and is associated with large-scale economic events or natural disasters and typically affects all companies to some degree.

Question 7

Lean manufacturing

Answer 7

Lean manufacturing is accurately described as using small batches of a high variety of unique products with highly skilled, cross-trained labor.

Question 8

mass manufacturing vs lean manufacturing

Answer 8

Mass production is typically characterized by higher setup times, dedicated equipment, and low-skilled workers with a high degree of specialization. In contrast, lean production is characterized by lower setup times, flexible equipment, and highly skilled, cross-trained workers.

Question 9

Slack Time

Answer 9

Slack time is always calculated as the maximum amount of time that an activity can be delayed without delaying the entire project.

Question 10

crashing

Answer 10

The process of adding resources to shorten selected activity times on the critical path is called “crashing.”

Question 11

Breakeven analysis assumes that over the relevant range

Answer 11

Unit Variables are constant

Question 12

Variable cost and Fixed cost slopes on Graph

Answer 12

Y intercept is less negative= Fixed Cost Decrease

Higher Slope= lower Variable Cost