Cost Accounting Systems

Question 1

What are some inventory valuation methods?

Answer 1

1) Absorption Costing
2) Marginal Costing
3) Activity Based Costing

Question 2

What are some cost accumulation costing?

Answer 2

1) Job/ order costing
2) Batch costing
3) Process costing
4) Service costing
5) Operation costing

Question 3

What are some cost flow assumptions?

Answer 3

1) LIFO
2) FIFO
3) AVCO

Question 4

What are some other costing methods?

Answer 4

1) Lifecycle costing
2) Target costing

Question 5

What are direct costing systems?

Answer 5

They only assign direct costs to cost objects. It reports contributions to indirect costs with no system in place to measure and assign indirect cost.

Question 6

What is traditional costing systems?

Answer 6

Use unsophisticated methods to allocate indirect costs to cost objects.

Question 7

What are some differences or similarities of ABC and traditional costing?

Answer 7

Similarities:
Both systems use the two-stage allocation process.

Differences:
Traditional allocates costs to departments whereas ABC allocates costs to activities.
Traditional uses volume-based cost drivers whereas ABC uses more second-stage cost drivers.
Traditional uses a more arbitrary allocation basis.

Question 8

Where to use ABC systems?

Answer 8

1) Direct costs were the dominant cost
2) Indirect costs were relatively small
3) Information costs were high
4) There was a lack of intense global competition
5) A limited range of products are produced