What are the impacts of variances on an operating income?
> Explain the concept of cost–volume–profit (CVP) analysis.
> Chico & Partners, a Quebec-based public accounting partnership, specializes in audit services. Its job-costing system has a single direct-cost category (professional labor) and a single indirect-cost pool (audit support, which contains all costs of t
> What is conceptually the most defensible method for allocating multiple support-department costs? Why?
> Distinguish between revenue allocation and bundled product or service.
> What are some common clauses that are often included in contracts based on cost accounting information?
> The “fairness or equity” criterion is most applicable to the government rather than the private sector. Explain.
> What factors should be considered by managers when allocating resources among customers?
> Describe peak-load pricing and give an example.
> Define price discrimination and give an example.
> What are the key components of the financial perspective and customer perspective of a balanced scorecard?
> Differentiate between a strategy map and a balanced scorecard.
> What are ways that a company can achieve cost leadership?
> Global Pipes produces longitudinal submerged arc welded (LSAW) pipes for the oil, gas, and petrochemical industries. Each job is unique. In April 2020, it completed all outstanding orders, and then, in May 2020, it worked on only two jobs, M1 and M2: Dir
> State the importance of cost information in decision making.
> What is a one-time-only special order?
> What is the likelihood value? Why do prediction models attempt to maximize it?
> How do data scientists use cross-validation and holdout samples?
> What is pruning? Why is it helpful?
> Why does overfitting occur?
> What is Gini impurity?
> Describe the decision tree technique of predictive modeling.
> Define target leakage.
> What is the seven-step decision-making process for applying machine-learning techniques in business situations?
> Docks Transport assembles prestige manufactured homes. Its job- costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead allocated at a budgeted $21 per machine-hou
> How do management accountants help managers to operationalize data science models?
> How does the management accountant use the payoff matrix to make decisions using data science models?
> Explain false positives (FP) and false negatives (FN).
> What is the receiver operating characteristic (ROC) curve?
> Explain the bias–variance tradeoff.
> How do management accountants work with data scientists to create value for an organization?
> When using the high-low method, should you base the high and low observations on the dependent variable or on the cost driver?
> Differentiate between the industrial engineering method of cost estimation and the quantitative method.
> What criteria are used by managers in the classification of costs into variable and fixed components?
> Why is a linear cost function useful?
> Virtual Company produces gadgets for the coveted small appliance market. The following data reflect activity for the year 2020: Virtual Co. uses a normal-costing system and allocates overhead to work in process at a rate of $2.50 per direct manufacturing
> Explain linear cost function and give an example.
> Do companies in either the service sector or the merchandising sector make choices about absorption costing versus variable costing?
> How does the treatment of fixed production overhead differ under variable costing and absorption costing?
> What needs to be calculated to explain a variable flexible-budget variance? Explain what an €8,000 unfavorable flexible-budget variance indicates.
> Assume variable manufacturing overhead is allocated using machine-hours. Give three possible reasons for a favorable variable overhead efficiency variance.
> Describe some of the characteristics of a flexible budget.
> Explain why standard costing should not be used to report results in year-end financial statements. Why would managers use standard costing?
> What are the main features to be considered in planning variable overhead costs and fixed over- head costs?
> How can flexible-budget variance analysis be used to control costs of activity areas?
> How are the main components of materials variances interrelated in a flexible budget?
> Olga Ltd produces stapling machines for most businesses operating in New Orleans. The production process involves three stages: cutting department, assembly department and painting and finishing department. Required Each department is treated as a cost
> Which of the following statements is true about a master budget? I. It is a summary of all other budgets. It is expressed as a budgeted income and is mentioned in the balance sheet. II. The master budget comprises of the operating budget and the financia
> Describe why standard costs are used in variance analysis.
> When is a flexible budget similar to a static budget? Why?
> Why are standard costs often used in variance analysis?
> Benchmarking is about comparing your firm’s performance against the best levels of performance in the market and has nothing to do with variance analyses.” Do you agree?
> When inputs are substitutable, how can the direct materials efficiency variance be decomposed further to obtain useful information?
> Comment on the following statement made by a management accountant: “The plant manager has little knowledge of the individual impacts of the purchase department, the sales department, and the production department on the total unfavorable variance in our
> What is the purpose of variance analysis to management?
> What is the usual starting point for an operating budget?
> Budgets meet the cost–benefit test by pushing managers to act differently.” Do you agree? Explain.
> Holland Builders uses normal costing and allocates manufacturing overhead to jobs based on a budgeted labor-hour rate and actual direct labor-hours. Under- or over allocated overhead, if immaterial, is written off to cost of goods sold. During 2020, Holl
> Budgets can promote coordination and communication among subunits within the company.” Do you agree? Explain.
> List the key questions that a manager must consider when developing a successful strategy.
> What are the advantages of a budget?
> Define a master budget and explain its purpose. Describe its components.
> Explain why cash budgets are important.
> What are some additional considerations when budgeting in multinational companies?
> What is the key emphasis in Kaizen budgeting?
> The cost of cost objects under simple costing systems and under activity-based costing are never the same.” Do you agree? Explain.
> What are some behavioral issues that managers must be sensitive to when implementing ABC systems?
> Outline the steps involved in a simple costing system using a single indirect-cost pool.
> Plunge Manufacturing produces outdoor wading and slide pools. The company uses a normal-costing system and allocates manufacturing overhead based on direct manufacturing labor-hours. Most of the company’s production and sales occur in t
> Which levels of cost hierarchy (under activity-based costing) are not used in simple costing systems and why are they important?
> How can a cost hierarchy lead to a more accurate costing system?
> What are the fundamental cost objects in activity-based costing? How does activity-based costing work?
> The total annual production cost of a manufacturing company that produces three different USB devices is $10,000,000. The manager of the company states that the contribution margins of all three products guarantee and justify their productions and, there
> What are the main factors determining the number of indirect-cost pools in a costing system, to increase the accuracy of product or service costs? Explain.
> Activity-based costing is providing more accurate and detailed information and should replace simple costing.” Do you agree? Explain.
> Explain why ABC is equally important for both manufacturing and service companies.
> Describe the main limitations of ABC systems.
> Describe normal costing and actual costing systems.
> Seasonal patterns and fluctuating levels of monthly outputs are the two main factors for most organizations to use an annual period rather than a weekly or a monthly period to compute budgeted indirect-cost rates. Explain how annual indirect rates allevi
> Global Enterprize, a management consulting firm, has the following condensed budget for 2021: Required Global Enterprize has a single direct-cost category (professional labor) and a single indirect-cost pool (client support). Indirect costs are allocate
> Explain the role of information technology in job costing.
> Describe a key feature of job costing and process costing.
> Explain how the cost of a cost object/job is determined under a job-costing system.
> Why do managers have to make adjustments for under- or over-allocated indirect costs?
> Describe the flow of costs in a normal job-costing system.
> Comment on the following statement: There is no difference between “actual costing” and “nor- mal costing” systems because both systems use the product’s actual direct-cost rates and actual quantities of direct-cost inputs.
> Explain how job-costing information may be used for decision making.
> Explain what are the main limitations of CVP analysis for decision making? Explain.
> What is breakeven point (BEP)?
> Differentiate between contribution margin and contribution margin ratio.
> The Lynn Company uses a normal job-costing system at its Minneapolis plant. The plant has a machining department and an assembly department. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and two m
> What is the main difference between gross margin and contribution margin? Which one is the focus of CVP analysis? Explain briefly.
> What are some of the assumptions underlying breakeven analysis in a multiple products environment?
> CVP analysis assumes that costs can be accurately divided into fixed and variable categories. Do you agree? Explain.
> Is it possible to calculate the breakeven point for a company that produces and sells more than one type of product? Explain.
> Is CVP analysis more focused on the short or the long term? Explain.
> Explain three common features of cost accounting and cost management and their applications.
> Inventoriable costs are usually associated with the manufacturing firms whilst period costs are mainly for trading firms. Discuss.
> Explain the impact of having weak ethics on suppliers, customers, and the market. Provide an example to illustrate your answer.
> Due to the significance of the information they’re trusted with, management accountants are expected to observe well-defined professional ethical standards. Professional management accountant organizations around the world have developed professional eth
> Explain how overtime premium and idle time affect labor costs.
