ACCT 3201 Cost Accounting: A Managerial Emphasis, 16e (Horngren) Chapter 14 Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis Q&A-GRADED A+
16 views 0 purchase
Course
ACCT 3201
Institution
University Of Minnesota, Duluth
Cost Accounting: A Managerial Emphasis, 16e (Horngren)
Chapter 14 Cost Allocation, Customer-Profitability Analysis, and
Sales-Variance Analysis
14.1 Objective 14.1
1) Which of the following customer related costs are NOT economically feasible to trace
but are related to a customer?
A) the add...
Cost Accounting: A Managerial Emphasis, 16e (Horngren)
Chapter 14 Cost Allocation, Customer-Profitability Analysis, and
Sales-Variance Analysis
14.1 Objective 14.1
1) Which of the following customer related costs are NOT economically feasible to trace
but are related to a customer?
A) the additional cost of selling one more unit to a new customer who has never done
business with the firm before
B) the direct material costs of a product that a customer has purchased
C) the allocation of the cost of travel, lodgings, and meals that result from visiting
customers at their locations
D) the shipping costs that result from shipping a package by Fed Ex to a customer when
the technology allows a direct match of that cost to the direct material and direct labor
costs of the product
Answer: C
Diff: 1
Objective: 1
AACSB: Analytical thinking
2) Which of the following is a reason to gather data, associate revenues with each customer
and develop a system of allocating costs to each customer?
A) GAAP requirements for external reporting including 10K disclosures
B) to assure that highly profitable customers get the appropriate level of care and attention
C) ABC systems cannot be implemented without customer-profitability reporting
D) to assure that more resources are committed to loss-making customers in an attempt to
retain all customers
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking
3) Segmenting customers as a result of customer profitability analysis would be done by
which of the following groupings?
A) geography such as state or by zip code
B) operating income
C) gross margin
D) total direct costs
Answer: B
Diff: 2
Objective: 1
AACSB: Analytical thinking
,4) Which of the following classifications would the cost of visiting customers would most
likely fit into?
A) customer output unit-level cost
B) customer batch-level cost
C) customer-sustaining cost
D) corporate-sustaining cost
Answer: C
Diff: 1
Objective: 1
AACSB: Analytical thinking
5) Which of the following classifications would costs incurred to handle each unit sold fit
into?
A) customer output unit-level cost
B) customer batch-level cost
C) customer-sustaining cost
D) corporate-sustaining cost
Answer: A
Diff: 1
Objective: 1
AACSB: Analytical thinking
6) Which of the following classifications would be the most appropriate for the cost of the
manager of a retail distribution channel?
A) customer-sustaining cost
B) distribution-channel cost
C) customer batch-level cost
D) corporate-sustaining cost
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking
7) Which of the following classifications would be the most relevant for the costs incurred
to process orders?
A) customer output unit-level cost
B) customer batch-level cost
C) customer-sustaining cost
D) corporate-sustaining cost
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking
,8) To improve customer profitability, companies should track which of the following?
A) only the final invoice price of a sale
B) the volume of the products purchased by each customer
C) the location of each customer
D) the customer profile
Answer: B
Diff: 2
Objective: 1
AACSB: Analytical thinking
9) Customers making large contributions to the profitability of the company should
________.
A) be treated the same as other customers because all customers are important
B) receive a higher level of attention from the company than less profitable customers
C) be charged higher prices for the same products than less profitable customers
D) not be offered the volume-based price discounts offered to less profitable customers
Answer: B
Diff: 2
Objective: 1
AACSB: Analytical thinking
10) To reduce distribution-channel costs, a company could ________.
A) improve the efficiency of the ordering process
B) make fewer customer visits
C) eliminate distribution to retailers and only service wholesalers
D) reduce product-handling costs
Answer: C
Diff: 3
Objective: 1
AACSB: Analytical thinking
11) Price discounts are influenced by ________.
A) the volume of product purchased
B) the prime cost of production
C) the operational budget
D) the contribution -margin per unit
Answer: A
Diff: 3
Objective: 1
AACSB: Analytical thinking
, 12) Managers use a customer-profitability analysis report to ensure that ________.
A) unpaid invoices are categorized according to age by due date
B) costs related to customers are segmented into different cost pools on the basis of
different types of cost drivers or cost-allocation bases
C) customers making large contributions to the operating income of a company receive a
high level of attention from the company
D) cost allocation of indirect cost is in place
Answer: C
Diff: 2
Objective: 1
AACSB: Analytical thinking
13) Which of the following illustrates a purpose for allocating costs to cost objects?
A) to provide information for cost-control and pricing decisions
B) to provide information to customers
C) to determine marginal cost
D) to measure capital expenditure
Answer: A
Diff: 2
Objective: 1
AACSB: Analytical thinking
14) How is value-engineering relevant to a well done customer profitability analysis,
especially when an ABC system is utilized to calculate customer profits (or losses)?
A) ABC will satisfy GAAP and provide input into value-engineering decisions
B) ABC offers the opportunity to analyze the costs of activities assigned to each customer
and to determine if improvements can be made to optimize profits
C) customer profitability analysis will reveal that the cost drivers of less profitable
customers are the problem and that value-engineering is the solution
D) Only value-added activities will be shown in the cost analysis and thus all other costs
will be eliminated via value-engineering
Answer: B
Diff: 3
Objective: 1
AACSB: Analytical thinking
15) Which purpose of cost allocation is used to encourage sales representatives to push
high-margin products or services?
A) to provide information for economic decisions
B) to motivate managers and other employees
C) to justify costs or compute reimbursement
D) to measure income and assets for reporting to external parties
Answer: B
Diff: 2
Objective: 1
AACSB: Analytical thinking
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Themanehoppe. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.99. You're not tied to anything after your purchase.
