Accounting 2037 Exam 2 Mizzou Questions and Answers.

common costs - Answer costs of operating a facility, activity, or like cost object that is shared by two or more users they are used because each user obtains a lower cost by sharing than if each user acted alone discounted price standalone method - Answer determines the weights for cost allocation by considering each cost object as a separate entity; its a pro-rata method (by %), as if the users are each using the common item separately incremental method - Answer ranks the individual users by which user is most responsible for the cost, then uses this ranking to allocate costs sales volume variance - Answer difference between flex operating income and budgeted operating income flex budget variance - Answer difference between flex operating income and actual operating income budget variance - Answer difference between actual operating income and budgeted operating income selling price variance - Answer actual quantity (actual selling price - budgeted selling price) direct materials variance - Answer actual quantity of DM x (actual price - budgeted price) benefits of absorption costing - Answer 1) takes into account all manufacturing costs to product 2) complies with GAAP requirements 3) more accurate representation of profitability make or buy decision - Answer management should consider: available capacity product quality employee morale