CLEMSON ACCT 2020 EXAM 2 QUESTIONS
WITH CORRECT ANSWERS 2025
Abc -ECORRECT ANSWER -- system of cost analysis
- analyzes, identifies, and measures the cost of key activities
- traces costs to cost objects
When abc is beneficial - CORRECT ANSWER -- large amount of overhead costs
- wide variety of products
- intense competition
Abc product costing model - CORRECT ANSWER -
1. Assign overhead resource costs to activity cost pools for key overhead activities
2. Assign cost pools to cost objects
Predetermined rate - CORRECT ANSWER -cost pool / cost driver activity level
Assigned cost - CORRECT ANSWER -
predetermined rate x quantity of cost driver used by the cost object
Limitations of abc - CORRECT ANSWER -- manufacturing costs and non-manufacturing costs
- practical capacity
Challenge in usingEabc - CORRECT ANSWERE-specifying the model
Abc implementation issues -ECORRECT ANSWER -1. External reporting
2. Complexity of production environment
, Activity based management (abm) - CORRECT ANSWER -
identifies which activities provide value to the customer
Selecting the activity base - CORRECT ANSWER --
causal relationship between activity level and costs
- high correlation between activity level and costs
Cost-volume graphs - CORRECT ANSWER -- activity level reported on horizontal (x) axis
- total costs reported on vertical (y) axis
Cost behavior - CORRECT ANSWER -how costs change as volume changes
Common cost behaviors - CORRECT ANSWER -variable costs, fixed costs, mixed costs
Variable costs - CORRECT ANSWER -- costs that are incurred for every unit of volume
- total variable costs change in direct proportion to changes in volume
- graphs always begin at the origin
- slope represents the variable cost per unit of activity
Fixed costs - CORRECT ANSWER -- costs that do not change in total despite volume
- committed fixed costs
- discretionary fixed costs
- graph: flat line thatEintersects y-axis
Mixed costs - CORRECT ANSWER -- contain both variable and fixed components
- increases with volume
WITH CORRECT ANSWERS 2025
Abc -ECORRECT ANSWER -- system of cost analysis
- analyzes, identifies, and measures the cost of key activities
- traces costs to cost objects
When abc is beneficial - CORRECT ANSWER -- large amount of overhead costs
- wide variety of products
- intense competition
Abc product costing model - CORRECT ANSWER -
1. Assign overhead resource costs to activity cost pools for key overhead activities
2. Assign cost pools to cost objects
Predetermined rate - CORRECT ANSWER -cost pool / cost driver activity level
Assigned cost - CORRECT ANSWER -
predetermined rate x quantity of cost driver used by the cost object
Limitations of abc - CORRECT ANSWER -- manufacturing costs and non-manufacturing costs
- practical capacity
Challenge in usingEabc - CORRECT ANSWERE-specifying the model
Abc implementation issues -ECORRECT ANSWER -1. External reporting
2. Complexity of production environment
, Activity based management (abm) - CORRECT ANSWER -
identifies which activities provide value to the customer
Selecting the activity base - CORRECT ANSWER --
causal relationship between activity level and costs
- high correlation between activity level and costs
Cost-volume graphs - CORRECT ANSWER -- activity level reported on horizontal (x) axis
- total costs reported on vertical (y) axis
Cost behavior - CORRECT ANSWER -how costs change as volume changes
Common cost behaviors - CORRECT ANSWER -variable costs, fixed costs, mixed costs
Variable costs - CORRECT ANSWER -- costs that are incurred for every unit of volume
- total variable costs change in direct proportion to changes in volume
- graphs always begin at the origin
- slope represents the variable cost per unit of activity
Fixed costs - CORRECT ANSWER -- costs that do not change in total despite volume
- committed fixed costs
- discretionary fixed costs
- graph: flat line thatEintersects y-axis
Mixed costs - CORRECT ANSWER -- contain both variable and fixed components
- increases with volume
