Costing - Study Mode

[#811] If static budget amount is $6000 and flexible budget amount is $15000, then sales volume variance will be
Correct Answer

(A) $9,000

Explanation

Solution: Sales volume variance = Flexible budget amount - Static budget amount = $15000 - $6000 = $9,000

[#812] An approach in which company under-costs it's one product and over-costs at least one product is classified as
Correct Answer

(C) product-cost cross subsidizing

Explanation

Solution: An approach in which company under-costs it's one product and over-costs at least one product is classified as product-cost cross subsidizing. Product-cost cross-subsidization is the strategy of pricing a product above its market value to subsidize the loss of pricing a different product below its market value.

[#813] Budgeted total cost in indirect cost pool is divided by budgeted total quantity of cost allocation base is to calculate by
Correct Answer

(B) budgeted indirect cost rate

Explanation

Solution: Budgeted total cost in indirect cost pool is divided by budgeted total quantity of cost allocation base is to calculate by budgeted indirect cost rate. The budgeted indirect cost rate formula is calculated by dividing the budgeted annual indirect costs by the budgeted annual quantity of the cost allocation base.

[#814] Costs of all activities for individual products or services can be called
Correct Answer

(B) output-unit level costs

Explanation

Solution: Costs of all activities for individual products or services can be called output-unit level costs. Output unit level costs are the costs of activities.

[#815] Broad's average use to assign cost of revenue to cost objects will be classified as
Correct Answer

(A) refined costing system

Explanation

Solution: Broad's average use to assign cost of revenue to cost objects will be classified as refined costing system. A refined costing system reduces the use of broad averages for assigning the cost of resources to cost objects (such as jobs, products, and services) and provides better measurement of the costs of indirect resources used by different cost objects no matter how differently various cost objects use indirect resources.