Answer 1 - 1. Productundercostingoccurswhentheproduct...

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1. Product undercosting occurs when the product Your Answer: consumes a high level of resources, but reports a low cost per unit.     CORRECT. Undercosting occurs when a high level of resources is used, but a low cost  per unit is reported.   2. When a firm uses cost smoothing, it causes products to be costed improperly, with some  having too high costs and others having too low costs. This is known as Your Answer: product undercosting   Correct Answer: product cost cross-subsidization.     INCORRECT. Undercosting only looks at when the product has too little of the cost, not  both sides, which is product cost cross-subsidization.   3. This guideline for a refined cost system involves reducing the amount of costs classified  as indirect. Your Answer: Direct-cost tracing     CORRECT. Direct cost tracing involves reducing the amount of costs classified as  indirect.   4. One of the best tools for refining a costing system is  Your Answer: job-order costing.   Correct Answer: activity-based costing.  
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This note was uploaded on 11/23/2011 for the course MANAGEMENT 101 taught by Professor Nguyen during the Spring '11 term at Troy.

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Answer 1 - 1. Productundercostingoccurswhentheproduct...

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