(25 min.) ABC, cost hierarchy, service.
Output unit-level costs
a. Direct-labor costs, $146,000
b. Equipment-related costs (rent, maintenance, energy, and so on), $350,000
These costs are output unit-level costs because they are incurred on each u
AN INTRODUCTION TO COST TERMS AND PURPOSES
A cost object is anything for which a separate measurement of costs is desired. Examples
include a product, a service, a project, a customer, a brand category, an activity, and a
STRATEGY, BALANCED SCORECARD, AND
STRATEGIC PROFITABILITY ANALYSIS
13-1 Strategy specifies how an organization matches its own capabilities with the
opportunities in the marketplace to accomplish its objectives.
13-2 The five key forces to cons
17-1 Industries using process costing in their manufacturing area include chemical processing,
oil refining, pharmaceuticals, plastics, brick and tile manufacturing, semiconductor chips,
beverages, and breakfast cereals.
NOTATION USED IN CHAPTER 3 SOLUTIONS
Variable cost per unit
Contribution margin per unit
Target operating income
Cost-volume-profit (CVP) analysis examines the beha
COST ALLOCATION, CUSTOMER-PROFITABILITY
ANALYSIS, AND SALES-VARIANCE ANALYSIS
14-1 Disagree. Cost accounting data plays a key role in many management planning and
control decisions. The division president will be able to make better operating a
SPOILAGE, REWORK, AND SCRAP
18-1 Managers have found that improved quality and intolerance for high spoilage have
lowered overall costs and increased sales.
18-2 Spoilageunits of production that do not meet the standards required by customers f