ussmentid 1128835& course id 15246211&content; id QUESTION 37 2.25 Process costi

Question

ussmentid 1128835& course id 15246211&content; id QUESTION 37 2.25 Process costing system, the cost object is masses of identical or similar units of a product or service. This statement is... O True O False QUESTION 38 Product-cost cross-subsidization is if a company under costs one of its products, it will over cost all of its products. This statement is O True O False QUESTION 39 2.25 Sensitivity analysis is a "what if" technique. This statement is..... Tre O False. QUESTION 40 2.25 The proration approach spreads under allocated and over allocated overhead evenly among ending work-in-process inventory, finished goods inventory, and cost of goods sold. This is False O True Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers

Explanation / Answer

Question 37

This Statement is true. In this costing system, in each period, the system divides the total costs or producing an identical or similar product or service by the total number of units produced to obtain a per unit cost.

Question 38

This statement is False. It is true that it under costs one of the products but it does not over costs all other products. Here is an Example - 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. For instance, if you have a sporting goods business, and you’re hoping to increase the sale of baseballs, you might price these below your own cost. Instead of taking a loss on the balls, you cross-subsidize the cost by pricing your baseball bats well above their actual market value. The extra profit you make on the bats will essentially cover any losses you take on the balls.

Question 39

This Statement is False. Sensitivity analysis is the study of how the uncertainty in the output of a mathematical model or system (numerical or otherwise) can be apportioned to different sources of uncertainty in its inputs. A related practice is uncertainty analysis, which has a greater focus on uncertainty quantification and propagation of uncertainty; ideally, uncertainty and sensitivity analysis should be run in tandem.

Question 40

This Statement is True. - Proration approach spreads the under (or over) allocated overhead among the ending WIP inventory, FG inventory, and COGS. This approach does not adjust overhead allocated at the individual job level, just for the company's WIP inventory, FG inventory, and COGS overall. Proration approach key assumption is that the degree to which the normal costing budgeted amounts were off applied evenly to all the different firm activity.

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