Cost Allocation, Customer-profitability Analysis, And Sales-variance Analysis
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- The Manager and Management AccountingAn Introduction to Cost Terms and PurposesCost-Volume-Profit AnalysisJob CostingActivity-Based Costing and Activity-Based ManagementMaster Budget and Responsibility AccountingFlexible Budgets, Direct-Cost Variances, and Management ControlFlexible Budgets, Overhead Cost Variances, and Management ControlInventory Costing and Capacity AnalysisDetermining How Costs BehaveDecision Making and Relevant InformationStrategy, Balanced Scorecard, and Strategic Profitability AnalysisPricing Decisions and Cost ManagementCost Allocation, Customer-Profitability Analysis, and Sales-Variance AnalysisAllocation of Support-Department Costs, Common Costs, and RevenuesCost Allocation: Joint Products and ByproductsProcess CostingSpoilage, Rework, and ScrapBalanced Scorecard: Quality and TimeInventory Management, Just-in-Time, and Simplified Costing MethodsCapital Budgeting and Cost AnalysisManagement Control Systems, Transfer Pricing, and Multinational ConsiderationsPerformance Measurement, Compensation, and Multinational Considerations
Question 1
Free
Multiple Choice
Which of the following customer related costs are NOT economically feasible to trace but are related to a customer?
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the additional cost of selling one more unit to a new customer who has never done business with the firm before
the direct material costs of a product that a customer has purchased
the allocation of the cost of travel, lodgings, and meals that result from visiting customers at their locations
the shipping costs that result from shipping a package by Fed Ex to a customer when the technology allows a direct match of that cost to the direct material and direct labor costs of the product
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Question 2
Free
Multiple Choice
Which of the following is a reason to gather data, associate revenues with each customer and develop a system of allocating costs to each customer?
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GAAP requirements for external reporting including 10K disclosures
to assure that highly profitable customers get the appropriate level of care and attention
ABC systems cannot be implemented without customer-profitability reporting
to assure that more resources are committed to loss-making customers in an attempt to retain all customers
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Question 3
Free
Multiple Choice
Segmenting customers as a result of customer profitability analysis would be done by which of the following groupings?
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geography such as state or by zip code
operating income
gross margin
total direct costs
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Question 4
Free
Multiple Choice
Which of the following classifications would the cost of visiting customers would most likely fit into?
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customer output unit-level cost
customer batch-level cost
customer-sustaining cost
corporate-sustaining cost
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Question 5
Free
Multiple Choice
Which of the following classifications would costs incurred to handle each unit sold fit into?
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customer output unit-level cost
customer batch-level cost
customer-sustaining cost
corporate-sustaining cost
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Question 6
Multiple Choice
Which of the following classifications would be the most appropriate for the cost of the manager of a retail distribution channel?
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customer-sustaining cost
distribution-channel cost
customer batch-level cost
corporate-sustaining cost
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Question 7
Multiple Choice
Which of the following classifications would be the most relevant for the costs incurred to process orders?
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customer output unit-level cost
customer batch-level cost
customer-sustaining cost
corporate-sustaining cost
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Question 8
Multiple Choice
To improve customer profitability, companies should track which of the following?
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only the final invoice price of a sale
the volume of the products purchased by each customer
the location of each customer
the customer profile
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Question 9
Multiple Choice
Customers making large contributions to the profitability of the company should ________ .
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be treated the same as other customers because all customers are important
receive a higher level of attention from the company than less profitable customers
be charged higher prices for the same products than less profitable customers
not be offered the volume-based price discounts offered to less profitable customers
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Question 10
Multiple Choice
To reduce distribution-channel costs, a company could ________ .
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improve the efficiency of the ordering process
make fewer customer visits
eliminate distribution to retailers and only service wholesalers
reduce product-handling costs
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Question 11
Multiple Choice
Price discounts are influenced by ________ .
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the volume of product purchased
the prime cost of production
the operational budget
the contribution -margin per unit
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Question 12
Multiple Choice
Managers use a customer-profitability analysis report to ensure that ________ .
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unpaid invoices are categorized according to age by due date
costs related to customers are segmented into different cost pools on the basis of different types of cost drivers or cost-allocation bases
customers making large contributions to the operating income of a company receive a high level of attention from the company
cost allocation of indirect cost is in place
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Question 13
Multiple Choice
Which of the following illustrates a purpose for allocating costs to cost objects?
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to provide information for cost-control and pricing decisions
to provide information to customers
to determine marginal cost
to measure capital expenditure
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Question 14
Multiple Choice
How is value-engineering relevant to a well done customer profitability analysis, especially when an ABC system is utilized to calculate customer profits (or losses)?
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ABC will satisfy GAAP and provide input into value-engineering decisions
ABC offers the opportunity to analyze the costs of activities assigned to each customer and to determine if improvements can be made to optimize profits
customer profitability analysis will reveal that the cost drivers of less profitable customers are the problem and that value-engineering is the solution
Only value-added activities will be shown in the cost analysis and thus all other costs will be eliminated via value-engineering
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Question 15
Multiple Choice
Which purpose of cost allocation is used to encourage sales representatives to push high-margin products or services?
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to provide information for economic decisions
to motivate managers and other employees
to justify costs or compute reimbursement
to measure income and assets for reporting to external parties
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Question 16
Multiple Choice
Which of the following classifications of costs in the customer-cost hierarchy would be most appropriate for the costs of activities to sell each unit to a customer?
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customer-sustaining costs
division-sustaining costs
customer output unit-level costs
distribution-channel costs
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Question 17
Multiple Choice
________ categorizes costs related to customers into different cost pools on the basis of either different classes of cost drivers or different degrees of difficulty in determining the cause-and-effect (or benefits-received) relationships.
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Customer-profitability analysis
Customer revenues
Customer cost hierarchy
Price discounting
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Question 18
True/False
To analyze customer profitability, corporate-sustaining costs should be allocated to customers.
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True
False
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Question 19
True/False
Costs of activities related to a group of units sold to a customer is termed as customer batch-level costs.
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True
False
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Question 20
True/False
A price discount is the reduction in selling price below list selling price to encourage customers to
purchase more quantities.
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True
False
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