Question

True Or False

Required 1 Predetermined overhead rates are calculated after the production period when the actual costs are known.

Required 2 At the end of the accounting cycle, the balance of the Manufacturing Overhead account should be zero.

Required 3 The change in the manufacturing environment from being labor-intensive to highly automated has had no impact on the allocation cost methods.

Required 4 Jiffy Cake Mix Company, having a homogeneous product, would use process costing for its manufacture of cake mixes.

Required 5 A customer profitability analysis will identify customer-driven costs and identify those with who the company may choose to not engage with.

Answer 1

1). FALSE - Predominant Overhads rates are calculated before actual production gets started.

2). FALSE - Its need not be necessary to at the end of the accounting cycle manufacturing overheads accounts to be zero.

3). False - Change in manufacturing environment impacted on method of Allocation of cost.

4). FAlSE - Its not recommended to use process costing in case of company's product are homogeneous.

5). True - Customer profitability helps Organizations to analyze its customer and provide services/ Products accordingly.

answered by: anonymous