Chapter 5 book

Question 1

the cost measurement system reports a cost for a product that is below the cost of the resources the product consumes

Answer 1

product undercosting

Question 2

the cost measurement system reports a cost for a product that is above the cost of the resources the product consumes

Answer 2

product overcosting

Question 3

if a company undercosts one of its products, it will overcost at lease one of its other products
or
if a company overcosts one of its products, it will undercost at least one of its other products

Answer 3

product-cost cross-subsidization

Question 4

1. identify the products that are the chosen cost objects
2. identify the direct costs of the products
3. select the cost allocation bases to use for allocating indirect (or overhead) costs to the products
4. identify the indirect costs associated with each cost allocation base
5. compute the rate per unit of each cost allocation base
6. compute the indirect costs allocated to the products
7. compute the total cost of the products by adding all direct and indirect costs assigned to the products

Answer 4

Plastims simple costing system

Question 5

ABC systems that use available time to allocate activity costs to cost objects

Answer 5

time driven activiy based costing
(TDABC) systems