For Each Item Listed, Select the Appropriate Purpose of Cost

question 23

Essay

For each item listed, select the appropriate purpose of cost allocation from the list below. A purpose may be used more than once.
1. To cost a product at a fair price for government contracts
2. To encourage simpler product design
3. To decide on an approprite selling price for a special-order product
4. To cost inventories for reporting on a company's tax return
5. To encourage the sales department to focus on high-margin products
6. To evaluate a make or buy decision
7. To cost inventories for the balance sheet
8. To decide whether to add or delete a product line
Purposes of cost allocation:
a. To provide information for economic decisions
b. To motivate managers and other employees
c. To justify costs or compute reimbursement amounts
d. To measure income and assets for reports to external parties

Apply fixed and variable cost estimates in budget forecasts.

Examine how budgeting assists in decision making for operational efficiency.

Analyze the impact of activity levels on budgeted revenue and expenses.

Interpret financial data to assess organizational performance.

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Definitions:

Copyright

A form of protection for intellectual property provided to the creator of a literary, musical, or artistic work for a period of the creator’s life plus 50 years.

Illegal And Unauthorized Use

The use of property, information, or resources without permission or in violation of laws or regulations.

Solo Album

A music album recorded by an individual artist, often showcasing their personal artistry separate from a group or band.

Formal Documentation

Official written records or materials that provide evidence or information, often used for legal or business purposes.