Exam 6: Service Costing

Which of the following characteristics apply to merchandising organisations? i. They purchase goods for sale. ii. Outputs can be stored. iii. They produce intangible outputs. iv. Services are consumed as they are produced.

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Question 1

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Service organisations are characterised by: i. intangible outputs. ii. zero inventories. iii. high labour costs.

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Question 2

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Underapplied/overapplied overhead How are underapplied and overapplied overhead dealt with in service industries?

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Question 3

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Because costing systems in service firms are not usually integrated with the accounting system, there is no necessity to adjust for underapplied or overapplied overhead. It is also not necessary because service firms do not carry inventory. Nevertheless, it is necessary to ensure that any underapplied or overapplied overhead does not result from an inaccurate forecasting system, particularly where this is used to establish prices.

Which of the following cost classifications do not apply to service organisations? i. Direct/indirect ii. Fixed/variable iii. Production/non-production iv. Controllable/uncontrollable

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Question 4

Which of the following does the value chain for a service shop include? i. Design ii. Customer support iii. Purchasing iv. Production/delivery

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Question 5

In a fast food outlet, the cost of advertising is classified as:

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Question 6

If the engineer worked for 20 hours on a job, Z, the overhead rates were 125 per cent of direct labour cost and the direct labour rate was $25 per hour, what is the total cost of the job?

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Question 7

Auto repairers would be classified as:

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Question 8

Process costing systems for mass services enable managers to individually track costs.

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Question 9

Which of the following statements describe a difference between the value chain of a service firm and the value chain of a merchandising firm?

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Question 10

Net realisable value of inventory refers to:

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Question 11

Fixed costs can be classified further as either committed or discretionary.

(True/False)

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Question 12

Service costs incur indirect costs and the basis of allocating indirect costs requires the identification of:

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Question 13

Which of the following statements best completes the following sentence? A realisation rate below 100 per cent indicates that the firm:

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Question 14

Implementing service costing What are the factors likely to influence a firm in the decision to implement service costing?

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Question 15

Which of the following correctly describes the way firms would set their chargeout rates per billable hour?

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Question 16

Which type of costing for their services are mass service entities likely to use?

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Question 17

Service entity costs can be classified as:

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Question 18

A financial planning business will generally consume three types of resources: overhead costs, direct material costs and professional labour costs.

(True/False)

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Question 19

Cost of goods in merchandising entities What costs should be included in the cost of goods in merchandising firms?

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Question 20

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Exam 6: Service Costing

Which of the following characteristics apply to merchandising organisations? i. They purchase goods for sale. ii. Outputs can be stored. iii. They produce intangible outputs. iv. Services are consumed as they are produced.

Service organisations are characterised by: i. intangible outputs. ii. zero inventories. iii. high labour costs.

Underapplied/overapplied overhead How are underapplied and overapplied overhead dealt with in service industries?

Which of the following cost classifications do not apply to service organisations? i. Direct/indirect ii. Fixed/variable iii. Production/non-production iv. Controllable/uncontrollable

Which of the following does the value chain for a service shop include? i. Design ii. Customer support iii. Purchasing iv. Production/delivery

In a fast food outlet, the cost of advertising is classified as:

If the engineer worked for 20 hours on a job, Z, the overhead rates were 125 per cent of direct labour cost and the direct labour rate was $25 per hour, what is the total cost of the job?

Auto repairers would be classified as:

Process costing systems for mass services enable managers to individually track costs.

Which of the following statements describe a difference between the value chain of a service firm and the value chain of a merchandising firm?

Net realisable value of inventory refers to:

Fixed costs can be classified further as either committed or discretionary.

Service costs incur indirect costs and the basis of allocating indirect costs requires the identification of:

Which of the following statements best completes the following sentence? A realisation rate below 100 per cent indicates that the firm:

Implementing service costing What are the factors likely to influence a firm in the decision to implement service costing?

Which of the following correctly describes the way firms would set their chargeout rates per billable hour?

Which type of costing for their services are mass service entities likely to use?

Service entity costs can be classified as:

A financial planning business will generally consume three types of resources: overhead costs, direct material costs and professional labour costs.

Cost of goods in merchandising entities What costs should be included in the cost of goods in merchandising firms?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

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