Exam 6: Service Costing

Service entity costs can be classified as:

Which of the following statements are false? i.Professional entities provide standardised service ii.Professional entities provide customised service. iii.Mass service entities provide standardised service.iv.Mass service entities provide customised service.

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

The mass services do not have high contact time or high customisation.

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

In an accounting practice,wages paid to audit clerks are classified as:

Professional services are characterised by: i.high contact time ii.high levels of customisation iii.low levels of discretion iv.front office orientation

Jane Maxwell is a financial planner at Trifle Consulting.Jane's annual salary (including on-costs)is $100 000.It is estimated she works 37 hours a week and 45 weeks per year (the other weeks relate to annual leave and public holidays).She also spends 100 hours a year on non-client related work,including administrative duties (30 hours),attending training (60 hours)and idle time (10 hours).To cover both overhead costs and profit,Trifle Consulting requires a margin of 30 per cent of labour cost when calculating billable rate.What is Jane's charge out rate per billable hour (rounded to nearest dollar)?

The realisation rate is:

What is the charge rate for engineers if direct labour is $30 per hour and the overhead is calculated at 60 per cent of direct labour?

When calculating billable hours,which of the following should be included? I the number of hours a employee has available to service customers Ii the number of hours a employee spends on training that is related to improving customer services Iii annual leave and sick leave

Which of the following does the value chain for a merchandising entity include? i.Design ii.Customer support iii.Purchasing iv.Production/sales transaction

Which of the following descriptions best explains the difference between a billing system and a costing system for a service firm?

Which of the following statements regarding the service industry and/or the application of management accounting techniques to the service industry is incorrect?

Hybrid costing of services is appropriate where: i.there is significant front office involvement ii.equipment is a key input iii.there is no discretion in service production iv.there is a very low number of services produced

The costs and benefits associated with service costing are influenced by the complexity of the costing system,the accuracy of the service cost information and the relevance of service cost information to managing resources and creating value.

In a merchandising business,purchases can be calculated by taking the cost of goods sold minus the cost of beginning inventory plus the cost of ending inventory.

Which of the following are repetitive services for a retail hardware store?