1. What are the limitations of activity-based costing?
2. Differentiate between variable costing and absorption costing.
3. When setting a transfer price, what objective(s) should the company have in mind?
4. Standard costs facilitate management planning. What are the other advantages of standard costs?
5. Distinguish between managerial and financial accounting as to (a) primary users of reports, (b) types and frequency of reports, and (c) purpose of reports.
6. The administrators of San Diego County's Memorial Hospital are interested in identifying the various costs and expenses that are incurred in producing a patient's X-ray. A list of such costs and expenses in presented below.
1. __b___Salaries for the X-ray machine technicians.
2. __c___Wages for the hospital janitorial personnel.
3. _____Film costs for the X-ray machines.
4. _____Property taxes on the hospital building.
5. __b___Salary of the X-ray technicians' supervisor.
6. _____Electricity costs for the X-ray y department.
7. _____Maintenance and repairs on the X-ray machines.
8. _a____X-ray department supplies.
9. _____Depreciation on the X-ray department equipment.
10. ____Depreciation on the hospital building.
The administrators want these costs and expenses classified as:
(a) direct materials,
(b) direct labor, or
(c) service overhead.
The solution explains some questions in managerial accounting relating to ABC method, direct materials, labor costs, and absorption costs