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193. Explain the differences between direct tracing, driver tracing, and allocation. Direct tracing is the process of identifying and assigning costs to a cost object that are specifically or physically associated with the cost object. Driver tracing is assigning costs using drivers, which are causal factors. The driver approach relies on identification of factors that allegedly capture the causal relationship. Allocation is the assignment of indirect costs to cost objects based on convenience or assumed linkages.
194. Classify the following costs incurred by a step railing manufacturing company as direct materials, direct labor, factory overhead, or period costs:
a. b. c. d. e. f. g. h. i. j.
a. b. c. d. e.
Wages paid to production workers Utilities in the office Depreciation on machinery in plant Steel Accountant's salary Rent on factory building Rent on office equipment Maintenance workers' wages Utilities in the plant Maintenance on office equipment
Direct labor Period Factory overhead Direct materials Period
f. g. h. i. j.
Factory overhead Period Factory overhead Factory overhead Period
195. Big Foot Athletics designs and manufactures running shoes. A new model of shoes, Fast Track, has been developed and is ready for production. Required: Which costs will the production manager collect from the value chain, and how would these costs be used in different decisions? a. b. c.
traditional product costs operating product costs value-chain product costs
Full file at https://testbankuniv.eu/Cornerstones-of-Cost-Management-2nd-Edition-Hansen-Test-Bank