if costs are accounted for at the company level, they would still be reported, so the...
if costs are accounted for at the company level, they would still be reported, so the net income for the organization would be correct, wouldn't it? If so, shouldn't a department manager only be responsible for those costs that are under their control? If not, why not? If so, then what is the issue with allocating costs the manager does not control?
Homework Answers
If costs are accounted for at the company level, they would still be reported, so the net income for the organization would be correct, wouldn't it?
Yes
If so, shouldn't a department manager only be responsible for those costs that are under their control? If not, why not? If so, then what is the issue with allocating costs the manager does not control?
Yes, a department manager should be responsible only for those costs that are under his control.
When costs not under the control of a manager are allocated to his department and then his performance is assessed against those costs, it would be unjust to him as he would become responsible for the inefficiencies of those who are in control of those costs. Hence, for performance assessment purposes a manager should be held responsible only for those costs that are under his control.
However, for inventory valuation, for external reporting purposes, such costs can be allocated.
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system and manufactures a single product—an industrial carpet
shampoo and cleaner used by many universities. The manufacturing
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partially completed production cost report for the month of October
for the Mixing and Cooking department is as follows.
(a)
Your answer is correct.
Prepare a schedule that shows how the equivalent units were
computed so that you can...
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