TESTBANK FOR COST ACCOUNTING 2ND
EDITION BY STEVEN M. BRAGG FULL
TESTBANK ALL CHAPTERS INCLUDED||
LATEST AND COMPLETE UPDATE 2025
GRADED A+
,1|Page
TESTBANK FOR COST ACCOUNTING 2ND
EDITION BY STEVEN M. BRAGG FULL
TESTBANK ALL CHAPTERS INCLUDED||
LATEST AND COMPLETE UPDATE 2025
GRADED A+
TABLE OF CONTENTS
Chapter 1 Introduction to Cost Accounting.................................................... 1
Chapter 2 Cost Terminology and Cost Behaviors .......................................... 13
Chapter 3 Predetermined Overhead Rates, Flexible Budgets, and Absorption/Variable
Costing..................... 41
Chapter 4 Activity-Based Management and Activity-Based Costing ........... 67
Chapter 5 Job Order Costing ........................................................................... 104
Chapter 6 Process Costing ................................................................................ 136
Chapter 7 Standard Costing and Variance Analysis...................................... 178
Chapter 8 The Master Budget .......................................................................... 223
Chapter 9 Break-Even Point and Cost-Volume-Profit Analysis ................... 261
Chapter 10 Relevant Information for Decision Making .................................. 292
Chapter 11 Cost Allocation for Joint Products and By-Products/Scrap ........ 315
Chapter 12 Introduction to Cost Management Systems .................................. 347
Chapter 13 Responsibility Accounting, Support Department Allocations, and Transfer Pricing
...............................................................359
Chapter 14 Performance Measurement, Balanced Scorecards, and Performance Rewards
..................................................................... 397
Chapter 15 Capital Budgeting ............................................................................ 426
Chapter 16 Managing Costs and Uncertainty................................................... 445
Chapter 17 Implementing Quality Concepts .................................................... 466
Chapter 18 Inventory and Production Management ....................................... 493
Chapter 19 Emerging Management Practices .................................................. 512
,2|Page
CHAPTER 01: INTRODUCTION TO COST ACCOUNTING
QUESTIONS
1. Management accounting stresses the informational needs of internal users over those of
external users (the focus of financial accounting). Because of this perspective, management
accounting provides information in a format that is flexible and relevant to a particular
manager’s usage. Financial accounting, on the other hand, must pro- vide some uniformity in the
manner in which information is presented for it to be comparable among companies and in
compliance with generally accepted accounting principles.
2. It is more important to have legally binding cost accounting standards for defense
contractors than for other manufacturers because government contracts are often awarded on a
low-bid basis. Without legally binding cost accounting standards, dif- ferent bidders could
include costs in different categories, making the bids noncompa- rable. With specified cost
accounting standards, there is a higher probability (although not absolute certainty) that
comparison among bids is consistent. Although contracts for nongovernment manufacturers may
be awarded on a bid basis, it is more common in this arena to consider a wide variety of factors
in addition to cost.
3. A mission statement is important to an organization because it provides a clearly worded
view of what the organization wants to accomplish and how the organization uniquely meets or
plans to meet its targeted customers’ needs with products and ser- vices. Without a mission
statement, an organization may veer away from its “view of itself” and find that it is engaging in
activities that are not, and can never be, part of what it wants to do.
4. Organizational strategy is the link between a firm’s goals and objectives and its oper-
ational plans. Strategy is therefore a specification of how a firm intends to compete and survive.
Each organization will have a unique strategy because it has unique goals, objectives,
opportunities, and constraints.
5. Core competencies are the special proficiencies possessed and valued by an organiza-
tion. If a particular strategy requires core competencies that are not possessed by a firm,
executing such a strategy would be very difficult. For example, a strategy of In- ternet business
expansion would be difficult to execute in a firm that does not possess a core competency in web
design or web security. Similarly, a growth strategy would be impossible in a not-for-profit that
did not have a core competency in attracting volunteers or donors.
6. Although polluting might be less expensive in the short run, there is no guarantee that
such a low-cost tactic may continue in the long run, especially if fines are incurred or
1
, 3|Page
additional legal regulations are enacted that would require retroactive cleanup. Being green may
be viewed from a self-serving standpoint: a proactive green strategy may attract environmentally
conscious consumers and provide a positive organizational image (which could help attract labor
talent). Further, such an approach may actually be less expensive through reduced energy and
waste costs. Current research indicates that being green can be profitable to a business.
Consumers may, in fact, be willing to pay a bit more for products that are nondamaging to the
environment and could cause an organization to refocus on a product differentiation strategy that
might be more profitable than a low-cost strategy.
7. Authority is the right, generally because of position or rank, to use resources to ac-
complish a task or achieve an objective. Responsibility is the obligation to accomplish a task or
achieve an objective. Authority can be delegated, but responsibility must be assumed and
maintained by the person to whom it is assigned. However, sufficient authority must accompany
responsibility or the assignment of responsibility cannot endure.
8. This statement is false. All firms have capital constraints, although the constraints are
more binding for some firms than others. For any firm, as the amount of capital raised through
either stock or bond offerings increases, the perceived riskiness of the offer- ings also rises. The
perceived risk rises because there is greater uncertainty associated with the new investment
relative to the firm’s existing investments. As the perceived risk rises, the rate of return required
by the investors also rises. At some point, the rate of return required by the investors will exceed
the return that the firm can gener- ate with the new funds.
9. Workforce diversity may affect organizational culture because the work ethic of indi-
vidual workers may be less homogeneous, communication may become more diffi- cult, and
observation of different religious holidays may create difficulties or new patterns of absenteeism.
As workforce diversity increases, organizational culture must change to reflect this diversity.
Some potential benefits of workforce diversity include an opportunity to reduce prej- udices,
having workers who prefer different holiday schedules (minimizing the need for closure for
specific holidays), and having workers who have different workplace characteristics (for
example, some cultures may prefer to work in groups; others alone). Some potential difficulties
of workforce diversity include the possibility of different work ethics (for example, some
cultures may perform at different “speeds,” desire different workplace “formats” such as
afternoon siestas, or view communica- tion within the workplace about outside activities
differently). There may also be less tolerance if one employee group demands a greater number
of religious holidays than another or lacks understanding of why a particular employee (or
employee group) does not believe in the need for a specific holiday that the majority observes.
EDITION BY STEVEN M. BRAGG FULL
TESTBANK ALL CHAPTERS INCLUDED||
LATEST AND COMPLETE UPDATE 2025
GRADED A+
,1|Page
TESTBANK FOR COST ACCOUNTING 2ND
EDITION BY STEVEN M. BRAGG FULL
TESTBANK ALL CHAPTERS INCLUDED||
LATEST AND COMPLETE UPDATE 2025
GRADED A+
TABLE OF CONTENTS
Chapter 1 Introduction to Cost Accounting.................................................... 1
Chapter 2 Cost Terminology and Cost Behaviors .......................................... 13
Chapter 3 Predetermined Overhead Rates, Flexible Budgets, and Absorption/Variable
Costing..................... 41
Chapter 4 Activity-Based Management and Activity-Based Costing ........... 67
Chapter 5 Job Order Costing ........................................................................... 104
Chapter 6 Process Costing ................................................................................ 136
Chapter 7 Standard Costing and Variance Analysis...................................... 178
Chapter 8 The Master Budget .......................................................................... 223
Chapter 9 Break-Even Point and Cost-Volume-Profit Analysis ................... 261
Chapter 10 Relevant Information for Decision Making .................................. 292
Chapter 11 Cost Allocation for Joint Products and By-Products/Scrap ........ 315
Chapter 12 Introduction to Cost Management Systems .................................. 347
Chapter 13 Responsibility Accounting, Support Department Allocations, and Transfer Pricing
...............................................................359
Chapter 14 Performance Measurement, Balanced Scorecards, and Performance Rewards
..................................................................... 397
Chapter 15 Capital Budgeting ............................................................................ 426
Chapter 16 Managing Costs and Uncertainty................................................... 445
Chapter 17 Implementing Quality Concepts .................................................... 466
Chapter 18 Inventory and Production Management ....................................... 493
Chapter 19 Emerging Management Practices .................................................. 512
,2|Page
CHAPTER 01: INTRODUCTION TO COST ACCOUNTING
QUESTIONS
1. Management accounting stresses the informational needs of internal users over those of
external users (the focus of financial accounting). Because of this perspective, management
accounting provides information in a format that is flexible and relevant to a particular
manager’s usage. Financial accounting, on the other hand, must pro- vide some uniformity in the
manner in which information is presented for it to be comparable among companies and in
compliance with generally accepted accounting principles.
2. It is more important to have legally binding cost accounting standards for defense
contractors than for other manufacturers because government contracts are often awarded on a
low-bid basis. Without legally binding cost accounting standards, dif- ferent bidders could
include costs in different categories, making the bids noncompa- rable. With specified cost
accounting standards, there is a higher probability (although not absolute certainty) that
comparison among bids is consistent. Although contracts for nongovernment manufacturers may
be awarded on a bid basis, it is more common in this arena to consider a wide variety of factors
in addition to cost.
3. A mission statement is important to an organization because it provides a clearly worded
view of what the organization wants to accomplish and how the organization uniquely meets or
plans to meet its targeted customers’ needs with products and ser- vices. Without a mission
statement, an organization may veer away from its “view of itself” and find that it is engaging in
activities that are not, and can never be, part of what it wants to do.
4. Organizational strategy is the link between a firm’s goals and objectives and its oper-
ational plans. Strategy is therefore a specification of how a firm intends to compete and survive.
Each organization will have a unique strategy because it has unique goals, objectives,
opportunities, and constraints.
5. Core competencies are the special proficiencies possessed and valued by an organiza-
tion. If a particular strategy requires core competencies that are not possessed by a firm,
executing such a strategy would be very difficult. For example, a strategy of In- ternet business
expansion would be difficult to execute in a firm that does not possess a core competency in web
design or web security. Similarly, a growth strategy would be impossible in a not-for-profit that
did not have a core competency in attracting volunteers or donors.
6. Although polluting might be less expensive in the short run, there is no guarantee that
such a low-cost tactic may continue in the long run, especially if fines are incurred or
1
, 3|Page
additional legal regulations are enacted that would require retroactive cleanup. Being green may
be viewed from a self-serving standpoint: a proactive green strategy may attract environmentally
conscious consumers and provide a positive organizational image (which could help attract labor
talent). Further, such an approach may actually be less expensive through reduced energy and
waste costs. Current research indicates that being green can be profitable to a business.
Consumers may, in fact, be willing to pay a bit more for products that are nondamaging to the
environment and could cause an organization to refocus on a product differentiation strategy that
might be more profitable than a low-cost strategy.
7. Authority is the right, generally because of position or rank, to use resources to ac-
complish a task or achieve an objective. Responsibility is the obligation to accomplish a task or
achieve an objective. Authority can be delegated, but responsibility must be assumed and
maintained by the person to whom it is assigned. However, sufficient authority must accompany
responsibility or the assignment of responsibility cannot endure.
8. This statement is false. All firms have capital constraints, although the constraints are
more binding for some firms than others. For any firm, as the amount of capital raised through
either stock or bond offerings increases, the perceived riskiness of the offer- ings also rises. The
perceived risk rises because there is greater uncertainty associated with the new investment
relative to the firm’s existing investments. As the perceived risk rises, the rate of return required
by the investors also rises. At some point, the rate of return required by the investors will exceed
the return that the firm can gener- ate with the new funds.
9. Workforce diversity may affect organizational culture because the work ethic of indi-
vidual workers may be less homogeneous, communication may become more diffi- cult, and
observation of different religious holidays may create difficulties or new patterns of absenteeism.
As workforce diversity increases, organizational culture must change to reflect this diversity.
Some potential benefits of workforce diversity include an opportunity to reduce prej- udices,
having workers who prefer different holiday schedules (minimizing the need for closure for
specific holidays), and having workers who have different workplace characteristics (for
example, some cultures may prefer to work in groups; others alone). Some potential difficulties
of workforce diversity include the possibility of different work ethics (for example, some
cultures may perform at different “speeds,” desire different workplace “formats” such as
afternoon siestas, or view communica- tion within the workplace about outside activities
differently). There may also be less tolerance if one employee group demands a greater number
of religious holidays than another or lacks understanding of why a particular employee (or
employee group) does not believe in the need for a specific holiday that the majority observes.
