solu读tion如-2.doc

CHAPTER 2basic management accounting concepts questions for writing and discussion 1. Product costing accuracy means assigning the cost of the resources consumed by a cost object to that cost object. 2. A cost object is any item for which costs are measured and assigned, including such things as products, plants, projects, departments, and activities. 3. An activity is a basic unit of work performed within an organization. Examples include material handling, inspection, purchasing, billing, and maintenance. 4. A direct cost is a cost that can be traced to a cost object. An indirect cost is a cost that cannot be traced to cost objects. 5. Traceability is the ability to assign a cost directly to a cost object in an economically feasible way using a causal relationship. Tracing is the assignment of costs to cost objects using either an observable measure of the cost object’s resource consumption or factors that allegedly capture the causal relationship. 6. Allocation is the assignment of indirect costs to cost objects based on convenience or assumed linkages. 7. Drivers are factors that cause changes in resource usage, activity usage, costs, and revenues. Resource drivers measure the demands placed on resources by activities and are used to assign the cost of resources to activities. Example: time used to assign the cost of supervision to individual activities. Activity drivers measure the demands placed on activities by cost objects and are used to assign the cost of activities to cost objects. Example: number of inspection hours used to assign the cost of inspection to individual products. 8. Direct tracing is the process of assigning costs to cost objects based on physically observable causal relationships. 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. Direct tracing relies on physical observation of the causal relationship and, th