Facility-level costs should not be allocated to products

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Reference no: EM132089325

1. Tom Rehr made the following comment: "Facility-level costs should not be allocated to products because they are irrelevant for decision-making purposes." Do you agree or disagree with this statement? Justify your response.

2. If each patient in a hospital is considered a cost object, what are examples of unit-, batch-, product-, and facility-level costs that would be allocated to this object using an activity-based costing system?

3. Alisa Kamuf's company has reported losses from operations for several years. Industry standards indicate that prices are normally set at 30% above manufacturing cost, which Ms. Kamuf has done. Assuming that her other costs are in line with industry norms, how could she continue to lose money while her competitors earn a profit?

4. Why would a company consider outsourcing products or services? If the company for which you work outsources manufacturing or products, product components, or services, please describe that outsourcing, along with the rationale for doing so (if you know).

5. "It all comes down to the bottom line. The numbers never lie." Do you agree with this conclusion? Explain your position.

6. Are all fixed costs unavoidable? If not, provide examples of fixed costs that would be avoidable.

Please answer accordinly.

Reference no: EM132089325

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