Question: In the chapter, we said that the costs from a prior department are often excluded when comparing a department's cost with its standards or budgets.

In the chapter, we said that the costs from a prior department are often excluded when comparing a department's cost with its standards or budgets. However, when a department buys materials from an outside firm, those costs would almost always be part of the evaluation process. Why might a firm treat prior period costs differently for evaluation purposes from direct material costs purchased from another firm?

Step by Step Solution

3.27 Rating (168 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

With prior period costs a department manager often does not control the decision to purchase input... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

1059-B-C-A-O (484).docx

120 KBs Word File

Students Have Also Explored These Related Cost Accounting Questions!