1. Why are traditional volume-based cost allocation systems likely to systematically distort product costs?
2. Under what two conditions are volume based traditional product costing systems most likely to distort product costs? How does activity-based costing systems provide more accurate costs when these two conditions hold?
3. Discuss the difference between budgets and standard costs.
4. Describe the relationship that unit standards have with flexible budgeting.
5. Why is historical experience often a poor basis for establishing standards?
6. Describe the connection between planning, feedback, and controlling.
7. How do managerial accounting and financial accounting differ?
8. Explain the role of financial reporting in the development of managerial accounting. Why has this changed in recent years?