Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



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solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1
Solutions to review questions
5.1
A cost item may change from being classified as an indirect cost to a direct cost (or vice versa) due to a change in the underlying operations – for example, the adoption of dedicated production lines. A change in information-gathering technology can also cause a cost item to change from being an indirect cost to a direct cost – for example, the use of bar codes and optical scanners.
5.2
The salary of a plant security guard would be a direct cost when the cost object is the security department or the plant. It would bean indirect cost when the cost object is a product.
5.3
Exhibit 5.1 in the text outlines four purposes for allocating costs

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