Question 1

Dual rate allocation methods separate support costs into direct and indirect cost pools.

Accepted Answer

A) True 
 B)False

Question 2

Once the total cost pool for each support department has been determined the next step is to choose the allocation basis.

Accepted Answer

A) True 
 B)False

Question 3

The allocation order of support department costs does not matter if the step down method of allocation is used

Accepted Answer

A) True 
 B)False

Question 4

A geographic region could be a cost object for a service organisation.

Accepted Answer

A) True 
 B)False

Question 5

Cost drivers are used to allocate indirect costs to direct cost pools.

Accepted Answer

A) True 
 B)False

Question 6

Mollie's Lollie Manufacturer has budged total overhead to be $269 500 and the expected cost driver is 55 000 machine hours. Last year actual machine hours was 50 000. The predetermined indirect cost rate is.

Accepted Answer

A)  $5.39 
B)  $1.10 
C)  $.20 
D)  $4.90 
A)  $5.39 
B)  $1.10 
C)  $.20 
D)  $4.90

Question 7

Which of these is an example of an indirect cost if Department M is the cost object?

Accepted Answer

A)  Insurance on the organisation's building, part of which is occupied by Department M 
B)  Rent on the organisation's building, part of which is occupied by Department M 
C)  Commission paid to the sales persons in Department M 
D)  A and B 
A)  Insurance on the organisation's building, part of which is occupied by Department M 
B)  Rent on the organisation's building, part of which is occupied by Department M 
C)  Commission paid to the sales persons in Department M 
D)  A and B

Question 8

The budgeted cost of maintenance for a production department is $250 000. The organisation has decided to use machine hours as the cost driver for allocating indirect costs. The budgeted amount of machine hours for the production department is 125 000 machine hours. Therefore the indirect cost rate is calculated as $250 000/125 000 = $2 per machine hour.

Accepted Answer

A) True 
 B)False

Question 9

Which of these statements concerning the determination of the full cost of a cost object is not true?

Accepted Answer

A)  direct costs are traced via source documentation 
B)  overheads are included 
C)  indirect costs are allocated via the use of a cost driver 
D)  full cost includes only manufacturing costs 
A)  direct costs are traced via source documentation 
B)  overheads are included 
C)  indirect costs are allocated via the use of a cost driver 
D)  full cost includes only manufacturing costs

Question 10

Organisations typically allocate costs from operating departments to support departments.

Accepted Answer

A) True 
 B)False

Question 11

Indirect costs are allocated to cost objects while direct costs are traced directly via source documentation.

Accepted Answer

A) True 
 B)False

Dual rate allocation methods separate support costs into direct and indirect cost pools.

Once the total cost pool for each support department has been determined the next step is to choose the allocation basis.

The allocation order of support department costs does not matter if the step down method of allocation is used

A geographic region could be a cost object for a service organisation.

Cost drivers are used to allocate indirect costs to direct cost pools.

Mollie's Lollie Manufacturer has budged total overhead to be $269 500 and the expected cost driver is 55 000 machine hours. Last year actual machine hours was 50 000. The predetermined indirect cost rate is.

Which of these is an example of an indirect cost if Department M is the cost object?

Which of these statements concerning the determination of the full cost of a cost object is not true?

Organisations typically allocate costs from operating departments to support departments.

Indirect costs are allocated to cost objects while direct costs are traced directly via source documentation.

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

Costvolumeprofit Cvp Analysis

Planning Budgeting and Behaviour

Operational Budgets

Job and Process Costing Systems

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters

Exam 3: A Costing Framework and Cost Allocation

Dual rate allocation methods separate support costs into direct and indirect cost pools.

Once the total cost pool for each support department has been determined the next step is to choose the allocation basis.

The allocation order of support department costs does not matter if the step down method of allocation is used

A geographic region could be a cost object for a service organisation.

Cost drivers are used to allocate indirect costs to direct cost pools.

Mollie's Lollie Manufacturer has budged total overhead to be $269 500 and the expected cost driver is 55 000 machine hours. Last year actual machine hours was 50 000. The predetermined indirect cost rate is.

Which of these is an example of an indirect cost if Department M is the cost object?

Which of these statements concerning the determination of the full cost of a cost object is not true?

Organisations typically allocate costs from operating departments to support departments.

Indirect costs are allocated to cost objects while direct costs are traced directly via source documentation.

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

Costvolumeprofit Cvp Analysis

Planning Budgeting and Behaviour

Operational Budgets

Job and Process Costing Systems

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters