Question 1

Cost objects are items or entities to which we allocate the costs from overhead.

Accepted Answer

A) True 
 B)False

Question 2

Once the production process is completed, firms transfer finished work physically from work-in-process inventory to raw materials inventory.

Accepted Answer

A) True 
 B)False

Question 3

Product costs include which of the following costs?

Accepted Answer

A) Manufacturing overhead costs and selling and administrative costs. 
B) Variable manufacturing costs and manufacturing overhead costs. 
C) Common costs and special costs. 
D) Period costs and common costs. 
E) Variable costs only. 
A) Manufacturing overhead costs and selling and administrative costs. 
B) Variable manufacturing costs and manufacturing overhead costs. 
C) Common costs and special costs. 
D) Period costs and common costs. 
E) Variable costs only.

Question 4

The costs of management salaries that are not a part of the costs of providing programs or services are referred to as:

Accepted Answer

A) Period costs 
B) Product costs. 
C) Cost of goods sold. 
D) Conversion costs. 
E) None of the above. 
A) Period costs 
B) Product costs. 
C) Cost of goods sold. 
D) Conversion costs. 
E) None of the above.

Question 5

Product costs are also referred as:

Accepted Answer

A) Mixed cost. 
B) Selling and administrative costs. 
C) Inventoriable costs. 
D) Volume cost. 
E) Break-even cost. 
A) Mixed cost. 
B) Selling and administrative costs. 
C) Inventoriable costs. 
D) Volume cost. 
E) Break-even cost.

Question 6

Bass Boss Manufacturing Company manufactures two types of bass boats.Bass Boss provides the following data, pertinent to allocating its annual overhead cost of $435,000: $\begin{array}{lcc}
\hline \text { Bass Boss Product } & \text { Boss } & \text { Boss } \
& \text { Hog } & \text { Bear } \
\text { Units per year } & 15,000 & 20,000 \
\text { Machine hours/unit } & 3.0 & 5.0\\hline
\text { Materials cost/unit } & \$ 1,500 & \$ 2,000 \
\text { Labor cost/unit } & \$ 800 & \$ 1,000\\hline
\end{array}$ What is the amount of manufacturing overhead allocated to Boss Bear?

Accepted Answer

A) $435,000 
B) $217,500 
C) $100,000 
D) $300,000 
E) $135,000 
A) $435,000 
B) $217,500 
C) $100,000 
D) $300,000 
E) $135,000

Question 7

A cost allocation is a procedure that allocates, or distributes, a common cost.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is most likely a product cost?

Accepted Answer

A) Advertising expense 
B) Sales commissions for the current month 
C) Cardboard packaging for the product 
D) Janitorial expense for the administrative offices 
A) Advertising expense 
B) Sales commissions for the current month 
C) Cardboard packaging for the product 
D) Janitorial expense for the administrative offices

Question 9

Service firms are distinguished from other firms in that the products service firms offer are not tangible or storable.

Accepted Answer

A) True 
 B)False

Question 10

The Flynn Company began the period with $15,000 worth of raw materials.During the period they purchased an additional $17,000 worth of materials and issued $24,000 of materials for production.In addition, the company paid $8,000 for direct labor costs and $6,000 in manufacturing overhead costs.The balance in the company's Work-in Process inventory account at the end of the period was:

Accepted Answer

A) $38,000 
B) $46,000 
C) $32,000 
D) $40,000 
A) $38,000 
B) $46,000 
C) $32,000 
D) $40,000

Question 11

Which of the following is the best example of prime costs for Sharp Edge Mowers?

Accepted Answer

A) Sales commissions and maintenance on the machine that tightens bolts on lawn mowers during production. 
B) Assembly line wages and the cost of tires to be installed on newly assembled lawnmowers. 
C) The general manager's salary and the janitorial expense for executives' offices. 
D) The interest cost on the manufacturing building and the wages paid for the quality control inspector for the assembly line 
A) Sales commissions and maintenance on the machine that tightens bolts on lawn mowers during production. 
B) Assembly line wages and the cost of tires to be installed on newly assembled lawnmowers. 
C) The general manager's salary and the janitorial expense for executives' offices. 
D) The interest cost on the manufacturing building and the wages paid for the quality control inspector for the assembly line

Question 12

If a company's revenue is $530,000, profit before taxes is $98,000, and product costs are $390,000 then:

Accepted Answer

A) The company's gross margin totals $140,000. 
B) The company's period costs total $140,000. 
C) The company's period costs cannot be determined. 
D) The company's contribution margin totals $140,000. 
A) The company's gross margin totals $140,000. 
B) The company's period costs total $140,000. 
C) The company's period costs cannot be determined. 
D) The company's contribution margin totals $140,000.

Question 13

Prime costs are:

Accepted Answer

A) The sum of materials and labor costs. 
B) The sum of labor and manufacturing overhead. 
C) The sum of fixed and variable overhead costs. 
D) The sum of material, labor, and overhead costs. 
A) The sum of materials and labor costs. 
B) The sum of labor and manufacturing overhead. 
C) The sum of fixed and variable overhead costs. 
D) The sum of material, labor, and overhead costs.

Question 14

Packaging materials is an example of:

Accepted Answer

A) Fixed overhead. 
B) Direct material. 
C) Variable overhead. 
D) Period cost. 
E) Prime cost. 
A) Fixed overhead. 
B) Direct material. 
C) Variable overhead. 
D) Period cost. 
E) Prime cost.

Question 15

For financial reporting purposes, merchandising firms expense the cost of items when they purchase them.

Accepted Answer

A) True 
 B)False

Question 16

Grand Rapids Rafting Company recorded the following data for the month of October: $\begin{array}{ll}
\text { Cost of beginning inventory } & \$ 46,000 \
\text { Cost of ending inventory } & \$ 32,000 \
\text { Cost of goods sold } & \$ 122,000
\end{array}$ Inventory purchases for the month of October total:

Accepted Answer

A) $108,000 
B) $136,000 
C) $200,000 
D) $44,000 
A) $108,000 
B) $136,000 
C) $200,000 
D) $44,000

Question 17

Which of the following would most likely not be included as manufacturing overhead in a plant which produces cars?

Accepted Answer

A) Glass used to make windshields. 
B) Salary paid to manufacturing plant custodians. 
C) Manufacturing plant utility expenses. 
D) Real estate taxes on the manufacturing plant 
A) Glass used to make windshields. 
B) Salary paid to manufacturing plant custodians. 
C) Manufacturing plant utility expenses. 
D) Real estate taxes on the manufacturing plant

Question 18

Period costs contain controllable, but not non-controllable costs.

Accepted Answer

A) True 
 B)False

Question 19

The GAAP income statement combines controllable with non-controllable costs and fixed costs with variable costs.

Accepted Answer

A) True 
 B)False

Question 20

Manufacturing overhead includes which of the following costs?

Accepted Answer

A) Fixed costs only. 
B) Variable costs only. 
C) Conversion costs and direct labor. 
D) Variable overhead and fixed overhead. 
E) Common costs and special costs. 
A) Fixed costs only. 
B) Variable costs only. 
C) Conversion costs and direct labor. 
D) Variable overhead and fixed overhead. 
E) Common costs and special costs.

Cost objects are items or entities to which we allocate the costs from overhead.

Once the production process is completed, firms transfer finished work physically from work-in-process inventory to raw materials inventory.

Product costs include which of the following costs?

The costs of management salaries that are not a part of the costs of providing programs or services are referred to as:

Product costs are also referred as:

A cost allocation is a procedure that allocates, or distributes, a common cost.

Which of the following is most likely a product cost?

Service firms are distinguished from other firms in that the products service firms offer are not tangible or storable.

Which of the following is the best example of prime costs for Sharp Edge Mowers?

If a company's revenue is $530,000, profit before taxes is $98,000, and product costs are $390,000 then:

Prime costs are:

Packaging materials is an example of:

For financial reporting purposes, merchandising firms expense the cost of items when they purchase them.

Grand Rapids Rafting Company recorded the following data for the month of October: Cost of beginning inventory \ 46,000 Cost of ending inventory \ 32,000 Cost of goods sold \ 122,000 Inventory purchases for the month of October total:

Which of the following would most likely not be included as manufacturing overhead in a plant which produces cars?

Period costs contain controllable, but not non-controllable costs.

The GAAP income statement combines controllable with non-controllable costs and fixed costs with variable costs.

Manufacturing overhead includes which of the following costs?

Accounting: Information for Decision Making

Identifying and Estimating Costs and Benefits

Techniques for Estimating Fixed and Variable Costs

Cost-Volume-Profit Analysis

Decision Making in the Short Term

Operating Budgets: Bridging Planning and Control

Budgetary Control and Variance Analysis

Cost Allocations

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Process-Costing Systems

Refining Systems: Support Activity

Filters

Exam 3: Cost Flows and Cost Terminology

Cost objects are items or entities to which we allocate the costs from overhead.

Once the production process is completed, firms transfer finished work physically from work-in-process inventory to raw materials inventory.

Product costs include which of the following costs?

The costs of management salaries that are not a part of the costs of providing programs or services are referred to as:

Product costs are also referred as:

A cost allocation is a procedure that allocates, or distributes, a common cost.

Which of the following is most likely a product cost?

Service firms are distinguished from other firms in that the products service firms offer are not tangible or storable.

Which of the following is the best example of prime costs for Sharp Edge Mowers?

If a company's revenue is $530,000, profit before taxes is $98,000, and product costs are $390,000 then:

Prime costs are:

Packaging materials is an example of:

For financial reporting purposes, merchandising firms expense the cost of items when they purchase them.

Grand Rapids Rafting Company recorded the following data for the month of October: Cost of beginning inventory \ 46,000 Cost of ending inventory \ 32,000 Cost of goods sold \ 122,000 Inventory purchases for the month of October total:

Which of the following would most likely not be included as manufacturing overhead in a plant which produces cars?

Period costs contain controllable, but not non-controllable costs.

The GAAP income statement combines controllable with non-controllable costs and fixed costs with variable costs.

Manufacturing overhead includes which of the following costs?

Accounting: Information for Decision Making

Identifying and Estimating Costs and Benefits

Techniques for Estimating Fixed and Variable Costs

Cost-Volume-Profit Analysis

Decision Making in the Short Term

Operating Budgets: Bridging Planning and Control

Budgetary Control and Variance Analysis

Cost Allocations

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Process-Costing Systems

Refining Systems: Support Activity

Filters