Question 1

Which of the following would not be considered a direct cost with respect to the service department of a new car dealership?

Accepted Answer

A)  Wages of repair technicians. 
B)  Property taxes paid by the dealership. 
C)  Repair parts consumed. 
D)  Salary of the department manager. 
E)  Depreciation on new equipment used to analyze engine problems. 
A)  Wages of repair technicians. 
B)  Property taxes paid by the dealership. 
C)  Repair parts consumed. 
D)  Salary of the department manager. 
E)  Depreciation on new equipment used to analyze engine problems.

Question 2

Which of the following is a period cost?

Accepted Answer

A)  Direct material. 
B)  Advertising expense. 
C)  Indirect labor. 
D)  Miscellaneous supplies used in production activities. 
E)  Factory foreman salary for the motor production line. 
A)  Direct material. 
B)  Advertising expense. 
C)  Indirect labor. 
D)  Miscellaneous supplies used in production activities. 
E)  Factory foreman salary for the motor production line.

Question 3

The higher the correlation between the cost and the cost driver, the more accurate will be the resulting understanding of cost behavior.

Accepted Answer

A) True 
 B)False

Question 4

The relevant range for Maxco Industries is 10,000 to 16,000 units of product. The variable costs per unit are $6 when a company produces 12,000 units of product. What are the variable costs per unit when 14,000 units are produced?

Accepted Answer

A)  $4.50. 
B)  $5.00. 
C)  $5.50. 
D)  $6.00. 
E)  None of the answers is correct. 
A)  $4.50. 
B)  $5.00. 
C)  $5.50. 
D)  $6.00. 
E)  None of the answers is correct.

Question 5

A cost that is not directly traceable to a particular cost object is called an indirect cost.

Accepted Answer

A) True 
 B)False

Question 6

Indirect costs:

Accepted Answer

A)  can be traced to a cost object. 
B)  cannot be traced to a particular cost object. 
C)  are not important. 
D)  are always variable costs. 
E)  may be indirect with respect to theme park but direct with respect to one of its major attractions or rides. 
A)  can be traced to a cost object. 
B)  cannot be traced to a particular cost object. 
C)  are not important. 
D)  are always variable costs. 
E)  may be indirect with respect to theme park but direct with respect to one of its major attractions or rides.

Question 7

As activity increases, unit variable cost:

Accepted Answer

A)  increases proportionately with activity. 
B)  decreases proportionately with activity. 
C)  remains constant. 
D)  increases by a fixed amount. 
E)  decreases by a fixed amount. 
A)  increases proportionately with activity. 
B)  decreases proportionately with activity. 
C)  remains constant. 
D)  increases by a fixed amount. 
E)  decreases by a fixed amount.

Question 8

As activity changes, total variable cost increases or decreases proportionately with the activity change, but unit variable cost remains the same.

Accepted Answer

A) True 
 B)False

Question 9

In a manufacturing company, the cost of goods completed during the period would include which of the following elements?

Accepted Answer

A)  Raw materials used. 
B)  Beginning finished goods inventory. 
C)  Marketing costs. 
D)  Depreciation of delivery trucks. 
E)  All of the answers are correct. 
A)  Raw materials used. 
B)  Beginning finished goods inventory. 
C)  Marketing costs. 
D)  Depreciation of delivery trucks. 
E)  All of the answers are correct.

Question 10

There are three standard categories of manufacturing processes.

Accepted Answer

A) True 
 B)False

Question 11

Describe the economic characteristics of sunk costs and opportunity costs, and explain the impact that these costs may have on decisions.

Accepted Answer

Sunk costs have already been incurred. T

Question 12

Another term for product cost is cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following costs is not a component of manufacturing overhead?

Accepted Answer

A)  Indirect materials. 
B)  Factory utilities. 
C)  Factory equipment. 
D)  Indirect labor. 
E)  Property taxes on the manufacturing plant. 
A)  Indirect materials. 
B)  Factory utilities. 
C)  Factory equipment. 
D)  Indirect labor. 
E)  Property taxes on the manufacturing plant.

Question 14

The accounting records of Younkin Corporation revealed the following selected costs: Sales commissions, $65,000; plant supervision, $190,000; and administrative expenses, $185,000. Younkin's period costs total:

Accepted Answer

A)  $250,000. 
B)  $440,000. 
C)  $375,000. 
D)  $255,000. 
E)  $185,000. 
A)  $250,000. 
B)  $440,000. 
C)  $375,000. 
D)  $255,000. 
E)  $185,000.

Question 15

Which of the following would not be classified as direct materials by a company that makes automobiles?

Accepted Answer

A)  Wheel lubricant. 
B)  Tires. 
C)  Interior leather. 
D)  CD player. 
E)  Sheet metal used in the automobile's body. 
A)  Wheel lubricant. 
B)  Tires. 
C)  Interior leather. 
D)  CD player. 
E)  Sheet metal used in the automobile's body.

Question 16

If the total cost of alternative A is $50,000 and the total cost of alternative B is $34,000, then $16,000 is termed the:

Accepted Answer

A)  opportunity cost. 
B)  average cost. 
C)  sunk cost. 
D)  out-of-pocket cost. 
E)  differential cost. 
A)  opportunity cost. 
B)  average cost. 
C)  sunk cost. 
D)  out-of-pocket cost. 
E)  differential cost.

Question 17

Dorsett Technologies had finished goods inventory on January 1, 20X8 of $29,300 and finished goods inventory on December 31, 20X8 of $24,100.
- If the cost of goods manufactured for the year was $385,000, what was the cost of goods sold for the year?

Accepted Answer

A)  $395,400. 
B)  $385,000. 
C)  $390,200. 
D)  $400,600. 
E)  None of the answers is correct. 
A)  $395,400. 
B)  $385,000. 
C)  $390,200. 
D)  $400,600. 
E)  None of the answers is correct.

Question 18

Fixed costs are costs that:

Accepted Answer

A)  vary directly with changes in activity. 
B)  vary inversely with changes in activity. 
C)  remain constant on a per-unit basis. 
D)  remain constant as activity changes. 
E)  increase on a per-unit basis as activity increases. 
A)  vary directly with changes in activity. 
B)  vary inversely with changes in activity. 
C)  remain constant on a per-unit basis. 
D)  remain constant as activity changes. 
E)  increase on a per-unit basis as activity increases.

Question 19

Selling and administrative costs are always period costs on any type of company's income statement.

Accepted Answer

A) True 
 B)False

Question 20

Selling and administrative expenses would likely appear on the balance sheet of:

Accepted Answer

A)  A clothing store. 
B)  A computer manufacturer. 
C)  A television network. 
D)  All of these firms. 
E)  None of these firms. 
A)  A clothing store. 
B)  A computer manufacturer. 
C)  A television network. 
D)  All of these firms. 
E)  None of these firms.

Which of the following would not be considered a direct cost with respect to the service department of a new car dealership?

Which of the following is a period cost?

The higher the correlation between the cost and the cost driver, the more accurate will be the resulting understanding of cost behavior.

The relevant range for Maxco Industries is 10,000 to 16,000 units of product. The variable costs per unit are $6 when a company produces 12,000 units of product. What are the variable costs per unit when 14,000 units are produced?

A cost that is not directly traceable to a particular cost object is called an indirect cost.

Indirect costs:

As activity increases, unit variable cost:

As activity changes, total variable cost increases or decreases proportionately with the activity change, but unit variable cost remains the same.

In a manufacturing company, the cost of goods completed during the period would include which of the following elements?

There are three standard categories of manufacturing processes.

Describe the economic characteristics of sunk costs and opportunity costs, and explain the impact that these costs may have on decisions.

Another term for product cost is cost of goods sold.

Which of the following costs is not a component of manufacturing overhead?

The accounting records of Younkin Corporation revealed the following selected costs: Sales commissions, $65,000; plant supervision, $190,000; and administrative expenses, $185,000. Younkin's period costs total:

Which of the following would not be classified as direct materials by a company that makes automobiles?

If the total cost of alternative A is $50,000 and the total cost of alternative B is $34,000, then $16,000 is termed the:

Dorsett Technologies had finished goods inventory on January 1, 20X8 of $29,300 and finished goods inventory on December 31, 20X8 of $24,100. - If the cost of goods manufactured for the year was $385,000, what was the cost of goods sold for the year?

Fixed costs are costs that:

Selling and administrative costs are always period costs on any type of company's income statement.

Selling and administrative expenses would likely appear on the balance sheet of:

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Compound Interest and the Concept of Present Value

Inventory Management

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Exam 2: Basic Cost Management Concepts

Which of the following would not be considered a direct cost with respect to the service department of a new car dealership?

Which of the following is a period cost?

The higher the correlation between the cost and the cost driver, the more accurate will be the resulting understanding of cost behavior.

The relevant range for Maxco Industries is 10,000 to 16,000 units of product. The variable costs per unit are $6 when a company produces 12,000 units of product. What are the variable costs per unit when 14,000 units are produced?

A cost that is not directly traceable to a particular cost object is called an indirect cost.

Indirect costs:

As activity increases, unit variable cost:

As activity changes, total variable cost increases or decreases proportionately with the activity change, but unit variable cost remains the same.

In a manufacturing company, the cost of goods completed during the period would include which of the following elements?

There are three standard categories of manufacturing processes.

Describe the economic characteristics of sunk costs and opportunity costs, and explain the impact that these costs may have on decisions.

Another term for product cost is cost of goods sold.

Which of the following costs is not a component of manufacturing overhead?

The accounting records of Younkin Corporation revealed the following selected costs: Sales commissions, $65,000; plant supervision, $190,000; and administrative expenses, $185,000. Younkin's period costs total:

Which of the following would not be classified as direct materials by a company that makes automobiles?

If the total cost of alternative A is $50,000 and the total cost of alternative B is $34,000, then $16,000 is termed the:

Dorsett Technologies had finished goods inventory on January 1, 20X8 of $29,300 and finished goods inventory on December 31, 20X8 of $24,100. - If the cost of goods manufactured for the year was $385,000, what was the cost of goods sold for the year?

Fixed costs are costs that:

Selling and administrative costs are always period costs on any type of company's income statement.

Selling and administrative expenses would likely appear on the balance sheet of:

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Compound Interest and the Concept of Present Value

Inventory Management

Filters