Question 1

The true statement about cost behavior is that:

Accepted Answer

A) variable costs change on a per-unit basis and change in total as activity changes. 
B) ﬁxed costs are constant on a per-unit basis and change in total as activity changes. 
C) ﬁxed costs are constant on a per-unit basis and are constant in total as activity changes. 
D) ﬁxed costs change on a per-unit basis and are constant in total as activity changes. 
E) variable costs are constant on a per-unit basis and are constant in total as activity changes. 
A) variable costs change on a per-unit basis and change in total as activity changes. 
B) ﬁxed costs are constant on a per-unit basis and change in total as activity changes. 
C) ﬁxed costs are constant on a per-unit basis and are constant in total as activity changes. 
D) ﬁxed costs change on a per-unit basis and are constant in total as activity changes. 
E) variable costs are constant on a per-unit basis and are constant in total as activity changes.

Question 2

What would the cost of ﬁre insurance for a manufacturing plant generally be categorized as?

Accepted Answer

A) Prime cost. 
B) Direct material cost. 
C) Period cost. 
D) Direct labor cost. 
E) Product cost. 
A) Prime cost. 
B) Direct material cost. 
C) Period cost. 
D) Direct labor cost. 
E) Product cost.

Question 3

Gisano's Pizza operates a restaurant that serves double-decker pizzas.The table below shows the cost incurred during a month when 900 pizzas were served.   Required: Fill in the missing amounts, labeled A through O, in the table above.

Accepted Answer

@#IMG-DLM& Explanatory notes:
A and C each equal $

Question 4

Prime costs are comprised of:

Accepted Answer

A) direct materials and manufacturing overhead. 
B) direct labor and manufacturing overhead. 
C) direct materials, direct labor, and manufacturing overhead. 
D) direct materials and direct labor. 
E) direct materials and indirect materials. 
A) direct materials and manufacturing overhead. 
B) direct labor and manufacturing overhead. 
C) direct materials, direct labor, and manufacturing overhead. 
D) direct materials and direct labor. 
E) direct materials and indirect materials.

Question 5

Beckett Industries has the following beginning and ending inventories for the month of April.   Beckett uses one overhead control account and charges overhead to production at 70% of direct labor cost.The company does not formally recognize over- or underapplied overhead until year-end. What is Beckett's cost of goods sold for April?

Accepted Answer

A) $476,000. 
B) $484,000. 
C) $491,000. 
D) $502,000. 
E) None of the answers is correct. 
A) $476,000. 
B) $484,000. 
C) $491,000. 
D) $502,000. 
E) None of the answers is correct.

Question 6

The sum of costs necessary to effect a one-unit increase in the activity level is a(n):

Accepted Answer

A) Differential cost. 
B) Opportunity cost. 
C) Marginal cost. 
D) Sunk cost. 
E) None of the answers is correct. 
A) Differential cost. 
B) Opportunity cost. 
C) Marginal cost. 
D) Sunk cost. 
E) None of the answers is correct.

Question 7

Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000. What are the total costs when 13,000 units are produced?

Accepted Answer

A) $199,200. 
B) $214,800. 
C) $234,000. 
D) Total costs cannot be calculated based on the information presented. 
E) None of the answers is correct. 
A) $199,200. 
B) $214,800. 
C) $234,000. 
D) Total costs cannot be calculated based on the information presented. 
E) None of the answers is correct.

Question 8

The true statement about cost behavior is that:

Accepted Answer

A) variable costs are constant on a per-unit basis and change in total as activity changes. 
B) ﬁxed costs are constant on a per-unit basis and change in total as activity changes. 
C) ﬁxed costs are constant on a per-unit basis and constant in total as activity changes. 
D) variable costs change on a per-unit basis and change in total as activity changes. 
E) variable costs are constant on a per-unit basis and are constant in total as activity changes. 
A) variable costs are constant on a per-unit basis and change in total as activity changes. 
B) ﬁxed costs are constant on a per-unit basis and change in total as activity changes. 
C) ﬁxed costs are constant on a per-unit basis and constant in total as activity changes. 
D) variable costs change on a per-unit basis and change in total as activity changes. 
E) variable costs are constant on a per-unit basis and are constant in total as activity changes.

Question 9

Which of the following is not a period cost?

Accepted Answer

A) Legal costs. 
B) Public relations costs. 
C) Sales commissions. 
D) Wages of assembly-line workers. 
E) The salary of a company's chief ﬁnancial oﬃcer (CFO). 
A) Legal costs. 
B) Public relations costs. 
C) Sales commissions. 
D) Wages of assembly-line workers. 
E) The salary of a company's chief ﬁnancial oﬃcer (CFO).

Question 10

At the most basic level, a cost may be deﬁned as a(n):

Accepted Answer

A) long-term asset. 
B) data classiﬁed for a speciﬁc application. 
C) sacriﬁce made to achieve a particular purpose. 
D) useful information for planning. 
E) suggestion for improvement. 
A) long-term asset. 
B) data classiﬁed for a speciﬁc application. 
C) sacriﬁce made to achieve a particular purpose. 
D) useful information for planning. 
E) suggestion for improvement.

Question 11

Which of the following would not be a period cost?

Accepted Answer

A) Sales salaries. 
B) Sales commissions. 
C) Tamper-proof packaging. 
D) Legal costs. 
E) Accounting costs. 
A) Sales salaries. 
B) Sales commissions. 
C) Tamper-proof packaging. 
D) Legal costs. 
E) Accounting costs.

Question 12

Which of the following entities would most likely have raw materials, work in process, and ﬁnished goods?

Accepted Answer

A) A petroleum reﬁner. 
B) A national department store. 
C) A carpet cleaning company. 
D) A regional airline. 
E) A state university. 
A) A petroleum reﬁner. 
B) A national department store. 
C) A carpet cleaning company. 
D) A regional airline. 
E) A state university.

Question 13

Frontline Industries has the following beginning and ending inventories for the month of June.   Production data for the month of June is:   Frontline uses one overhead control account and charges overhead to production at 70% of direct labor cost.The company does not formally recognize over- or underapplied overhead until year-end. (a) What was the cost of the materials used by Frontline in June? (b) What is Frontline's total manufacturing cost for June? (c) What is Frontline's cost of goods transferred to ﬁnished goods inventory for June? (d) What is Frontline's cost of goods sold for June?

Accepted Answer

(a) Materials used: @#IMG-DLM& (b) Total manufactu

Question 14

Which of the following would not be characterized as a cost object?

Accepted Answer

A) A vehicle manufactured by an automobile manufacturer. 
B) A large city's ﬁre department. 
C) A fast food restaurant located in a Midwest town. 
D) A regional airline ﬂight from Atlanta to Miami. 
E) All of these are examples of cost objects. 
A) A vehicle manufactured by an automobile manufacturer. 
B) A large city's ﬁre department. 
C) A fast food restaurant located in a Midwest town. 
D) A regional airline ﬂight from Atlanta to Miami. 
E) All of these are examples of cost objects.

Question 15

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 sold for the year was $427,500, what was the cost of goods manufactured for the year?

Accepted Answer

A) $402,100. 
B) $422,300. 
C) $417,100. 
D) $427,500. 
E) None of the answers is correct. 
A) $402,100. 
B) $422,300. 
C) $417,100. 
D) $427,500. 
E) None of the answers is correct.

Question 16

Finished goods inventory is ordinarily held for sale by a manufacturing company.

Accepted Answer

A) True 
 B)False

Question 17

Work-in-process inventory is composed of:

Accepted Answer

A) direct material and direct labor. 
B) direct labor and manufacturing overhead. 
C) direct material and manufacturing overhead. 
D) direct material, direct labor, and manufacturing overhead. 
E) direct material only. 
A) direct material and direct labor. 
B) direct labor and manufacturing overhead. 
C) direct material and manufacturing overhead. 
D) direct material, direct labor, and manufacturing overhead. 
E) direct material only.

Question 18

Sebastian Muﬄer, Inc.operates an automobile service facility.The table below shows the cost incurred during a month when 500 muﬄers were replaced.   Required: Fill in the missing amounts, labeled A through O, in the table above.

Accepted Answer

@#IMG-DLM& Explanatory notes:
A and C each equal $

Question 19

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 20

Your brother is trying to sell his bicycle for $200.He refuses to lose more than $50 on the sale because it originally cost him $229 when he purchased it two years ago.Which of the following would be his sunk cost?

Accepted Answer

A) $50. 
B) $200. 
C) $229. 
D) $179. 
E) None of the answers is correct. 
A) $50. 
B) $200. 
C) $229. 
D) $179. 
E) None of the answers is correct.

The true statement about cost behavior is that:

What would the cost of ﬁre insurance for a manufacturing plant generally be categorized as?

Gisano's Pizza operates a restaurant that serves double-decker pizzas.The table below shows the cost incurred during a month when 900 pizzas were served. Required: Fill in the missing amounts, labeled A through O, in the table above.

Prime costs are comprised of:

The sum of costs necessary to effect a one-unit increase in the activity level is a(n):

Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000. What are the total costs when 13,000 units are produced?

The true statement about cost behavior is that:

Which of the following is not a period cost?

At the most basic level, a cost may be deﬁned as a(n):

Which of the following would not be a period cost?

Which of the following entities would most likely have raw materials, work in process, and ﬁnished goods?

Which of the following would not be characterized as a cost object?

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 sold for the year was $427,500, what was the cost of goods manufactured for the year?

Finished goods inventory is ordinarily held for sale by a manufacturing company.

Work-in-process inventory is composed of:

Sebastian Muﬄer, Inc.operates an automobile service facility.The table below shows the cost incurred during a month when 500 muﬄers were replaced. Required: Fill in the missing amounts, labeled A through O, in the table above.

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

Your brother is trying to sell his bicycle for $200.He refuses to lose more than $50 on the sale because it originally cost him $229 when he purchased it two years ago.Which of the following would be his sunk cost?

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

Inventory Management and Economic Order Quantity (EOQ) Analysis

Filters

Exam 2: Basic Cost Management Concepts

The true statement about cost behavior is that:

What would the cost of ﬁre insurance for a manufacturing plant generally be categorized as?

Gisano's Pizza operates a restaurant that serves double-decker pizzas.The table below shows the cost incurred during a month when 900 pizzas were served. Required: Fill in the missing amounts, labeled A through O, in the table above.

Prime costs are comprised of:

The sum of costs necessary to effect a one-unit increase in the activity level is a(n):

Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000. What are the total costs when 13,000 units are produced?

The true statement about cost behavior is that:

Which of the following is not a period cost?

At the most basic level, a cost may be deﬁned as a(n):

Which of the following would not be a period cost?

Which of the following entities would most likely have raw materials, work in process, and ﬁnished goods?

Which of the following would not be characterized as a cost object?

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 sold for the year was $427,500, what was the cost of goods manufactured for the year?

Finished goods inventory is ordinarily held for sale by a manufacturing company.

Work-in-process inventory is composed of:

Sebastian Muﬄer, Inc.operates an automobile service facility.The table below shows the cost incurred during a month when 500 muﬄers were replaced. Required: Fill in the missing amounts, labeled A through O, in the table above.

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

Your brother is trying to sell his bicycle for $200.He refuses to lose more than $50 on the sale because it originally cost him $229 when he purchased it two years ago.Which of the following would be his sunk cost?

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

Inventory Management and Economic Order Quantity (EOQ) Analysis

Filters