Question 1

Different cost concepts and classiﬁcations are used for different purposes.

Accepted Answer

A) True 
 B)False

Question 2

You have been asked to work an extra day and will receive $150.However, you already bought a discounted ticket to a theme park for $37 and ﬁgure that you will spend an additional $50 at the park. What is the sunk cost if you decide to work?

Accepted Answer

A) $150. 
B) $107. 
C) $87. 
D) $37. 
E) None of the answers is correct. 
A) $150. 
B) $107. 
C) $87. 
D) $37. 
E) None of the answers is correct.

Question 3

Ford Motor Company produces cars and trucks.Which type of production process is most likely used by Ford?

Accepted Answer

A) Batch. 
B) Job Shop. 
C) Continuous Flow. 
D) Assembly. 
E) None of these answers is correct. 
A) Batch. 
B) Job Shop. 
C) Continuous Flow. 
D) Assembly. 
E) None of these answers is correct.

Question 4

A job shop is generally associated with high production volume.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would not be classiﬁed as a product cost?

Accepted Answer

A) Direct materials. 
B) Direct labor. 
C) Indirect materials. 
D) Insurance on a manufacturing plant. 
E) Sales bonuses for meeting quota sales. 
A) Direct materials. 
B) Direct labor. 
C) Indirect materials. 
D) Insurance on a manufacturing plant. 
E) Sales bonuses for meeting quota sales.

Question 6

Texas Plating Company reported a cost of goods manufactured of $520,000, with the ﬁrm's year-end balance sheet revealing work in process and ﬁnished goods of $70,000 and $134,000, respectively.If supplemental information disclosed raw materials used in production of $80,000, direct labor of $140,000, and manufacturing overhead of $240,000, the company's beginning work in process must have been:

Accepted Answer

A) $130,000. 
B) $10,000. 
C) $66,000. 
D) $390,000. 
E) None of the answers is correct. 
A) $130,000. 
B) $10,000. 
C) $66,000. 
D) $390,000. 
E) None of the answers is correct.

Question 7

Which of the following statements is true?

Accepted Answer

A) The word "cost" has the same meaning in all situations in which it is used. 
B) Cost data, once classiﬁed and recorded for a speciﬁc application, are appropriate for use in 
C) Different cost concepts and classiﬁcations are used for different purposes. 
D) All organizations incur the same types of costs. 
E) Costs incurred in one year are always meaningful in the following year. 
A) The word "cost" has the same meaning in all situations in which it is used. 
B) Cost data, once classiﬁed and recorded for a speciﬁc application, are appropriate for use in 
C) Different cost concepts and classiﬁcations are used for different purposes. 
D) All organizations incur the same types of costs. 
E) Costs incurred in one year are always meaningful in the following year.

Question 8

An employee accidentally overstated the year's advertising expense by $50,000.Which of the following correctly depicts the effect of this error?

Accepted Answer

A) Cost of goods manufactured will be overstated by $50,000. 
B) Cost of goods sold will be overstated by $50,000. 
C) Both cost of goods manufactured and cost of goods sold will be overstated by $50,000. 
D) Cost of goods sold will be overstated by $50,000, and cost of goods manufactured will be 
E) None of the answers is correct. 
A) Cost of goods manufactured will be overstated by $50,000. 
B) Cost of goods sold will be overstated by $50,000. 
C) Both cost of goods manufactured and cost of goods sold will be overstated by $50,000. 
D) Cost of goods sold will be overstated by $50,000, and cost of goods manufactured will be 
E) None of the answers is correct.

Question 9

Travon and Tony (T & T) Enterprises has a single facility that it uses for manufacturing, sales, and administrative activities.Should the company's building depreciation charge be expensed in its entirety or is a different accounting procedure appropriate? Explain.

Accepted Answer

The company's depreciation charge is, in

Question 10

Cost data that are classiﬁed and recorded in a particular way for one purpose may be inappropriate for another use.For example, costs that would likely be noncontrollable by a department supervisor include

Accepted Answer

A) labor used in department production. 
B) materials used in department production. 
C) insurance on the plant where the department is housed. 
D) overtime pay earned by workers in the department. 
E) bonuses earned by department workers for on-time production. 
A) labor used in department production. 
B) materials used in department production. 
C) insurance on the plant where the department is housed. 
D) overtime pay earned by workers in the department. 
E) bonuses earned by department workers for on-time production.

Question 11

In discussing the operation of her automobile, Dr.Lawson once observed that gasoline is a ﬁxed cost because the cost per gallon is relatively stable.Insurance, on the other hand, is a variable cost because the cost per mile varies inversely with the number of miles driven.Comment on the Dr. Lawson's observation.

Accepted Answer

Dr.Lawson's observations are incorrect,

Question 12

Costs that are expensed when incurred are called:

Accepted Answer

A) product costs. 
B) direct costs. 
C) inventoriable costs. 
D) period costs. 
E) indirect costs. 
A) product costs. 
B) direct costs. 
C) inventoriable costs. 
D) period costs. 
E) indirect costs.

Question 13

Which two terms below best describe the wages paid to security guards that monitor a factory 24 hours a day?

Accepted Answer

A) variable cost and direct cost. 
B) ﬁxed cost and direct cost. 
C) variable cost and indirect cost. 
D) ﬁxed cost and indirect cost. 
E) value-added cost and direct cost. 
A) variable cost and direct cost. 
B) ﬁxed cost and direct cost. 
C) variable cost and indirect cost. 
D) ﬁxed cost and indirect cost. 
E) value-added cost and direct cost.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Which of the following equations is used to calculate cost of goods sold during the period?

Accepted Answer

A) Beginning ﬁnished goods + cost of goods manufactured + ending ﬁnished goods. 
B) Beginning ﬁnished goods − ending ﬁnished goods. 
C) Beginning ﬁnished goods + cost of goods manufactured. 
D) Beginning ﬁnished goods + cost of goods manufactured − ending ﬁnished goods. 
E) Beginning ﬁnished goods + ending ﬁnished goods − cost of goods manufactured. 
A) Beginning ﬁnished goods + cost of goods manufactured + ending ﬁnished goods. 
B) Beginning ﬁnished goods − ending ﬁnished goods. 
C) Beginning ﬁnished goods + cost of goods manufactured. 
D) Beginning ﬁnished goods + cost of goods manufactured − ending ﬁnished goods. 
E) Beginning ﬁnished goods + ending ﬁnished goods − cost of goods manufactured.

Question 16

Which of the following statements is correct?

Accepted Answer

A) Overtime premiums should be treated as a component of manufacturing overhead. 
B) Overtime premiums should be treated as a component of direct labor. 
C) Idle time should be treated as a component of direct labor. 
D) Idle time should be accounted for as a special type of loss. 
E) Overtime premiums should be treated as a component of direct labor and idle time should be 
A) Overtime premiums should be treated as a component of manufacturing overhead. 
B) Overtime premiums should be treated as a component of direct labor. 
C) Idle time should be treated as a component of direct labor. 
D) Idle time should be accounted for as a special type of loss. 
E) Overtime premiums should be treated as a component of direct labor and idle time should be

Question 17

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 18

Another term for product cost is cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

Accepted Answer

A) The number of units sold. 
B) The number of direct labor hours worked. 
C) The number of machine hours worked. 
D) The number of units produced. 
E) The number of employees working in the factory. 
A) The number of units sold. 
B) The number of direct labor hours worked. 
C) The number of machine hours worked. 
D) The number of units produced. 
E) The number of employees working in the factory.

Question 20

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.

Different cost concepts and classiﬁcations are used for different purposes.

You have been asked to work an extra day and will receive $150.However, you already bought a discounted ticket to a theme park for $37 and ﬁgure that you will spend an additional $50 at the park. What is the sunk cost if you decide to work?

Ford Motor Company produces cars and trucks.Which type of production process is most likely used by Ford?

A job shop is generally associated with high production volume.

Which of the following would not be classiﬁed as a product cost?

Which of the following statements is true?

An employee accidentally overstated the year's advertising expense by $50,000.Which of the following correctly depicts the effect of this error?

Travon and Tony (T & T) Enterprises has a single facility that it uses for manufacturing, sales, and administrative activities.Should the company's building depreciation charge be expensed in its entirety or is a different accounting procedure appropriate? Explain.

Cost data that are classiﬁed and recorded in a particular way for one purpose may be inappropriate for another use.For example, costs that would likely be noncontrollable by a department supervisor include

Costs that are expensed when incurred are called:

Which two terms below best describe the wages paid to security guards that monitor a factory 24 hours a day?

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

Which of the following equations is used to calculate cost of goods sold during the period?

Which of the following statements is correct?

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:

Another term for product cost is cost of goods sold.

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

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

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

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Exam 2: Basic Cost Management Concepts

Different cost concepts and classiﬁcations are used for different purposes.

You have been asked to work an extra day and will receive $150.However, you already bought a discounted ticket to a theme park for $37 and ﬁgure that you will spend an additional $50 at the park. What is the sunk cost if you decide to work?

Ford Motor Company produces cars and trucks.Which type of production process is most likely used by Ford?

A job shop is generally associated with high production volume.

Which of the following would not be classiﬁed as a product cost?

Which of the following statements is true?

An employee accidentally overstated the year's advertising expense by $50,000.Which of the following correctly depicts the effect of this error?

Travon and Tony (T & T) Enterprises has a single facility that it uses for manufacturing, sales, and administrative activities.Should the company's building depreciation charge be expensed in its entirety or is a different accounting procedure appropriate? Explain.

Cost data that are classiﬁed and recorded in a particular way for one purpose may be inappropriate for another use.For example, costs that would likely be noncontrollable by a department supervisor include

Costs that are expensed when incurred are called:

Which two terms below best describe the wages paid to security guards that monitor a factory 24 hours a day?

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

Which of the following equations is used to calculate cost of goods sold during the period?

Which of the following statements is correct?

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:

Another term for product cost is cost of goods sold.

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

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

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