Question 1

FASB rules require companies to use full absorption cost methods, and do not allow the use of direct costing methods, for financial reporting purposes.

Accepted Answer

A) True 
 B)False

Question 2

Improperly set transfer prices between divisions of a company can lead to incorrect judgments of the relative profitability of the divisions.

Accepted Answer

A) True 
 B)False

Question 3

"Throughput" is the selling price of the amount processed through the binding constraint, minus the "full absorption cost" of producing this output.

Accepted Answer

A) True 
 B)False

Question 4

A "job cost system" is typically used in businesses that produce a large amount of identical items on a continuous basis.

Accepted Answer

A) True 
 B)False

Question 5

Kovacs Corp. started the year with $3,000,000 in inventory. During the year, it applied the following costs to inventory: direct labor of $1,000,000; raw materials of $7,000,000; and overhead of $4,000,000. The ending inventory had a cost of $3,000,000. Find the cost of goods sold. (Assume the cost of goods sold includes any shrinkage.)______

Accepted Answer

To calculate the cost of goods sold (COG

Question 6

"Work in process" consists of items that a company has started to work on, but has not yet finished.

Accepted Answer

A) True 
 B)False

Question 7

One disadvantage of using market prices as transfer prices between subsidiaries of a large company is that some subsidiaries may buy their materials from outside companies when, for the group as a whole, it would be better if they bought from other members of the group.

Accepted Answer

A) True 
 B)False

Question 8

A disadvantage of resource consumption accounting is that it may lead managers to overproduce, in order to avoid showing underutilized production capacity.

Accepted Answer

A) True 
 B)False

Question 9

The method of setting transfer prices among subsidiaries of a corporation never affects creditors of the different subsidiaries.

Accepted Answer

A) True 
 B)False

Question 10

The text discusses both traditional full absorption costing methods, and activity-based costing ("ABC").

Accepted Answer

The text appears to discuss two differen

Question 11

Typically, "throughput" would be measured as the selling price of the amount of products processed through the binding constraint minus

Accepted Answer

A)  Totally variable costs 
B)  Totally variable costs plus all factory labor costs 
C)  Totally variable costs plus all factory labor and machinery costs 
D)  Nothing-no costs are subtracted in the computation of throughput 
A)  Totally variable costs 
B)  Totally variable costs plus all factory labor costs 
C)  Totally variable costs plus all factory labor and machinery costs 
D)  Nothing-no costs are subtracted in the computation of throughput

Question 12

Ilyas Corp. started the year with $2,000,000 in inventory. During the year, it applied the following costs to inventory: direct labor of $6,000,000; raw materials of $2,000,000; and overhead of $10,000,000. The total cost of goods sold and shrinkage was $17,000,000. Find the ending inventory.______

Accepted Answer

To calculate the ending inventory for Il

Question 13

"Throughput" is the selling price of the amount processed through the binding constraint, minus the "totally variable cost" of producing this output.

Accepted Answer

A) True 
 B)False

Question 14

Hazan Corp. started the year with $200,000 in inventory. During the year, it applied the following costs to inventory: direct labor of $1,000,000; raw materials of $2,000,000; and overhead of $1,000,000. The ending inventory had a cost of $300,000. Find the cost of goods sold. (Assume the cost of goods sold includes any shrinkage.)______

Accepted Answer

To calculate the cost of goods sold (COG

Question 15

In general, the traditional full absorption method is more complicated to use than the ABC or resource consumption methods.

Accepted Answer

A) True 
 B)False

Question 16

In the cost hierarchy, "batch level costs" would include both unit level costs and facility level costs.

Accepted Answer

A) True 
 B)False

Question 17

In general, the traditional full absorption method is simper to use than the ABC or resource consumption methods.

Accepted Answer

A) True 
 B)False

Question 18

A major benefit of resource consumption accounting is that, by separating out fixed and proportional costs, it provides managers with more relevant information for making decisions.

Accepted Answer

A) True 
 B)False

Question 19

Tabby Co. had beginning inventory of $200 and ending inventory of $300. Tabby Co. had cost of goods sold amounting to $800. Based on this information, Tabby Co. must have purchased inventory amounting to: $ _________

Accepted Answer

To calculate the amount of inventory Tab

Question 20

Managerial costing should aid managers in their analysis and decision-making.

Accepted Answer

A) True 
 B)False

FASB rules require companies to use full absorption cost methods, and do not allow the use of direct costing methods, for financial reporting purposes.

Improperly set transfer prices between divisions of a company can lead to incorrect judgments of the relative profitability of the divisions.

"Throughput" is the selling price of the amount processed through the binding constraint, minus the "full absorption cost" of producing this output.

A "job cost system" is typically used in businesses that produce a large amount of identical items on a continuous basis.

"Work in process" consists of items that a company has started to work on, but has not yet finished.

One disadvantage of using market prices as transfer prices between subsidiaries of a large company is that some subsidiaries may buy their materials from outside companies when, for the group as a whole, it would be better if they bought from other members of the group.

A disadvantage of resource consumption accounting is that it may lead managers to overproduce, in order to avoid showing underutilized production capacity.

The method of setting transfer prices among subsidiaries of a corporation never affects creditors of the different subsidiaries.

The text discusses both traditional full absorption costing methods, and activity-based costing ("ABC").

Typically, "throughput" would be measured as the selling price of the amount of products processed through the binding constraint minus

Ilyas Corp. started the year with $2,000,000 in inventory. During the year, it applied the following costs to inventory: direct labor of $6,000,000; raw materials of $2,000,000; and overhead of $10,000,000. The total cost of goods sold and shrinkage was $17,000,000. Find the ending inventory.______

"Throughput" is the selling price of the amount processed through the binding constraint, minus the "totally variable cost" of producing this output.

In general, the traditional full absorption method is more complicated to use than the ABC or resource consumption methods.

In the cost hierarchy, "batch level costs" would include both unit level costs and facility level costs.

In general, the traditional full absorption method is simper to use than the ABC or resource consumption methods.

A major benefit of resource consumption accounting is that, by separating out fixed and proportional costs, it provides managers with more relevant information for making decisions.

Tabby Co. had beginning inventory of $200 and ending inventory of $300. Tabby Co. had cost of goods sold amounting to $800. Based on this information, Tabby Co. must have purchased inventory amounting to: $ _________

Managerial costing should aid managers in their analysis and decision-making.

How Accounting Works

Selecting Your Business Structure

Choosing Accounting Software

Managing Your Accounts

Accounting for Inventory

Doing Business Day to Day

Tackling the General Ledger

Reconciling Bank and Credit Card Statements

Setting up New Team Members

Other Benefits and Reimbursements

Payroll Taxes

Appendix

Filters

Exam 10: Understanding Insurance

FASB rules require companies to use full absorption cost methods, and do not allow the use of direct costing methods, for financial reporting purposes.

Improperly set transfer prices between divisions of a company can lead to incorrect judgments of the relative profitability of the divisions.

"Throughput" is the selling price of the amount processed through the binding constraint, minus the "full absorption cost" of producing this output.

A "job cost system" is typically used in businesses that produce a large amount of identical items on a continuous basis.

"Work in process" consists of items that a company has started to work on, but has not yet finished.

One disadvantage of using market prices as transfer prices between subsidiaries of a large company is that some subsidiaries may buy their materials from outside companies when, for the group as a whole, it would be better if they bought from other members of the group.

A disadvantage of resource consumption accounting is that it may lead managers to overproduce, in order to avoid showing underutilized production capacity.

The method of setting transfer prices among subsidiaries of a corporation never affects creditors of the different subsidiaries.

The text discusses both traditional full absorption costing methods, and activity-based costing ("ABC").

Typically, "throughput" would be measured as the selling price of the amount of products processed through the binding constraint minus

Ilyas Corp. started the year with $2,000,000 in inventory. During the year, it applied the following costs to inventory: direct labor of $6,000,000; raw materials of $2,000,000; and overhead of $10,000,000. The total cost of goods sold and shrinkage was $17,000,000. Find the ending inventory.______

"Throughput" is the selling price of the amount processed through the binding constraint, minus the "totally variable cost" of producing this output.

In general, the traditional full absorption method is more complicated to use than the ABC or resource consumption methods.

In the cost hierarchy, "batch level costs" would include both unit level costs and facility level costs.

In general, the traditional full absorption method is simper to use than the ABC or resource consumption methods.

A major benefit of resource consumption accounting is that, by separating out fixed and proportional costs, it provides managers with more relevant information for making decisions.

Tabby Co. had beginning inventory of $200 and ending inventory of $300. Tabby Co. had cost of goods sold amounting to $800. Based on this information, Tabby Co. must have purchased inventory amounting to: $ _________

Managerial costing should aid managers in their analysis and decision-making.

How Accounting Works

Selecting Your Business Structure

Choosing Accounting Software

Managing Your Accounts

Accounting for Inventory

Doing Business Day to Day

Tackling the General Ledger

Reconciling Bank and Credit Card Statements

Setting up New Team Members

Other Benefits and Reimbursements

Payroll Taxes

Appendix

Filters