Question 1

Woodcarving Co. incurred the following costs during May:   What was the amount of direct materials and direct labor used in May?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 2

The additional cost incurred as the cost driver increases by one unit is:

Accepted Answer

A) Average cost. 
B) Controllable cost. 
C) Variable cost. 
D) Unit cost. 
A) Average cost. 
B) Controllable cost. 
C) Variable cost. 
D) Unit cost.

Question 3

Jeffrey's Bottling Co. incurred the following costs during November:   If direct materials cost was $140,000 in November, what was the conversion cost for November?

Accepted Answer

A) $255,000 
B) $240,000 
C) $215,000 
D) $235,000 
A) $255,000 
B) $240,000 
C) $215,000 
D) $235,000

Question 4

Young Fashions Company produces children's clothing. During 2013, the company incurred the following costs:   Inventories for the year were:   Required:
Prepare a statement of cost of goods manufactured and cost of goods sold.

Accepted Answer

Answer may

Question 5

Cost of goods manufactured is calculated to be:

Accepted Answer

A) $289,000. 
B) $348,000. 
C) $314,000. 
D) $297,000. 
E) $323,000. 
A) $289,000. 
B) $348,000. 
C) $314,000. 
D) $297,000. 
E) $323,000.

Question 6

Greenbelt Hospital has the following activities in its value chain of providing service to each inpatient admission:
1. Schedule patient.
2. Verify insurance.
3. Admit patient.
4. Prepare patient's room.
5. Review doctor's report.
6. Feed patient.
7. Order tests.
8. Move to/from laboratory.
9. Administer lab tests.
10. Order pharmaceuticals.
11. Complete patient report.
12. Check patient's vital signs.
13. Prepare patient for operation.
14. Move to/from operating room.
15. Operate.
16. Collect charges.
17. Discharge patient.
18. Bill insurance.
Required: Assume that the cost object is the individual patient. Determine the appropriate cost driver(s) for each activity.

Accepted Answer

Answer may

Question 7

A group of related products may be referenced as:

Accepted Answer

A) Cost objects 
B) Cost drivers 
C) Value streams 
D) Cost pools 
A) Cost objects 
B) Cost drivers 
C) Value streams 
D) Cost pools

Question 8

Lester-Sung, Inc. is a large general construction firm in the commercial building industry. The following is a list of costs incurred by this company:
1) The cost of an employee for 8 hours at $6.00 an hour.
2) The cost of insurance for the employees.
3) The cost of 1,000 board feet of 2 x 4 lumber.
4) The CEO's salary.
Required:
Classify each cost above using the following categories:
(a) General, selling and administrative cost
(b) Direct material
(c) Direct labor
(d) Overhead cost

Accepted Answer

Answer may

Question 9

Which of the following should be considered a structural cost driver?

Accepted Answer

A) Scale. 
B) Experience. 
C) Complexity. 
D) Technology. 
E) All of the above. 
A) Scale. 
B) Experience. 
C) Complexity. 
D) Technology. 
E) All of the above.

Question 10

The term relevant range as used in cost accounting means the range over which:

Accepted Answer

A) Costs may fluctuate. 
B) Cost relationships are approximately linear. 
C) Production may vary. 
D) Relevant costs are incurred. 
A) Costs may fluctuate. 
B) Cost relationships are approximately linear. 
C) Production may vary. 
D) Relevant costs are incurred.

Question 11

Theoretically, a decision maker would probably be willing to buy cost management information if:

Accepted Answer

A) It is accurate. 
B) It is consistent with management objectives. 
C) It is timely. 
D) Its value is equal to or greater than its cost. 
A) It is accurate. 
B) It is consistent with management objectives. 
C) It is timely. 
D) Its value is equal to or greater than its cost.

Question 12

The following costs are incurred by the Oakland Company, a manufacturer of furniture.
1) wood and fabric used in furniture
2) depreciation on machinery
3) property taxes on the factory
4) labor costs to manufacture the furniture
5) electricity cost to operate the machinery
6) factory rent
7) production supervisor's salary
8) sandpaper and other supplies
9) fire insurance on factory
10) commissions paid to salespersons
Required
Classify each cost as either variable or fixed.

Accepted Answer

Answer may vary
Feedback: (1)

Question 13

What is the amount in the finished goods inventory at the beginning of the year?

Accepted Answer

A) $10,500. 
B) $15,000. 
C) $20,000. 
D) $25,000. 
A) $10,500. 
B) $15,000. 
C) $20,000. 
D) $25,000.

Question 14

Total manufacturing cost is calculated to be:

Accepted Answer

A) $306,000. 
B) $26,000. 
C) $110,000. 
D) $331,000. 
E) $111,000. 
A) $306,000. 
B) $26,000. 
C) $110,000. 
D) $331,000. 
E) $111,000.

Question 15

The following information applies to the Johnson Tools Company for the year.   Required:
Prepare a statement of cost of goods manufactured and an income statement for the year.

Accepted Answer

Answer may

Question 16

The emphasis on effective _________ has ________ significantly in recent years in response to SEC requirements imposed by the Sarbanes-Oxley Act of 2002.

Accepted Answer

A) Cost allocation; decreased 
B) Internal accounting controls; increased 
C) Profitability; increased 
D) Cost drivers; decreased 
A) Cost allocation; decreased 
B) Internal accounting controls; increased 
C) Profitability; increased 
D) Cost drivers; decreased

Question 17

Which of the following is not a correct pair between the activity and the potential cost driver?

Accepted Answer

A) Provide cashier service-number of customers 
B) Process loan applications-number of loan applications processed 
C) Mail customer statements-number of accounts by customer type and size 
D) Advise customers on banking services-number of ATM transactions 
A) Provide cashier service-number of customers 
B) Process loan applications-number of loan applications processed 
C) Mail customer statements-number of accounts by customer type and size 
D) Advise customers on banking services-number of ATM transactions

Question 18

Consider the following information for Blue Water Equipment, Inc., a manufacturer of sailboat rigging, blocks, and cordage.   Required:
Prepare a statement of cost of goods manufactured and an income statement for Blue Water Equipment, Inc. for the year.

Accepted Answer

Answer may

Question 19

Factory overhead is calculated to be:

Accepted Answer

A) $306,000. 
B) $26,000. 
C) $110,000. 
D) $84,000. 
E) $111,000. 
A) $306,000. 
B) $26,000. 
C) $110,000. 
D) $84,000. 
E) $111,000.

Question 20

The main objective(s) of internal accounting controls is/are:

Accepted Answer

A) To increase customer satisfaction. 
B) To increase revenue. 
C) To prevent or detect errors and fraudulent acts. 
D) To facilitate new product lines. 
E) To increase employee morale. 
A) To increase customer satisfaction. 
B) To increase revenue. 
C) To prevent or detect errors and fraudulent acts. 
D) To facilitate new product lines. 
E) To increase employee morale.

Woodcarving Co. incurred the following costs during May: What was the amount of direct materials and direct labor used in May?

The additional cost incurred as the cost driver increases by one unit is:

Jeffrey's Bottling Co. incurred the following costs during November: If direct materials cost was $140,000 in November, what was the conversion cost for November?

Young Fashions Company produces children's clothing. During 2013, the company incurred the following costs: Inventories for the year were: Required: Prepare a statement of cost of goods manufactured and cost of goods sold.

Cost of goods manufactured is calculated to be:

A group of related products may be referenced as:

Which of the following should be considered a structural cost driver?

The term relevant range as used in cost accounting means the range over which:

Theoretically, a decision maker would probably be willing to buy cost management information if:

What is the amount in the finished goods inventory at the beginning of the year?

Total manufacturing cost is calculated to be:

The following information applies to the Johnson Tools Company for the year. Required: Prepare a statement of cost of goods manufactured and an income statement for the year.

The emphasis on effective _ has significantly in recent years in response to SEC requirements imposed by the Sarbanes-Oxley Act of 2002.

Which of the following is not a correct pair between the activity and the potential cost driver?

Consider the following information for Blue Water Equipment, Inc., a manufacturer of sailboat rigging, blocks, and cordage. Required: Prepare a statement of cost of goods manufactured and an income statement for Blue Water Equipment, Inc. for the year.

Factory overhead is calculated to be:

The main objective(s) of internal accounting controls is/are:

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 3: Basic Cost Management Concepts

Woodcarving Co. incurred the following costs during May: What was the amount of direct materials and direct labor used in May?

The additional cost incurred as the cost driver increases by one unit is:

Jeffrey's Bottling Co. incurred the following costs during November: If direct materials cost was $140,000 in November, what was the conversion cost for November?

Young Fashions Company produces children's clothing. During 2013, the company incurred the following costs: Inventories for the year were: Required: Prepare a statement of cost of goods manufactured and cost of goods sold.

Cost of goods manufactured is calculated to be:

A group of related products may be referenced as:

Which of the following should be considered a structural cost driver?

The term relevant range as used in cost accounting means the range over which:

Theoretically, a decision maker would probably be willing to buy cost management information if:

What is the amount in the finished goods inventory at the beginning of the year?

Total manufacturing cost is calculated to be:

The following information applies to the Johnson Tools Company for the year. Required: Prepare a statement of cost of goods manufactured and an income statement for the year.

The emphasis on effective _________ has ________ significantly in recent years in response to SEC requirements imposed by the Sarbanes-Oxley Act of 2002.

Which of the following is not a correct pair between the activity and the potential cost driver?

Consider the following information for Blue Water Equipment, Inc., a manufacturer of sailboat rigging, blocks, and cordage. Required: Prepare a statement of cost of goods manufactured and an income statement for Blue Water Equipment, Inc. for the year.

Factory overhead is calculated to be:

The main objective(s) of internal accounting controls is/are:

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters

The emphasis on effective _ has significantly in recent years in response to SEC requirements imposed by the Sarbanes-Oxley Act of 2002.