Question 1

Variable costs are costs that:

Accepted Answer

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

Question 2

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.They are part of history and cannot be altered.Therefore,sunk costs are not relevant for any current or future management decision.
Opportunity costs,in contrast,are relevant for current and future decisions.Such costs are defined as the net benefits from a decision alternative that was not selected-that is,the benefits were sacrificed to pursue another option.

Question 3

The average cost per student when 16 students enroll in the school is:

Accepted Answer

A) $100. 
B) $125. 
C) $175. 
D) $300. 
E) $400. 
A) $100. 
B) $125. 
C) $175. 
D) $300. 
E) $400. C

Question 4

Which of the following statements is true?

Accepted Answer

A) Product costs affect only the balance sheet. 
B) Product costs affect only the income statement. 
C) Period costs affect only the balance sheet. 
D) Neither product costs nor period costs affect the Statement of Retained Earnings.This can also be a true statement if the period costs were prepaid (i.e. ,prepaid advertising,depreciation). 
E) Product costs eventually affect both the balance sheet and the income statement. 
A) Product costs affect only the balance sheet. 
B) Product costs affect only the income statement. 
C) Period costs affect only the balance sheet. 
D) Neither product costs nor period costs affect the Statement of Retained Earnings.This can also be a true statement if the period costs were prepaid (i.e. ,prepaid advertising,depreciation). 
E) Product costs eventually affect both the balance sheet and the income statement.

Question 5

If purchases of raw materials were $135,000 during the year,what was the amount of raw materials used during the year?

Accepted Answer

A) $129,200. 
B) $140,800. 
C) $135,000. 
D) $146,600. 
E) some other amount. 
A) $129,200. 
B) $140,800. 
C) $135,000. 
D) $146,600. 
E) some other amount.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Xi Manufacturing,which began operations on January 1 of the current year,produces an industrial scraper that sells for $325 per unit.Information related to the current year's activities follows.
A.Compute the company's average unit cost of production.
B.Determine the cost of the December 31 finished-goods inventory.
C.Compute the company's cost of goods sold.
D.1.No change.Direct labor is a variable cost,and the cost per unit will remain constant.
2.No change.Despite the increase in the number of units produced,this is a fixed cost,which remains the same in total.
D.If next year's production increases to 23,000 units and general cost behavior patterns do not change,what is the likely effect on:
1.The direct-labor cost of $35 per unit? Why?
2.The fixed manufacturing overhead cost of $400,000? Why?

Accepted Answer

@#IMG-DLM& 
Xi carries its finished-goods inventor

Question 8

Baxter Company,which pays a 10% commission to its salespeople,reported sales revenues of $210,000 for the period just ended.If fixed and variable sales expenses totaled $56,000,what would these expenses total at sales of $168,000?

Accepted Answer

A) $16,800. 
B) $35,000. 
C) $44,800. 
D) $51,800. 
E) Some other amount. 
A) $16,800. 
B) $35,000. 
C) $44,800. 
D) $51,800. 
E) Some other amount.

Question 9

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) Some other amount. 
A) $4.50. 
B) $5.00. 
C) $5.50. 
D) $6.00. 
E) Some other amount.

Question 10

Lake Appliance produces washers and dryers in an assembly-line process.Labor costs incurred during a recent period were: corporate executives,$500,000;assembly-line workers,$180,000;security guards,$45,000;and plant supervisor,$110,000.The total of Lake's direct labor cost was:

Accepted Answer

A) $110,000. 
B) $180,000. 
C) $155,000. 
D) $235,000. 
E) $735,000. 
A) $110,000. 
B) $180,000. 
C) $155,000. 
D) $235,000. 
E) $735,000.

Question 11

Which of the following employees of a commercial printer/publisher would be classified as direct labor?

Accepted Answer

A) Book binder. 
B) Plant security guard. 
C) Sales representative. 
D) Plant supervisor. 
E) Payroll supervisor. 
A) Book binder. 
B) Plant security guard. 
C) Sales representative. 
D) Plant supervisor. 
E) Payroll supervisor.

Question 12

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

Accepted Answer

A) Exxon Corporation. 
B) Macy's Department Store. 
C) Wendy's. 
D) Southwest Airlines. 
E) Columbia University. 
A) Exxon Corporation. 
B) Macy's Department Store. 
C) Wendy's. 
D) Southwest Airlines. 
E) Columbia University.

Question 13

Which of the following costs should be ignored when choosing among alternatives?

Accepted Answer

A) Opportunity costs. 
B) Sunk costs. 
C) Out-of-pocket costs. 
D) Differential costs. 
E) None of thesE. 
A) Opportunity costs. 
B) Sunk costs. 
C) Out-of-pocket costs. 
D) Differential costs. 
E) None of thesE.

Question 14

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 15

Product costs are:

Accepted Answer

A) expensed when incurred. 
B) inventoried. 
C) treated in the same manner as period costs. 
D) treated in the same manner as advertising costs. 
E) subtracted from cost of goods sold. 
A) expensed when incurred. 
B) inventoried. 
C) treated in the same manner as period costs. 
D) treated in the same manner as advertising costs. 
E) subtracted from cost of goods sold.

Question 16

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) some other amount. 
A) $402,100. 
B) $422,300. 
C) $417,100. 
D) $427,500. 
E) some other amount.

Question 17

In discussing the operation of her automobile,a doctor 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 doctor's observation.

Accepted Answer

The doctor's observations are incorrect,

Question 18

Manufacturers have established a cost classification called product costs.Define the term "product cost" and note where these costs appear in the financial statements.Be specific.

Accepted Answer

Product costs are costs that relate to t

Question 19

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) Some other amount. 
E) Total costs cannot be calculated based on the information presented. 
A) $199,200. 
B) $214,800. 
C) $234,000. 
D) Some other amount. 
E) Total costs cannot be calculated based on the information presented.

Question 20

Which of the following statements is (are)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) Both "B" and "C" are correct. 
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) Both "B" and "C" are correct.

Variable costs are costs that:

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

The average cost per student when 16 students enroll in the school is:

Which of the following statements is true?

If purchases of raw materials were $135,000 during the year,what was the amount of raw materials used during the year?

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

Baxter Company,which pays a 10% commission to its salespeople,reported sales revenues of $210,000 for the period just ended.If fixed and variable sales expenses totaled $56,000,what would these expenses total at sales of $168,000?

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?

Lake Appliance produces washers and dryers in an assembly-line process.Labor costs incurred during a recent period were: corporate executives,$500,000;assembly-line workers,$180,000;security guards,$45,000;and plant supervisor,$110,000.The total of Lake's direct labor cost was:

Which of the following employees of a commercial printer/publisher would be classified as direct labor?

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

Which of the following costs should be ignored when choosing among alternatives?

The true statement about cost behavior is that:

Product costs are:

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

Manufacturers have established a cost classification called product costs.Define the term "product cost" and note where these costs appear in the financial statements.Be specific.

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?

Which of the following statements is (are)correct?

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

Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Cost-Volume-Profit Analysis

Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Standard Costing,Operational Performance Measures,and the Balanced Scorecard

Flexible Budgeting and the Management of Overhead and Support Activity Costs

Responsibility Accounting, Quality Control, and Environmental Cost Management

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

compound Interest and the Concept of Present Value

Inventory Management

Filters

Exam 2: Basic Cost Management Concepts and Accounting for Mass Customization Operations

Variable costs are costs that:

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

The average cost per student when 16 students enroll in the school is:

Which of the following statements is true?

If purchases of raw materials were $135,000 during the year,what was the amount of raw materials used during the year?

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

Baxter Company,which pays a 10% commission to its salespeople,reported sales revenues of $210,000 for the period just ended.If fixed and variable sales expenses totaled $56,000,what would these expenses total at sales of $168,000?

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?

Lake Appliance produces washers and dryers in an assembly-line process.Labor costs incurred during a recent period were: corporate executives,$500,000;assembly-line workers,$180,000;security guards,$45,000;and plant supervisor,$110,000.The total of Lake's direct labor cost was:

Which of the following employees of a commercial printer/publisher would be classified as direct labor?

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

Which of the following costs should be ignored when choosing among alternatives?

The true statement about cost behavior is that:

Product costs are:

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

Manufacturers have established a cost classification called product costs.Define the term "product cost" and note where these costs appear in the financial statements.Be specific.

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?

Which of the following statements is (are)correct?

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

Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Cost-Volume-Profit Analysis

Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Standard Costing,Operational Performance Measures,and the Balanced Scorecard

Flexible Budgeting and the Management of Overhead and Support Activity Costs

Responsibility Accounting, Quality Control, and Environmental Cost Management

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

compound Interest and the Concept of Present Value

Inventory Management

Filters