Question 1

Write a short essay and explain why a manager at a manufacturing company considers the direct costs to be more accurate than indirect costs.

Accepted Answer

Managers at manufacturing companies cons

Question 2

If each motorcycle requires a fan belt that costs $20 and 2,000 motorcycles are produced in the month,the total cost for the fan belts is:

Accepted Answer

A) considered to be a fixed cost. 
B) considered to be a direct variable cost. 
C) considered to be an indirect fixed cost. 
D) considered to be an indirect variable cost. 
E) none of these are true. 
A) considered to be a fixed cost. 
B) considered to be a direct variable cost. 
C) considered to be an indirect fixed cost. 
D) considered to be an indirect variable cost. 
E) none of these are true.

Question 3

We define cost allocation as:

Accepted Answer

A) the process of tracking both direct and indirect costs associated with a cost object. 
B) the process of determining the actual cost of the cost object. 
C) the assignment of indirect costs to the chosen cost object. 
D) a function of cost tracing. 
E) not a function of cost assignment. 
A) the process of tracking both direct and indirect costs associated with a cost object. 
B) the process of determining the actual cost of the cost object. 
C) the assignment of indirect costs to the chosen cost object. 
D) a function of cost tracing. 
E) not a function of cost assignment.

Question 4

Costs that have both fixed and variable elements are called mixed costs or semivariable costs.

Accepted Answer

A) True 
 B)False

Question 5

The general term used to identify the tracing and allocation of accumulated costs to a cost object is:

Accepted Answer

A) cost accumulation. 
B) cost assignment. 
C) cost tracing. 
D) conversion costing. 
E) convertible costing. 
A) cost accumulation. 
B) cost assignment. 
C) cost tracing. 
D) conversion costing. 
E) convertible costing.

Question 6

A manager at a company that uses both variable costing and absorption costing methods can benefit from the different advantages of both.

Accepted Answer

A) True 
 B)False

Question 7

Acme Candle Company reported the following information:
 
Required:
Compute the average manufacturing cost per unit.

Accepted Answer

A) $1.00 
B) $1.75 
C) $2.95 
D) $4.50 
E) $5.00 
A) $1.00 
B) $1.75 
C) $2.95 
D) $4.50 
E) $5.00

Question 8

In general,a manager is more confident about the accuracy of direct costs of cost objects.

Accepted Answer

A) True 
 B)False

Question 9

Write a short essay and explain how managers classify manufacturing costs.

Accepted Answer

There are three ways that managers class

Question 10

The wage rate paid to workers (for both direct labor and indirect labor)in excess of their straight time wage rate is:

Accepted Answer

A) idle time. 
B) straight-time. 
C) accelerated time. 
D) overtime premium. 
E) direct costing method. 
A) idle time. 
B) straight-time. 
C) accelerated time. 
D) overtime premium. 
E) direct costing method.

Question 11

Wagner Company reported the following information about revenues and the cost of goods sold:
 
Required:
Compute the gross margin.

Accepted Answer

A) $100,000 
B) $125,000 
C) $150,000 
D) $175,000 
E) $200,000 
A) $100,000 
B) $125,000 
C) $150,000 
D) $175,000 
E) $200,000

Question 12

Under the variable costing method:

Accepted Answer

A) fixed manufacturing costs are not inventoried. 
B) fixed manufacturing costs are inventoried. 
C) costs are absorbed into the finished goods inventory. 
D) does not distinguish fixed manufacturing costs from variable manufacturing costs. 
E) is only useful in long-term decision making processes in manufacturing firms. 
A) fixed manufacturing costs are not inventoried. 
B) fixed manufacturing costs are inventoried. 
C) costs are absorbed into the finished goods inventory. 
D) does not distinguish fixed manufacturing costs from variable manufacturing costs. 
E) is only useful in long-term decision making processes in manufacturing firms.

Question 13

The cost object is:

Accepted Answer

A) the cost incurred. 
B) a collection of cost data in some organized way by means of a cost object. 
C) a predicted,or forecasted,cost. 
D) anything for which a measurement of costs is desired. 
E) used to describe the assignment of indirect costs to a particular cost object. 
A) the cost incurred. 
B) a collection of cost data in some organized way by means of a cost object. 
C) a predicted,or forecasted,cost. 
D) anything for which a measurement of costs is desired. 
E) used to describe the assignment of indirect costs to a particular cost object.

Question 14

Write a short essay and explain how managers differentiate between fixed costs and variable costs.

Accepted Answer

Managers understand that total fixed cos

Question 15

Direct manufacturing labor costs are only a part of prime costs.

Accepted Answer

A) True 
 B)False

Question 16

Under Generally Accepted Accounting Principles (GAAP),only ________ costs can be assigned to inventories in the financial statements.

Accepted Answer

A) period 
B) direct 
C) indirect 
D) variable 
E) manufacturing 
A) period 
B) direct 
C) indirect 
D) variable 
E) manufacturing

Question 17

Service-sector companies only provide services or intangible products and so do not hold inventories of tangible products.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following methods is not used to reduce the undesirable affects of absorption costing?

Accepted Answer

A) Focus on careful planning and budgeting of inventory amounts. 
B) Incorporate carrying charges for inventory in the internal accounting system. 
C) Place greater weight on reporting performance over longer periods. 
D) Include only financial variables in the measures used to evaluate performance. 
E) Use alternative methods of inventory costing for internal purposes that does not create incentives for managers to produce for inventory. 
A) Focus on careful planning and budgeting of inventory amounts. 
B) Incorporate carrying charges for inventory in the internal accounting system. 
C) Place greater weight on reporting performance over longer periods. 
D) Include only financial variables in the measures used to evaluate performance. 
E) Use alternative methods of inventory costing for internal purposes that does not create incentives for managers to produce for inventory.

Question 19

Which of the following is normally included in direct materials inventory?

Accepted Answer

A) Direct materials in stock and awaiting use in the manufacturing process. 
B) Goods partially worked on but not yet fully completed. 
C) Goods fully completed but not yet sold. 
D) Products in their original form intended to be sold without changing their basic form. 
E) Goods and products that have been completed and sold. 
A) Direct materials in stock and awaiting use in the manufacturing process. 
B) Goods partially worked on but not yet fully completed. 
C) Goods fully completed but not yet sold. 
D) Products in their original form intended to be sold without changing their basic form. 
E) Goods and products that have been completed and sold.

Question 20

The two terms that managers use to describe cost classifications in manufacturing costing systems are prime costs and conversion costs.

Accepted Answer

A) True 
 B)False

Write a short essay and explain why a manager at a manufacturing company considers the direct costs to be more accurate than indirect costs.

If each motorcycle requires a fan belt that costs $20 and 2,000 motorcycles are produced in the month,the total cost for the fan belts is:

We define cost allocation as:

Costs that have both fixed and variable elements are called mixed costs or semivariable costs.

The general term used to identify the tracing and allocation of accumulated costs to a cost object is:

A manager at a company that uses both variable costing and absorption costing methods can benefit from the different advantages of both.

Acme Candle Company reported the following information: Required: Compute the average manufacturing cost per unit.

In general,a manager is more confident about the accuracy of direct costs of cost objects.

Write a short essay and explain how managers classify manufacturing costs.

The wage rate paid to workers (for both direct labor and indirect labor)in excess of their straight time wage rate is:

Wagner Company reported the following information about revenues and the cost of goods sold: Required: Compute the gross margin.

Under the variable costing method:

The cost object is:

Write a short essay and explain how managers differentiate between fixed costs and variable costs.

Direct manufacturing labor costs are only a part of prime costs.

Under Generally Accepted Accounting Principles (GAAP),only ________ costs can be assigned to inventories in the financial statements.

Service-sector companies only provide services or intangible products and so do not hold inventories of tangible products.

Which of the following methods is not used to reduce the undesirable affects of absorption costing?

Which of the following is normally included in direct materials inventory?

The two terms that managers use to describe cost classifications in manufacturing costing systems are prime costs and conversion costs.

The Manager and Management Accounting

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Exam 2: An Introduction to Cost Terms and Purposes

Write a short essay and explain why a manager at a manufacturing company considers the direct costs to be more accurate than indirect costs.

If each motorcycle requires a fan belt that costs $20 and 2,000 motorcycles are produced in the month,the total cost for the fan belts is:

We define cost allocation as:

Costs that have both fixed and variable elements are called mixed costs or semivariable costs.

The general term used to identify the tracing and allocation of accumulated costs to a cost object is:

A manager at a company that uses both variable costing and absorption costing methods can benefit from the different advantages of both.

Acme Candle Company reported the following information: Required: Compute the average manufacturing cost per unit.

In general,a manager is more confident about the accuracy of direct costs of cost objects.

Write a short essay and explain how managers classify manufacturing costs.

The wage rate paid to workers (for both direct labor and indirect labor)in excess of their straight time wage rate is:

Wagner Company reported the following information about revenues and the cost of goods sold: Required: Compute the gross margin.

Under the variable costing method:

The cost object is:

Write a short essay and explain how managers differentiate between fixed costs and variable costs.

Direct manufacturing labor costs are only a part of prime costs.

Under Generally Accepted Accounting Principles (GAAP),only ________ costs can be assigned to inventories in the financial statements.

Service-sector companies only provide services or intangible products and so do not hold inventories of tangible products.

Which of the following methods is not used to reduce the undesirable affects of absorption costing?

Which of the following is normally included in direct materials inventory?

The two terms that managers use to describe cost classifications in manufacturing costing systems are prime costs and conversion costs.

The Manager and Management Accounting

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters