Question 1

Managers should think in terms of unit costs rather than terms of total costs for many decisions.

Accepted Answer

A) True 
 B)False

Question 2

Ford Motor Company is an example of a plant that manufactures automobiles.The cost of the lease where it manufactures automobiles can be categorized as an indirect cost.

Accepted Answer

A) True 
 B)False

Question 3

Financial accountants realize that a mixed cost is:

Accepted Answer

A) a fixed cost. 
B) a cost with fixed and variable elements. 
C) a variable cost. 
D) always an indirect cost. 
E) only an indirect cost. 
A) a fixed cost. 
B) a cost with fixed and variable elements. 
C) a variable cost. 
D) always an indirect cost. 
E) only an indirect cost.

Question 4

Answer the question below using the following information:
 
Required:
Compute the fixed supervision cost per custom carburetor for 5,000,10,000,and 15,000 carburetors produced.

Accepted Answer

A) $250;$300 
B) $250;$166.66 
C) $150;$100 
D) $200;$300 
E) $50;$25 
A) $250;$300 
B) $250;$166.66 
C) $150;$100 
D) $200;$300 
E) $50;$25

Question 5

Mr.Foxhound works at a manufacturing plant that makes balloons for holiday parades.He earns $30 per hour for straight-time and $50 per hour for overtime.One week he worked 46 hours,which included 6 hours of overtime,and 4 hours of idle time caused by a shortage of materials to make the balloons.
Required:
Compute Mr.Foxhound's total compensation for the week;the amount of compensation reported as direct manufacturing labor;and the amount of compensation that would be reported as manufacturing overhead.

Accepted Answer

A) $1,200;$1,100;$220 
B) $1,250;$1,200;$160 
C) $1,500;$1,260;$240 
D) $1,600;$1,280;$260 
E) $1,750;$1,300;$280 
A) $1,200;$1,100;$220 
B) $1,250;$1,200;$160 
C) $1,500;$1,260;$240 
D) $1,600;$1,280;$260 
E) $1,750;$1,300;$280

Question 6

In the absorption-costing method,all of the manufacturing costs are included as inventoriable costs.

Accepted Answer

A) True 
 B)False

Question 7

Outside the relevant range,variable costs,such as direct materials,may not change proportionately with changes in production volume.

Accepted Answer

A) True 
 B)False

Question 8

A ________ is usually measured as the amount of money that must be paid to acquire goods and services.

Accepted Answer

A) time 
B) cost 
C) goal 
D) product 
E) prediction 
A) time 
B) cost 
C) goal 
D) product 
E) prediction

Question 9

Managers compare actual results to planned performance:

Accepted Answer

A) at the end of the reporting period. 
B) at the beginning of the reporting period. 
C) at the middle of the reporting period. 
D) at the middle of the first quarter. 
E) at the future planning meetings. 
A) at the end of the reporting period. 
B) at the beginning of the reporting period. 
C) at the middle of the reporting period. 
D) at the middle of the first quarter. 
E) at the future planning meetings.

Question 10

A production system under which products are manufactured only when needed is:

Accepted Answer

A) absorption system production. 
B) now system production. 
C) future system production. 
D) current system production. 
E) just-in-time production. 
A) absorption system production. 
B) now system production. 
C) future system production. 
D) current system production. 
E) just-in-time production.

Question 11

The managerial accountant at Sahara Organizations matches business functions to cost drivers.The list below provides representative cost drivers in the right column are randomized with respect to the list of functions in the left column [Note: These are not matched to the respective cost driver].
   
Numbers 1-6 represent the Business Functions and the letters A-F represent the cost drivers at the company.
Required:
Insert the letter of the appropriate cost driver (A through F)and match each business function with its appropriate cost driver.

Accepted Answer

D,F,A,E,B,

Question 12

Isaac Manufacturing reported the following information for the previous month:
 
Compute the projected operating income if sales doubled in the next month.

Accepted Answer

A) $99,000 
B) $109,000 
C) $119,000 
D) $129,000 
E) $139,000 
A) $99,000 
B) $109,000 
C) $119,000 
D) $129,000 
E) $139,000

Question 13

Merchandising-sector companies purchase and then sell tangible products without changing their basic form.

Accepted Answer

A) True 
 B)False

Question 14

The sum of the costs assigned to a product for a specific purpose are:

Accepted Answer

A) manufacturing costs. 
B) design costs. 
C) product costs. 
D) service-sector costs. 
E) technology costs. 
A) manufacturing costs. 
B) design costs. 
C) product costs. 
D) service-sector costs. 
E) technology costs.

Question 15

Service-sector companies are known as companies that provide products to its customers.

Accepted Answer

A) True 
 B)False

Question 16

Compute the Total Manufacturing Costs incurred from the data provided by Wize Manufacturing.

Accepted Answer

A) $85,000 
B) $88,500 
C) $102,500 
D) $107,300 
E) $110,000 
A) $85,000 
B) $88,500 
C) $102,500 
D) $107,300 
E) $110,000

Question 17

Which of the following is not a characteristic of the type of inventory used in manufacturing-type sector companies?

Accepted Answer

A) Direct materials inventory. 
B) Work-in process inventory. 
C) Finished goods inventory. 
D) Materials in stock and waiting to use. 
E) Products already manufactured and sold. 
A) Direct materials inventory. 
B) Work-in process inventory. 
C) Finished goods inventory. 
D) Materials in stock and waiting to use. 
E) Products already manufactured and sold.

Question 18

The distinction between variable costs and fixed costs is central to variable costing,and it is highlighted by the gross-margin format.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not true about unit costs?

Accepted Answer

A) Decision makers think in terms of total costs rather than unit costs. 
B) Decision makers think in terms of unit costs rather than total costs. 
C) Calculating unit cost is essential. 
D) Unit costs are also known as average costs. 
E) Managers can express costs in various ways. 
A) Decision makers think in terms of total costs rather than unit costs. 
B) Decision makers think in terms of unit costs rather than total costs. 
C) Calculating unit cost is essential. 
D) Unit costs are also known as average costs. 
E) Managers can express costs in various ways.

Question 20

The cost of steel and tires to an automobile manufacturer is an example of a direct cost.

Accepted Answer

A) True 
 B)False

Managers should think in terms of unit costs rather than terms of total costs for many decisions.

Ford Motor Company is an example of a plant that manufactures automobiles.The cost of the lease where it manufactures automobiles can be categorized as an indirect cost.

Financial accountants realize that a mixed cost is:

Answer the question below using the following information: Required: Compute the fixed supervision cost per custom carburetor for 5,000,10,000,and 15,000 carburetors produced.

In the absorption-costing method,all of the manufacturing costs are included as inventoriable costs.

Outside the relevant range,variable costs,such as direct materials,may not change proportionately with changes in production volume.

A ________ is usually measured as the amount of money that must be paid to acquire goods and services.

Managers compare actual results to planned performance:

A production system under which products are manufactured only when needed is:

Isaac Manufacturing reported the following information for the previous month: Compute the projected operating income if sales doubled in the next month.

Merchandising-sector companies purchase and then sell tangible products without changing their basic form.

The sum of the costs assigned to a product for a specific purpose are:

Service-sector companies are known as companies that provide products to its customers.

Compute the Total Manufacturing Costs incurred from the data provided by Wize Manufacturing.

Which of the following is not a characteristic of the type of inventory used in manufacturing-type sector companies?

The distinction between variable costs and fixed costs is central to variable costing,and it is highlighted by the gross-margin format.

Which of the following is not true about unit costs?

The cost of steel and tires to an automobile manufacturer is an example of a direct cost.

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

Managers should think in terms of unit costs rather than terms of total costs for many decisions.

Ford Motor Company is an example of a plant that manufactures automobiles.The cost of the lease where it manufactures automobiles can be categorized as an indirect cost.

Financial accountants realize that a mixed cost is:

Answer the question below using the following information: Required: Compute the fixed supervision cost per custom carburetor for 5,000,10,000,and 15,000 carburetors produced.

In the absorption-costing method,all of the manufacturing costs are included as inventoriable costs.

Outside the relevant range,variable costs,such as direct materials,may not change proportionately with changes in production volume.

A ________ is usually measured as the amount of money that must be paid to acquire goods and services.

Managers compare actual results to planned performance:

A production system under which products are manufactured only when needed is:

Isaac Manufacturing reported the following information for the previous month: Compute the projected operating income if sales doubled in the next month.

Merchandising-sector companies purchase and then sell tangible products without changing their basic form.

The sum of the costs assigned to a product for a specific purpose are:

Service-sector companies are known as companies that provide products to its customers.

Compute the Total Manufacturing Costs incurred from the data provided by Wize Manufacturing.

Which of the following is not a characteristic of the type of inventory used in manufacturing-type sector companies?

The distinction between variable costs and fixed costs is central to variable costing,and it is highlighted by the gross-margin format.

Which of the following is not true about unit costs?

The cost of steel and tires to an automobile manufacturer is an example of a direct cost.

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