Question 1

When 5,000 units are produced,variable costs are $6 per unit.Therefore,when 20,000 units are produced:

Accepted Answer

A) variable costs will total $120,000. 
B) variable costs will total $60,000. 
C) variable unit costs will increase to $12 per unit. 
D) variable unit costs will decrease to $3 per unit. 
E) variable costs will decrease to $2 per unit. 
A) variable costs will total $120,000. 
B) variable costs will total $60,000. 
C) variable unit costs will increase to $12 per unit. 
D) variable unit costs will decrease to $3 per unit. 
E) variable costs will decrease to $2 per unit.

Question 2

Write a short essay and discuss how unit costs are calculated.Discuss how unit costs are related to the value chain.

Accepted Answer

Unit costs are also known as the average

Question 3

Costs are defined as variable or fixed for a specific activity and for a given time period.

Accepted Answer

A) True 
 B)False

Question 4

The plant administrative costs at a manufacturing company are indirect costs.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not a challenge to managers that allocate costs?

Accepted Answer

A) Assign inaccurate product costs. 
B) Inaccurate product costs mislead managers about the profitability of products. 
C) Managers will promote unprofitable products. 
D) Managers deemphasize profitable products. 
E) Assign accurate product costs. 
A) Assign inaccurate product costs. 
B) Inaccurate product costs mislead managers about the profitability of products. 
C) Managers will promote unprofitable products. 
D) Managers deemphasize profitable products. 
E) Assign accurate product costs.

Question 6

A band of normal activity or volume in which specific cost-volume relationships are maintained is referred to as the:

Accepted Answer

A) average range. 
B) cost-allocation range. 
C) cost drive range. 
D) relevant range. 
E) driving range. 
A) average range. 
B) cost-allocation range. 
C) cost drive range. 
D) relevant range. 
E) driving range.

Question 7

Write a brief summary and discuss why cost allocation is important to a manager.Discuss some of the challenges that managers face when they allocate costs and discuss those factors that affect the direct/indirect cost classification.Be specific.

Accepted Answer

Cost allocation is important to a manage

Question 8

As a general rule,managers first calculate total costs,and then compute which of the following costs when they need to make decisions?

Accepted Answer

A) A direct cost. 
B) A unit cost. 
C) A variable cost. 
D) An indirect cost. 
E) A cost driver. 
A) A direct cost. 
B) A unit cost. 
C) A variable cost. 
D) An indirect cost. 
E) A cost driver.

Question 9

The Material Handler company reported the following information:
 
Required:
Compute the Total Cost of Direct Materials used in 2012

Accepted Answer

A) $64,000 
B) $72,000 
C) $78,000 
D) $82,000 
E) $86,000 
A) $64,000 
B) $72,000 
C) $78,000 
D) $82,000 
E) $86,000

Question 10

Managers compute the cost of goods sold in a manufacturing entity as:

Accepted Answer

A) beginning work-in-process inventory + Cost of goods manufactured - Ending work-in-process inventory = Cost of goods sold. 
B) beginning work-in-process inventory + Cost of goods manufactured + Ending work-in-process inventory = Cost of goods sold. 
C) cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold. 
D) cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold. 
E) cost of goods manufactured - Beginning finished goods inventory + Ending work-in-process inventory = Cost of goods sold. 
A) beginning work-in-process inventory + Cost of goods manufactured - Ending work-in-process inventory = Cost of goods sold. 
B) beginning work-in-process inventory + Cost of goods manufactured + Ending work-in-process inventory = Cost of goods sold. 
C) cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold. 
D) cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold. 
E) cost of goods manufactured - Beginning finished goods inventory + Ending work-in-process inventory = Cost of goods sold.

Question 11

During 2011,Maryland Corporation incurred manufacturing expenses of $15,000,000 to produce 300,000 finished units.At year-end,it was determined that 250,000 units were sold while 25,000 units remained in ending inventory.
Required:
a.Compute the cost to produce one unit.
b.Compute the amount that will be reported on the income statement for cost of goods sold.
c.Compute the amount that will be reported on the balance sheet for ending inventory.

Accepted Answer

a.$15,000,000 ÷ 300,000 = $50.

Question 12

We define cost tracing as:

Accepted Answer

A) the assignment of direct costs to a chosen cost object. 
B) a function of cost allocation. 
C) the process of tracking both direct and indirect costs associated with a cost object. 
D) the process of determining the actual cost of the cost object. 
E) the process of tracking only the direct and indirect costs. 
A) the assignment of direct costs to a chosen cost object. 
B) a function of cost allocation. 
C) the process of tracking both direct and indirect costs associated with a cost object. 
D) the process of determining the actual cost of the cost object. 
E) the process of tracking only the direct and indirect costs.

Question 13

Manufacturing-sector companies purchase materials and components and convert them into various finished goods.

Accepted Answer

A) True 
 B)False

Question 14

The unit cost,or average cost,is the ratio of total costs to the number of units produced.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following explains why managers compare the budgeted costs to actual costs?

Accepted Answer

A) Managers only focus on the budgeted costs. 
B) Managers only learn how to make better decisions in the future. 
C) Managers know how well they did to control costs only. 
D) Managers evaluate how well they did to control costs and learn how to do better in the future. 
E) Managers never compare these costs. 
A) Managers only focus on the budgeted costs. 
B) Managers only learn how to make better decisions in the future. 
C) Managers know how well they did to control costs only. 
D) Managers evaluate how well they did to control costs and learn how to do better in the future. 
E) Managers never compare these costs.

Question 16

Which of the following is not a commonly used classification or characteristic of manufacturing costs?

Accepted Answer

A) Direct material costs. 
B) Direct manufacturing labor costs. 
C) Indirect manufacturing costs. 
D) Freight-in charges. 
E) Cost of goods sold. 
A) Direct material costs. 
B) Direct manufacturing labor costs. 
C) Indirect manufacturing costs. 
D) Freight-in charges. 
E) Cost of goods sold.

Question 17

Budgeting is not an important tool that managers use in planning and control.

Accepted Answer

A) True 
 B)False

Question 18

Analyzing relevant information is a key aspect of making appropriate decisions.

Accepted Answer

A) True 
 B)False

Question 19

Fixed and variable costs:

Accepted Answer

A) always change in the same proportion. 
B) are defined as variable or fixed for a specific activity for a given time period. 
C) are only defined for a specific activity and never for a given period of time. 
D) are only defined for a given period of time and not for a specific activity. 
E) are never useful to managers when they make cost decisions. 
A) always change in the same proportion. 
B) are defined as variable or fixed for a specific activity for a given time period. 
C) are only defined for a specific activity and never for a given period of time. 
D) are only defined for a given period of time and not for a specific activity. 
E) are never useful to managers when they make cost decisions.

Question 20

Jim's Manufacturing currently produces 1,250 brakes per month.The following per unit data apply for sales to regular customers:
   
The plant has capacity for 2,000 brakes.
Required:
a.What is the total cost of producing 1,000 brakes?
b.What is the total cost of producing 1,500 brakes?
c.What is the per-unit cost when producing 1,500 brakes?

Accepted Answer

a.[($225 + $28 + $50)× 1,000 u

When 5,000 units are produced,variable costs are $6 per unit.Therefore,when 20,000 units are produced:

Write a short essay and discuss how unit costs are calculated.Discuss how unit costs are related to the value chain.

Costs are defined as variable or fixed for a specific activity and for a given time period.

The plant administrative costs at a manufacturing company are indirect costs.

Which of the following is not a challenge to managers that allocate costs?

A band of normal activity or volume in which specific cost-volume relationships are maintained is referred to as the:

Write a brief summary and discuss why cost allocation is important to a manager.Discuss some of the challenges that managers face when they allocate costs and discuss those factors that affect the direct/indirect cost classification.Be specific.

As a general rule,managers first calculate total costs,and then compute which of the following costs when they need to make decisions?

The Material Handler company reported the following information: Required: Compute the Total Cost of Direct Materials used in 2012

Managers compute the cost of goods sold in a manufacturing entity as:

We define cost tracing as:

Manufacturing-sector companies purchase materials and components and convert them into various finished goods.

The unit cost,or average cost,is the ratio of total costs to the number of units produced.

Which of the following explains why managers compare the budgeted costs to actual costs?

Which of the following is not a commonly used classification or characteristic of manufacturing costs?

Budgeting is not an important tool that managers use in planning and control.

Analyzing relevant information is a key aspect of making appropriate decisions.

Fixed and variable 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

When 5,000 units are produced,variable costs are $6 per unit.Therefore,when 20,000 units are produced:

Write a short essay and discuss how unit costs are calculated.Discuss how unit costs are related to the value chain.

Costs are defined as variable or fixed for a specific activity and for a given time period.

The plant administrative costs at a manufacturing company are indirect costs.

Which of the following is not a challenge to managers that allocate costs?

A band of normal activity or volume in which specific cost-volume relationships are maintained is referred to as the:

Write a brief summary and discuss why cost allocation is important to a manager.Discuss some of the challenges that managers face when they allocate costs and discuss those factors that affect the direct/indirect cost classification.Be specific.

As a general rule,managers first calculate total costs,and then compute which of the following costs when they need to make decisions?

The Material Handler company reported the following information: Required: Compute the Total Cost of Direct Materials used in 2012

Managers compute the cost of goods sold in a manufacturing entity as:

We define cost tracing as:

Manufacturing-sector companies purchase materials and components and convert them into various finished goods.

The unit cost,or average cost,is the ratio of total costs to the number of units produced.

Which of the following explains why managers compare the budgeted costs to actual costs?

Which of the following is not a commonly used classification or characteristic of manufacturing costs?

Budgeting is not an important tool that managers use in planning and control.

Analyzing relevant information is a key aspect of making appropriate decisions.

Fixed and variable 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