Question 1

Period costs include selling and administrative expenses.

Accepted Answer

A) True 
 B)False

Question 2

The process of collecting costs by some natural classification is called ________.

Accepted Answer

A) cost accounting 
B) cost allocation 
C) cost accumulation 
D) cost application 
A) cost accounting 
B) cost allocation 
C) cost accumulation 
D) cost application

Question 3

A manufacturer has three types of inventory that include direct materials inventory,work in process inventory and merchandise inventory.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is NOT a period expense in a manufacturing firm?

Accepted Answer

A) selling expense 
B) administrative expenses 
C) R&D expenses 
D) cost of goods sold 
A) selling expense 
B) administrative expenses 
C) R&D expenses 
D) cost of goods sold

Question 5

Examples using activity-based costing generally show that traditional costing systems ________ high-volume,simple products and ________ low-volume,complex products.

Accepted Answer

A) undercost; overcost 
B) overcost; undercost 
C) undercost; undercost 
D) overcost; overcost 
A) undercost; overcost 
B) overcost; undercost 
C) undercost; undercost 
D) overcost; overcost

Question 6

Companies must assign all nonproduction costs to cost objects for internal management purposes.

Accepted Answer

A) True 
 B)False

Question 7

________ is the part of the accounting system that measures costs for the purposes of management decision making and financial reporting.

Accepted Answer

A) Activity-based costing 
B) Activity-based management 
C) Cost accounting 
D) Cost allocation 
A) Activity-based costing 
B) Activity-based management 
C) Cost accounting 
D) Cost allocation

Question 8

In a manufacturing company,unsold,partially complete products are called work-in-process inventory.

Accepted Answer

A) True 
 B)False

Question 9

A century ago,a large proportion of labor costs were indirect.

Accepted Answer

A) True 
 B)False

Question 10

Determining the key components of an Activity-Based Costing(ABC)system is the first step in the design of an ABC system.

Accepted Answer

A) True 
 B)False

Question 11

In designing an activity-based costing system,what is the first step?

Accepted Answer

A) collecting data about costs 
B) determining the relationships among cost objects,activities,and resources 
C) determining the key components of the activity-based costing system 
D) calculating the costs of the product 
A) collecting data about costs 
B) determining the relationships among cost objects,activities,and resources 
C) determining the key components of the activity-based costing system 
D) calculating the costs of the product

Question 12

Which purpose of cost allocation usually dominates most business situations?

Accepted Answer

A) to justify costs or obtain reimbursement 
B) to compute income and asset valuations for financial reporting 
C) to give feedback for performance evaluation 
D) to predict the economic effects of strategic and operational control decisions 
A) to justify costs or obtain reimbursement 
B) to compute income and asset valuations for financial reporting 
C) to give feedback for performance evaluation 
D) to predict the economic effects of strategic and operational control decisions

Question 13

Where a specific manufactured product is the cost object,minor materials,such as tacks and nails,used to manufacture the product would probably be classified as a(n)________.

Accepted Answer

A) direct; variable cost 
B) direct; fixed cost 
C) indirect; variable cost 
D) indirect; fixed cost 
A) direct; variable cost 
B) direct; fixed cost 
C) indirect; variable cost 
D) indirect; fixed cost

Question 14

Manufactured goods fully completed but not sold are called ________.

Accepted Answer

A) merchandise inventory 
B) direct materials inventory 
C) finished goods inventory 
D) work in process inventory 
A) merchandise inventory 
B) direct materials inventory 
C) finished goods inventory 
D) work in process inventory

Question 15

Which step is NOT used in the allocation of indirect costs to cost objects?

Accepted Answer

A) Accumulate indirect costs for a period of time in a cost pool. 
B) Select an allocation base for each cost pool. 
C) Determine the percentage of the cost pool used for each cost object. 
D) Measure the units of the cost-allocation base used for each cost object. 
A) Accumulate indirect costs for a period of time in a cost pool. 
B) Select an allocation base for each cost pool. 
C) Determine the percentage of the cost pool used for each cost object. 
D) Measure the units of the cost-allocation base used for each cost object.

Question 16

Costs can be classified as direct or indirect with respect to a particular cost object.

Accepted Answer

A) True 
 B)False

Question 17

A merchandising firm typically has ________ inventory account(s).

Accepted Answer

A) no 
B) one 
C) two 
D) three 
A) no 
B) one 
C) two 
D) three

Question 18

Period costs become expenses during a future period.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is FALSE?

Accepted Answer

A) Traditional cost systems generally assign only production costs to products. 
B) Only one cost driver is acceptable when indirect manufacturing costs are a large proportion of total costs. 
C) Traditional cost systems work well with simple production and operating systems. 
D) Cost drivers can be expressed in dollar amounts. 
A) Traditional cost systems generally assign only production costs to products. 
B) Only one cost driver is acceptable when indirect manufacturing costs are a large proportion of total costs. 
C) Traditional cost systems work well with simple production and operating systems. 
D) Cost drivers can be expressed in dollar amounts.

Question 20

In general,more costs are direct when a department is the cost object than when a product or service is the cost object.

Accepted Answer

A) True 
 B)False

Period costs include selling and administrative expenses.

The process of collecting costs by some natural classification is called ________.

A manufacturer has three types of inventory that include direct materials inventory,work in process inventory and merchandise inventory.

Which of the following is NOT a period expense in a manufacturing firm?

Examples using activity-based costing generally show that traditional costing systems high-volume,simple products and low-volume,complex products.

Companies must assign all nonproduction costs to cost objects for internal management purposes.

________ is the part of the accounting system that measures costs for the purposes of management decision making and financial reporting.

In a manufacturing company,unsold,partially complete products are called work-in-process inventory.

A century ago,a large proportion of labor costs were indirect.

Determining the key components of an Activity-Based Costing(ABC)system is the first step in the design of an ABC system.

In designing an activity-based costing system,what is the first step?

Which purpose of cost allocation usually dominates most business situations?

Where a specific manufactured product is the cost object,minor materials,such as tacks and nails,used to manufacture the product would probably be classified as a(n)________.

Manufactured goods fully completed but not sold are called ________.

Which step is NOT used in the allocation of indirect costs to cost objects?

Costs can be classified as direct or indirect with respect to a particular cost object.

A merchandising firm typically has ________ inventory account(s).

Period costs become expenses during a future period.

Which of the following statements is FALSE?

In general,more costs are direct when a department is the cost object than when a product or service is the cost object.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 4: Cost Management Systems and Activity-Based Costing

Period costs include selling and administrative expenses.

The process of collecting costs by some natural classification is called ________.

A manufacturer has three types of inventory that include direct materials inventory,work in process inventory and merchandise inventory.

Which of the following is NOT a period expense in a manufacturing firm?

Examples using activity-based costing generally show that traditional costing systems ________ high-volume,simple products and ________ low-volume,complex products.

Companies must assign all nonproduction costs to cost objects for internal management purposes.

________ is the part of the accounting system that measures costs for the purposes of management decision making and financial reporting.

In a manufacturing company,unsold,partially complete products are called work-in-process inventory.

A century ago,a large proportion of labor costs were indirect.

Determining the key components of an Activity-Based Costing(ABC)system is the first step in the design of an ABC system.

In designing an activity-based costing system,what is the first step?

Which purpose of cost allocation usually dominates most business situations?

Where a specific manufactured product is the cost object,minor materials,such as tacks and nails,used to manufacture the product would probably be classified as a(n)________.

Manufactured goods fully completed but not sold are called ________.

Which step is NOT used in the allocation of indirect costs to cost objects?

Costs can be classified as direct or indirect with respect to a particular cost object.

A merchandising firm typically has ________ inventory account(s).

Period costs become expenses during a future period.

Which of the following statements is FALSE?

In general,more costs are direct when a department is the cost object than when a product or service is the cost object.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Examples using activity-based costing generally show that traditional costing systems high-volume,simple products and low-volume,complex products.