Question 1

Which of the following statements is FALSE?

Accepted Answer

A) An unallocated cost for one company may be a direct cost for another company. 
B) The cost of a system for tracing costs to cost objects should be less than its expected benefit. 
C) A cost driver is a measure that causes the costs in a cost pool. 
D) Because of the rise in direct costs for most companies,allocating direct costs is important in most companies today. 
A) An unallocated cost for one company may be a direct cost for another company. 
B) The cost of a system for tracing costs to cost objects should be less than its expected benefit. 
C) A cost driver is a measure that causes the costs in a cost pool. 
D) Because of the rise in direct costs for most companies,allocating direct costs is important in most companies today.

Question 2

A hospital radiology department has the following activities:   Which activity is a value-added activity?

Accepted Answer

A) Activity 1 
B) Activity 2 
C) Activity 3 
D) Activity 4 
A) Activity 1 
B) Activity 2 
C) Activity 3 
D) Activity 4

Question 3

For a merchandising firm,insurance expense on the factory building is a product cost.

Accepted Answer

A) True 
 B)False

Question 4

In a manufacturing firm,which inventory account is NOT used?

Accepted Answer

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

Question 5

________ use(s)the output of an activity-based costing system to improve the operational control of an organization.

Accepted Answer

A) Cost accounting 
B) Cost-volume-profit models 
C) Activity-based management 
D) Traditional costing system 
A) Cost accounting 
B) Cost-volume-profit models 
C) Activity-based management 
D) Traditional costing system

Question 6

Accountants can specifically and exclusively identify indirect costs with a given cost object in an economically feasible way.

Accepted Answer

A) True 
 B)False

Question 7

In a manufacturing company,________.

Accepted Answer

A) inventoriable costs only become an expense when the company sells the inventory 
B) inventoriable costs become an expense as soon as the company finishes manufacturing the product 
C) there is only one inventory account 
D) merchandise inventory is reported on the balance sheet and income statement 
A) inventoriable costs only become an expense when the company sells the inventory 
B) inventoriable costs become an expense as soon as the company finishes manufacturing the product 
C) there is only one inventory account 
D) merchandise inventory is reported on the balance sheet and income statement

Question 8

Depreciation expense on assembly equipment is an example of a direct cost for a manufactured product.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements about cost accounting systems is FALSE?

Accepted Answer

A) The cost accounting system provides the cost data that managers use for decision making. 
B) The cost accounting system is the most fundamental component of a cost management system. 
C) A cost accounting system that provides accurate information is a key success factor for all types of organizations. 
D) The cost accounting system does not provide data for financial reports. 
A) The cost accounting system provides the cost data that managers use for decision making. 
B) The cost accounting system is the most fundamental component of a cost management system. 
C) A cost accounting system that provides accurate information is a key success factor for all types of organizations. 
D) The cost accounting system does not provide data for financial reports.

Question 10

Departments and territories are examples of cost objects.

Accepted Answer

A) True 
 B)False

Question 11

Cost can be measured by yen,euros,and other currencies.

Accepted Answer

A) True 
 B)False

Question 12

When comparing traditional costing systems to activity-based costing systems,the analysis reveals that ________.

Accepted Answer

A) high volume products are undercosted with traditional costing systems 
B) high volume products are overcosted with traditional costing systems 
C) low volume products are overcosted with traditional costing systems 
D) both high volume and low volume products are undercosted with traditional costing systems 
A) high volume products are undercosted with traditional costing systems 
B) high volume products are overcosted with traditional costing systems 
C) low volume products are overcosted with traditional costing systems 
D) both high volume and low volume products are undercosted with traditional costing systems

Question 13

A cost accounting system typically includes two processes: cost allocation and cost determination.

Accepted Answer

A) True 
 B)False

Question 14

In contrast to traditional costing systems,activity-based costing systems provide ________.

Accepted Answer

A) the cost of each product or service 
B) the cost of goods sold 
C) the cost of each activity 
D) inventory values in accordance with Generally Accepted Accounting Principles 
A) the cost of each product or service 
B) the cost of goods sold 
C) the cost of each activity 
D) inventory values in accordance with Generally Accepted Accounting Principles

Question 15

The Palin Company manufactures several products.The Palin Company has gathered the following information for the year ended December 31,2010:
   Requirements: 
A)Compute the Cost of Goods Manufactured for the year ended December 31,2010.
B)Compute the Cost of Goods Sold for the year ended December 31,2010.
C)Compute the Net Income(Loss)for the year ended December 31,2010.

Accepted Answer

A)$72,400($20,800 + $12,300 +

Question 16

There is no universally best cost allocation system.

Accepted Answer

A) True 
 B)False

Question 17

What type of users need detailed cost information about products or services?

Accepted Answer

A) creditors 
B) investors 
C) managers 
D) government regulators 
A) creditors 
B) investors 
C) managers 
D) government regulators

Question 18

Direct manufacturing costs are the same as manufacturing overhead costs.

Accepted Answer

A) True 
 B)False

Question 19

A manufacturing company has identified several costs.Indicate whether each of the following costs is an Inventoriable cost(I)or a Period cost(P):
________ 1.depreciation on factory equipment
________ 2.depreciation on treasurer's desk
________ 3.direct materials
________ 4.factory supplies
________ 5.indirect labor
________ 6.repairs expensefactory
________ 7.office supplies
________ 8.advertising expense
________ 9.depreciation on office equipment
 .direct labor
 .factory supervisor's salary
 2.factory utilities
 3.indirect materials
 4.officer salaries
 5.sales commissions

Accepted Answer

1.I 2.P 3.I 4.I 5.I

Question 20

An example of a strategic management decision is the decision to outsource a particular value-chain function.

Accepted Answer

A) True 
 B)False

Which of the following statements is FALSE?

A hospital radiology department has the following activities: Which activity is a value-added activity?

For a merchandising firm,insurance expense on the factory building is a product cost.

In a manufacturing firm,which inventory account is NOT used?

________ use(s)the output of an activity-based costing system to improve the operational control of an organization.

Accountants can specifically and exclusively identify indirect costs with a given cost object in an economically feasible way.

In a manufacturing company,________.

Depreciation expense on assembly equipment is an example of a direct cost for a manufactured product.

Which of the following statements about cost accounting systems is FALSE?

Departments and territories are examples of cost objects.

Cost can be measured by yen,euros,and other currencies.

When comparing traditional costing systems to activity-based costing systems,the analysis reveals that ________.

A cost accounting system typically includes two processes: cost allocation and cost determination.

In contrast to traditional costing systems,activity-based costing systems provide ________.

There is no universally best cost allocation system.

What type of users need detailed cost information about products or services?

Direct manufacturing costs are the same as manufacturing overhead costs.

An example of a strategic management decision is the decision to outsource a particular value-chain function.

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

Which of the following statements is FALSE?

A hospital radiology department has the following activities: Which activity is a value-added activity?

For a merchandising firm,insurance expense on the factory building is a product cost.

In a manufacturing firm,which inventory account is NOT used?

________ use(s)the output of an activity-based costing system to improve the operational control of an organization.

Accountants can specifically and exclusively identify indirect costs with a given cost object in an economically feasible way.

In a manufacturing company,________.

Depreciation expense on assembly equipment is an example of a direct cost for a manufactured product.

Which of the following statements about cost accounting systems is FALSE?

Departments and territories are examples of cost objects.

Cost can be measured by yen,euros,and other currencies.

When comparing traditional costing systems to activity-based costing systems,the analysis reveals that ________.

A cost accounting system typically includes two processes: cost allocation and cost determination.

In contrast to traditional costing systems,activity-based costing systems provide ________.

There is no universally best cost allocation system.

What type of users need detailed cost information about products or services?

Direct manufacturing costs are the same as manufacturing overhead costs.

An example of a strategic management decision is the decision to outsource a particular value-chain function.

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