Question 1

In a manufacturing company,product costs appear on either the balance sheet or income statement,but not both.

Accepted Answer

A) True 
 B)False

Question 2

Company activities such as processing orders,billing customers,and moving materials can be cost objects.

Accepted Answer

A) True 
 B)False

Question 3

An example of a strategic management decision is the selection of the product mix that maximizes profits.

Accepted Answer

A) True 
 B)False

Question 4

________ is a name for a system that first accumulates indirect resource costs for each of the activities of an organization and then assigns the cost of each activity to the cost objects that require that activity.

Accepted Answer

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

Question 5

In a manufacturing firm,the computation of Cost of Goods Manufactured does NOT use ________.

Accepted Answer

A) finished goods inventory,ending balance 
B) indirect production costs 
C) direct labor costs 
D) direct materials used 
A) finished goods inventory,ending balance 
B) indirect production costs 
C) direct labor costs 
D) direct materials used

Question 6

In a manufacturing firm,the finished goods inventory account is only found on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

Unallocated costs ________.

Accepted Answer

A) are not recorded in the cost accounting system 
B) are not allocated to cost objects 
C) are direct costs for service firms 
D) are indirect costs for merchandising firms 
A) are not recorded in the cost accounting system 
B) are not allocated to cost objects 
C) are direct costs for service firms 
D) are indirect costs for merchandising firms

Question 8

Which of the following is NOT a valid step when designing an activity-based costing system?

Accepted Answer

A) Determine the key components of the system. 
B) Determine the relationships between cost objects,activities,and resources. 
C) Calculate the new cost of the product. 
D) Benchmarking. 
A) Determine the key components of the system. 
B) Determine the relationships between cost objects,activities,and resources. 
C) Calculate the new cost of the product. 
D) Benchmarking.

Question 9

________ is the process of comparing products against the best industry standards.

Accepted Answer

A) Activity-based costing 
B) Continuous process improvements 
C) Benchmarking 
D) GPK 
A) Activity-based costing 
B) Continuous process improvements 
C) Benchmarking 
D) GPK

Question 10

Which of these costs is NOT an indirect production cost for a manufactured chair?

Accepted Answer

A) rental cost of factory building 
B) depreciation expense on factory equipment 
C) cost of legal staff to identify legal issues associated with the chair 
D) salary of factory supervisor 
A) rental cost of factory building 
B) depreciation expense on factory equipment 
C) cost of legal staff to identify legal issues associated with the chair 
D) salary of factory supervisor

Question 11

Accountants initially collect costs by some natural classification such as activities performed.

Accepted Answer

A) True 
 B)False

Question 12

What is an example of a strategic management decision that uses cost information?

Accepted Answer

A) calculating the cost of production areas 
B) determining the product mix 
C) assessing a cost control program in a factory 
D) determining the amount of cost of goods sold for financial reporting 
A) calculating the cost of production areas 
B) determining the product mix 
C) assessing a cost control program in a factory 
D) determining the amount of cost of goods sold for financial reporting

Question 13

The computation for Cost of Goods Manufactured on the income statement is ________.(Assume there are no work-in-process inventories.)

Accepted Answer

A) direct materials used plus direct production costs 
B) direct materials used plus direct labor plus indirect production costs 
C) direct materials used plus direct labor 
D) direct materials used plus direct labor plus direct production costs 
A) direct materials used plus direct production costs 
B) direct materials used plus direct labor plus indirect production costs 
C) direct materials used plus direct labor 
D) direct materials used plus direct labor plus direct production costs

Question 14

Which statement is FALSE?

Accepted Answer

A) A cost may be defined as a sacrifice or giving up of resources for a particular purpose. 
B) Costs are frequently measured by the monetary units that must be paid for goods and services. 
C) Only manufacturing firms need some form of cost accounting. 
D) The first step in a cost accounting system is the collection of costs by some category. 
A) A cost may be defined as a sacrifice or giving up of resources for a particular purpose. 
B) Costs are frequently measured by the monetary units that must be paid for goods and services. 
C) Only manufacturing firms need some form of cost accounting. 
D) The first step in a cost accounting system is the collection of costs by some category.

Question 15

Which statement about indirect costs is FALSE?

Accepted Answer

A) Today,indirect costs exceed 50% of total costs in many companies. 
B) Some indirect costs are variable. 
C) Managers can ignore indirect costs and make good operational decisions. 
D) Indirect costs include labor costs that cannot be traced to a particular product. 
A) Today,indirect costs exceed 50% of total costs in many companies. 
B) Some indirect costs are variable. 
C) Managers can ignore indirect costs and make good operational decisions. 
D) Indirect costs include labor costs that cannot be traced to a particular product.

Question 16

Which of the following costs is a direct cost to a manufactured product?

Accepted Answer

A) depreciation expense on factory equipment used for the product 
B) the wages of an assembly worker who works specifically on the product 
C) accountants who accumulate the costs of the product 
D) a factory supervisor who oversees the production of several different types of products 
A) depreciation expense on factory equipment used for the product 
B) the wages of an assembly worker who works specifically on the product 
C) accountants who accumulate the costs of the product 
D) a factory supervisor who oversees the production of several different types of products

Question 17

What is an example of a strategic management decision that uses cost information?

Accepted Answer

A) determination of cost of goods sold for the income statement 
B) identification of value-chain function to outsource 
C) evaluation of operational cost control program 
D) assessment of process improvement efforts in quality control 
A) determination of cost of goods sold for the income statement 
B) identification of value-chain function to outsource 
C) evaluation of operational cost control program 
D) assessment of process improvement efforts in quality control

Question 18

Cost accounting is that part of the cost management system that measures costs for the sole purpose of financial reporting.

Accepted Answer

A) True 
 B)False

Question 19

The wages of the janitor in the factory are direct costs for a manufactured product.

Accepted Answer

A) True 
 B)False

Question 20

Happy Manufacturing Company had the following information available for the year:
   Work in process inventories and raw materials inventories were negligible at the beginning and end of the year.
Required: 
A)Compute the Cost of Goods Manufactured for the year.
B)Compute the Cost of Goods Sold for the year.

Accepted Answer

A)$174,930 ($44,000 + $7,700 +

In a manufacturing company,product costs appear on either the balance sheet or income statement,but not both.

Company activities such as processing orders,billing customers,and moving materials can be cost objects.

An example of a strategic management decision is the selection of the product mix that maximizes profits.

________ is a name for a system that first accumulates indirect resource costs for each of the activities of an organization and then assigns the cost of each activity to the cost objects that require that activity.

In a manufacturing firm,the computation of Cost of Goods Manufactured does NOT use ________.

In a manufacturing firm,the finished goods inventory account is only found on the balance sheet.

Unallocated costs ________.

Which of the following is NOT a valid step when designing an activity-based costing system?

________ is the process of comparing products against the best industry standards.

Which of these costs is NOT an indirect production cost for a manufactured chair?

Accountants initially collect costs by some natural classification such as activities performed.

What is an example of a strategic management decision that uses cost information?

The computation for Cost of Goods Manufactured on the income statement is ________.(Assume there are no work-in-process inventories.)

Which statement is FALSE?

Which statement about indirect costs is FALSE?

Which of the following costs is a direct cost to a manufactured product?

What is an example of a strategic management decision that uses cost information?

Cost accounting is that part of the cost management system that measures costs for the sole purpose of financial reporting.

The wages of the janitor in the factory are direct costs for a manufactured product.

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

In a manufacturing company,product costs appear on either the balance sheet or income statement,but not both.

Company activities such as processing orders,billing customers,and moving materials can be cost objects.

An example of a strategic management decision is the selection of the product mix that maximizes profits.

________ is a name for a system that first accumulates indirect resource costs for each of the activities of an organization and then assigns the cost of each activity to the cost objects that require that activity.

In a manufacturing firm,the computation of Cost of Goods Manufactured does NOT use ________.

In a manufacturing firm,the finished goods inventory account is only found on the balance sheet.

Unallocated costs ________.

Which of the following is NOT a valid step when designing an activity-based costing system?

________ is the process of comparing products against the best industry standards.

Which of these costs is NOT an indirect production cost for a manufactured chair?

Accountants initially collect costs by some natural classification such as activities performed.

What is an example of a strategic management decision that uses cost information?

The computation for Cost of Goods Manufactured on the income statement is ________.(Assume there are no work-in-process inventories.)

Which statement is FALSE?

Which statement about indirect costs is FALSE?

Which of the following costs is a direct cost to a manufactured product?

What is an example of a strategic management decision that uses cost information?

Cost accounting is that part of the cost management system that measures costs for the sole purpose of financial reporting.

The wages of the janitor in the factory are direct costs for a manufactured product.

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