Question 1

The accuracy of cost information increases as the number of cost pools (increases/decreases)_________________.

Accepted Answer

increases

Question 2

Costs drivers can be based on either volume or activity.Which of the following is a volume based cost driver?

Accepted Answer

A) number of invoices processed. 
B) time taken to set up machines. 
C) number of inspections undertaken. 
D) machine hours. 
A) number of invoices processed. 
B) time taken to set up machines. 
C) number of inspections undertaken. 
D) machine hours. D

Question 3

Under Australia accounting standards,which of the following are inventoriable product costs?

Accepted Answer

A) office salaries 
B) manufacturing costs 
C) depreciation of office equipment 
D) all the options are inventoriable product costs 
A) office salaries 
B) manufacturing costs 
C) depreciation of office equipment 
D) all the options are inventoriable product costs B

Question 4

To calculate the total cost of a cost object,________ costs need to be traced and indirect costs allocated.

Accepted Answer

The answer of To calculate the total cost of a...

Question 5

Which of the following statements about indirect costs is true?

Accepted Answer

A) All the statements about indirect costs are true. 
B) Indirect costs are incurred for the benefit of multiple cost objects. 
C) Cost drivers provide the link between indirect costs and cost objects. 
D) Because it is not economically feasible to trace indirect costs to specific cost objects,the costs need to be allocated. 
A) All the statements about indirect costs are true. 
B) Indirect costs are incurred for the benefit of multiple cost objects. 
C) Cost drivers provide the link between indirect costs and cost objects. 
D) Because it is not economically feasible to trace indirect costs to specific cost objects,the costs need to be allocated.

Question 6

Manufacturing overhead costs are applied to each job

Accepted Answer

A) only if the cost can be directly traced to the job. 
B) when the indirect cost is incurred. 
C) by using a predetermined overhead rate. 
D) at the end of the year when exact cost figures are known. 
A) only if the cost can be directly traced to the job. 
B) when the indirect cost is incurred. 
C) by using a predetermined overhead rate. 
D) at the end of the year when exact cost figures are known.

Question 7

Compared to a high volume product,a low volume product

Accepted Answer

A) is usually responsible for more indirect costs per unit. 
B) usually requires less special handling per unit 
C) requires relatively fewer machine set-ups costs per unit. 
D) requires the use of direct labour hours as the cost driver. 
A) is usually responsible for more indirect costs per unit. 
B) usually requires less special handling per unit 
C) requires relatively fewer machine set-ups costs per unit. 
D) requires the use of direct labour hours as the cost driver.

Question 8

Which of these is not usually one of the levels of the activity hierarchy in a typical manufacturing entity?

Accepted Answer

A) Product level 
B) Unit level 
C) Facility level 
D) Building level 
A) Product level 
B) Unit level 
C) Facility level 
D) Building level

Question 9

Overhead costs are:

Accepted Answer

A) incurred for the benefit of multiple cost objects 
B) also known as indirect costs 
C) might be traceable to an individual cost object but it is not cost effective to do so. 
D) all the statements about overhead costs are true. 
A) incurred for the benefit of multiple cost objects 
B) also known as indirect costs 
C) might be traceable to an individual cost object but it is not cost effective to do so. 
D) all the statements about overhead costs are true.

Question 10

The practice of setting different prices for different customers is known as price ________________.

Accepted Answer

The answer of The practice of setting different prices for...

Question 11

Inventoriable product cost is the sum of direct and indirect _______________ costs.

Accepted Answer

The answer of Inventoriable product cost is the sum of...

Question 12

Any non-manufacturing costs incurred to support entity activities such as office salaries and other administration expenses are not permitted under Australian accounting standards to be included in the _________________ product cost.

Accepted Answer

The answer of Any non-manufacturing costs incurred to support entity...

Question 13

The first step from the list below in the process of allocating indirect costs is to:

Accepted Answer

A) identify a cost driver that has a strong correlation to the cost pool. 
B) compute the indirect cost rate per cost driver. 
C) allocate the indirect costs to each cost object. 
D) decide on the number of indirect cost pools. 
A) identify a cost driver that has a strong correlation to the cost pool. 
B) compute the indirect cost rate per cost driver. 
C) allocate the indirect costs to each cost object. 
D) decide on the number of indirect cost pools.

Question 14

Which of these is $\bold{not}$ a pricing method?

Accepted Answer

A) Peak load pricing 
B) Price skimming 
C) Price discrimination 
D) Greedy pricing 
A) Peak load pricing 
B) Price skimming 
C) Price discrimination 
D) Greedy pricing

Question 15

The statement that is incorrect is:

Accepted Answer

A) Inaccurate application of overheads to products can lead to the wrong conclusions about the profitability of products. 
B) An indirect cost benefits multiple cost objects. 
C) Direct labour is usually an accurate cost driver for most indirect costs. 
D) By allocating indirect costs an organisation is able to determine the full cost of a cost object. 
A) Inaccurate application of overheads to products can lead to the wrong conclusions about the profitability of products. 
B) An indirect cost benefits multiple cost objects. 
C) Direct labour is usually an accurate cost driver for most indirect costs. 
D) By allocating indirect costs an organisation is able to determine the full cost of a cost object.

Question 16

Period costs are costs that:

Accepted Answer

A) are allocated over several accounting periods 
B) non-manufacturing costs for the current period 
C) manufacturing costs for the current period 
D) none of the options is correct 
A) are allocated over several accounting periods 
B) non-manufacturing costs for the current period 
C) manufacturing costs for the current period 
D) none of the options is correct

Question 17

Labour hours,machine hours and units of output are examples of ______________ drivers that use a measure of output to assign indirect costs to cost objects.

Accepted Answer

The answer of Labour hours,machine hours and units of output...

Question 18

Which of the following statements regarding variances is true?

Accepted Answer

A) All the statements are true 
B) Variance calculations need to be made when budgeted costs are used to allocate indirect costs. 
C) Variances arise when an entity over estimates the expenditure level of indirect costs assigned to the cost pool or the expected usage of the cost driver. 
D) Variances arise when an entity underestimates the expenditure level of indirect costs assigned to the cost pool or the expected usage of the cost driver. 
A) All the statements are true 
B) Variance calculations need to be made when budgeted costs are used to allocate indirect costs. 
C) Variances arise when an entity over estimates the expenditure level of indirect costs assigned to the cost pool or the expected usage of the cost driver. 
D) Variances arise when an entity underestimates the expenditure level of indirect costs assigned to the cost pool or the expected usage of the cost driver.

Question 19

Indirect costs are incurred for the benefit of (one/multiple)_________________ cost object(s).

Accepted Answer

The answer of Indirect costs are incurred for the benefit...

Question 20

If the cost object is the product,from the choices given,the cost driver that would be the most accurate means of allocating the overhead costs for the Ordering and Receiving department is:

Accepted Answer

A) set-ups. 
B) purchase orders. 
C) machine hours. 
D) machine set-ups. 
A) set-ups. 
B) purchase orders. 
C) machine hours. 
D) machine set-ups.

The accuracy of cost information increases as the number of cost pools (increases/decreases)_________________.

Costs drivers can be based on either volume or activity.Which of the following is a volume based cost driver?

Under Australia accounting standards,which of the following are inventoriable product costs?

To calculate the total cost of a cost object,________ costs need to be traced and indirect costs allocated.

Which of the following statements about indirect costs is true?

Manufacturing overhead costs are applied to each job

Compared to a high volume product,a low volume product

Which of these is not usually one of the levels of the activity hierarchy in a typical manufacturing entity?

Overhead costs are:

The practice of setting different prices for different customers is known as price ________________.

Inventoriable product cost is the sum of direct and indirect _______________ costs.

Any non-manufacturing costs incurred to support entity activities such as office salaries and other administration expenses are not permitted under Australian accounting standards to be included in the _________________ product cost.

The first step from the list below in the process of allocating indirect costs is to:

Which of these is $\bold{not}$ a pricing method?

The statement that is incorrect is:

Period costs are costs that:

Labour hours,machine hours and units of output are examples of ______________ drivers that use a measure of output to assign indirect costs to cost objects.

Which of the following statements regarding variances is true?

Indirect costs are incurred for the benefit of (one/multiple)_________________ cost object(s).

If the cost object is the product,from the choices given,the cost driver that would be the most accurate means of allocating the overhead costs for the Ordering and Receiving department is:

Introduction to Accounting

Business Sustainability

Business Structures

Business Transactions

Balance Sheet

Income Statement and Statement of Changes in Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Budgeting

Cost-Volume-Profit Analysis

Capital Investment

Financing the Business

Performance Measurement

Filters

Exam 11: Costing and Pricing in an Entity

The accuracy of cost information increases as the number of cost pools (increases/decreases)_________________.

Costs drivers can be based on either volume or activity.Which of the following is a volume based cost driver?

Under Australia accounting standards,which of the following are inventoriable product costs?

To calculate the total cost of a cost object,________ costs need to be traced and indirect costs allocated.

Which of the following statements about indirect costs is true?

Manufacturing overhead costs are applied to each job

Compared to a high volume product,a low volume product

Which of these is not usually one of the levels of the activity hierarchy in a typical manufacturing entity?

Overhead costs are:

The practice of setting different prices for different customers is known as price ________________.

Inventoriable product cost is the sum of direct and indirect _______________ costs.

Any non-manufacturing costs incurred to support entity activities such as office salaries and other administration expenses are not permitted under Australian accounting standards to be included in the _________________ product cost.

The first step from the list below in the process of allocating indirect costs is to:

Which of these is not\bold{not}not a pricing method?

The statement that is incorrect is:

Period costs are costs that:

Labour hours,machine hours and units of output are examples of ______________ drivers that use a measure of output to assign indirect costs to cost objects.

Which of the following statements regarding variances is true?

Indirect costs are incurred for the benefit of (one/multiple)_________________ cost object(s).

If the cost object is the product,from the choices given,the cost driver that would be the most accurate means of allocating the overhead costs for the Ordering and Receiving department is:

Introduction to Accounting

Business Sustainability

Business Structures

Business Transactions

Balance Sheet

Income Statement and Statement of Changes in Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Budgeting

Cost-Volume-Profit Analysis

Capital Investment

Financing the Business

Performance Measurement

Filters

Which of these is $\bold{not}$ a pricing method?