Question 1

Setting low prices when new products are introduced to increase market share is known as:

Accepted Answer

A) peak-load pricing 
B) price skimming 
C) penetration pricing 
D) price discrimination 
A) peak-load pricing 
B) price skimming 
C) penetration pricing 
D) price discrimination

Question 2

If the overhead costs applied to a product are less than the actual overhead costs incurred,overhead is:

Accepted Answer

A) overapplied. 
B) underapplied. 
C) avoidable. 
D) unavoidable. 
A) overapplied. 
B) underapplied. 
C) avoidable. 
D) unavoidable.

Question 3

Place the following selected steps in determining the full cost of a cost object in the order they are carried out: - Allocate indirect costs to the cost object,Identify cost pools and cost drivers,Identify the cost object,Determine the indirect cost rate for each cost driver

Accepted Answer

A) Allocate indirect costs to the cost object,Identify the cost object,Identify cost pools and cost drivers,Determine the indirect cost rate for each cost driver 
B) Allocate indirect costs to the cost object,Identify cost pools and cost drivers,Identify the cost object,Determine the indirect cost rate for each cost driver 
C) Identify the cost object,Identify cost pools and cost drivers,Determine the indirect cost rate for each cost driver,Allocate indirect costs to the cost object 
D) Determine the indirect cost rate for each cost driver,Identify the cost object,Identify cost pools and cost drivers,Allocate indirect costs to the cost object 
A) Allocate indirect costs to the cost object,Identify the cost object,Identify cost pools and cost drivers,Determine the indirect cost rate for each cost driver 
B) Allocate indirect costs to the cost object,Identify cost pools and cost drivers,Identify the cost object,Determine the indirect cost rate for each cost driver 
C) Identify the cost object,Identify cost pools and cost drivers,Determine the indirect cost rate for each cost driver,Allocate indirect costs to the cost object 
D) Determine the indirect cost rate for each cost driver,Identify the cost object,Identify cost pools and cost drivers,Allocate indirect costs to the cost object

Question 4

The system used to allocate costs to cost objects is known as:

Accepted Answer

A) an accounting system 
B) a management system 
C) a costing system 
D) none of the options is a name for a system used to allocate costs to cost objects 
A) an accounting system 
B) a management system 
C) a costing system 
D) none of the options is a name for a system used to allocate costs to cost objects

Question 5

The practice used by foreign based entities of selling products in Australia at prices below the market value in the country where the product is produced at prices that could harm an Australian industry is known as:

Accepted Answer

A) predatory pricing 
B) penetration pricing 
C) dumping 
D) collusive pricing 
A) predatory pricing 
B) penetration pricing 
C) dumping 
D) collusive pricing

Question 6

The cost pool,Machine Set-ups,has estimated overhead of $120 000.The machines in the pool produce two products,X (200 set-ups)and Y (400 set-ups).The amount of machine set-up costs that should be allocated to product Y is:

Accepted Answer

A) $80 000 
B) $60 000 
C) $40 000 
D) $120 000 
A) $80 000 
B) $60 000 
C) $40 000 
D) $120 000

Question 7

The cost pool,machine set-ups,has an estimated overhead of $120 000.The machines in the pool produce two products,X (200 set-ups)and Y (400 set-ups).If 10 000 units of product X are produced,the amount of machine set-up costs that will be assigned to each unit of X is:

Accepted Answer

A) $2 
B) $4 
C) $8 
D) $12 
A) $2 
B) $4 
C) $8 
D) $12

Question 8

Assume Air Tec manufactures only one component for the air conditioning industry.In 2013 the company produced 12 000 units of the component of which 10 000 were sold.The following costs were recorded for 2013:
 
Calculate the inventoriable product cost per unit of output for Air Tec.

Accepted Answer

A) $26.42 
B) $62.50 
C) $80.58 
D) $72.50 
A) $26.42 
B) $62.50 
C) $80.58 
D) $72.50

Question 9

Cost-based pricing is a pricing method that:

Accepted Answer

A) applies a mark-up to the calculation of the product or service cost 
B) seeks to establish prices at what the customer is willing to pay 
C) determines the minimum amount a customer will pay 
D) none of the options is true 
A) applies a mark-up to the calculation of the product or service cost 
B) seeks to establish prices at what the customer is willing to pay 
C) determines the minimum amount a customer will pay 
D) none of the options is true

Question 10

In the activity hierarchy,costs incurred for the benefit of the entire entity are known as ________________ level costs.

Accepted Answer

The answer of In the activity hierarchy,costs incurred for the...

Question 11

Assume Air Tec manufactures only one component for the air conditioning industry.In 2013 the company produced 12 000 units of the component of which 10 000 were sold.The following costs were recorded for 2013:
$\begin{array}{llcc}
  &\text { \$ }\
  \text { Direct material} &500000  \
 \text {Direct labour  } &150000\
 \text { Manufacturing overhead } &220000\
 \text { Administrative expenses } &  97000\
\end{array}$

If there were 1000 units in beginning inventory,calculate the value of ending inventory for Air Tec.

Accepted Answer

A) $72 500 
B) $145 000 
C) $217 500 
D) $241 750 
A) $72 500 
B) $145 000 
C) $217 500 
D) $241 750

Question 12

All of these are indirect costs $\bold{except:}$

Accepted Answer

A) factory rent. 
B) machinery maintenance costs. 
C) raw materials. 
D) supervisor wages. 
A) factory rent. 
B) machinery maintenance costs. 
C) raw materials. 
D) supervisor wages.

Question 13

Simon operates a kitchen manufacturing business.Which cost would not be classed as a direct cost of building a kitchen for a client?

Accepted Answer

A) fittings for the kitchen cabinets 
B) wages of tradesmen 
C) depreciation of tools and equipment 
D) timber for the kitchen cabinets 
A) fittings for the kitchen cabinets 
B) wages of tradesmen 
C) depreciation of tools and equipment 
D) timber for the kitchen cabinets

Question 14

Which of the following is a use of cost information?

Accepted Answer

A) profitability analysis 
B) performance evaluation 
C) cost management 
D) all of the options are uses of cost information 
A) profitability analysis 
B) performance evaluation 
C) cost management 
D) all of the options are uses of cost information

Question 15

The traceability of direct costs by businesses is made possible by the use of:

Accepted Answer

A) a tracking system to link the cost to the cost object 
B) financial reports 
C) cost drivers 
D) all of the options are used to trace direct costs. 
A) a tracking system to link the cost to the cost object 
B) financial reports 
C) cost drivers 
D) all of the options are used to trace direct costs.

Question 16

A ____________ system is the system used by entities to collect and report the cost of resources used by particular cost objects.

Accepted Answer

The answer of A ____________ system is the system used...

Question 17

The statement concerned with pricing that is $\bold{not}$ true is:

Accepted Answer

A) Some entities may use variable costs only as the base for cost-based pricing 
B) With less competition it is more likely that market-based pricing will be used 
C) Cost-based prices are normally less than customers would be willing to pay 
D) An advantage of cost-based pricing is its simplicity 
A) Some entities may use variable costs only as the base for cost-based pricing 
B) With less competition it is more likely that market-based pricing will be used 
C) Cost-based prices are normally less than customers would be willing to pay 
D) An advantage of cost-based pricing is its simplicity

Question 18

Under the activity hierarchy of costs,costs incurred for each unit of output e.g.the cost of fuel to operate machines are classified as:

Accepted Answer

A) unit level costs 
B) batch level costs 
C) product level costs 
D) facility level costs 
A) unit level costs 
B) batch level costs 
C) product level costs 
D) facility level costs

Question 19

An indirect cost is linked to a cost object by identification of an appropriate:

Accepted Answer

A) cost driver. 
B) activity hierarchy. 
C) cost pool. 
D) relevant cost. 
A) cost driver. 
B) activity hierarchy. 
C) cost pool. 
D) relevant cost.

Question 20

Under the activity hierarchy of costs,costs incurred for the benefit of a group of products simultaneously,e.g.machine set-up costs are classified as:

Accepted Answer

A) unit level costs 
B) batch level costs 
C) product level costs 
D) facility level costs 
A) unit level costs 
B) batch level costs 
C) product level costs 
D) facility level costs

Setting low prices when new products are introduced to increase market share is known as:

If the overhead costs applied to a product are less than the actual overhead costs incurred,overhead is:

Place the following selected steps in determining the full cost of a cost object in the order they are carried out: - Allocate indirect costs to the cost object,Identify cost pools and cost drivers,Identify the cost object,Determine the indirect cost rate for each cost driver

The system used to allocate costs to cost objects is known as:

The practice used by foreign based entities of selling products in Australia at prices below the market value in the country where the product is produced at prices that could harm an Australian industry is known as:

The cost pool,Machine Set-ups,has estimated overhead of $120 000.The machines in the pool produce two products,X (200 set-ups)and Y (400 set-ups).The amount of machine set-up costs that should be allocated to product Y is:

The cost pool,machine set-ups,has an estimated overhead of $120 000.The machines in the pool produce two products,X (200 set-ups)and Y (400 set-ups).If 10 000 units of product X are produced,the amount of machine set-up costs that will be assigned to each unit of X is:

Assume Air Tec manufactures only one component for the air conditioning industry.In 2013 the company produced 12 000 units of the component of which 10 000 were sold.The following costs were recorded for 2013: Calculate the inventoriable product cost per unit of output for Air Tec.

Cost-based pricing is a pricing method that:

In the activity hierarchy,costs incurred for the benefit of the entire entity are known as ________________ level costs.

All of these are indirect costs $\bold{except:}$

Simon operates a kitchen manufacturing business.Which cost would not be classed as a direct cost of building a kitchen for a client?

Which of the following is a use of cost information?

The traceability of direct costs by businesses is made possible by the use of:

A ____________ system is the system used by entities to collect and report the cost of resources used by particular cost objects.

The statement concerned with pricing that is $\bold{not}$ true is:

Under the activity hierarchy of costs,costs incurred for each unit of output e.g.the cost of fuel to operate machines are classified as:

An indirect cost is linked to a cost object by identification of an appropriate:

Under the activity hierarchy of costs,costs incurred for the benefit of a group of products simultaneously,e.g.machine set-up costs are classified as:

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

Setting low prices when new products are introduced to increase market share is known as:

If the overhead costs applied to a product are less than the actual overhead costs incurred,overhead is:

Place the following selected steps in determining the full cost of a cost object in the order they are carried out: - Allocate indirect costs to the cost object,Identify cost pools and cost drivers,Identify the cost object,Determine the indirect cost rate for each cost driver

The system used to allocate costs to cost objects is known as:

The practice used by foreign based entities of selling products in Australia at prices below the market value in the country where the product is produced at prices that could harm an Australian industry is known as:

The cost pool,Machine Set-ups,has estimated overhead of $120 000.The machines in the pool produce two products,X (200 set-ups)and Y (400 set-ups).The amount of machine set-up costs that should be allocated to product Y is:

The cost pool,machine set-ups,has an estimated overhead of $120 000.The machines in the pool produce two products,X (200 set-ups)and Y (400 set-ups).If 10 000 units of product X are produced,the amount of machine set-up costs that will be assigned to each unit of X is:

Assume Air Tec manufactures only one component for the air conditioning industry.In 2013 the company produced 12 000 units of the component of which 10 000 were sold.The following costs were recorded for 2013: Calculate the inventoriable product cost per unit of output for Air Tec.

Cost-based pricing is a pricing method that:

In the activity hierarchy,costs incurred for the benefit of the entire entity are known as ________________ level costs.

All of these are indirect costs except:\bold{except:}except:

Simon operates a kitchen manufacturing business.Which cost would not be classed as a direct cost of building a kitchen for a client?

Which of the following is a use of cost information?

The traceability of direct costs by businesses is made possible by the use of:

A ____________ system is the system used by entities to collect and report the cost of resources used by particular cost objects.

The statement concerned with pricing that is not\bold{not}not true is:

Under the activity hierarchy of costs,costs incurred for each unit of output e.g.the cost of fuel to operate machines are classified as:

An indirect cost is linked to a cost object by identification of an appropriate:

Under the activity hierarchy of costs,costs incurred for the benefit of a group of products simultaneously,e.g.machine set-up costs are classified as:

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

All of these are indirect costs $\bold{except:}$

The statement concerned with pricing that is $\bold{not}$ true is: