Question 1

________ are the acquisition costs of all materials that eventually become part of the cost object and can be traced to the cost object.

Accepted Answer

A) Direct manufacturing labor costs 
B) Direct material costs 
C) Indirect manufacturing costs 
D) Manufacturing overhead costs 
A) Direct manufacturing labor costs 
B) Direct material costs 
C) Indirect manufacturing costs 
D) Manufacturing overhead costs

Question 2

Budgeted costs are:

Accepted Answer

A) the costs incurred this year 
B) the costs incurred last year 
C) planned or forecasted costs 
D) competitor's costs 
A) the costs incurred this year 
B) the costs incurred last year 
C) planned or forecasted costs 
D) competitor's costs

Question 3

Helmer Sporting Goods Company manufactured 100,000 units in 20X5 and reported the following costs:
   Required:
a. What is the amount of direct materials used during 20X5?
b. What manufacturing costs were added to WIP during 20X5?
c. What is cost of goods manufactured for 20X5?
d. What is cost of goods sold for 20X5?

Accepted Answer

a. $384,000 + $3,136,000 - $275,200 = $3

Question 4

Answer the following questions using the information below:
  
-What is gross margin for 20X3?

Accepted Answer

A) $283,000 
B) $355,000 
C) $230,000 
D) $257,000 
A) $283,000 
B) $355,000 
C) $230,000 
D) $257,000

Question 5

Answer the following questions using the information below:
Pederson Company reported the following:
  
-________ - sector companies purchase and then sell tangible products without changing their basic form.

Accepted Answer

A) Merchandising 
B) Professional 
C) Service 
D) Manufacturing 
A) Merchandising 
B) Professional 
C) Service 
D) Manufacturing

Question 6

Which of the following formulas determine cost of goods sold in a merchandising entity?

Accepted Answer

A) Beginning inventory + Purchases + Ending inventory = Cost of goods sold 
B) Beginning inventory + Purchases - Ending inventory = Costs of goods sold 
C) Beginning inventory - Purchases + Ending inventory = Cost of goods sold 
D) Beginning inventory - Ending inventory - Purchases = Cost of goods sold 
A) Beginning inventory + Purchases + Ending inventory = Cost of goods sold 
B) Beginning inventory + Purchases - Ending inventory = Costs of goods sold 
C) Beginning inventory - Purchases + Ending inventory = Cost of goods sold 
D) Beginning inventory - Ending inventory - Purchases = Cost of goods sold

Question 7

Answer the following questions using the information below:
The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows:
  
-What are the variable costs per unit associated with Product ORD203?

Accepted Answer

A) $60 
B) $82 
C) $73 
D) $105 
A) $60 
B) $82 
C) $73 
D) $105

Question 8

Which statement is true?

Accepted Answer

A) A direct cost of one cost object cannot be an indirect cost of another cost object. 
B) All variable costs are direct costs. 
C) A direct cost of one cost object can be an indirect cost of another cost object. 
D) All fixed costs are direct costs. 
A) A direct cost of one cost object cannot be an indirect cost of another cost object. 
B) All variable costs are direct costs. 
C) A direct cost of one cost object can be an indirect cost of another cost object. 
D) All fixed costs are direct costs.

Question 9

A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of indirect cost for the soccer equipment line is:

Accepted Answer

A) material used to make the soccer balls 
B) labor to shape the leather used to make the soccer ball 
C) shift supervisor for the soccer line 
D) plant supervisor 
A) material used to make the soccer balls 
B) labor to shape the leather used to make the soccer ball 
C) shift supervisor for the soccer line 
D) plant supervisor

Question 10

Products, services, departments, and customers may be cost objects.

Accepted Answer

A) True 
 B)False

Question 11

Accountants define a cost as a resource to be sacrificed to achieve a specific objective.

Accepted Answer

A) True 
 B)False

Question 12

Why is it possible that a raw material such as glue might be considered as an indirect material for one furniture manufacturer and as a direct material for another furniture manufacture?

Accepted Answer

It is possible for a raw material such a

Question 13

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company), Gregory Food Retailers (a merchandising company), and Larson Real Estate (a service sector company). Classify each item as either inventoriable (I)costs or period (P)costs.

Accepted Answer

The answer of Each of the following items pertains to...

Question 14

For a manufacturing company, direct material costs may be included in:

Accepted Answer

A) direct materials inventory only 
B) merchandise inventory only 
C) both work-in-process inventory and finished goods inventory 
D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts 
A) direct materials inventory only 
B) merchandise inventory only 
C) both work-in-process inventory and finished goods inventory 
D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts

Question 15

What are the differences between direct costs and indirect costs? Give an example of each.

Accepted Answer

Direct costs are costs that can be trace

Question 16

A customer could be considered a cost object.

Accepted Answer

A) True 
 B)False

Question 17

Service-sector companies report:

Accepted Answer

A) only merchandise inventory 
B) only finished goods inventory 
C) direct materials inventory, work-in-process inventory, and finished goods inventory accounts 
D) no inventory accounts 
A) only merchandise inventory 
B) only finished goods inventory 
C) direct materials inventory, work-in-process inventory, and finished goods inventory accounts 
D) no inventory accounts

Question 18

Unit costs and average costs are really the same thing.

Accepted Answer

A) True 
 B)False

Question 19

Misallocated indirect costs may lead to NOT promoting profitability.

Accepted Answer

A) True 
 B)False

Question 20

The following information pertains to the Cannady Corporation:   What is cost of goods sold?

Accepted Answer

A) $1,235,000 
B) $1,205,000 
C) $1,218,000 
D) $1,222,000 
A) $1,235,000 
B) $1,205,000 
C) $1,218,000 
D) $1,222,000

Exam 2: An Introduction to Cost Terms and Purposes

________ are the acquisition costs of all materials that eventually become part of the cost object and can be traced to the cost object.

Budgeted costs are:

Answer the following questions using the information below: -What is gross margin for 20X3?

Answer the following questions using the information below: Pederson Company reported the following: -________ - sector companies purchase and then sell tangible products without changing their basic form.

Which of the following formulas determine cost of goods sold in a merchandising entity?

Answer the following questions using the information below: The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows: -What are the variable costs per unit associated with Product ORD203?

Which statement is true?

A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of indirect cost for the soccer equipment line is:

Products, services, departments, and customers may be cost objects.

Accountants define a cost as a resource to be sacrificed to achieve a specific objective.

Why is it possible that a raw material such as glue might be considered as an indirect material for one furniture manufacturer and as a direct material for another furniture manufacture?

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company), Gregory Food Retailers (a merchandising company), and Larson Real Estate (a service sector company). Classify each item as either inventoriable (I)costs or period (P)costs.

For a manufacturing company, direct material costs may be included in:

What are the differences between direct costs and indirect costs? Give an example of each.

A customer could be considered a cost object.

Service-sector companies report:

Unit costs and average costs are really the same thing.

Misallocated indirect costs may lead to NOT promoting profitability.

The following information pertains to the Cannady Corporation: What is cost of goods sold?

The Accountants Role in the Organization

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters