Question 1

The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is:

Accepted Answer

A) cost accumulation 
B) cost assignment 
C) cost tracing 
D) conversion costing 
A) cost accumulation 
B) cost assignment 
C) cost tracing 
D) conversion costing

Question 2

The collection of accounting data in some organized way is:

Accepted Answer

A) cost accumulation 
B) cost assignment 
C) cost tracing 
D) conversion costing 
A) cost accumulation 
B) cost assignment 
C) cost tracing 
D) conversion costing

Question 3

Work-in-process inventory would normally include:

Accepted Answer

A) direct materials in stock and awaiting use in the manufacturing process 
B) goods partially worked on but not yet fully completed 
C) goods fully completed but not yet sold 
D) products in their original form intended to be sold without changing their basic form 
A) direct materials in stock and awaiting use in the manufacturing process 
B) goods partially worked on but not yet fully completed 
C) goods fully completed but not yet sold 
D) products in their original form intended to be sold without changing their basic form

Question 4

For a manufacturing company, direct labor 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 5

Kym Manufacturing provided the following information for last month:   If sales double next month, what is the projected operating income?

Accepted Answer

A) $14,000 
B) $15,000 
C) $18,000 
D) $19,000 
A) $14,000 
B) $15,000 
C) $18,000 
D) $19,000

Question 6

Answer the following questions using the information below:
The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows:
  
-For last year, Wampum Enterprises reported revenues of $420,000, cost of goods sold of $108,000, cost of goods manufactured of $101,000, and total operating costs of $70,000. Operating income for that year was:

Accepted Answer

A) $319,000 
B) $312,000 
C) $249,000 
D) $242,000 
A) $319,000 
B) $312,000 
C) $249,000 
D) $242,000

Question 7

When 20,000 units are produced, fixed costs are $16 per unit. Therefore, when 40,000 units are produced fixed costs will:

Accepted Answer

A) increase to $32 per unit 
B) remain at $16 per unit 
C) decrease to $8 per unit 
D) total $640,000 
A) increase to $32 per unit 
B) remain at $16 per unit 
C) decrease to $8 per unit 
D) total $640,000

Question 8

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 inventoriable costs per unit associated with Product ORD203?

Accepted Answer

A) $60 
B) $66 
C) $48 
D) $91 
A) $60 
B) $66 
C) $48 
D) $91

Question 9

For a manufacturing-sector company, the cost of factory depreciation is classified as a:

Accepted Answer

A) direct material cost 
B) direct manufacturing labor cost 
C) manufacturing overhead cost 
D) period cost 
A) direct material cost 
B) direct manufacturing labor cost 
C) manufacturing overhead cost 
D) period cost

Question 10

Within the relevant range, if there is a change in the level of the cost driver, then:

Accepted Answer

A) fixed and variable costs per unit will change 
B) fixed and variable costs per unit will remain the same 
C) fixed costs per unit will remain the same and variable costs per unit will change 
D) fixed costs per unit will change and variable costs per unit will remain the same 
A) fixed and variable costs per unit will change 
B) fixed and variable costs per unit will remain the same 
C) fixed costs per unit will remain the same and variable costs per unit will change 
D) fixed costs per unit will change and variable costs per unit will remain the same

Question 11

Answer the following questions using the information below:
Pederson Company reported the following:
  
-What is the amount of gross margin?

Accepted Answer

A) $1,750,000 
B) $3,525,000 
C) $5,405,000 
D) $1,645,000 
A) $1,750,000 
B) $3,525,000 
C) $5,405,000 
D) $1,645,000

Question 12

Inventoriable costs are expensed on the income statement:

Accepted Answer

A) when direct materials for the product are purchased 
B) after the products are manufactured 
C) when the products are sold 
D) not at any particular time, it varies 
A) when direct materials for the product are purchased 
B) after the products are manufactured 
C) when the products are sold 
D) not at any particular time, it varies

Question 13

________ are all manufacturing costs that are related to the cost object but CANNOT be traced to that cost object.

Accepted Answer

A) Direct material costs 
B) Period costs 
C) Indirect manufacturing costs 
D) Direct manufacturing labor costs 
A) Direct material costs 
B) Period costs 
C) Indirect manufacturing costs 
D) Direct manufacturing labor costs

Question 14

Which of the following statements about the direct/indirect cost classification is NOT true?

Accepted Answer

A) Indirect costs are always traced. 
B) Indirect costs are always allocated. 
C) The design of operations affects the direct/indirect classification. 
D) The direct/indirect classification depends on the choice of cost object. 
A) Indirect costs are always traced. 
B) Indirect costs are always allocated. 
C) The design of operations affects the direct/indirect classification. 
D) The direct/indirect classification depends on the choice of cost object.

Question 15

A decision maker CANNOT adjust capacity over the short run.

Accepted Answer

A) True 
 B)False

Question 16

In the cost classification system used by manufacturing firms, total manufacturing costs would include all of the following EXCEPT:

Accepted Answer

A) direct materials costs and conversion costs 
B) direct materials costs, direct manufacturing labor costs, and manufacturing overhead costs 
C) indirect materials costs, indirect manufacturing labor costs, and manufacturing overhead costs 
D) prime costs and manufacturing overhead costs 
A) direct materials costs and conversion costs 
B) direct materials costs, direct manufacturing labor costs, and manufacturing overhead costs 
C) indirect materials costs, indirect manufacturing labor costs, and manufacturing overhead costs 
D) prime costs and manufacturing overhead costs

Question 17

In determining product cost, what concerns does a manufacturing firm have when contracting with a government agency?

Accepted Answer

Government contracts often reimburse on

Question 18

Cost of goods sold refers to the products brought to completion, whether they were started before or during the current accounting period.

Accepted Answer

A) True 
 B)False

Question 19

Budgeting often plays a major role in affecting behavior and decisions.

Accepted Answer

A) True 
 B)False

Question 20

In the cost classification system used by manufacturing firms, assembly workers' wages would be included in all of the following EXCEPT:

Accepted Answer

A) product cost 
B) prime cost 
C) conversion cost 
D) period cost 
A) product cost 
B) prime cost 
C) conversion cost 
D) period cost

Exam 2: An Introduction to Cost Terms and Purposes

The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is:

The collection of accounting data in some organized way is:

Work-in-process inventory would normally include:

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

Kym Manufacturing provided the following information for last month: If sales double next month, what is the projected operating income?

When 20,000 units are produced, fixed costs are $16 per unit. Therefore, when 40,000 units are produced fixed costs will:

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 inventoriable costs per unit associated with Product ORD203?

For a manufacturing-sector company, the cost of factory depreciation is classified as a:

Within the relevant range, if there is a change in the level of the cost driver, then:

Answer the following questions using the information below: Pederson Company reported the following: -What is the amount of gross margin?

Inventoriable costs are expensed on the income statement:

________ are all manufacturing costs that are related to the cost object but CANNOT be traced to that cost object.

Which of the following statements about the direct/indirect cost classification is NOT true?

A decision maker CANNOT adjust capacity over the short run.

In the cost classification system used by manufacturing firms, total manufacturing costs would include all of the following EXCEPT:

In determining product cost, what concerns does a manufacturing firm have when contracting with a government agency?

Cost of goods sold refers to the products brought to completion, whether they were started before or during the current accounting period.

Budgeting often plays a major role in affecting behavior and decisions.

In the cost classification system used by manufacturing firms, assembly workers' wages would be included in all of the following EXCEPT:

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

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