Question 1

Variable costing is a method of inventory costing in which all variable manufacturing costs (direct and indirect)are included as inventoriable costs.

Accepted Answer

A) True 
 B)False  True

Question 2

Accounting systems typically report both total cost amounts and average-cost-per-unit amounts.

Accepted Answer

A) True 
 B)False  True

Question 3

An actual cost is the cost incurred (a historical or past cost),as distinguished from a budgeted cost,which is a predicted or forecasted cost (a future cost).

Accepted Answer

A) True 
 B)False  True

Question 4

Direct materials inventory includes which of the following?

Accepted Answer

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

Question 5

The two most common methods of costing inventories in manufacturing companies are variable costing and fixed costing.

Accepted Answer

A) True 
 B)False

Question 6

Sutcliffe Corporation manufactures and sells top-of-the-line saxophones and uses standard costing.For the month of September,there was no beginning inventory,there were 1500 units produced and 1250 units sold.The manufacturing variable cost per unit is $770 and the operating cost per unit was $625.The fixed manufacturing cost is $450 000 and the fixed operating cost is $75 000.The selling price per unit is $1850.
Required:
Prepare the income statement for Sutcliffe Corporation for September under variable costing.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

None

Question 7

Woods Golf Company sells a special putter for $20 each.In March,it sold 28 000 putters while manufacturing 30 000.There was no beginning inventory on 1 March.Production information for March was:
 $\begin{array}{lr}
\text { Direct manufacturing labour per unit } & 15 \text { minutes } \
\text { Fixed selling and administrative costs } & \$ 40000 \
\text { Fixed manufacturing overhead } & 132000 \
\text { Direct materials cost per unit } & 2 \
\text { Direct manufacturing labour per hour } & 24 \
\text { Variable manufacturing overhead per unit } & 4 \
\text { Variable selling expenses per unit } & 2
\end{array}$ 
Required:
a.Compute the cost per unit under both absorption and variable costing.
b.Compute the ending inventories under both absorption and variable costing.
c.Compute operating profit under both absorption and variable costing.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Woods Golf Company sells a special putter...

Question 8

Answer the following questions using the information below:
Axle and Wheel Manufacturing currently produces 1000 axles per month.The following per unit data apply for sales to regular customers:
 $\begin{array}{lr}
\text { Direct materials } & \$ 30 \
\text { Direct manufacturing labour } & 5 \
\text { Variable manufacturing overhead } & 10 \
\text { Fixed manufacturing overhead } & \underline{40} \
{\text { Total manufacturing costs }} & \$ 85
\end{array}$
-What is the per unit cost when producing 1500 axles?

Accepted Answer

A) $71.67 
B) $170.00 
C) $85.00 
D) $107.50 
A) $71.67 
B) $170.00 
C) $85.00 
D) $107.50

Question 9

'Conversion costs' include:

Accepted Answer

A) only direct materials. 
B) direct materials and direct manufacturing labour costs. 
C) direct manufacturing labour and manufacturing overhead costs. 
D) direct materials and manufacturing overhead costs. 
A) only direct materials. 
B) direct materials and direct manufacturing labour costs. 
C) direct manufacturing labour and manufacturing overhead costs. 
D) direct materials and manufacturing overhead costs.

Question 10

________ costs are the acquisition costs of all materials that eventually become part of the cost object (work in process and then finished goods)and can be traced to the cost object in an economically feasible way.

Accepted Answer

A) Direct materials 
B) Indirect materials 
C) Fixed 
D) Variable 
A) Direct materials 
B) Indirect materials 
C) Fixed 
D) Variable

Question 11

For manufacturing sector companies,period costs in the income statement are all manufacturing costs.

Accepted Answer

A) True 
 B)False

Question 12

The cost of a customised machine only used in the production of a single product would be classified as a direct cost.

Accepted Answer

A) True 
 B)False

Question 13

Answer the following questions using the information below:
The SouthAus Company manufactures several different products.Unit costs associated with Product ADE108 are as follows:
 $$\begin{array} { l r } 
\text { Direct materials } & \$ 40 \
\text { Direct manufacturing labour } & 8 \
\text { Variable manufacturing overhead } & 12 \
\text { Fixed manufacturing overhead } & 23 \
\text { Sales commissions (2\% of sales) } & 6 \
\text { Administrative salaries } & 9 \underline { 9 } \
\quad \text { Total } & \$ 98
\end{array}$$
-What are the period costs per unit associated with Product ADE108?

Accepted Answer

A) $15 
B) $6 
C) $27 
D) $9 
A) $15 
B) $6 
C) $27 
D) $9

Question 14

________ are commonly divided into many subclassifications.

Accepted Answer

A) Indirect labour costs 
B) Direct material costs 
C) Direct labour costs 
D) Fixed costs 
A) Indirect labour costs 
B) Direct material costs 
C) Direct labour costs 
D) Fixed costs

Question 15

Because there are no inventoriable costs for service sector companies,all costs in the income statement are period costs.

Accepted Answer

A) True 
 B)False

Question 16

Direct costs of a cost object are related to the particular cost object but cannot be traced to it in an economically feasible (cost-effective)way.

Accepted Answer

A) True 
 B)False

Question 17

Fixed manufacturing costs included in cost of goods available for sale + the production-volume variance will always = total fixed manufacturing costs under absorption costing.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following inventory costing methods shown below is required by GAAP (generally accepted accounting principles)for external financial reporting?

Accepted Answer

A) Absorption costing 
B) Throughput costing 
C) Direct costing 
D) Variable costing 
A) Absorption costing 
B) Throughput costing 
C) Direct costing 
D) Variable costing

Question 19

Manufacturing costs include all of the following EXCEPT:

Accepted Answer

A) both inventoriable and period costs. 
B) both direct and indirect costs. 
C) both variable and fixed costs. 
D) costs incurred inside the factory. 
A) both inventoriable and period costs. 
B) both direct and indirect costs. 
C) both variable and fixed costs. 
D) costs incurred inside the factory.

Question 20

Answer the following questions using the information below:
 $\begin{array}{lr}
\text { Beginning finished goods, } 1 / 1 / 2018 & \$ 80000 \
\text { Ending firished goods, } 12 / 31 / 2018 & 67000 \
\text { Cost of goods sold } & 270000 \
\text { Sales revenue } & 500000 \
\text { Operating expenses } & 145000
\end{array}$
-What is cost of goods manufactured for 2018?

Accepted Answer

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

Variable costing is a method of inventory costing in which all variable manufacturing costs (direct and indirect)are included as inventoriable costs.

Accounting systems typically report both total cost amounts and average-cost-per-unit amounts.

An actual cost is the cost incurred (a historical or past cost),as distinguished from a budgeted cost,which is a predicted or forecasted cost (a future cost).

Direct materials inventory includes which of the following?

The two most common methods of costing inventories in manufacturing companies are variable costing and fixed costing.

'Conversion costs' include:

________ costs are the acquisition costs of all materials that eventually become part of the cost object (work in process and then finished goods)and can be traced to the cost object in an economically feasible way.

For manufacturing sector companies,period costs in the income statement are all manufacturing costs.

The cost of a customised machine only used in the production of a single product would be classified as a direct cost.

________ are commonly divided into many subclassifications.

Because there are no inventoriable costs for service sector companies,all costs in the income statement are period costs.

Direct costs of a cost object are related to the particular cost object but cannot be traced to it in an economically feasible (cost-effective)way.

Fixed manufacturing costs included in cost of goods available for sale + the production-volume variance will always = total fixed manufacturing costs under absorption costing.

Which of the following inventory costing methods shown below is required by GAAP (generally accepted accounting principles)for external financial reporting?

Manufacturing costs include all of the following EXCEPT:

Answer the following questions using the information below: Beginning finished goods, 1/1/2018 \ 80000 Ending firished goods, 12/31/2018 67000 Cost of goods sold 270000 Sales revenue 500000 Operating expenses 145000 -What is cost of goods manufactured for 2018?

Management Accounting in Context

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

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Exam 2: Different Costs for Different Purposes

Variable costing is a method of inventory costing in which all variable manufacturing costs (direct and indirect)are included as inventoriable costs.

Accounting systems typically report both total cost amounts and average-cost-per-unit amounts.

An actual cost is the cost incurred (a historical or past cost),as distinguished from a budgeted cost,which is a predicted or forecasted cost (a future cost).

Direct materials inventory includes which of the following?

The two most common methods of costing inventories in manufacturing companies are variable costing and fixed costing.

'Conversion costs' include:

________ costs are the acquisition costs of all materials that eventually become part of the cost object (work in process and then finished goods)and can be traced to the cost object in an economically feasible way.

For manufacturing sector companies,period costs in the income statement are all manufacturing costs.

The cost of a customised machine only used in the production of a single product would be classified as a direct cost.

________ are commonly divided into many subclassifications.

Because there are no inventoriable costs for service sector companies,all costs in the income statement are period costs.

Direct costs of a cost object are related to the particular cost object but cannot be traced to it in an economically feasible (cost-effective)way.

Fixed manufacturing costs included in cost of goods available for sale + the production-volume variance will always = total fixed manufacturing costs under absorption costing.

Which of the following inventory costing methods shown below is required by GAAP (generally accepted accounting principles)for external financial reporting?

Manufacturing costs include all of the following EXCEPT:

Answer the following questions using the information below: Beginning finished goods, 1/1/2018 \ 80000 Ending firished goods, 12/31/2018 67000 Cost of goods sold 270000 Sales revenue 500000 Operating expenses 145000 -What is cost of goods manufactured for 2018?

Management Accounting in Context

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

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