Question 1

Fixed costs depend on the

Accepted Answer

A) amount of resources used. 
B) amount of resources acquired. 
C) volume of production. 
D) volume of sales. 
E) allocation method. 
A) amount of resources used. 
B) amount of resources acquired. 
C) volume of production. 
D) volume of sales. 
E) allocation method.

Question 2

Cost assignment is a term that refers solely to allocating indirect costs among diverse cost
objects.

Accepted Answer

A) True 
 B)False

Question 3

Ames Power Point had sales in October of $28,000,000 for its three stores in Toronto.The beginning merchandise inventories for October and November were $5,000,000 and $4,000,000,respectively.October purchases totalled $19,000,000.All sales are on account (terms 2/15,net 30 days)and are collected 50 percent in the month of the sale and 50 percent in the following month.One-half of all sales discounts are taken for a total of $265,000.September sales totalled $25,000,000 while November sales were $30,000,000.Additional information for October is as follows:
   
Required:
Using an appropriately formatted income statement,determine the operating income of the company.

Accepted Answer

The answer of Ames Power Point had sales in October...

Question 4

Which of the following is a cost object?

Accepted Answer

A) direct materials 
B) customers 
C) conversion costs 
D) cost assignments 
E) indirect labour 
A) direct materials 
B) customers 
C) conversion costs 
D) cost assignments 
E) indirect labour

Question 5

Which one of the following is a variable cost in a grocery store?

Accepted Answer

A) rent 
B) president's salary 
C) inventory of vegetables 
D) property taxes 
E) administrative salaries 
A) rent 
B) president's salary 
C) inventory of vegetables 
D) property taxes 
E) administrative salaries

Question 6

Eschliman Manufacturing Company had the following account balances for the quarter ending September 30,unless otherwise noted:
   
Required:
a.Prepare a cost of goods manufactured schedule for the quarter.
b.Prepare a cost of goods sold schedule for the quarter.

Accepted Answer

The answer of Eschliman Manufacturing Company had the following account...

Question 7

An appropriate cost driver for shipping costs might be the number of units shipped.

Accepted Answer

A) True 
 B)False

Question 8

Anything for which a separate measurement of costs is desired is known as

Accepted Answer

A) a cost item. 
B) a cost object. 
C) a fixed cost item. 
D) a variable cost object. 
E) a cost driver. 
A) a cost item. 
B) a cost object. 
C) a fixed cost item. 
D) a variable cost object. 
E) a cost driver.

Question 9

Describe a variable cost.Describe a fixed cost.Explain why the distinction between variable and fixed costs is important in cost accounting.

Accepted Answer

Total variable costs increase with incre

Question 10

Answer the following question using the information below.
Pederson Company reported the following:
  
-What is the amount of finished goods inventory?

Accepted Answer

A) $2,000,000 
B) $12,000 
C) $225,000 
D) $127,659 
E) $120,000 
A) $2,000,000 
B) $12,000 
C) $225,000 
D) $127,659 
E) $120,000

Question 11

Which of the following is TRUE concerning prime costs?

Accepted Answer

A) Prime costs are direct manufacturing costs. 
B) They include indirect manufacturing labour. 
C) They equal the sum of direct manufacturing costs plus conversion costs. 
D) They equal the sum of fixed manufacturing costs plus conversion costs. 
E) They are indirect manufacturing costs. 
A) Prime costs are direct manufacturing costs. 
B) They include indirect manufacturing labour. 
C) They equal the sum of direct manufacturing costs plus conversion costs. 
D) They equal the sum of fixed manufacturing costs plus conversion costs. 
E) They are indirect manufacturing costs.

Question 12

Manufacturing sector firms normally hold three types of inventory: direct materials inventory,work-in-process inventory,and finished goods inventory.

Accepted Answer

A) True 
 B)False

Question 13

Conversion costs include all direct manufacturing costs.

Accepted Answer

A) True 
 B)False

Question 14

Materiality refers to the significance of the cost in question.

Accepted Answer

A) True 
 B)False

Question 15

Changes in particular cost drivers automatically result in decreases in overall costs.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements about the key features of cost accounting and cost management is TRUE?

Accepted Answer

A) When making decisions about what products to produce,managers need to know how revenue and costs vary with changes in output levels. 
B) Managers need to understand that period costs remain the same from one period to the next. 
C) The costing system allocates direct costs and traces indirect costs to products. 
D) When making decisions,managers must understand that all revenue and costs are relevant. 
E) Cost accounting is used for managerial decision making,not for financial statements. 
A) When making decisions about what products to produce,managers need to know how revenue and costs vary with changes in output levels. 
B) Managers need to understand that period costs remain the same from one period to the next. 
C) The costing system allocates direct costs and traces indirect costs to products. 
D) When making decisions,managers must understand that all revenue and costs are relevant. 
E) Cost accounting is used for managerial decision making,not for financial statements.

Question 17

A new employee in the accounting department is having difficulty understanding two sets of accounting terms-variable and fixed costs as opposed to period and product costs.He understands that variable costs change during an accounting period while fixed costs do not.However,he explains that a period cost implies that it is for a period of time and is,therefore,also fixed.Does his assumption imply that all product costs are then variable?
Required:
As part of your responsibility to train new staff,explain the difference between these terms.

Accepted Answer

First,you should explain that all costs

Question 18

Manufacturing-sector companies purchase materials and other resources for conversion into various finished goods.

Accepted Answer

A) True 
 B)False

Question 19

A mixed cost is

Accepted Answer

A) a fixed cost. 
B) a cost with fixed and variable elements. 
C) a variable cost. 
D) always an indirect cost. 
E) a cost with direct and indirect elements. 
A) a fixed cost. 
B) a cost with fixed and variable elements. 
C) a variable cost. 
D) always an indirect cost. 
E) a cost with direct and indirect elements.

Question 20

Fixed costs do not have cost drivers,at least in the short-run.

Accepted Answer

A) True 
 B)False

Fixed costs depend on the

Cost assignment is a term that refers solely to allocating indirect costs among diverse cost objects.

Which of the following is a cost object?

Which one of the following is a variable cost in a grocery store?

Eschliman Manufacturing Company had the following account balances for the quarter ending September 30,unless otherwise noted: Required: a.Prepare a cost of goods manufactured schedule for the quarter. b.Prepare a cost of goods sold schedule for the quarter.

An appropriate cost driver for shipping costs might be the number of units shipped.

Anything for which a separate measurement of costs is desired is known as

Describe a variable cost.Describe a fixed cost.Explain why the distinction between variable and fixed costs is important in cost accounting.

Answer the following question using the information below. Pederson Company reported the following: -What is the amount of finished goods inventory?

Which of the following is TRUE concerning prime costs?

Manufacturing sector firms normally hold three types of inventory: direct materials inventory,work-in-process inventory,and finished goods inventory.

Conversion costs include all direct manufacturing costs.

Materiality refers to the significance of the cost in question.

Changes in particular cost drivers automatically result in decreases in overall costs.

Which of the following statements about the key features of cost accounting and cost management is TRUE?

Manufacturing-sector companies purchase materials and other resources for conversion into various finished goods.

A mixed cost is

Fixed costs do not have cost drivers,at least in the short-run.

The Accountants Vital Role in Decision Making

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 2: An Introduction to Cost Terms and Purposes

Fixed costs depend on the

Cost assignment is a term that refers solely to allocating indirect costs among diverse cost objects.

Which of the following is a cost object?

Which one of the following is a variable cost in a grocery store?

Eschliman Manufacturing Company had the following account balances for the quarter ending September 30,unless otherwise noted: Required: a.Prepare a cost of goods manufactured schedule for the quarter. b.Prepare a cost of goods sold schedule for the quarter.

An appropriate cost driver for shipping costs might be the number of units shipped.

Anything for which a separate measurement of costs is desired is known as

Describe a variable cost.Describe a fixed cost.Explain why the distinction between variable and fixed costs is important in cost accounting.

Answer the following question using the information below. Pederson Company reported the following: -What is the amount of finished goods inventory?

Which of the following is TRUE concerning prime costs?

Manufacturing sector firms normally hold three types of inventory: direct materials inventory,work-in-process inventory,and finished goods inventory.

Conversion costs include all direct manufacturing costs.

Materiality refers to the significance of the cost in question.

Changes in particular cost drivers automatically result in decreases in overall costs.

Which of the following statements about the key features of cost accounting and cost management is TRUE?

Manufacturing-sector companies purchase materials and other resources for conversion into various finished goods.

A mixed cost is

Fixed costs do not have cost drivers,at least in the short-run.

The Accountants Vital Role in Decision Making

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters