Question 1

Delivery charges are typically considered to be an indirect cost because it cannot be traced to each customer.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following formulae would determine costs of goods sold in a merchandising entity?

Accepted Answer

A) Purchases - Ending inventory 
B) Beginning inventory + Purchases - Ending inventory 
C) Beginning inventory - Purchases + Ending inventory 
D) Beginning inventory - Ending inventory - Purchases 
E) Ending Inventory - Beginning inventory - Purchases 
A) Purchases - Ending inventory 
B) Beginning inventory + Purchases - Ending inventory 
C) Beginning inventory - Purchases + Ending inventory 
D) Beginning inventory - Ending inventory - Purchases 
E) Ending Inventory - Beginning inventory - Purchases

Question 3

Which one of the following items is typically an example of an indirect cost of a cost object?

Accepted Answer

A) courier charges for shipment delivery 
B) manufacturing plant electricity 
C) direct manufacturing labour 
D) wood used for furniture manufacture 
E) refundable sales tax on direct materials 
A) courier charges for shipment delivery 
B) manufacturing plant electricity 
C) direct manufacturing labour 
D) wood used for furniture manufacture 
E) refundable sales tax on direct materials

Question 4

Use the information below to answer the following question(s).
Montreal Industries Inc.had the following activities during the year:
  
-What is Montreal's cost of goods sold during the year?

Accepted Answer

A) $260,000 
B) $232,000 
C) $220,000 
D) $200,000 
E) $240,000 
A) $260,000 
B) $232,000 
C) $220,000 
D) $200,000 
E) $240,000

Question 5

Operating income does not include interest expense and income taxes.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) $4,000 
B) $7,000 
C) $9,000 
D) $12,000 
E) $6,000 
A) $4,000 
B) $7,000 
C) $9,000 
D) $12,000 
E) $6,000

Question 7

Competition places an increased emphasis on cost reductions.For an organization to reduce costs it must focus on

Accepted Answer

A) maximizing the cost allocation system. 
B) reporting non-value added costs separately from value-added costs. 
C) efficiently managing the use of the cost drivers in those value-added activities. 
D) the cost allocation process. 
E) reducing the number of cost drivers. 
A) maximizing the cost allocation system. 
B) reporting non-value added costs separately from value-added costs. 
C) efficiently managing the use of the cost drivers in those value-added activities. 
D) the cost allocation process. 
E) reducing the number of cost drivers.

Question 8

The determination of a cost as being either direct or indirect depends upon

Accepted Answer

A) the accounting system. 
B) the allocation system. 
C) the cost tracing system. 
D) only the cost object chosen to determine its individual costs. 
E) the choice of the cost object,and the materiality of the cost in question. 
A) the accounting system. 
B) the allocation system. 
C) the cost tracing system. 
D) only the cost object chosen to determine its individual costs. 
E) the choice of the cost object,and the materiality of the cost in question.

Question 9

The following information is taken from the records of Britton Company for March:
Purchases:
   
* Of these costs,60 percent are assigned to manufacturing and 40 percent to selling and administration.
Required:
a.Prepare a schedule of cost of goods manufactured.
b.Prepare an income statement for the month.
c.Compute the prime costs using a two-part production costing system,conversion costs,and indirect manufacturing costs.

Accepted Answer

a.
 @#IMG-DLM& 
b.
 @#IMG-DLM& 
c.
Prime costs $11

Question 10

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 
E) $20,000 
A) $14,000 
B) $15,000 
C) $18,000 
D) $19,000 
E) $20,000

Question 11

Direct materials inventory is products held for resale.

Accepted Answer

A) True 
 B)False

Question 12

Manitoba Industries Inc.had the following account balances at the end of the current year:
   
Required:
Determine the amounts for direct material purchases,direct manufacturing labour,ending work-in-process inventory,and beginning finished goods inventory.

Accepted Answer

The answer of Manitoba Industries Inc.had the following account balances...

Question 13

A cost is classified as a direct or indirect cost based on the applicable cost object.

Accepted Answer

A) True 
 B)False

Question 14

Costs are accounted for in two basic stages: assignment followed by accumulation.

Accepted Answer

A) True 
 B)False

Question 15

Whippany manufacturing wants to estimate costs for each product they produce at its Troy plant.The Troy plant produces three products at this plant,and runs two flexible assembly lines.Each assembly line can produce all three products.
Required:
a.Classify each of the following costs as either direct or indirect for each product.
b.Classify each of the following costs as either fixed or variable with respect to the number of units produced of each product.

Accepted Answer

The answer of Whippany manufacturing wants to estimate costs for...

Question 16

Manufacturing-sector companies

Accepted Answer

A) purchase materials and convert them to finished goods. 
B) buy goods and resell them. 
C) provide services or intangible products. 
D) have only period costs. 
E) have one classification of inventory. 
A) purchase materials and convert them to finished goods. 
B) buy goods and resell them. 
C) provide services or intangible products. 
D) have only period costs. 
E) have one classification of inventory.

Question 17

Inventoriable costs

Accepted Answer

A) include administrative and marketing costs. 
B) are expensed in the accounting period in which the products are sold. 
C) are particularly useful in management accounting. 
D) are also referred to as nonmanufacturing costs. 
E) are similar to period costs. 
A) include administrative and marketing costs. 
B) are expensed in the accounting period in which the products are sold. 
C) are particularly useful in management accounting. 
D) are also referred to as nonmanufacturing costs. 
E) are similar to period costs.

Question 18

What is the unit cost for the direct materials for 2016 assuming direct materials costs are for the production of 1,014,000 units?

Accepted Answer

A) $0.80 
B) $0.95 
C) $1.00 
D) $1.08 
E) $1.11 
A) $0.80 
B) $0.95 
C) $1.00 
D) $1.08 
E) $1.11

Question 19

Macadamia Co.produced and sold 40,000 units last year.Per unit revenue and costs were as follows:
   
The Fixed Manufacturing Overhead provides a capacity of 50,000 units.The Production Manager has proposed leasing a new machine at a cost of $80,000 per year.This will reduce Direct Labour by 30% and improve quality so the the selling price per unit can be increased by $10.Production and sales are expected to remain the same as last year.
Required:
Prepare a statement of operating income assuming the leasing proposal is accepted.

Accepted Answer

@#IMG-DLM& Recommendation: Acc

Question 20

A cost object is anything for which a separate measurement of costs is desired.

Accepted Answer

A) True 
 B)False

Delivery charges are typically considered to be an indirect cost because it cannot be traced to each customer.

Which of the following formulae would determine costs of goods sold in a merchandising entity?

Which one of the following items is typically an example of an indirect cost of a cost object?

Use the information below to answer the following question(s). Montreal Industries Inc.had the following activities during the year: -What is Montreal's cost of goods sold during the year?

Operating income does not include interest expense and income taxes.

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

Competition places an increased emphasis on cost reductions.For an organization to reduce costs it must focus on

The determination of a cost as being either direct or indirect depends upon

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

Direct materials inventory is products held for resale.

Manitoba Industries Inc.had the following account balances at the end of the current year: Required: Determine the amounts for direct material purchases,direct manufacturing labour,ending work-in-process inventory,and beginning finished goods inventory.

A cost is classified as a direct or indirect cost based on the applicable cost object.

Costs are accounted for in two basic stages: assignment followed by accumulation.

Manufacturing-sector companies

Inventoriable costs

What is the unit cost for the direct materials for 2016 assuming direct materials costs are for the production of 1,014,000 units?

A cost object is anything for which a separate measurement of costs is desired.

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

Delivery charges are typically considered to be an indirect cost because it cannot be traced to each customer.

Which of the following formulae would determine costs of goods sold in a merchandising entity?

Which one of the following items is typically an example of an indirect cost of a cost object?

Use the information below to answer the following question(s). Montreal Industries Inc.had the following activities during the year: -What is Montreal's cost of goods sold during the year?

Operating income does not include interest expense and income taxes.

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

Competition places an increased emphasis on cost reductions.For an organization to reduce costs it must focus on

The determination of a cost as being either direct or indirect depends upon

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

Direct materials inventory is products held for resale.

Manitoba Industries Inc.had the following account balances at the end of the current year: Required: Determine the amounts for direct material purchases,direct manufacturing labour,ending work-in-process inventory,and beginning finished goods inventory.

A cost is classified as a direct or indirect cost based on the applicable cost object.

Costs are accounted for in two basic stages: assignment followed by accumulation.

Manufacturing-sector companies

Inventoriable costs

What is the unit cost for the direct materials for 2016 assuming direct materials costs are for the production of 1,014,000 units?

A cost object is anything for which a separate measurement of costs is desired.

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