Question 1

Which of the following companies is part of the merchandising sector of our economy?

Accepted Answer

A)  Jaguar 
B)  Hewlett Packard 
C)  Arrow Electronics 
D)  Michael Toback Accounting Firm 
A)  Jaguar 
B)  Hewlett Packard 
C)  Arrow Electronics 
D)  Michael Toback Accounting Firm

Question 2

Which of the following is common for reporting product cost under financial reporting and product cost for reimbursement under government contracts?

Accepted Answer

A)  marketing cost 
B)  distribution costs 
C)  customer service 
D)  research and development costs 
A)  marketing cost 
B)  distribution costs 
C)  customer service 
D)  research and development costs

Question 3

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

Accepted Answer

A)  beverages provided daily in the plant break room 
B)  monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver 
C)  salaries of the clerical staff that work in the company administrative offices 
D)  overheads incurred in producing both golf and soccer equipment 
A)  beverages provided daily in the plant break room 
B)  monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver 
C)  salaries of the clerical staff that work in the company administrative offices 
D)  overheads incurred in producing both golf and soccer equipment

Question 4

Merchandising companies purchase products and sell them to customers without changing their basic form.

Accepted Answer

A) True 
 B)False

Question 5

Costs that are initially recorded as assets and expensed when goods sold are called ________.

Accepted Answer

A)  period costs 
B)  inventoriable costs 
C)  irrelevant costs 
D)  research and development costs 
A)  period costs 
B)  inventoriable costs 
C)  irrelevant costs 
D)  research and development costs

Question 6

Managers use cost accumulation data to make decisions and implement them.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true of indirect costs?

Accepted Answer

A)  Indirect costs are always considered sunk costs. 
B)  All indirect costs are included in cost of goods sold. 
C)  Indirect costs always vary in direct proportion to the level of production. 
D)  Indirect costs cannot be traced to a particular cost object in an economically feasible way. 
A)  Indirect costs are always considered sunk costs. 
B)  All indirect costs are included in cost of goods sold. 
C)  Indirect costs always vary in direct proportion to the level of production. 
D)  Indirect costs cannot be traced to a particular cost object in an economically feasible way.

Question 8

A plant manufactures several different products.The wages of the plant supervisor can be classified as a(n)________.

Accepted Answer

A)  direct cost 
B)  inventoriable cost 
C)  variable cost 
D)  period cost 
A)  direct cost 
B)  inventoriable cost 
C)  variable cost 
D)  period cost

Question 9

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 expensed in the accounting period in which the products are manufactured 
D)  are also referred to as nonmanufacturing costs 
A)  include administrative and marketing costs 
B)  are expensed in the accounting period in which the products are sold 
C)  are expensed in the accounting period in which the products are manufactured 
D)  are also referred to as nonmanufacturing costs

Question 10

A fixed cost is fixed only in relation to a given wide range of total activity or volume and only for a given time span,usually a particular budget period.

Accepted Answer

A) True 
 B)False

Question 11

Ridez Manufacturing currently produces 1,000 bicycles per month.The following per unit data apply for sales to regular customers: $\begin{array}{lr}
\text { Direct materials } & \$ 50 \
\text { Direct manufacturing labor } & 8 \
\text { Variable manufacturing overhead } & 12 \
\text { Fixed manufacturing overhead } & \underline{15} \
{\text { Total manufacturing costs }} & \$ 85
\end{array}$ The plant has capacity for 3,000 bicycles and is considering expanding production to 2,000 bicycles.What is the per unit cost of producing 2,000 bicycles?

Accepted Answer

A)  $78.50 per unit 
B)  $170 per unit 
C)  $72.50 per unit 
D)  $77.50 per unit 
A)  $78.50 per unit 
B)  $170 per unit 
C)  $72.50 per unit 
D)  $77.50 per unit

Question 12

Service-sector companies ________.

Accepted Answer

A)  provide intangible products 
B)  purchase and then sell tangible products without changing their basic form 
C)  purchase and then sell tangible products by changing their basic form 
D)  purchase materials and components and convert them into finished goods 
A)  provide intangible products 
B)  purchase and then sell tangible products without changing their basic form 
C)  purchase and then sell tangible products by changing their basic form 
D)  purchase materials and components and convert them into finished goods

Question 13

Glass House Manufacturing currently produces 1,000 glasses per month.The following per unit data for thousand apply for sales to regular customers:
 $$\begin{array} { l r } 
\text { Direct materials } & \$ 250 \
\text { Direct manufacturing labor } & 40 \
\text { Variable manufacturing overhead } & 70 \
\text { Fiæed manufacturing overhead } & \underline { 50 } \
 { \text { Total manufacturing costs } } & \$ 410 \
\hline
\end{array}$$ The plant has capacity for 2,000 glasses.Plant supervisor's salary is $15,000.
Required:
a.What is the total cost of producing 1,000 glasses?
b.What is the total cost of producing 1,500 glasses?
c.What is the per unit cost when producing 1,500 glasses?

Accepted Answer

a.[($250 + $40 + $70)× 1,000 units] + ($

Question 14

Answer the following questions using the information below:
Buildz Manufacturing currently produces 1,000 tables per month. The following per unit data for 1,000 tables apply for sales to regular customers:
 $\begin{array}{lr}
\text { Direct materials } & \$ 50 \
\text { Direct manufacturing labor } & 10 \
\text { Variable manufacturing overhead } & 15 \
\text { Fixed manufacturing overhead } & \underline{30} \
{\text { Total manufacturing costs }} & \$ 105
\end{array}$
-The plant has capacity for 3,000 tables and is considering expanding production to 3,000 tables.What is the total cost of producing 3,000 tables?

Accepted Answer

A)  $255,000 
B)  $225,000 
C)  $175,000 
D)  $235,000 
A)  $255,000 
B)  $225,000 
C)  $175,000 
D)  $235,000

Question 15

Tony worked 48 hours last week for Bread Works Manufacturing.Of the 48 hours 5 hours were considered overtime,and also Tony was idle for 4 of the 48 hours due to an equipment malfunction.Tony makes $50 per hour and is paid $75 an hour (time and a half)for overtime.Tony's total compensation for that week would be ________,and assuming Bread Works charges overtime premium and idle time to indirect labor,the amount of this compensation credited to indirect labor would be ________.

Accepted Answer

A)  $2,950; $325 
B)  $2,900; $280 
C)  $2,750; $300 
D)  $2,500; $350 
A)  $2,950; $325 
B)  $2,900; $280 
C)  $2,750; $300 
D)  $2,500; $350

Question 16

Period costs ________.

Accepted Answer

A)  include only fixed costs 
B)  seldom influence financial success or failure 
C)  include the cost of selling, delivering, and after-sales support for customers 
D)  should be treated as an indirect cost rather than as a direct manufacturing cost 
A)  include only fixed costs 
B)  seldom influence financial success or failure 
C)  include the cost of selling, delivering, and after-sales support for customers 
D)  should be treated as an indirect cost rather than as a direct manufacturing cost

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The following information pertains to Max Corporation: $$\begin{array} { l r } 
\text { Beginuning work-in-process inventory } & \$ 20,000 \
\text { Ending work-int-process inventory } & 23,000 \
\text { Beginuning finished goods inventory } & 36,000 \
\text { Ending finished goods inventory } & 34,000 \
\text { Cost of goods manufactured } & 246,000 \
\text { Sales } & 300,000
\end{array}$$ What is the gross profit margin earned by the company?

Accepted Answer

A)  $52,000 
B)  $50,000 
C)  $48,500 
D)  $53,500 
A)  $52,000 
B)  $50,000 
C)  $48,500 
D)  $53,500

Question 19

Genosis Metals provided the following information for last month: $$\begin{array} { l r } 
\text { Sales } & \$ 20,000 \
\text { Variable costs } & 8,000 \
\text { Fixed costs } & 4,000 \
\text { Operating income } & \$ 8,000 \
\hline
\end{array}$$ If sales reduce to half the amount in the next month,what is the projected operating income?

Accepted Answer

A)  $0 
B)  $4,000 
C)  $2,000 
D)  $6,000 
A)  $0 
B)  $4,000 
C)  $2,000 
D)  $6,000

Question 20

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)  goods returned after being sold to be re-worked on further improvements and quality 
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)  goods returned after being sold to be re-worked on further improvements and quality

Which of the following companies is part of the merchandising sector of our economy?

Which of the following is common for reporting product cost under financial reporting and product cost for reimbursement under government contracts?

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

Merchandising companies purchase products and sell them to customers without changing their basic form.

Costs that are initially recorded as assets and expensed when goods sold are called ________.

Managers use cost accumulation data to make decisions and implement them.

Which of the following is true of indirect costs?

A plant manufactures several different products.The wages of the plant supervisor can be classified as a(n)________.

Inventoriable costs ________.

A fixed cost is fixed only in relation to a given wide range of total activity or volume and only for a given time span,usually a particular budget period.

Service-sector companies ________.

Period costs ________.

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

Genosis Metals provided the following information for last month: Sales \ 20,000 Variable costs 8,000 Fixed costs 4,000 Operating income \ 8,000 If sales reduce to half the amount in the next month,what is the projected operating income?

Work-in-process inventory would normally include ________.

The Manager and Management Accounting

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

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

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 and Time

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

Exam 2: An Introduction to Cost Terms and Purposes

Which of the following companies is part of the merchandising sector of our economy?

Which of the following is common for reporting product cost under financial reporting and product cost for reimbursement under government contracts?

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

Merchandising companies purchase products and sell them to customers without changing their basic form.

Costs that are initially recorded as assets and expensed when goods sold are called ________.

Managers use cost accumulation data to make decisions and implement them.

Which of the following is true of indirect costs?

A plant manufactures several different products.The wages of the plant supervisor can be classified as a(n)________.

Inventoriable costs ________.

A fixed cost is fixed only in relation to a given wide range of total activity or volume and only for a given time span,usually a particular budget period.

Service-sector companies ________.

Period costs ________.

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

Genosis Metals provided the following information for last month: Sales \ 20,000 Variable costs 8,000 Fixed costs 4,000 Operating income \ 8,000 If sales reduce to half the amount in the next month,what is the projected operating income?

Work-in-process inventory would normally include ________.

The Manager and Management Accounting

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

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

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 and Time

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