Question 1

Which of the following factors affect the direct/indirect classification of a cost?

Accepted Answer

A)  the level of budgeted profit for the next year 
B)  the estimation of time required to complete the order 
C)  the ability to execute an order in the most cost-efficient manner 
D)  the design of the operation 
A)  the level of budgeted profit for the next year 
B)  the estimation of time required to complete the order 
C)  the ability to execute an order in the most cost-efficient manner 
D)  the design of the operation

Question 2

Total manufacturing costs equal ________.

Accepted Answer

A)  direct materials plus prime costs 
B)  direct materials plus conversion costs 
C)  direct manufacturing labor costs plus sunk costs 
D)  direct manufacturing labor costs plus conversion costs 
A)  direct materials plus prime costs 
B)  direct materials plus conversion costs 
C)  direct manufacturing labor costs plus sunk costs 
D)  direct manufacturing labor costs plus conversion costs

Question 3

Bosely Manufacturing Co.wants to classify costs for the product produced at its facility.The company produces only one product at the facility and operates continually.The cost categories are:
Product cost
Prime cost
Conversion cost
Period cost
The following costs are found in the accounting records:
a.Quality control inspection wages
b.Raw material purchases
c.Sales commissions
d.Factory depreciation
e.Assembly wages
Required:
Assign each of the above costs to the most appropriate cost categories.

Accepted Answer

Product cost includes a,b,d,e.

Question 4

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

Accepted Answer

A)  Target 
B)  Ernst & Young 
C)  Nokia 
D)  Amazon.com 
A)  Target 
B)  Ernst & Young 
C)  Nokia 
D)  Amazon.com

Question 5

Indirect manufacturing costs are also referred to as manufacturing overhead costs or factory overhead costs.

Accepted Answer

A) True 
 B)False

Question 6

Direct manufacturing labor includes plant rent and salaries paid to plant supervisors.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following formulas determine cost of goods sold in a merchandising entity?

Accepted Answer

A)  Beginning inventory + Purchases + Ending inventory = Cost of goods sold 
B)  Beginning inventory + Purchases - Ending inventory = Costs of goods sold 
C)  Beginning inventory - Purchases + Ending inventory = Cost of goods sold 
D)  Beginning inventory - Ending inventory - Purchases = Cost of goods sold 
A)  Beginning inventory + Purchases + Ending inventory = Cost of goods sold 
B)  Beginning inventory + Purchases - Ending inventory = Costs of goods sold 
C)  Beginning inventory - Purchases + Ending inventory = Cost of goods sold 
D)  Beginning inventory - Ending inventory - Purchases = Cost of goods sold

Question 8

Manufacturing overhead costs in an automobile manufacturing plant most likely include ________.

Accepted Answer

A)  labor costs of the painting department 
B)  indirect material costs such as lubricants 
C)  leather seat costs 
D)  tyre costs 
A)  labor costs of the painting department 
B)  indirect material costs such as lubricants 
C)  leather seat costs 
D)  tyre costs

Question 9

Answer the following questions using the information below:
Leslie Manufacturing reported the following:
 $$\begin{array} { | l | r | } 
\hline\text { Revenue } & \$ 450,000 \
\hline \text { Beginning inventory of direct materials, January 1, 2015 } & 20,000 \
\hline \text { Purchases of direct materials } & 156,000 \
\hline \text { Ending inventory of direct materials, December 31, 2015 } & 18,000 \
\hline \text { Direct manufacturing labor } & 21,000 \
\hline \text { Indirect manufacturing costs } & 42,000 \
\hline \text { Beginning inventory of finished goods, January 1, 2015 } & 40,000 \
\hline \text { Cost of goods manufactured } & 114,000 \
\hline \text { Ending inventory of finished goods, December 31, 2015 } & 45,000 \
\hline \text { Operating costs } & 150,000 \
\hline
\end{array}$$
-What is Leslie's gross margin (or gross profit)?

Accepted Answer

A)  $103,000 
B)  $152,000 
C)  $341,000 
D)  $317,000 
A)  $103,000 
B)  $152,000 
C)  $341,000 
D)  $317,000

Question 10

Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime.One week she worked 42 hours,which included 2 hours of overtime.What is the overhead incurred to the company?

Accepted Answer

A)  $60 
B)  $10 
C)  $30 
D)  $20 
A)  $60 
B)  $10 
C)  $30 
D)  $20

Question 11

Variable costs depend on the resources used.

Accepted Answer

A) True 
 B)False

Question 12

Variable costs per unit vary with the level of production or sales volume.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Rework labor time is considered an overhead cost and not a direct labor cost.

Accepted Answer

A) True 
 B)False

Question 15

Cost behavior refers to ________.

Accepted Answer

A)  how costs react to a change in the level of activity 
B)  whether a cost is incurred in a manufacturing, merchandising, or service company 
C)  classifying costs as either perpetual or period costs 
D)  whether a particular expense is expensed in the same or the following period 
A)  how costs react to a change in the level of activity 
B)  whether a cost is incurred in a manufacturing, merchandising, or service company 
C)  classifying costs as either perpetual or period costs 
D)  whether a particular expense is expensed in the same or the following period

Question 16

Which of the following is a fixed cost?

Accepted Answer

A)  monthly rent payment 
B)  electricity expenses 
C)  travel expenses 
D)  direct material costs 
A)  monthly rent payment 
B)  electricity expenses 
C)  travel expenses 
D)  direct material costs

Question 17

Answer the following questions using the information below:
 $\begin{array}{lr}
\text { Beginning finished goods, } 1 / 1 / 2015 & \$ 46,000 \
\text { Ending finished goods, } 12 / 31 / 2015 & 38,000 \
\text { Cost of goods sold } & 250,000 \
\text { Sales revenue } & 488,000 \
\text { Operating expenses } & 112,000
\end{array}$
-What is gross margin for 2015?

Accepted Answer

A)  $243,000 
B)  $238,000 
C)  $318,000 
D)  $228,000 
A)  $243,000 
B)  $238,000 
C)  $318,000 
D)  $228,000

Question 18

Which of the following formulas determine cost of goods sold in a manufacturing entity?

Accepted Answer

A)  Beginning work-in-process inventory + Cost of goods manufactured - Ending work-in-process inventory = Cost of goods sold 
B)  Beginning work-in-process inventory + Cost of goods manufactured + Ending work-in-process inventory = Cost of goods sold 
C)  Cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold 
D)  Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold 
A)  Beginning work-in-process inventory + Cost of goods manufactured - Ending work-in-process inventory = Cost of goods sold 
B)  Beginning work-in-process inventory + Cost of goods manufactured + Ending work-in-process inventory = Cost of goods sold 
C)  Cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold 
D)  Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold

Question 19

Answer the following questions using the information below:
Zephyr Apparels is a clothing retailer. Unit costs associated with one of its products, Product DCT121, are as follows:
 $$\begin{array} { l r } 
\text { Direct materials } & \$ 70 \
\text { Direct manufacturing labor } & 20 \
\text { Variable manufacturing overhead } & 15 \
\text { Fixed manufacturing overhead } & 32 \
\text { Sales commissions ( } 2 \% \text { of sales) } & 5 \
\text { Administrative salaries } & 16 \
\quad \text { Total } & \$ 158
\end{array}$$
-What are the direct variable manufacturing costs per unit associated with Product DCT121?

Accepted Answer

A)  $142 
B)  $90 
C)  $105 
D)  $110 
A)  $142 
B)  $90 
C)  $105 
D)  $110

Question 20

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

Which of the following factors affect the direct/indirect classification of a cost?

Total manufacturing costs equal ________.

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

Indirect manufacturing costs are also referred to as manufacturing overhead costs or factory overhead costs.

Direct manufacturing labor includes plant rent and salaries paid to plant supervisors.

Which of the following formulas determine cost of goods sold in a merchandising entity?

Manufacturing overhead costs in an automobile manufacturing plant most likely include ________.

Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime.One week she worked 42 hours,which included 2 hours of overtime.What is the overhead incurred to the company?

Variable costs depend on the resources used.

Variable costs per unit vary with the level of production or sales volume.

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

Rework labor time is considered an overhead cost and not a direct labor cost.

Cost behavior refers to ________.

Which of the following is a fixed cost?

Answer the following questions using the information below: Beginning finished goods, 1/1/2015 \ 46,000 Ending finished goods, 12/31/2015 38,000 Cost of goods sold 250,000 Sales revenue 488,000 Operating expenses 112,000 -What is gross margin for 2015?

Which of the following formulas determine cost of goods sold in a manufacturing entity?

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

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 factors affect the direct/indirect classification of a cost?

Total manufacturing costs equal ________.

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

Indirect manufacturing costs are also referred to as manufacturing overhead costs or factory overhead costs.

Direct manufacturing labor includes plant rent and salaries paid to plant supervisors.

Which of the following formulas determine cost of goods sold in a merchandising entity?

Manufacturing overhead costs in an automobile manufacturing plant most likely include ________.

Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime.One week she worked 42 hours,which included 2 hours of overtime.What is the overhead incurred to the company?

Variable costs depend on the resources used.

Variable costs per unit vary with the level of production or sales volume.

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

Rework labor time is considered an overhead cost and not a direct labor cost.

Cost behavior refers to ________.

Which of the following is a fixed cost?

Answer the following questions using the information below: Beginning finished goods, 1/1/2015 \ 46,000 Ending finished goods, 12/31/2015 38,000 Cost of goods sold 250,000 Sales revenue 488,000 Operating expenses 112,000 -What is gross margin for 2015?

Which of the following formulas determine cost of goods sold in a manufacturing entity?

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

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