Exam 4: Cost Management Systems and Activity-Based Costing

Costs that can be allocated to a cost object are called direct costs.

Collecting cost and operational data is the first step in the design of an Activity-Based Costing system.

When determining the cost of a product,which of the following costs is often not allocated?

A manufacturing company has identified several costs.Indicate whether each of the following costs is an Inventoriable cost(I)or a Period cost(P): _____ 1.Rent Expense on factory equipment _____ 2.Cost of subassemblies used in producing product _____ 3.Wages of machine operators in factory _____ 4.Rent Expense on computers at corporate office _____ 5.Wage Expense for janitors in factory _____ 6.Repairs Expense for factory equipment _____ 7.Office Supplies Expense at corporate office _____ 8.Wage Expense for janitors at corporate office _____ 9.Wages of security guards at corporate office _____ 10.Property taxes on factory building and land _____ 11.Wages of security guards at factory _____ 12.Wages of forklift driver in factory _____ 13.Supplies Expense for factory _____ 14.Wages of forklift operators in factory _____ 15.Distribution Expenses

________ is a name for a system that first accumulates indirect resource costs for each of the activities of an organization and then assigns the cost of each activity to the cost objects that require that activity.

Indirect manufacturing costs are the same as manufacturing overhead costs.

What is an example of a tool or technique that is used in a cost management system?

Which of the following is NOT a stated purpose of cost allocation?

The process of collecting costs by some natural classification is called ________.

Which of the following statements about cost accounting systems is FALSE?

To assign indirect costs to cost objects,which of the following methods is used?

Indirect production costs can be ignored because they do not affect the cost of a product.

If the Production Department is the cost object,the salary of the factory supervisor is a(n)________ cost for the department.If the product made in the factory is the cost object,the salary of the factory supervisor is a(n)________ cost for the product.

In a manufacturing firm,which inventory account is NOT used?

Sandler Company has identified the following activities related to indirect production costs: Activity Activity Costs Cost Drivers Machine Setup \ 180,000 1,500 setup hours Materials Handling \ 50,000 12,500 pounds of materials Electric Power \ 20,000 20,000 kilowatt hours Sandler Company has obtained the following data concerning two products: Prodirct A Prodirct B Number of units produced 4,000 20,000 Direct materials cost \ 20,000 \ 25,000 Direct labor cost \ 12,000 \ 20,000 Number of setup hours 100120 Pounds of materials used 5001,500 Kilowatt-hours 1,000 2,000 Using activity-based costing,what amount of electric power cost is assigned to Product A and Product B? Prodirct A Prodirct B A) \ 1,000 \ 2,000 B) \ 3,333 \ 16,667 C) \ 5,000 \ 15,000 D) \ 6,667 \ 13,333

Which of the following is NOT a period expense in a merchandising firm?

In general,many more costs are direct costs instead of indirect costs when the cost object is a ________ instead of a(n)________.

Which of the following is NOT an example of indirect production costs?

Depreciation expense on assembly equipment used for several products is an example of a direct cost for a manufactured product.

A merchandising firm has ________ inventory account(s).A manufacturing firm has ________ inventory account(s).