Question 1

Another term for product cost is

Accepted Answer

A)  period cost. 
B)  direct cost. 
C)  value-adding cost. 
D)  inventoriable cost. 
A)  period cost. 
B)  direct cost. 
C)  value-adding cost. 
D)  inventoriable cost.

Question 2

Normal costing is the sum of actual direct materials,actual direct labor,and actual overhead.

Accepted Answer

A) True 
 B)False

Question 3

Overhead costs generally are estimated as part of the normal budgeting function.

Accepted Answer

A) True 
 B)False

Question 4

The product costs that appear in the financial statements are actual product costs.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following types of product costs appear in the financial statements?

Accepted Answer

A)  Normal costs 
B)  Estimated costs 
C)  Standard costs 
D)  Actual costs 
A)  Normal costs 
B)  Estimated costs 
C)  Standard costs 
D)  Actual costs

Question 6

Product costs for a manufacturing company consist of direct materials,direct labor,and overhead.

Accepted Answer

A) True 
 B)False

Question 7

Property taxes and equipment depreciation are examples of indirect manufacturing costs.

Accepted Answer

A) True 
 B)False

Question 8

Complete the following chart by placing an "X" under the applicable column heading.Classify each cost as a fixed cost or variable cost and as either a direct or indirect product cost or a period cost.

Accepted Answer

The answer of Complete the following chart by placing an...

Question 9

The product is the cost object when assigning indirect product costs.

Accepted Answer

A) True 
 B)False

Question 10

When a company calculates its product unit cost using estimated costs,it is using which cost measurement method?

Accepted Answer

A)  Standard costing 
B)  Actual costing 
C)  Full costing 
D)  Normal costing 
A)  Standard costing 
B)  Actual costing 
C)  Full costing 
D)  Normal costing

Question 11

Total manufacturing costs and the change in Finished Goods Inventory are used to compute cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 12

Predetermined overhead rates generally are useful for all but which of the following?

Accepted Answer

A)  Price determination 
B)  Estimating production levels 
C)  Inventory valuation 
D)  Product costing 
A)  Price determination 
B)  Estimating production levels 
C)  Inventory valuation 
D)  Product costing

Question 13

When a company uses a single predetermined overhead rate to assign overhead to production,only one cost pool is used.

Accepted Answer

A) True 
 B)False

Question 14

The activity base that would be most appropriate in a capital-intensive industry is

Accepted Answer

A)  direct labor dollars. 
B)  direct labor hours. 
C)  sales volume. 
D)  machine hours. 
A)  direct labor dollars. 
B)  direct labor hours. 
C)  sales volume. 
D)  machine hours.

Question 15

Which of the following is a source document for materials?

Accepted Answer

A)  Vendor's invoice 
B)  Materials request 
C)  Receiving report 
D)  All of these 
A)  Vendor's invoice 
B)  Materials request 
C)  Receiving report 
D)  All of these

Question 16

From Jolier's year-end income statement,you observe that the finished goods inventory has doubled during the year.This would indicate that during the year Jolier

Accepted Answer

A)  sold more goods than were produced. 
B)  produced more goods than last year. 
C)  produced more goods than were sold. 
D)  sold more goods than last year. 
A)  sold more goods than were produced. 
B)  produced more goods than last year. 
C)  produced more goods than were sold. 
D)  sold more goods than last year.

Question 17

Which of the following terms does not apply to materials and supplies that cannot be traced conveniently to specific products?

Accepted Answer

A)  Indirect materials 
B)  Indirect manufacturing costs 
C)  Direct costs 
D)  Overhead 
A)  Indirect materials 
B)  Indirect manufacturing costs 
C)  Direct costs 
D)  Overhead

Question 18

All manufacturing costs that are assigned to completed (but unsold)products should be classified as

Accepted Answer

A)  materials inventory costs. 
B)  overhead costs. 
C)  work in process inventory costs. 
D)  finished goods inventory costs. 
A)  materials inventory costs. 
B)  overhead costs. 
C)  work in process inventory costs. 
D)  finished goods inventory costs.

Question 19

Accounting personnel utilize estimates when deriving product unit costs in order to determine product pricing.

Accepted Answer

A) True 
 B)False

Question 20

The Sorrel Pharmaceuticals Corporation manufactures a variety of drugs that are marketed internationally.Inventories on May 31 and June 30 were as follows:
 $$\begin{array} { l c c } 
& \mathbf { May  31} &\mathbf {    June}  \mathbf { 3 0 } \ 
\text { Materials Inventory } &3 5 4 , 1 0 0&3 2 7 , 4 0 0 \
\text { Work in Process Inventory } & 112,600 & 116,400 \
\text { Finished Goods Inventory } & 138,500 & 142,800
\end{array}$$ Purchases of materials for June were $142,600.Direct labor costs were incurred and computed on the basis of 27,000 hours at $8 per hour.Actual overhead costs incurred in June were as follows: operating supplies used,$5,700; janitorial and materials handling labor,$38,100; employee benefits,$110,800; heat,light,and power,$50,000; factory depreciation,$8,400; property taxes,$8,000; and expired portion of insurance premiums,$12,000.Net sales for June were $992,700.Selling and administrative expenses were $165,000.
Prepare a statement of cost of goods manufactured for the month ended June 30.

Accepted Answer

The answer of The Sorrel Pharmaceuticals Corporation manufactures a variety...

Exam 16: Cost Concepts and Cost Allocation

Another term for product cost is

Normal costing is the sum of actual direct materials,actual direct labor,and actual overhead.

Overhead costs generally are estimated as part of the normal budgeting function.

The product costs that appear in the financial statements are actual product costs.

Which of the following types of product costs appear in the financial statements?

Product costs for a manufacturing company consist of direct materials,direct labor,and overhead.

Property taxes and equipment depreciation are examples of indirect manufacturing costs.

Complete the following chart by placing an "X" under the applicable column heading.Classify each cost as a fixed cost or variable cost and as either a direct or indirect product cost or a period cost.

The product is the cost object when assigning indirect product costs.

When a company calculates its product unit cost using estimated costs,it is using which cost measurement method?

Total manufacturing costs and the change in Finished Goods Inventory are used to compute cost of goods sold.

Predetermined overhead rates generally are useful for all but which of the following?

When a company uses a single predetermined overhead rate to assign overhead to production,only one cost pool is used.

The activity base that would be most appropriate in a capital-intensive industry is

Which of the following is a source document for materials?

From Jolier's year-end income statement,you observe that the finished goods inventory has doubled during the year.This would indicate that during the year Jolier

Which of the following terms does not apply to materials and supplies that cannot be traced conveniently to specific products?

All manufacturing costs that are assigned to completed (but unsold)products should be classified as

Accounting personnel utilize estimates when deriving product unit costs in order to determine product pricing.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions,incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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