Question 1

An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.

Accepted Answer

A) True 
 B)False  True

Question 2

It is NOT necessary to assign indirect costs to cost objects.

Accepted Answer

A) True 
 B)False  False

Question 3

Refer to the Figure.What was the per-unit conversion cost last month?

Accepted Answer

A)  $100.00 
B)  $140.00 
C)  $162.50 
D)  $218.00 
A)  $100.00 
B)  $140.00 
C)  $162.50 
D)  $218.00 B

Question 4

Costs are directly,NOT indirectly,associated with cost objects.

Accepted Answer

A) True 
 B)False

Question 5

What is the definition of cost of goods manufactured?

Accepted Answer

A)  the cost of direct materials used in production 
B)  the product cost of goods completed during the current period 
C)  the product cost of goods sold during the current period 
D)  the cost remaining in ending work-in-process inventory 
A)  the cost of direct materials used in production 
B)  the product cost of goods completed during the current period 
C)  the product cost of goods sold during the current period 
D)  the cost remaining in ending work-in-process inventory

Question 6

$\begin{array}{l}
\text { Sales revenue } &\$428,000\
\text { Cost of goods sold }&205,440\\text { Gross margin }&222,560\\text { Less: }\\text { Selling expenses }&81,320\\text { Administrative expenses }&72,760\\text { Operating income }&\$68,480
\end{array}$
-Refer to the Figure.What was the selling expense percentage?

Accepted Answer

A)  17% 
B)  19% 
C)  16% 
D)  21% 
A)  17% 
B)  19% 
C)  16% 
D)  21%

Question 7

A cost object is any item,such as products,customers,departments,regions,and so on,for which costs are measured and assigned.

Accepted Answer

A) True 
 B)False

Question 8

Reducing the cost required to achieve a given benefit means that a company is becoming less efficient.

Accepted Answer

A) True 
 B)False

Question 9

$$\begin{array} { l c c } 
& \text { January 1 } & \text { December } 31 \
\text { Materials } & \$ 10,000 & \$ 8,000 \
\text { Work in Process } & \$ 18,000 & \$ 17,000 \
\text { Finished Goods } & \$ 21,000 & \$ 16,500
\end{array}$$
-Refer to the Figure.What were the total manufacturing costs for the year?

Accepted Answer

A)  $101,000 
B)  $102,000 
C)  $106,500 
D)  $123,000 
A)  $101,000 
B)  $102,000 
C)  $106,500 
D)  $123,000

Question 10

What type of cost is direct labour?

Accepted Answer

A)  a nonproduction cost 
B)  a period cost 
C)  a nonmanufacturing cost 
D)  a product cost 
A)  a nonproduction cost 
B)  a period cost 
C)  a nonmanufacturing cost 
D)  a product cost

Question 11

Research and development costs would be classified as period costs.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following would be found on the balance sheet of a manufacturer?

Accepted Answer

A)  cost of goods sold 
B)  cost of goods manufactured 
C)  work in progress inventory 
D)  revenue 
A)  cost of goods sold 
B)  cost of goods manufactured 
C)  work in progress inventory 
D)  revenue

Question 13

What is one of the main purposes of assigning costs to cost objects?

Accepted Answer

A)  It provides information on why money was spent. 
B)  It records the historical events of the organization. 
C)  It allows management to incorporate products in marketing. 
D)  It facilitates service businesses in following financial regulations. 
A)  It provides information on why money was spent. 
B)  It records the historical events of the organization. 
C)  It allows management to incorporate products in marketing. 
D)  It facilitates service businesses in following financial regulations.

Question 14

Which of the following expenses is included in overhead?

Accepted Answer

A)  advertising and marketing costs 
B)  property taxes on the factory 
C)  utility costs at the head office 
D)  computers used at the head office 
A)  advertising and marketing costs 
B)  property taxes on the factory 
C)  utility costs at the head office 
D)  computers used at the head office

Question 15

A variable cost is one that decreases in total as output increases and increases in total as output decreases.

Accepted Answer

A) True 
 B)False

Question 16

What is the behaviour pattern of a variable cost?

Accepted Answer

A)  It increases in total as output increases. 
B)  It remains constant in total at all levels of output. 
C)  It increases per unit as output increases. 
D)  It decreases per unit as output increases. 
A)  It increases in total as output increases. 
B)  It remains constant in total at all levels of output. 
C)  It increases per unit as output increases. 
D)  It decreases per unit as output increases.

Question 17

Global Inc.manufactured 6,000 units during the month of April and incurred a direct materials cost of $110,000 and an overhead cost of $50,000.Suppose the per-unit prime cost was $30.00 per unit.How much direct labour cost did Global incur during April?

Accepted Answer

A)  $20,000 
B)  $70,000 
C)  $85,000 
D)  $90,000 
A)  $20,000 
B)  $70,000 
C)  $85,000 
D)  $90,000

Question 18

What is the formula to calculate operating income?

Accepted Answer

A)  sales revenue − cost of goods sold − selling and administrative expenses 
B)  gross margin − selling expenses + selling and administrative expenses 
C)  sales revenue − cost of goods sold + selling and administrative expenses 
D)  sales revenue − selling and administrative expenses 
A)  sales revenue − cost of goods sold − selling and administrative expenses 
B)  gross margin − selling expenses + selling and administrative expenses 
C)  sales revenue − cost of goods sold + selling and administrative expenses 
D)  sales revenue − selling and administrative expenses

Question 19

$$\begin{array} { l r } 
\text { Direct materials } & \$ 40,000 \
\text { Direct labour } & 60,000 \
\text { Overhead } & 90,000 \
\text { Selling expenses } & 24,000 \
\text { Administrative expenses } & 22,000
\end{array}$$
-Refer to the Figure.What was the gross margin per unit?

Accepted Answer

A)  $7 
B)  $30 
C)  $95 
D)  $125 
A)  $7 
B)  $30 
C)  $95 
D)  $125

Question 20

Which of the following is a period cost?

Accepted Answer

A)  direct materials 
B)  indirect labour 
C)  indirect materials 
D)  depreciation on an office building 
A)  direct materials 
B)  indirect labour 
C)  indirect materials 
D)  depreciation on an office building

An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.

It is NOT necessary to assign indirect costs to cost objects.

Refer to the Figure.What was the per-unit conversion cost last month?

Costs are directly,NOT indirectly,associated with cost objects.

What is the definition of cost of goods manufactured?

Sales revenue \4 28,000 Cost of goods sold 205,440 Gross margin 222,560 Less: Selling expenses 81,320 Administrative expenses 72,760 Operating income \6 8,480 -Refer to the Figure.What was the selling expense percentage?

A cost object is any item,such as products,customers,departments,regions,and so on,for which costs are measured and assigned.

Reducing the cost required to achieve a given benefit means that a company is becoming less efficient.

January 1 December 31 Materials \ 10,000 \ 8,000 Work in Process \ 18,000 \ 17,000 Finished Goods \ 21,000 \ 16,500 -Refer to the Figure.What were the total manufacturing costs for the year?

What type of cost is direct labour?

Research and development costs would be classified as period costs.

Which of the following would be found on the balance sheet of a manufacturer?

What is one of the main purposes of assigning costs to cost objects?

Which of the following expenses is included in overhead?

A variable cost is one that decreases in total as output increases and increases in total as output decreases.

What is the behaviour pattern of a variable cost?

Global Inc.manufactured 6,000 units during the month of April and incurred a direct materials cost of $110,000 and an overhead cost of $50,000.Suppose the per-unit prime cost was $30.00 per unit.How much direct labour cost did Global incur during April?

What is the formula to calculate operating income?

Direct materials \ 40,000 Direct labour 60,000 Overhead 90,000 Selling expenses 24,000 Administrative expenses 22,000 -Refer to the Figure.What was the gross margin per unit?

Which of the following is a period cost?

Introduction to Managerial Accounting

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 2: Basic Managerial Accounting Concepts

An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.

It is NOT necessary to assign indirect costs to cost objects.

Refer to the Figure.What was the per-unit conversion cost last month?

Costs are directly,NOT indirectly,associated with cost objects.

What is the definition of cost of goods manufactured?

Sales revenue \4 28,000 Cost of goods sold 205,440 Gross margin 222,560 Less: Selling expenses 81,320 Administrative expenses 72,760 Operating income \6 8,480 -Refer to the Figure.What was the selling expense percentage?

A cost object is any item,such as products,customers,departments,regions,and so on,for which costs are measured and assigned.

Reducing the cost required to achieve a given benefit means that a company is becoming less efficient.

January 1 December 31 Materials \ 10,000 \ 8,000 Work in Process \ 18,000 \ 17,000 Finished Goods \ 21,000 \ 16,500 -Refer to the Figure.What were the total manufacturing costs for the year?

What type of cost is direct labour?

Research and development costs would be classified as period costs.

Which of the following would be found on the balance sheet of a manufacturer?

What is one of the main purposes of assigning costs to cost objects?

Which of the following expenses is included in overhead?

A variable cost is one that decreases in total as output increases and increases in total as output decreases.

What is the behaviour pattern of a variable cost?

Global Inc.manufactured 6,000 units during the month of April and incurred a direct materials cost of $110,000 and an overhead cost of $50,000.Suppose the per-unit prime cost was $30.00 per unit.How much direct labour cost did Global incur during April?

What is the formula to calculate operating income?

Direct materials \ 40,000 Direct labour 60,000 Overhead 90,000 Selling expenses 24,000 Administrative expenses 22,000 -Refer to the Figure.What was the gross margin per unit?

Which of the following is a period cost?

Introduction to Managerial Accounting

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters