Question 1

Cost of goods sold for a manufacturer is calculated as follows: beginning finished goods + cost of goods manufacturered - ending finished goods.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following statements is true?

Accepted Answer

A) A direct cost of one cost object will always be a direct cost of another cost object. 
B) Because of a cost-benefit tradeoff,some direct costs may be treated as indirect costs. 
C) All fixed costs are indirect costs. 
D) All direct costs are variable costs. 
A) A direct cost of one cost object will always be a direct cost of another cost object. 
B) Because of a cost-benefit tradeoff,some direct costs may be treated as indirect costs. 
C) All fixed costs are indirect costs. 
D) All direct costs are variable costs. B

Question 3

For a manufacturing company,indirect manufacturing costs would 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 C

Question 4

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 5

Cost accounting helps to aids managers in formulating strategies,setting prices for products and services and making decisions about the mix of products and services to be offered to customers.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a direct manufacturing cost?

Accepted Answer

A) plant maintenance 
B) plant rent 
C) fringe benefits paid to machine operators 
D) property taxes on plant 
A) plant maintenance 
B) plant rent 
C) fringe benefits paid to machine operators 
D) property taxes on plant

Question 7

The balance sheet of a manufacturing-sector companies would report ________.

Accepted Answer

A) only merchandise inventory 
B) only finished goods inventory 
C) direct materials inventory,work-in-process inventory,and finished goods inventory accounts 
D) direct materials inventory and finished goods inventory accounts only 
A) only merchandise inventory 
B) only finished goods inventory 
C) direct materials inventory,work-in-process inventory,and finished goods inventory accounts 
D) direct materials inventory and finished goods inventory accounts only

Question 8

Pederson Company reported the following:
 
What is the manufacturing cost for the ending finished goods inventory?

Accepted Answer

A) $100,000 
B) $60,000 
C) $744,000 
D) $54,000 
A) $100,000 
B) $60,000 
C) $744,000 
D) $54,000

Question 9

All Rite Manufacturing reported the following:
 
What is All Rite's gross margin (or gross profit)?

Accepted Answer

A) $54,000 
B) $217,000 
C) $211,000 
D) $60,000 
A) $54,000 
B) $217,000 
C) $211,000 
D) $60,000

Question 10

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 11

Exceptional 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:
   
The following costs are found in the accounting records:
   
Required:
Assign each of the above costs to the most appropriate cost categories.

Accepted Answer

Product cost includes a,b,d,e.

Question 12

Campus Apparels is a clothing maker.Unit costs associated with one of its products,Product DCT121,are as follows:
 
What are the period costs per unit associated with Product DCT121?

Accepted Answer

A) $33 
B) $17 
C) $30 
D) $100 
A) $33 
B) $17 
C) $30 
D) $100

Question 13

Howard Manufacturing Company had the following account balances for the quarter ending March 31,unless otherwise noted:
   
Required:
a.Prepare a cost of goods manufactured schedule for the quarter.
b.Prepare a cost of goods sold schedule for the quarter.

Accepted Answer

a.Howard Manufacturing Company

Question 14

A band of normal activity or volume in which specific cost-volume relationships are maintained is referred to as the ________.

Accepted Answer

A) average range 
B) cost-allocation range 
C) cost driver range 
D) relevant range 
A) average range 
B) cost-allocation range 
C) cost driver range 
D) relevant range

Question 15

What is the cost of goods manufactured for 2018?

Accepted Answer

A) $404,000 
B) $399,000 
C) $301,000 
D) $311,000 
A) $404,000 
B) $399,000 
C) $301,000 
D) $311,000

Question 16

Since costs that are inventoried are not expensed until the units associated with them are sold,a manager can produce more units than are expected to be sold in a period without reducing a firm's net income.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) only the direct materials inventory to reflect the cost of labor that has worked using those materials 
B) only in the merchandise inventory to reflect the value added in the production process 
C) only in both work-in-process inventory and finished goods inventory 
D) direct materials inventory,work-in-process inventory,and finished goods inventory accounts 
A) only the direct materials inventory to reflect the cost of labor that has worked using those materials 
B) only in the merchandise inventory to reflect the value added in the production process 
C) only in both work-in-process inventory and finished goods inventory 
D) direct materials inventory,work-in-process inventory,and finished goods inventory accounts

Question 18

The East Company manufactures several different products.Unit costs associated with Product ORD105 are as follows:
 
What is the percentage of the total variable costs per unit associated with Product ORD105 with respect to total cost?

Accepted Answer

A) 81% 
B) 68% 
C) 84% 
D) 71% 
A) 81% 
B) 68% 
C) 84% 
D) 71%

Question 19

Variable costs ________.

Accepted Answer

A) are always indirect costs 
B) increase in total when the actual level of activity increases 
C) include most personnel costs and depreciation on machinery 
D) are never considered a part of prime cost 
A) are always indirect costs 
B) increase in total when the actual level of activity increases 
C) include most personnel costs and depreciation on machinery 
D) are never considered a part of prime cost

Question 20

Management accountants help managers identify what information is relevant and what information is
irrelevant that help in decision making.

Accepted Answer

A) True 
 B)False

Exam 2: An Introduction to Cost Terms and Purposes

Cost of goods sold for a manufacturer is calculated as follows: beginning finished goods + cost of goods manufacturered - ending finished goods.

Which of the following statements is true?

For a manufacturing company,indirect manufacturing costs would be included in ________.

Which of the following is true of indirect costs?

Cost accounting helps to aids managers in formulating strategies,setting prices for products and services and making decisions about the mix of products and services to be offered to customers.

Which of the following is a direct manufacturing cost?

The balance sheet of a manufacturing-sector companies would report ________.

Pederson Company reported the following: What is the manufacturing cost for the ending finished goods inventory?

All Rite Manufacturing reported the following: What is All Rite's gross margin (or gross profit)?

Period costs ________.

Campus Apparels is a clothing maker.Unit costs associated with one of its products,Product DCT121,are as follows: What are the period costs per unit associated with Product DCT121?

Howard Manufacturing Company had the following account balances for the quarter ending March 31,unless otherwise noted: Required: a.Prepare a cost of goods manufactured schedule for the quarter. b.Prepare a cost of goods sold schedule for the quarter.

A band of normal activity or volume in which specific cost-volume relationships are maintained is referred to as the ________.

What is the cost of goods manufactured for 2018?

Since costs that are inventoried are not expensed until the units associated with them are sold,a manager can produce more units than are expected to be sold in a period without reducing a firm's net income.

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

The East Company manufactures several different products.Unit costs associated with Product ORD105 are as follows: What is the percentage of the total variable costs per unit associated with Product ORD105 with respect to total cost?

Variable costs ________.

Management accountants help managers identify what information is relevant and what information is irrelevant that help in decision making.

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

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