Question 1

The determination of a cost as either direct or indirect depends upon the ________.

Accepted Answer

A) accounting standards 
B) tax system chosen 
C) inventory valuation 
D) cost object chosen 
A) accounting standards 
B) tax system chosen 
C) inventory valuation 
D) cost object chosen

Question 2

A manufacturing plant produces two product lines: golf equipment and soccer equipment.An example of a direct cost for the golf equipment line is ________.

Accepted Answer

A) beverages provided daily in the plant break room for the entire staff 
B) monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver 
C) salaries of the clerical staff that work in the company administrative offices 
D) overheads incurred in producing both golf and soccer equipment 
A) beverages provided daily in the plant break room for the entire staff 
B) monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver 
C) salaries of the clerical staff that work in the company administrative offices 
D) overheads incurred in producing both golf and soccer equipment

Question 3

What are the factors that affect the classification of a cost as direct or indirect?

Accepted Answer

Several factors affect whether a cost is

Question 4

What is the operating income for 2018?

Accepted Answer

A) $73,000 
B) $49,000 
C) $36,000 
D) $62,000 
A) $73,000 
B) $49,000 
C) $36,000 
D) $62,000

Question 5

The following information pertains to the Ruby Corp:
 
What is cost of goods sold?

Accepted Answer

A) $1,210,000 
B) $1,165,000 
C) $1,157,000 
D) $1,239,000 
A) $1,210,000 
B) $1,165,000 
C) $1,157,000 
D) $1,239,000

Question 6

Francis Kenney is paid $26 an hour for straight-time and $31 an hour for overtime.One week she worked 46 hours,which included 6 hours of overtime.What is the overtime premium incurred to the company?

Accepted Answer

A) $186 
B) $72 
C) $31 
D) $432 
A) $186 
B) $72 
C) $31 
D) $432

Question 7

For a manufacturing-sector company,the cost of factory depreciation is classified as a ________.

Accepted Answer

A) direct material cost 
B) direct manufacturing labor cost 
C) manufacturing overhead cost 
D) period cost 
A) direct material cost 
B) direct manufacturing labor cost 
C) manufacturing overhead cost 
D) period cost

Question 8

Which of the following is a fixed cost with respect to units produced in a factory?

Accepted Answer

A) monthly rent payment for the building 
B) electricity expenses 
C) utilities cost of the building 
D) direct material costs 
A) monthly rent payment for the building 
B) electricity expenses 
C) utilities cost of the building 
D) direct material costs

Question 9

Expert Manufacturing reported the following:
 
What is Expert's operating income?

Accepted Answer

A) $346,400 
B) $218,200 
C) $204,200 
D) $200,200 
A) $346,400 
B) $218,200 
C) $204,200 
D) $200,200

Question 10

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

Accepted Answer

A) Nike 
B) Barnes & Noble 
C) Corvette Law Firm 
D) Sears,Roebuck,and Company 
A) Nike 
B) Barnes & Noble 
C) Corvette Law Firm 
D) Sears,Roebuck,and Company

Question 11

Millworks Company manufactured 100,000 units in 2018 and reported the following costs:
   
Required:
a.What is the amount of direct materials used during 2018?
b.What manufacturing costs were added to WIP during 2018?
c.What is cost of goods manufactured for 2018?
d.What is cost of goods sold for 2018?

Accepted Answer

a.$348,000 + $3,140,000 - $280,000 = $3,

Question 12

All costs reported on the income statement of a service-sector company are inventoriable costs.

Accepted Answer

A) True 
 B)False

Question 13

Designing,marketing,customer services,research and development expenses are all examples of operating costs.

Accepted Answer

A) True 
 B)False

Question 14

If a worker is paid for 40 hours,but is idle for 5 of those 40 hours,the 5 hour of idle time would be considered a component of direct labor.

Accepted Answer

A) True 
 B)False

Question 15

A cost is a resource sacrificed or forgone to achieve a specific objective.

Accepted Answer

A) True 
 B)False

Question 16

Lucas Manufacturing has three cost objects that it uses to accumulate costs for its manufacturing plants.They are:
   
The following manufacturing overhead cost categories are found in the accounting records:
   
Required:
Assign each of the above costs to the most appropriate cost object.

Accepted Answer

Cost object # 1 includes categ

Question 17

One possible item that some companies include as direct manufacturing labor include ________.

Accepted Answer

A) fringe benefits 
B) overtime 
C) idle time 
D) plant supervisor's salary 
A) fringe benefits 
B) overtime 
C) idle time 
D) plant supervisor's salary

Question 18

Banks provide services or what some might call "intangible products" to their customers.

Accepted Answer

A) True 
 B)False

Question 19

Prime costs include ________.

Accepted Answer

A) direct materials and direct manufacturing labor costs 
B) direct manufacturing labor and manufacturing overhead costs 
C) direct materials and manufacturing overhead costs 
D) only direct materials 
A) direct materials and direct manufacturing labor costs 
B) direct manufacturing labor and manufacturing overhead costs 
C) direct materials and manufacturing overhead costs 
D) only direct materials

Question 20

Inventoriable costs are reported as a liability on the balance sheet when incurred and expensed on the income statement when the product is sold.

Accepted Answer

A) True 
 B)False

Exam 2: An Introduction to Cost Terms and Purposes

The determination of a cost as either direct or indirect depends upon the ________.

A manufacturing plant produces two product lines: golf equipment and soccer equipment.An example of a direct cost for the golf equipment line is ________.

What are the factors that affect the classification of a cost as direct or indirect?

What is the operating income for 2018?

The following information pertains to the Ruby Corp: What is cost of goods sold?

Francis Kenney is paid $26 an hour for straight-time and $31 an hour for overtime.One week she worked 46 hours,which included 6 hours of overtime.What is the overtime premium incurred to the company?

For a manufacturing-sector company,the cost of factory depreciation is classified as a ________.

Which of the following is a fixed cost with respect to units produced in a factory?

Expert Manufacturing reported the following: What is Expert's operating income?

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

Millworks Company manufactured 100,000 units in 2018 and reported the following costs: Required: a.What is the amount of direct materials used during 2018? b.What manufacturing costs were added to WIP during 2018? c.What is cost of goods manufactured for 2018? d.What is cost of goods sold for 2018?

All costs reported on the income statement of a service-sector company are inventoriable costs.

Designing,marketing,customer services,research and development expenses are all examples of operating costs.

If a worker is paid for 40 hours,but is idle for 5 of those 40 hours,the 5 hour of idle time would be considered a component of direct labor.

A cost is a resource sacrificed or forgone to achieve a specific objective.

Lucas Manufacturing has three cost objects that it uses to accumulate costs for its manufacturing plants.They are: The following manufacturing overhead cost categories are found in the accounting records: Required: Assign each of the above costs to the most appropriate cost object.

One possible item that some companies include as direct manufacturing labor include ________.

Banks provide services or what some might call "intangible products" to their customers.

Prime costs include ________.

Inventoriable costs are reported as a liability on the balance sheet when incurred and expensed on the income statement when the product is sold.

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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