Question 1

Inventoriable costs are expensed on the income statement ________.

Accepted Answer

A) when direct materials for the product are purchased 
B) when the direct materials are used in production. 
C) when the products are sold 
D) when the goods move from work-in process to finished goods account 
A) when direct materials for the product are purchased 
B) when the direct materials are used in production. 
C) when the products are sold 
D) when the goods move from work-in process to finished goods account

Question 2

An actual cost is the cost incurred-a historical or past cost.

Accepted Answer

A) True 
 B)False

Question 3

Pederson Company reported the following:
 
What is the average manufacturing cost per unit?

Accepted Answer

A) $11.20 
B) $11.00 
C) $22.00 
D) $22.40 
A) $11.20 
B) $11.00 
C) $22.00 
D) $22.40

Question 4

The list of representative cost drivers in the right column below are randomized with respect to the list of functions in the left column.That is,they do not match.
   
Required:
Match each business function with its representative cost driver.

Accepted Answer

@#IMG-DLM&_TB5540_00

Question 5

Outside the relevant range,variable costs,such as direct material costs ________.

Accepted Answer

A) will decrease proportionately with changes in sales volumes 
B) will remain the same with changes in production volumes 
C) will not change proportionately with changes in production volumes 
D) will increase proportionately with changes in sales volumes 
A) will decrease proportionately with changes in sales volumes 
B) will remain the same with changes in production volumes 
C) will not change proportionately with changes in production volumes 
D) will increase proportionately with changes in sales volumes

Question 6

The only type of inventory that Macy's,a major U.S.department store chain would report on its balance sheet is:

Accepted Answer

A) merchandise inventory 
B) finished goods inventory 
C) direct materials inventory,work-in-process inventory,and finished goods inventory accounts 
D) no inventory accounts as Macy's is a service-sector company 
A) merchandise inventory 
B) finished goods inventory 
C) direct materials inventory,work-in-process inventory,and finished goods inventory accounts 
D) no inventory accounts as Macy's is a service-sector company

Question 7

Which of the following is not an inventoriable cost of a manufacturer?

Accepted Answer

A) Sales commissions paid to sales representatives who sell the products made by the manufacturer 
B) Wages paid to assembly-line workers 
C) Plant depreciation incurred 
D) Property taxes on plant 
A) Sales commissions paid to sales representatives who sell the products made by the manufacturer 
B) Wages paid to assembly-line workers 
C) Plant depreciation incurred 
D) Property taxes on plant

Question 8

What are the three types of manufacturing cost?

Accepted Answer

Direct materials costs are the acquisiti

Question 9

The American West Company manufactures several different products.Unit costs associated with Product ORD210 are as follows:
 
What are the period costs per unit associated with Product ORD210?

Accepted Answer

A) $18 
B) $38 
C) $56 
D) $66 
A) $18 
B) $38 
C) $56 
D) $66

Question 10

Rally Synthesis Inc.manufactures and sells 100 bottles per day.Fixed costs are $22,000 and the variable costs for manufacturing 100 bottles are $30,000.Each bottle is sold for $1,200.How would the daily profit be affected if the daily volume of sales drop by 10%?

Accepted Answer

A) profits are reduced by $9,000 
B) profits are reduced by $3,000 
C) profits are reduced by $12,000 
D) profits are reduced by $59,000 
A) profits are reduced by $9,000 
B) profits are reduced by $3,000 
C) profits are reduced by $12,000 
D) profits are reduced by $59,000

Question 11

What are the differences between direct costs and indirect costs? Give an example of each.

Accepted Answer

Direct costs are costs that can be trace

Question 12

Indirect manufacturing costs ________.

Accepted Answer

A) can be traced to the product that created the costs 
B) can be easily identified with the cost object 
C) generally include the cost of material and the cost of labor 
D) may include both variable and fixed costs 
A) can be traced to the product that created the costs 
B) can be easily identified with the cost object 
C) generally include the cost of material and the cost of labor 
D) may include both variable and fixed costs

Question 13

Work-in-process inventory would normally include ________.

Accepted Answer

A) direct materials in stock and awaiting use in the manufacturing process 
B) goods partially worked on but not yet fully completed 
C) goods fully completed but not yet sold 
D) goods returned after being sold to be re-worked on further improvements and quality 
A) direct materials in stock and awaiting use in the manufacturing process 
B) goods partially worked on but not yet fully completed 
C) goods fully completed but not yet sold 
D) goods returned after being sold to be re-worked on further improvements and quality

Question 14

The following information pertains to Expert System Corporation:
 
What is the gross profit margin earned by the company?

Accepted Answer

A) $56,000 
B) $63,000 
C) $68,000 
D) $66,000 
A) $56,000 
B) $63,000 
C) $68,000 
D) $66,000

Question 15

The broader the cost object definition (i.e. ,plant versus product),the more confident the manager will be about the accuracy of the direct cost amounts.

Accepted Answer

A) True 
 B)False

Question 16

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company),Gregory Food Retailers (a merchandising company),and Larson Real Estate (a service sector company).Classify each item as either inventoriable (I)costs or period (P)costs.

Accepted Answer

@#IMG-DLM&_TB5540_00

Question 17

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

Accepted Answer

A) Macy's 
B) KPMG 
C) Apple Inc. 
D) Amazon.com 
A) Macy's 
B) KPMG 
C) Apple Inc. 
D) Amazon.com

Question 18

A cost object is anything for which a cost measurement is desired.

Accepted Answer

A) True 
 B)False

Question 19

Explain the difference between an inventoriable cost and a period cost.What potential problems does an inaccurate classification of product and period costs cause?

Accepted Answer

Inventoriable costs are all costs of a p

Question 20

Inventoriable costs are costs of a product that are considered ________.

Accepted Answer

A) assets in a company's balance sheet when the costs are incurred and that are expensed as cost of goods sold only when the product is sold 
B) liabilities in a company's balance sheet when the costs are incurred and that are expensed only when the product is sold 
C) assets in a company's income statement when the costs are capitalized and that are expensed as cost of goods sold only when the product is sold 
D) liabilities in a company's income statement when the costs are capitalized and that are expensed only when the product is sold 
A) assets in a company's balance sheet when the costs are incurred and that are expensed as cost of goods sold only when the product is sold 
B) liabilities in a company's balance sheet when the costs are incurred and that are expensed only when the product is sold 
C) assets in a company's income statement when the costs are capitalized and that are expensed as cost of goods sold only when the product is sold 
D) liabilities in a company's income statement when the costs are capitalized and that are expensed only when the product is sold

Exam 2: An Introduction to Cost Terms and Purposes

Inventoriable costs are expensed on the income statement ________.

An actual cost is the cost incurred-a historical or past cost.

Pederson Company reported the following: What is the average manufacturing cost per unit?

The list of representative cost drivers in the right column below are randomized with respect to the list of functions in the left column.That is,they do not match. Required: Match each business function with its representative cost driver.

Outside the relevant range,variable costs,such as direct material costs ________.

The only type of inventory that Macy's,a major U.S.department store chain would report on its balance sheet is:

Which of the following is not an inventoriable cost of a manufacturer?

What are the three types of manufacturing cost?

The American West Company manufactures several different products.Unit costs associated with Product ORD210 are as follows: What are the period costs per unit associated with Product ORD210?

Rally Synthesis Inc.manufactures and sells 100 bottles per day.Fixed costs are $22,000 and the variable costs for manufacturing 100 bottles are $30,000.Each bottle is sold for $1,200.How would the daily profit be affected if the daily volume of sales drop by 10%?

What are the differences between direct costs and indirect costs? Give an example of each.

Indirect manufacturing costs ________.

Work-in-process inventory would normally include ________.

The following information pertains to Expert System Corporation: What is the gross profit margin earned by the company?

The broader the cost object definition (i.e. ,plant versus product),the more confident the manager will be about the accuracy of the direct cost amounts.

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company),Gregory Food Retailers (a merchandising company),and Larson Real Estate (a service sector company).Classify each item as either inventoriable (I)costs or period (P)costs.

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

A cost object is anything for which a cost measurement is desired.

Explain the difference between an inventoriable cost and a period cost.What potential problems does an inaccurate classification of product and period costs cause?

Inventoriable costs are costs of a product that are considered ________.

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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