Question 1

If each motorcycle requires a belt that costs $20 and 2,000 motorcycles are produced for the month,the total cost for belts is ________.

Accepted Answer

A) considered to be a direct fixed cost 
B) considered to be a direct variable cost 
C) considered to be an indirect fixed cost 
D) considered to be an indirect variable cost 
A) considered to be a direct fixed cost 
B) considered to be a direct variable cost 
C) considered to be an indirect fixed cost 
D) considered to be an indirect variable cost

Question 2

Ridez Manufacturing currently produces 4,000 bicycles per month.The following per unit data apply for sales to regular customers:
 
The plant has capacity for 6,000 bicycles and is considering expanding production to 5,000 bicycles.What is the per unit cost of producing 5,000 bicycles?

Accepted Answer

A) $91.80 per unit 
B) $111.25 per unit 
C) $69.80 per unit 
D) $86.20 per unit 
A) $91.80 per unit 
B) $111.25 per unit 
C) $69.80 per unit 
D) $86.20 per unit

Question 3

When 24,000 units are produced,variable costs are $12.00 per unit.Therefore,when 18,000 units are produced ________.

Accepted Answer

A) variable costs will remain at $12.00 per unit 
B) variable costs will total $288,000 
C) variable unit costs will increase to $16.00 per unit 
D) variable unit costs will decrease to $9.00 per unit 
A) variable costs will remain at $12.00 per unit 
B) variable costs will total $288,000 
C) variable unit costs will increase to $16.00 per unit 
D) variable unit costs will decrease to $9.00 per unit

Question 4

Direct manufacturing cost labor includes plant rent and salaries paid to plant supervisors.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is true?

Accepted Answer

A) There is a cause-and-effect relationship between the cost driver and the amount of cost. 
B) Fixed costs have cost drivers over the short run. 
C) Over the short run all costs have cost drivers. 
D) Volume of production is a cost driver of distribution costs. 
A) There is a cause-and-effect relationship between the cost driver and the amount of cost. 
B) Fixed costs have cost drivers over the short run. 
C) Over the short run all costs have cost drivers. 
D) Volume of production is a cost driver of distribution costs.

Question 6

Rework labor time is considered an overhead cost and not a direct labor cost.

Accepted Answer

A) True 
 B)False

Question 7

In determining product cost,what concerns does a manufacturing firm have when contracting with a government agency?

Accepted Answer

Government contracts often reimburse on

Question 8

The balance sheet of a service-sector companies would show ________.

Accepted Answer

A) work-in-process inventory,and finished goods inventory accounts 
B) only finished goods inventory 
C) direct materials inventory,work-in-process inventory,and finished goods inventory accounts 
D) no inventory accounts 
A) work-in-process inventory,and finished goods inventory accounts 
B) only finished goods inventory 
C) direct materials inventory,work-in-process inventory,and finished goods inventory accounts 
D) no inventory accounts

Question 9

A cost system determines the cost of a cost object by ________.

Accepted Answer

A) accumulating and then assigning costs 
B) accumulating costs 
C) assigning and then accumulating costs 
D) assigning costs 
A) accumulating and then assigning costs 
B) accumulating costs 
C) assigning and then accumulating costs 
D) assigning costs

Question 10

Ralph Johnson is paid $30 an hour for straight-time and $40 an hour for overtime.One week he worked 39 hours,which included 9 hours of overtime,and 4 hours of idle time caused by material shortages.What is the direct labor cost incurred to the company?

Accepted Answer

A) $1,050 
B) $1,260 
C) $1,140 
D) $1,100 
A) $1,050 
B) $1,260 
C) $1,140 
D) $1,100

Question 11

The cost of natural gas used to heat a production facility that makes three products (A,B,and
C)would be classified as an indirect cost when the cost object is one of the products (either A,B,or
C).

Accepted Answer

A) True 
 B)False

Question 12

Fixed costs depend on the ________.

Accepted Answer

A) amount of resources used 
B) amount of unchanged costs for a given time period 
C) volume of production 
D) total number of units sold 
A) amount of resources used 
B) amount of unchanged costs for a given time period 
C) volume of production 
D) total number of units sold

Question 13

U.S.Systems Inc. ,had the following activities during 2018:
   
Required:
a.What is the cost of direct materials used during 2018?
b.What is cost of goods manufactured for 2018?
c.What is cost of goods sold for 2018?
d.What amount of prime costs was added to production during 2018?
e.What amount of conversion costs was added to production during 2018?

Accepted Answer

a.Cost of direct materials = $24,000 + $

Question 14

What is the cost of goods manufactured for 2018?

Accepted Answer

A) $248,000 
B) $369,000 
C) $270,000 
D) $259,000 
A) $248,000 
B) $369,000 
C) $270,000 
D) $259,000

Question 15

A unit cost is computed by ________.

Accepted Answer

A) multiplying total cost by the number of units produced 
B) dividing total cost by the number of units produced 
C) dividing variable cost by the number of units produced 
D) dividing fixed cost by the number of units produced 
A) multiplying total cost by the number of units produced 
B) dividing total cost by the number of units produced 
C) dividing variable cost by the number of units produced 
D) dividing fixed cost by the number of units produced

Question 16

Marriott International,would be classified as a(n)________.

Accepted Answer

A) manufacturing-sector company 
B) merchandising-sector company 
C) service-sector company 
D) financial services firm 
A) manufacturing-sector company 
B) merchandising-sector company 
C) service-sector company 
D) financial services firm

Question 17

Cost assignment ________.

Accepted Answer

A) includes future and arbitrary costs 
B) associates accumulated costs with certain cost objects 
C) is the same as cost accumulation 
D) is the difference between budgeted and actual costs 
A) includes future and arbitrary costs 
B) associates accumulated costs with certain cost objects 
C) is the same as cost accumulation 
D) is the difference between budgeted and actual costs

Question 18

Buildz Manufacturing currently produces 2,000 tables per month.The following per unit data for 2,000 tables apply for sales to regular customers:
 
What is the per unit cost when producing 4,000 tables?

Accepted Answer

A) $125.00 
B) $195.00 
C) $135.00 
D) $155.00 
A) $125.00 
B) $195.00 
C) $135.00 
D) $155.00

Question 19

What is operating income for 2018?

Accepted Answer

A) $199,000 
B) $110,000 
C) $125,000 
D) $140,000 
A) $199,000 
B) $110,000 
C) $125,000 
D) $140,000

Question 20

Which of the following influences the make or buy decision to the company?

Accepted Answer

A) opportunity cost 
B) sunk cost 
C) historical cost 
D) plant depreciation 
A) opportunity cost 
B) sunk cost 
C) historical cost 
D) plant depreciation

Exam 2: An Introduction to Cost Terms and Purposes

If each motorcycle requires a belt that costs $20 and 2,000 motorcycles are produced for the month,the total cost for belts is ________.

Ridez Manufacturing currently produces 4,000 bicycles per month.The following per unit data apply for sales to regular customers: The plant has capacity for 6,000 bicycles and is considering expanding production to 5,000 bicycles.What is the per unit cost of producing 5,000 bicycles?

When 24,000 units are produced,variable costs are $12.00 per unit.Therefore,when 18,000 units are produced ________.

Direct manufacturing cost labor includes plant rent and salaries paid to plant supervisors.

Which of the following statements is true?

Rework labor time is considered an overhead cost and not a direct labor cost.

In determining product cost,what concerns does a manufacturing firm have when contracting with a government agency?

The balance sheet of a service-sector companies would show ________.

A cost system determines the cost of a cost object by ________.

Ralph Johnson is paid $30 an hour for straight-time and $40 an hour for overtime.One week he worked 39 hours,which included 9 hours of overtime,and 4 hours of idle time caused by material shortages.What is the direct labor cost incurred to the company?

The cost of natural gas used to heat a production facility that makes three products (A,B,and C)would be classified as an indirect cost when the cost object is one of the products (either A,B,or C).

Fixed costs depend on the ________.

What is the cost of goods manufactured for 2018?

A unit cost is computed by ________.

Marriott International,would be classified as a(n)________.

Cost assignment ________.

Buildz Manufacturing currently produces 2,000 tables per month.The following per unit data for 2,000 tables apply for sales to regular customers: What is the per unit cost when producing 4,000 tables?

What is operating income for 2018?

Which of the following influences the make or buy decision to the company?

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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