Question 1

A projected cost for the future is a

Accepted Answer

A)  direct cost. 
B)  fixed cost. 
C)  inventoriable cost. 
D)  budgeted cost. 
A)  direct cost. 
B)  fixed cost. 
C)  inventoriable cost. 
D)  budgeted cost.

Question 2

The two types of cost behavior are value-adding and nonvalue-adding.

Accepted Answer

A) True 
 B)False

Question 3

Factory employees' wages should be incorporated into the Work in Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 4

Compute the overhead rate per shipping request for the Shipping Department if the estimated overhead costs are $18,290 and the number of estimated shipping requests is 3,100.

Accepted Answer

$18,290 / 3,100 requ

Question 5

Conversion costs consist of

Accepted Answer

A)  direct materials and direct labor. 
B)  direct labor and overhead. 
C)  direct materials and overhead. 
D)  direct labor and indirect labor. 
A)  direct materials and direct labor. 
B)  direct labor and overhead. 
C)  direct materials and overhead. 
D)  direct labor and indirect labor.

Question 6

The following budget data are available for Howers Company:   If overhead is to be applied based on direct labor hours, the predetermined overhead rate per hour (rounded) is

Accepted Answer

A)  $11.75 
B)  $11.25 
C)  $10.35 
D)  $9.75 
A)  $11.75 
B)  $11.25 
C)  $10.35 
D)  $9.75

Question 7

Period cost and product cost are synonymous terms.

Accepted Answer

A) True 
 B)False

Question 8

The Overhead account is used to accumulate actual overhead costs.

Accepted Answer

A) True 
 B)False

Question 9

The income statement for a manufacturing company usually contains a detailed computation of the

Accepted Answer

A)  total manufacturing cost. 
B)  cost of goods sold. 
C)  total cost of materials used. 
D)  cost of goods manufactured. 
A)  total manufacturing cost. 
B)  cost of goods sold. 
C)  total cost of materials used. 
D)  cost of goods manufactured.

Question 10

Which of the following terms does not apply to materials and supplies that cannot be traced conveniently to specific products?

Accepted Answer

A)  Indirect materials 
B)  Indirect manufacturing costs 
C)  Direct costs 
D)  Overhead 
A)  Indirect materials 
B)  Indirect manufacturing costs 
C)  Direct costs 
D)  Overhead

Question 11

Calculation of a product's overhead rate is done during the accounting period.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following types of product costs appear in the financial statements?

Accepted Answer

A)  Normal costs 
B)  Estimated costs 
C)  Standard costs 
D)  Actual costs 
A)  Normal costs 
B)  Estimated costs 
C)  Standard costs 
D)  Actual costs

Question 13

Lubrication used for machines is an example of a direct material.

Accepted Answer

A) True 
 B)False

Question 14

Predetermined overhead rates generally are useful for all but which of the following?

Accepted Answer

A)  Price determination 
B)  Estimating production levels 
C)  Inventory valuation 
D)  Product costing 
A)  Price determination 
B)  Estimating production levels 
C)  Inventory valuation 
D)  Product costing

Question 15

Overhead can be traced to products once the products are completed.

Accepted Answer

A) True 
 B)False

Question 16

A cost is classified as an overhead cost if it is not directly traceable to an end product or a cost object.

Accepted Answer

A) True 
 B)False

Question 17

The Finished Goods Inventory and Cost of Goods Sold for a manufacturing company for the year 20xx are as follows: January 1 Finished Goods Inventory, $382,500; December 31 Finished Goods Inventory, $270,000; Cost of Goods Sold for the year, $1,522,000. The cost of goods manufactured for the year was

Accepted Answer

A)  $1,139,500. 
B)  $644,500. 
C)  $1,184,500. 
D)  $1,409,500. 
A)  $1,139,500. 
B)  $644,500. 
C)  $1,184,500. 
D)  $1,409,500.

Question 18

Fill in the missing data for Company C:

Accepted Answer

a. $5,000
b. $4,000

Question 19

Overhead costs generally are estimated as part of the normal budgeting function.

Accepted Answer

A) True 
 B)False

Question 20

The key to the preparation of an income statement for a manufacturing company is proper determination of the cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Exam 19: Cost Concepts and Cost Allocation

A projected cost for the future is a

The two types of cost behavior are value-adding and nonvalue-adding.

Factory employees' wages should be incorporated into the Work in Process Inventory account.

Compute the overhead rate per shipping request for the Shipping Department if the estimated overhead costs are $18,290 and the number of estimated shipping requests is 3,100.

Conversion costs consist of

The following budget data are available for Howers Company: If overhead is to be applied based on direct labor hours, the predetermined overhead rate per hour (rounded) is

Period cost and product cost are synonymous terms.

The Overhead account is used to accumulate actual overhead costs.

The income statement for a manufacturing company usually contains a detailed computation of the

Which of the following terms does not apply to materials and supplies that cannot be traced conveniently to specific products?

Calculation of a product's overhead rate is done during the accounting period.

Which of the following types of product costs appear in the financial statements?

Lubrication used for machines is an example of a direct material.

Predetermined overhead rates generally are useful for all but which of the following?

Overhead can be traced to products once the products are completed.

A cost is classified as an overhead cost if it is not directly traceable to an end product or a cost object.

Fill in the missing data for Company C:

Overhead costs generally are estimated as part of the normal budgeting function.

The key to the preparation of an income statement for a manufacturing company is proper determination of the cost of goods manufactured.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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