Exam 2: Basic Cost Management Concepts

Which of the following is an example of a loss?

In deciding whether to implement a(n) __________ cost management system, managers must evaluate the trade-off between costs of measurement and cost of errors. or

One or more of the following is (are) a cost accounting system(s) that use(s) only unit-based activity drivers to assign costs to cost objects.

A cost management subsystem designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control activities is called the:

In an accounting information system, which of the following is NOT a transformation process?

Services differ from tangible products in which of the following dimensions?

Which of the following costs incurred by a chair manufacturer would be traced to the product cost through direct tracing?

Big Foot Athletics designs and manufactures running shoes. A new model of shoes, Fast Track, has been developed and is ready for production. Required: Which costs will the production manager collect from the value chain, and how would these costs be used in different decisions? Production costs would be included in all of the above definitions.

Inventory balances for Marshall, Inc., in June 2014 are as follows: During June, purchases of direct materials were $1,500. Direct labor and factory overhead costs were $2,500 and $3,500, respectively. Conversion costs for June were

Figure 2-12 Information from the records of the Conundrum Company for September 2014 was as follows: Conundrum Corporation produced 20,000 units. Refer to Figure 2-12. If production increased to 32,000 units next year, what is the effect on variable product costs per unit and total product costs per unit respectively?

Order-getting costs would NOT include

Which of the following items would be associated with both a functional-based cost accounting information system and an activity based cost information system?

Which of the following items would NOT be classified as part of factory overhead of a firm that makes sailboats?

Figure 2-12 Information from the records of the Conundrum Company for September 2014 was as follows: Conundrum Corporation produced 20,000 units. Refer to Figure 2-12. What are the total variable costs per unit?

Figure 2-16 A small engine repair shop purchased materials costing $9,000 in July. The beginning inventory of material parts was $4,500 and the ending inventory of material parts was $4,000. Payments for direct labor for July totaled $27,000, secretarial costs were $2,000, and overhead of $5,000 was incurred. In addition, $5,000 was spent on advertising and $2,000 for the franchise name. Revenue for July was $50,000. Refer to Figure 2-16. What is the cost of services sold for July?

The cost accounting system that emphasizes tracing over allocation is called an activity-based accounting system.

Explain the differences between direct tracing, driver tracing, and allocation.

The following information has been provided for Hopen Enterprises: What is the amount of factory overhead?

The Sumter Company recently had a fire in its accounting office, destroying most of its records. Only the following information could be salvaged for 2014: The cost of direct materials used in production during 2014 is

Figure 2-12 Information from the records of the Conundrum Company for September 2014 was as follows: Conundrum Corporation produced 20,000 units. Refer to Figure 2-12. What is the total product cost per unit?