Question 1

Only direct costs can be classified as product costs;indirect costs are classified as period costs.Product costs can include both direct and indirect costs.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not a product cost under full-absorption costing?

Accepted Answer

A) Direct materials used in the current period 
B) Rent for the warehouse used to store direct materials 
C) Salaries paid to the top management in the company 
D) Vacation pay accrued for the production workers 
A) Direct materials used in the current period 
B) Rent for the warehouse used to store direct materials 
C) Salaries paid to the top management in the company 
D) Vacation pay accrued for the production workers

Question 3

Makwa Industries has developed two new products but has only enough plant capacity to introduce one product during the current year.The following data will assist management in deciding which product should be selected.Makwa's fixed overhead includes rent and utilities,equipment depreciation,and supervisory salaries.Selling and administrative expenses are not allocated to individual products.   For Makwa's Product L,the costs for direct material,machining labor,and assembly labor represent

Accepted Answer

A) Conversion costs. 
B) Period costs. 
C) Prime costs. 
D) Common costs. 
A) Conversion costs. 
B) Period costs. 
C) Prime costs. 
D) Common costs.

Question 4

During April,the CJG Manufacturing Company had the following operating results:   What is the cost of goods manufactured for April?

Accepted Answer

A) $900,000 
B) $875,000 
C) $925,000 
D) $905,000 
A) $900,000 
B) $875,000 
C) $925,000 
D) $905,000

Question 5

XYZ Company manufactures a single product.The product's prime costs consist of

Accepted Answer

A) direct material and direct labor. 
B) direct material and factory overhead. 
C) direct labor and factory overhead. 
D) direct material,direct labor and factory overheaD. 
A) direct material and direct labor. 
B) direct material and factory overhead. 
C) direct labor and factory overhead. 
D) direct material,direct labor and factory overheaD.

Question 6

The cost of the direct labor will be treated as an expense on the income statement when the resulting:

Accepted Answer

A) payroll costs are paid. 
B) payroll costs are incurred. 
C) products are completed. 
D) products are solD.This solution supports the matching principle. 
A) payroll costs are paid. 
B) payroll costs are incurred. 
C) products are completed. 
D) products are solD.This solution supports the matching principle.

Question 7

A product cost is deducted from revenue when

Accepted Answer

A) the finished goods are sold. 
B) the expenditure is incurred. 
C) the production process takes place. 
D) the production process is completeD. 
A) the finished goods are sold. 
B) the expenditure is incurred. 
C) the production process takes place. 
D) the production process is completeD.

Question 8

A cost allocation rule is the method or process used to assign the costs in the _________ to the ______________.

Accepted Answer

A) cost allocation;cost pool 
B) cost pool;opportunity cost 
C) cost object;cost pool 
D) cost pool;cost object 
A) cost allocation;cost pool 
B) cost pool;opportunity cost 
C) cost object;cost pool 
D) cost pool;cost object

Question 9

The term full cost refers to the cost of manufacturing and selling a unit of product and includes both fixed and variable costs.We need to distinguish between full cost (which includes selling costs)and full absorption cost (which does not include selling costs. )

Accepted Answer

A) True 
 B)False

Question 10

The process of assigning indirect costs to products,services,people,business units,etc. ,is

Accepted Answer

A) cost object. 
B) cost pool. 
C) cost allocation. 
D) opportunity cost. 
A) cost object. 
B) cost pool. 
C) cost allocation. 
D) opportunity cost.

Question 11

The beginning Work-in-Process inventory plus the total of the manufacturing costs equals

Accepted Answer

A) total finished goods during the period. 
B) cost of goods sold for the period. 
C) total work-in-process during the period. 
D) cost of goods manufactured for the perioD.Total work-in-process during the period is equal to the beginning Work-in-Process inventory plus the total of the manufacturing costs. 
A) total finished goods during the period. 
B) cost of goods sold for the period. 
C) total work-in-process during the period. 
D) cost of goods manufactured for the perioD.Total work-in-process during the period is equal to the beginning Work-in-Process inventory plus the total of the manufacturing costs.

Question 12

A ___________________ is any end to which a cost is assigned.

Accepted Answer

A) cost object 
B) cost pool 
C) cost allocation 
D) opportunity cost 
A) cost object 
B) cost pool 
C) cost allocation 
D) opportunity cost

Question 13

The first step in determining whether a cost is direct or indirect is to specify the cost allocation rule.This is the first step to define the cost object.

Accepted Answer

A) True 
 B)False

Question 14

Classifying a cost as either direct or indirect depends upon

Accepted Answer

A) whether an expenditure is unavoidable because it cannot be changed regardless of any action taken. 
B) whether the cost is expensed in the period in which it is incurred. 
C) the behavior of the cost in response to volume changes. 
D) the cost object to which the cost is being relateD.This is the definition for classifying a cost as either direct or indirect. 
A) whether an expenditure is unavoidable because it cannot be changed regardless of any action taken. 
B) whether the cost is expensed in the period in which it is incurred. 
C) the behavior of the cost in response to volume changes. 
D) the cost object to which the cost is being relateD.This is the definition for classifying a cost as either direct or indirect.

Question 15

The absorption ending inventory is:

Accepted Answer

A) $40,000 
B) $24,000 
C) $36,000 
D) $8,000 
A) $40,000 
B) $24,000 
C) $36,000 
D) $8,000

Question 16

Laner Company has the following data for the production and sale of 2,000 units.   What is the full cost per unit of making and selling the product?

Accepted Answer

A) $430 
B) $480 
C) $530 
D) $730 
A) $430 
B) $480 
C) $530 
D) $730

Question 17

Which of the following is not a name for indirect resources?

Accepted Answer

A) Overhead costs 
B) Burden 
C) Direct costs 
D) Common costs 
A) Overhead costs 
B) Burden 
C) Direct costs 
D) Common costs

Question 18

Which of the following accounts would be a period cost rather than a product cost?

Accepted Answer

A) Depreciation on manufacturing machinery. 
B) Maintenance on factory machines. 
C) Production manager's salary. 
D) Direct Labor. 
E) Freight out. 
A) Depreciation on manufacturing machinery. 
B) Maintenance on factory machines. 
C) Production manager's salary. 
D) Direct Labor. 
E) Freight out.

Question 19

Direct labor would be part of the cost of the ending inventory for which of these accounts?

Accepted Answer

A) Work-in-Process. 
B) Finished Goods. 
C) Direct Materials and Work-in-Process. 
D) Work-in-Process and Finished Goods. 
A) Work-in-Process. 
B) Finished Goods. 
C) Direct Materials and Work-in-Process. 
D) Work-in-Process and Finished Goods.

Question 20

Compute the Cost of Goods Sold for 2008 using the following information:

Accepted Answer

A) $244,000 
B) $234,000 
C) $211,000 
D) $198,000 
A) $244,000 
B) $234,000 
C) $211,000 
D) $198,000

Only direct costs can be classified as product costs;indirect costs are classified as period costs.Product costs can include both direct and indirect costs.

Which of the following is not a product cost under full-absorption costing?

During April,the CJG Manufacturing Company had the following operating results: What is the cost of goods manufactured for April?

XYZ Company manufactures a single product.The product's prime costs consist of

The cost of the direct labor will be treated as an expense on the income statement when the resulting:

A product cost is deducted from revenue when

A cost allocation rule is the method or process used to assign the costs in the _ to the ______.

The term full cost refers to the cost of manufacturing and selling a unit of product and includes both fixed and variable costs.We need to distinguish between full cost (which includes selling costs)and full absorption cost (which does not include selling costs. )

The process of assigning indirect costs to products,services,people,business units,etc. ,is

The beginning Work-in-Process inventory plus the total of the manufacturing costs equals

A ___________________ is any end to which a cost is assigned.

The first step in determining whether a cost is direct or indirect is to specify the cost allocation rule.This is the first step to define the cost object.

Classifying a cost as either direct or indirect depends upon

The absorption ending inventory is:

Laner Company has the following data for the production and sale of 2,000 units. What is the full cost per unit of making and selling the product?

Which of the following is not a name for indirect resources?

Which of the following accounts would be a period cost rather than a product cost?

Direct labor would be part of the cost of the ending inventory for which of these accounts?

Compute the Cost of Goods Sold for 2008 using the following information:

Cost Accounting: Information for Decision Making

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Fundamentals of Cost Management

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Additional Topics in Variance Analysis

Performance Measurement to Support Business Strategy

Filters

Exam 2: Cost Concepts and Behavior

Only direct costs can be classified as product costs;indirect costs are classified as period costs.Product costs can include both direct and indirect costs.

Which of the following is not a product cost under full-absorption costing?

During April,the CJG Manufacturing Company had the following operating results: What is the cost of goods manufactured for April?

XYZ Company manufactures a single product.The product's prime costs consist of

The cost of the direct labor will be treated as an expense on the income statement when the resulting:

A product cost is deducted from revenue when

A cost allocation rule is the method or process used to assign the costs in the _________ to the ______________.

The term full cost refers to the cost of manufacturing and selling a unit of product and includes both fixed and variable costs.We need to distinguish between full cost (which includes selling costs)and full absorption cost (which does not include selling costs. )

The process of assigning indirect costs to products,services,people,business units,etc. ,is

The beginning Work-in-Process inventory plus the total of the manufacturing costs equals

A ___________________ is any end to which a cost is assigned.

The first step in determining whether a cost is direct or indirect is to specify the cost allocation rule.This is the first step to define the cost object.

Classifying a cost as either direct or indirect depends upon

The absorption ending inventory is:

Laner Company has the following data for the production and sale of 2,000 units. What is the full cost per unit of making and selling the product?

Which of the following is not a name for indirect resources?

Which of the following accounts would be a period cost rather than a product cost?

Direct labor would be part of the cost of the ending inventory for which of these accounts?

Compute the Cost of Goods Sold for 2008 using the following information:

Cost Accounting: Information for Decision Making

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Fundamentals of Cost Management

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Additional Topics in Variance Analysis

Performance Measurement to Support Business Strategy

Filters

A cost allocation rule is the method or process used to assign the costs in the _ to the ______.