Question 1

The corporate controller's salary would be considered a(n):

Accepted Answer

A) manufacturing cost. 
B) product cost. 
C) administrative cost. 
D) selling expense. 
A) manufacturing cost. 
B) product cost. 
C) administrative cost. 
D) selling expense.

Question 2

Waupun Company has the following unit costs:   What cost per unit would be used for product costing under full absorption costing?

Accepted Answer

A) $29 
B) $42 
C) $52 
D) $60 
A) $29 
B) $42 
C) $52 
D) $60

Question 3

Which of the following costs is both a prime cost and a conversion cost?

Accepted Answer

A) direct materials 
B) direct labor 
C) manufacturing overhead 
D) administrative costs 
A) direct materials 
B) direct labor 
C) manufacturing overhead 
D) administrative costs

Question 4

The cost of fire insurance for a manufacturing plant is generally considered to be a:

Accepted Answer

A) product cost. 
B) period cost. 
C) variable cost. 
D) all of these. 
A) product cost. 
B) period cost. 
C) variable cost. 
D) all of these.

Question 5

Total variable costs change inversely with changes in the volume of activity.Total variable costs are linear and vary directly with changes in the volume of activity,fixed costs vary inversely.

Accepted Answer

A) True 
 B)False

Question 6

The variable ending inventory is:

Accepted Answer

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

Question 7

The primary goal of the cost accounting system is to provide managers with information to prepare their annual financial statements.The primary goal is to provide managers with information for decision making.

Accepted Answer

A) True 
 B)False

Question 8

The following cost data for the month of May were taken from the records of the Paducah Manufacturing Company: (CIA adapted)   Based upon this information,the manufacturing cost incurred during the month was:

Accepted Answer

A) $78,500. 
B) $80,000. 
C) $80,500. 
D) $83,000. 
A) $78,500. 
B) $80,000. 
C) $80,500. 
D) $83,000.

Question 9

Cost of goods sold plus the ending finished goods inventory minus the beginning finished goods inventory equals the cost of goods manufactured.This statement works backwards from cost of goods sold to cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Question 10

Cost of goods sold includes the actual costs of the goods sold and the cost of selling them to the customer.Cost of goods sold does not include selling costs.

Accepted Answer

A) True 
 B)False

Question 11

For a manufacturing company,which of the following is an example of a period cost rather than a product cost?

Accepted Answer

A) Wages of salespersons. 
B) Salaries of machine operators. 
C) Insurance on factory equipment. 
D) Depreciation of factory equipment. 
A) Wages of salespersons. 
B) Salaries of machine operators. 
C) Insurance on factory equipment. 
D) Depreciation of factory equipment.

Question 12

The cost of an item is the sacrifice of resources made to acquire it.This statement is the definition of cost.

Accepted Answer

A) True 
 B)False

Question 13

The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows:   What are the estimated prime costs per unit?

Accepted Answer

A) $73 
B) $32 
C) $67 
D) $52 
A) $73 
B) $32 
C) $67 
D) $52

Question 14

If the cost of goods manufactured during the period exceeds the cost of goods sold,the ending balance of Finished Goods Inventory account increased.Cost of goods sold = cost of goods manufactured + beginning finished goods inventory - ending finished goods inventory.

Accepted Answer

A) True 
 B)False

Question 15

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.   The advertising costs for the product selected by Makwa will be

Accepted Answer

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

Question 16

The term "gross margin" for a manufacturing firm refers to the excess of sales over:

Accepted Answer

A) cost of goods sold,excluding fixed indirect manufacturing costs. 
B) all variable costs,including variable marketing and administrative costs. 
C) cost of goods sold,including fixed indirect manufacturing costs. 
D) variable costs,excluding variable marketing and administrative costs. 
A) cost of goods sold,excluding fixed indirect manufacturing costs. 
B) all variable costs,including variable marketing and administrative costs. 
C) cost of goods sold,including fixed indirect manufacturing costs. 
D) variable costs,excluding variable marketing and administrative costs.

Question 17

Revenue minus cost of goods sold equals contribution margin.Revenue minus cost of goods sold equals gross margin.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following best distinguishes an opportunity cost from an outlay cost?

Accepted Answer

A) Opportunity costs are recorded,whereas outlay costs are not. 
B) Outlay costs are speculative in nature,whereas opportunity costs are easily traceable to products. 
C) Opportunity costs have very little utility in practical applications,whereas outlay costs are always relevant. 
D) Opportunity costs are sacrifices from foregone alternative uses of resources,whereas outlay costs are cash outflows. 
A) Opportunity costs are recorded,whereas outlay costs are not. 
B) Outlay costs are speculative in nature,whereas opportunity costs are easily traceable to products. 
C) Opportunity costs have very little utility in practical applications,whereas outlay costs are always relevant. 
D) Opportunity costs are sacrifices from foregone alternative uses of resources,whereas outlay costs are cash outflows.

Question 19

How would property taxes paid on a factory building be classified in a manufacturing company?

Accepted Answer

A) Fixed,period cost. 
B) Fixed,product cost. 
C) Variable,period cost. 
D) Variable,product cost. 
A) Fixed,period cost. 
B) Fixed,product cost. 
C) Variable,period cost. 
D) Variable,product cost.

Question 20

The absorption operating income is:

Accepted Answer

A) $120,000 
B) $140,000 
C) $128,000 
D) $112,000 
A) $120,000 
B) $140,000 
C) $128,000 
D) $112,000

The corporate controller's salary would be considered a(n):

Waupun Company has the following unit costs: What cost per unit would be used for product costing under full absorption costing?

Which of the following costs is both a prime cost and a conversion cost?

The cost of fire insurance for a manufacturing plant is generally considered to be a:

Total variable costs change inversely with changes in the volume of activity.Total variable costs are linear and vary directly with changes in the volume of activity,fixed costs vary inversely.

The variable ending inventory is:

The primary goal of the cost accounting system is to provide managers with information to prepare their annual financial statements.The primary goal is to provide managers with information for decision making.

The following cost data for the month of May were taken from the records of the Paducah Manufacturing Company: (CIA adapted) Based upon this information,the manufacturing cost incurred during the month was:

Cost of goods sold plus the ending finished goods inventory minus the beginning finished goods inventory equals the cost of goods manufactured.This statement works backwards from cost of goods sold to cost of goods manufactured.

Cost of goods sold includes the actual costs of the goods sold and the cost of selling them to the customer.Cost of goods sold does not include selling costs.

For a manufacturing company,which of the following is an example of a period cost rather than a product cost?

The cost of an item is the sacrifice of resources made to acquire it.This statement is the definition of cost.

The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows: What are the estimated prime costs per unit?

If the cost of goods manufactured during the period exceeds the cost of goods sold,the ending balance of Finished Goods Inventory account increased.Cost of goods sold = cost of goods manufactured + beginning finished goods inventory - ending finished goods inventory.

The term "gross margin" for a manufacturing firm refers to the excess of sales over:

Revenue minus cost of goods sold equals contribution margin.Revenue minus cost of goods sold equals gross margin.

Which of the following best distinguishes an opportunity cost from an outlay cost?

How would property taxes paid on a factory building be classified in a manufacturing company?

The absorption operating income is:

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

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Exam 2: Cost Concepts and Behavior

The corporate controller's salary would be considered a(n):

Waupun Company has the following unit costs: What cost per unit would be used for product costing under full absorption costing?

Which of the following costs is both a prime cost and a conversion cost?

The cost of fire insurance for a manufacturing plant is generally considered to be a:

Total variable costs change inversely with changes in the volume of activity.Total variable costs are linear and vary directly with changes in the volume of activity,fixed costs vary inversely.

The variable ending inventory is:

The primary goal of the cost accounting system is to provide managers with information to prepare their annual financial statements.The primary goal is to provide managers with information for decision making.

The following cost data for the month of May were taken from the records of the Paducah Manufacturing Company: (CIA adapted) Based upon this information,the manufacturing cost incurred during the month was:

Cost of goods sold plus the ending finished goods inventory minus the beginning finished goods inventory equals the cost of goods manufactured.This statement works backwards from cost of goods sold to cost of goods manufactured.

Cost of goods sold includes the actual costs of the goods sold and the cost of selling them to the customer.Cost of goods sold does not include selling costs.

For a manufacturing company,which of the following is an example of a period cost rather than a product cost?

The cost of an item is the sacrifice of resources made to acquire it.This statement is the definition of cost.

The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows: What are the estimated prime costs per unit?

If the cost of goods manufactured during the period exceeds the cost of goods sold,the ending balance of Finished Goods Inventory account increased.Cost of goods sold = cost of goods manufactured + beginning finished goods inventory - ending finished goods inventory.

The term "gross margin" for a manufacturing firm refers to the excess of sales over:

Revenue minus cost of goods sold equals contribution margin.Revenue minus cost of goods sold equals gross margin.

Which of the following best distinguishes an opportunity cost from an outlay cost?

How would property taxes paid on a factory building be classified in a manufacturing company?

The absorption operating income is:

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