Question 1

Depreciation on manufacturing equipment is a period cost

Accepted Answer

A) True 
 B)False

Question 2

The following costs were incurred in April:
Conversion costs during the month totalled:
$\begin{array}{lrr}
  \text { Direct materials. } &£ 18,000\
 \text { Direct labour. } &£ 21,000\
 \text { Manufacturing overhead. } &£ 33,000\
 \text { Selling expenses. } &£ 14,000\
 \text { Administrative expenses. } & £ 19,000\

\end{array}$

Accepted Answer

A) £39,000. 
B) £54,000. 
C) £105,000. 
D) £51,000. 
A) £39,000. 
B) £54,000. 
C) £105,000. 
D) £51,000.

Question 3

Data for Morton Co:
Prime cost was:
$\begin{array}{lrr}
  \text { Direct materials } &£300,000\
 \text { Direct labour } &400,000\
 \text { Manutacturing overhead: } &\
 \text {variable.  } &80,000\
 \text {Fixed  } &50,000\
\end{array}$

Accepted Answer

A) £300,000. 
B) £380,000. 
C) £700,000. 
D) £830,000. 
A) £300,000. 
B) £380,000. 
C) £700,000. 
D) £830,000.

Question 4

Noel Stewart bought a machine two years ago for £500. He must now replace the old machine by buying a new model 206 for £700 or a used model 204 for £650. Noel has decided to buy model 204.
Noel Stewart has estimated that the total fixed costs for his department are £10,000. He also estimated that his variable cost per unit is £10.
Noel Stewart bought some materials 2 years ago for £300. These materials have simply been left in stock as they were not needed. A new customer offers to buy a product that uses these materials. The conversion cost is £500 and the customer has offered to pay £650 for the product. Noel decides to accept the order.
-
In this decision, Noel would consider the relevant material cost to be:

Accepted Answer

A) £300. 
B) £650. 
C) £600. 
D) £0. 
A) £300. 
B) £650. 
C) £600. 
D) £0.

Question 5

Noel Stewart bought a machine two years ago for £500. He must now replace the old machine by buying a new model 206 for £700 or a used model 204 for £650. Noel has decided to buy model 204.
Noel Stewart has estimated that the total fixed costs for his department are £10,000. He also estimated that his variable cost per unit is £10.
Noel Stewart bought some materials 2 years ago for £300. These materials have simply been left in stock as they were not needed. A new customer offers to buy a product that uses these materials. The conversion cost is £500 and the customer has offered to pay £650 for the product. Noel decides to accept the order.
-
In this decision the company is better off by:

Accepted Answer

A) £150. 
B) £350. 
C) £300. 
D) £0. 
A) £150. 
B) £350. 
C) £300. 
D) £0.

Question 6

Noel Stewart bought a machine two years ago for £500. He must now replace the old machine by buying a new model 206 for £700 or a used model 204 for £650. Noel has decided to buy model 204.
Noel Stewart has estimated that the total fixed costs for his department are £10,000. He also estimated that his variable cost per unit is £10.
Noel Stewart bought some materials 2 years ago for £300. These materials have simply been left in stock as they were not needed. A new customer offers to buy a product that uses these materials. The conversion cost is £500 and the customer has offered to pay £650 for the product. Noel decides to accept the order.
-If Noel produced only one unit his fixed cost per unit would be:

Accepted Answer

A) £10,000. 
B) £100. 
C) £1,000. 
D) £0. 
A) £10,000. 
B) £100. 
C) £1,000. 
D) £0.

Question 7

Within the relevant range

Accepted Answer

A) variable cost per unit decreases as production decreases. 
B) fixed cost per unit increases as production decreases. 
C) fixed cost per unit decreases as production decreases. 
D) variable cost per unit increases as production decreases. 
A) variable cost per unit decreases as production decreases. 
B) fixed cost per unit increases as production decreases. 
C) fixed cost per unit decreases as production decreases. 
D) variable cost per unit increases as production decreases.

Question 8

In a manufacturing company, direct labour costs combined with direct materials costs are known as

Accepted Answer

A) period costs. 
B) conversion costs. 
C) prime costs. 
D) opportunity cost. 
A) period costs. 
B) conversion costs. 
C) prime costs. 
D) opportunity cost.

Question 9

The variable portion of the cost of electricity for a manufacturing plant is a: I. Conversion Cost or II. Period Cost

Accepted Answer

A) Only I 
B) Both I and II 
C) Only II 
D) Neither I nor II 
A) Only I 
B) Both I and II 
C) Only II 
D) Neither I nor II

Question 10

The following data (in thousands of pounds) have been taken from the accounting records of Karmint Corporation for the just completed year:
 
-The cost of goods manufactured (finished) for the year (in thousands of pounds) was:

Accepted Answer

A) £480. 
B) £490. 
C) £440. 
D) £510. 
A) £480. 
B) £490. 
C) £440. 
D) £510.

Question 11

Wages paid to the factory supply shop foreman are considered an example of: I. Direct Labour or II. Period Cost

Accepted Answer

A) Both I and II 
B) Only I 
C) Only II 
D) Neither I nor II 
A) Both I and II 
B) Only I 
C) Only II 
D) Neither I nor II

Question 12

In general only the differences between alternatives are relevant to decisions

Accepted Answer

A) True 
 B)False

Question 13

Last month a manufacturing company had the following operating results:
What was the cost of goods manufactured for the month?
$\begin{array}{lrr}
  \text {  Beginning finished goods inventory} &£ 84,000 \
 \text {  Ending finished goods inventory} &£ 71,000\
 \text { Sales } &£ 505,000\
 \text {Gross margin  } &£ 63,000\
\end{array}$

Accepted Answer

A) £429,000 
B) £492,000 
C) £442,000 
D) £455,000 
A) £429,000 
B) £492,000 
C) £442,000 
D) £455,000

Question 14

Noel Stewart bought a machine two years ago for £500. He must now replace the old machine by buying a new model 206 for £700 or a used model 204 for £650. Noel has decided to buy model 204.
Noel Stewart has estimated that the total fixed costs for his department are £10,000. He also estimated that his variable cost per unit is £10.
Noel Stewart bought some materials 2 years ago for £300. These materials have simply been left in stock as they were not needed. A new customer offers to buy a product that uses these materials. The conversion cost is £500 and the customer has offered to pay £650 for the product. Noel decides to accept the order.
-If Noel produced only one unit his total cost would be:

Accepted Answer

A) £10,010. 
B) £10,000. 
C) £10,100. 
D) £10. 
A) £10,010. 
B) £10,000. 
C) £10,100. 
D) £10.

Question 15

The potential benefit that is given up when one alternative is selected over another is called a sunk cost

Accepted Answer

A) True 
 B)False

Question 16

The following data (in thousands of pounds) have been taken from the accounting records of Karmint Corporation for the just completed year:
 
-The cost of goods sold for the year (in thousands of pounds) was

Accepted Answer

A) £540. 
B) £420. 
C) £460. 
D) £520. 
A) £540. 
B) £420. 
C) £460. 
D) £520.

Question 17

Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table

Accepted Answer

A) The amount paid to the individual who stains the table. 
B) The commission paid to the salesperson who sold the table. 
C) Rent of the factory. 
D) The cost of the wood used in the table. 
A) The amount paid to the individual who stains the table. 
B) The commission paid to the salesperson who sold the table. 
C) Rent of the factory. 
D) The cost of the wood used in the table.

Question 18

During April, the cost of goods manufactured was £74,000. The beginning finished goods inventory was £17,000 and the ending finished goods inventory was £14,000. What was the cost of goods sold for the month

Accepted Answer

A) £74,000 
B) £71,000 
C) £77,000 
D) £105,000 
A) £74,000 
B) £71,000 
C) £77,000 
D) £105,000

Question 19

A department accepts a new order from a customer. It has already incurred £100 for design costs. It has also incurred costs of £200 for visits by sales staff. If the order is accepted a quality inspector will be transferred from another department. The inspector earns £20,000 per year. If the order is accepted there will be additional training costs of £700.
-In this decision the differential costs total:

Accepted Answer

A) £0. 
B) £300. 
C) £20,700. 
D) £700. 
A) £0. 
B) £300. 
C) £20,700. 
D) £700.

Question 20

A sunk cost is

Accepted Answer

A) a cost that may be saved by not adopting an alternative. 
B) a cost that may be shifted to the future with little or no effect on current operations. 
C) a cost that cannot be avoided because it has already been incurred. 
D) a cost which does not entail any pound outlay but which is relevant to the decision-making process. 
A) a cost that may be saved by not adopting an alternative. 
B) a cost that may be shifted to the future with little or no effect on current operations. 
C) a cost that cannot be avoided because it has already been incurred. 
D) a cost which does not entail any pound outlay but which is relevant to the decision-making process.

Depreciation on manufacturing equipment is a period cost

The following costs were incurred in April: Conversion costs during the month totalled: Direct materials. £18,000 Direct labour. £21,000 Manufacturing overhead. £33,000 Selling expenses. £14,000 Administrative expenses. £19,000

Data for Morton Co: Prime cost was: Direct materials £300,000 Direct labour 400,000 Manutacturing overhead: variable. 80,000 Fixed 50,000

Within the relevant range

In a manufacturing company, direct labour costs combined with direct materials costs are known as

The variable portion of the cost of electricity for a manufacturing plant is a: I. Conversion Cost or II. Period Cost

The following data (in thousands of pounds) have been taken from the accounting records of Karmint Corporation for the just completed year: -The cost of goods manufactured (finished) for the year (in thousands of pounds) was:

Wages paid to the factory supply shop foreman are considered an example of: I. Direct Labour or II. Period Cost

In general only the differences between alternatives are relevant to decisions

Last month a manufacturing company had the following operating results: What was the cost of goods manufactured for the month? Beginning finished goods inventory £84,000 Ending finished goods inventory £71,000 Sales £505,000 Gross margin £63,000

The potential benefit that is given up when one alternative is selected over another is called a sunk cost

The following data (in thousands of pounds) have been taken from the accounting records of Karmint Corporation for the just completed year: -The cost of goods sold for the year (in thousands of pounds) was

Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table

During April, the cost of goods manufactured was £74,000. The beginning finished goods inventory was £17,000 and the ending finished goods inventory was £14,000. What was the cost of goods sold for the month

A sunk cost is

The Role of Accounting Information in Management Decision Making

A Costing Framework and Cost Allocation

Costvolumeprofit Cvp Analysis

Planning Budgeting and Behaviour

Operational Budgets

Job Costing Systems

Process Costing Systems

Absorption and Variable Costing

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

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Exam 2: Cost Concepts, Behaviour and Estimation

Depreciation on manufacturing equipment is a period cost

The following costs were incurred in April: Conversion costs during the month totalled: Direct materials. £18,000 Direct labour. £21,000 Manufacturing overhead. £33,000 Selling expenses. £14,000 Administrative expenses. £19,000

Data for Morton Co: Prime cost was: Direct materials £300,000 Direct labour 400,000 Manutacturing overhead: variable. 80,000 Fixed 50,000

Within the relevant range

In a manufacturing company, direct labour costs combined with direct materials costs are known as

The variable portion of the cost of electricity for a manufacturing plant is a: I. Conversion Cost or II. Period Cost

The following data (in thousands of pounds) have been taken from the accounting records of Karmint Corporation for the just completed year: -The cost of goods manufactured (finished) for the year (in thousands of pounds) was:

Wages paid to the factory supply shop foreman are considered an example of: I. Direct Labour or II. Period Cost

In general only the differences between alternatives are relevant to decisions

Last month a manufacturing company had the following operating results: What was the cost of goods manufactured for the month? Beginning finished goods inventory £84,000 Ending finished goods inventory £71,000 Sales £505,000 Gross margin £63,000

The potential benefit that is given up when one alternative is selected over another is called a sunk cost

The following data (in thousands of pounds) have been taken from the accounting records of Karmint Corporation for the just completed year: -The cost of goods sold for the year (in thousands of pounds) was

Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table

During April, the cost of goods manufactured was £74,000. The beginning finished goods inventory was £17,000 and the ending finished goods inventory was £14,000. What was the cost of goods sold for the month

A sunk cost is

The Role of Accounting Information in Management Decision Making

A Costing Framework and Cost Allocation

Costvolumeprofit Cvp Analysis

Planning Budgeting and Behaviour

Operational Budgets

Job Costing Systems

Process Costing Systems

Absorption and Variable Costing

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Filters