Question 1

Which of the following costs of a manufactured product is a period cost?

Accepted Answer

A)  Direct material 
B)  Manufacturing overhead 
C)  Indirect material 
D)  Sales commission 
A)  Direct material 
B)  Manufacturing overhead 
C)  Indirect material 
D)  Sales commission D

Question 2

To calculate the cost of goods sold during the period,you would use which of the following equations?

Accepted Answer

A)  Beginning finished goods + cost of goods manufactured + ending finished goods 
B)  Ending finished goods + cost of goods manufactured - beginning finished goods 
C)  Beginning finished goods + cost of goods manufactured - ending finished goods 
D)  Beginning finished goods + ending finished goods - cost of goods manufactured 
A)  Beginning finished goods + cost of goods manufactured + ending finished goods 
B)  Ending finished goods + cost of goods manufactured - beginning finished goods 
C)  Beginning finished goods + cost of goods manufactured - ending finished goods 
D)  Beginning finished goods + ending finished goods - cost of goods manufactured C

Question 3

Which of the following is not a period cost?

Accepted Answer

A)  Marketing costs 
B)  Administrative costs 
C)  Research and development 
D)  Factory overheads 
A)  Marketing costs 
B)  Administrative costs 
C)  Research and development 
D)  Factory overheads D

Question 4

Which is the correct order of cost incurrence in the value chain?

Accepted Answer

A)  R & D,Product Design,Manufacturing,Marketing,Distribution,Customer Support 
B)  R & D,Product Design,Customer Support,Marketing,Distribution,Manufacturing 
C)  R & D,Product Design,Manufacturing,Distribution,Customer Support,Selling 
D)  R & D,Product Design,Manufacturing,Distribution,Marketing,Customer Support 
A)  R & D,Product Design,Manufacturing,Marketing,Distribution,Customer Support 
B)  R & D,Product Design,Customer Support,Marketing,Distribution,Manufacturing 
C)  R & D,Product Design,Manufacturing,Distribution,Customer Support,Selling 
D)  R & D,Product Design,Manufacturing,Distribution,Marketing,Customer Support

Question 5

Eldervale Winery is a producer of premium wine.Which of the following is NOT an example of a downstream cost?

Accepted Answer

A)  The costs associated with random quality check during the wine production process 
B)  The costs associated with the sales team travelling to a wine show to promote Eldervale wine 
C)  The costs associated with delivering wine to customers 
D)  The costs associated with answering customer inquiries on the differences between wine varieties 
A)  The costs associated with random quality check during the wine production process 
B)  The costs associated with the sales team travelling to a wine show to promote Eldervale wine 
C)  The costs associated with delivering wine to customers 
D)  The costs associated with answering customer inquiries on the differences between wine varieties

Question 6

Cost of goods purchased includes the:

Accepted Answer

A)  purchase cost 
B)  transportation inward cost 
C)  storage cost 
D)  purchase cost AND transportation inward cost 
A)  purchase cost 
B)  transportation inward cost 
C)  storage cost 
D)  purchase cost AND transportation inward cost

Question 7

Product costs are:

Accepted Answer

A)  expended as they are incurred 
B)  inventoriable costs 
C)  period costs 
D)  expended as they are incurred AND inventoriable costs 
A)  expended as they are incurred 
B)  inventoriable costs 
C)  period costs 
D)  expended as they are incurred AND inventoriable costs

Question 8

The flow of manufacturing costs through the system is:

Accepted Answer

A)  raw materials inventory;work in process inventory;finished goods inventory;cost of goods sold 
B)  raw materials inventory;work in process inventory;cost of goods sold;finished goods inventory 
C)  work in process inventory;raw materials inventory;finished goods inventory;cost of goods sold 
D)  raw materials inventory;finished goods inventory;work in process inventory;cost of goods sold 
A)  raw materials inventory;work in process inventory;finished goods inventory;cost of goods sold 
B)  raw materials inventory;work in process inventory;cost of goods sold;finished goods inventory 
C)  work in process inventory;raw materials inventory;finished goods inventory;cost of goods sold 
D)  raw materials inventory;finished goods inventory;work in process inventory;cost of goods sold

Question 9

The equation to calculate total manufacturing costs = cost of goods manufactured - beginning work in process + ending work in process.

Accepted Answer

A) True 
 B)False

Question 10

Mydas Ltd operates a large factory which manufactures three types of motor vehicles,including family sedans,sports cars and motorcycles.If the cost object is a family car,which of the following is an indirect cost?

Accepted Answer

A)  The costs of wheels on the motorcycle 
B)  The salary of the factory general manager 
C)  The wages of the quality inspector whose job is to inspect each family car 
D)  The windscreen wipers on a family car 
A)  The costs of wheels on the motorcycle 
B)  The salary of the factory general manager 
C)  The wages of the quality inspector whose job is to inspect each family car 
D)  The windscreen wipers on a family car

Question 11

Sally Strong is the production manager of Eldervale Winery.Her role includes overseeing the production and bottling processes of Eldervale Winery's three product lines: sparkling wine,red wine and white wine.Which of the following is most likely an example of an uncontrollable cost for Sally?

Accepted Answer

A)  The costs associated with bottling wine 
B)  The costs associated with advertising Eldervale wine on national TV 
C)  The costs associated with moving wine from the barrels to the bottling area 
D)  The costs associated with quality testing 
A)  The costs associated with bottling wine 
B)  The costs associated with advertising Eldervale wine on national TV 
C)  The costs associated with moving wine from the barrels to the bottling area 
D)  The costs associated with quality testing

Question 12

Which of the following is not an example of a manufacturing overhead?

Accepted Answer

A)  Assembly line workers' wages 
B)  Factory rent 
C)  Depreciation of factory machinery 
D)  Factory lighting 
A)  Assembly line workers' wages 
B)  Factory rent 
C)  Depreciation of factory machinery 
D)  Factory lighting

Question 13

With respect to the flow of manufacturing costs through the accounts,what does the ending balance of work in process account show?

Accepted Answer

A)  The total of costs for completed jobs. 
B)  The total of costs for incomplete jobs. 
C)  The amount of costs incurred for the period. 
D)  The amount of cost to be transferred to cost of goods sold. 
A)  The total of costs for completed jobs. 
B)  The total of costs for incomplete jobs. 
C)  The amount of costs incurred for the period. 
D)  The amount of cost to be transferred to cost of goods sold.

Question 14

If production increases,variable cost will:

Accepted Answer

A)  remain constant on a per unit basis 
B)  increase by a variable amount 
C)  vary on a per unit basis 
D)  remain unchanged 
A)  remain constant on a per unit basis 
B)  increase by a variable amount 
C)  vary on a per unit basis 
D)  remain unchanged

Question 15

A courier company may view kilometres driven as a possible cost driver.

Accepted Answer

A) True 
 B)False

Question 16

Eldervale Winery is a producer of premium wine.Which of the following is NOT an example of an upstream cost?

Accepted Answer

A)  The costs associated with marketing a new range of wine in an international trade fair 
B)  The costs associated with researching a new variety of grapes 
C)  The costs associated with testing a new wine barrel 
D)  The costs associated with negotiating with and managing farmers who supply the grapes 
A)  The costs associated with marketing a new range of wine in an international trade fair 
B)  The costs associated with researching a new variety of grapes 
C)  The costs associated with testing a new wine barrel 
D)  The costs associated with negotiating with and managing farmers who supply the grapes

Question 17

The monthly cost of renting manufacturing equipment is:

Accepted Answer

A)  part of conversion cost and a period cost 
B)  part of prime cost and an inventoriable cost 
C)  part of prime cost and a period cost 
D)  part of conversion cost and an inventoriable cost 
A)  part of conversion cost and a period cost 
B)  part of prime cost and an inventoriable cost 
C)  part of prime cost and a period cost 
D)  part of conversion cost and an inventoriable cost

Question 18

As activity level decreases,unit variable cost:

Accepted Answer

A)  increases proportionately with activity 
B)  decreases proportionately with activity 
C)  remains constant 
D)  decreases by a fixed amount 
A)  increases proportionately with activity 
B)  decreases proportionately with activity 
C)  remains constant 
D)  decreases by a fixed amount

Question 19

Unless overtime and idle time are caused by a particular job,they are treated as:

Accepted Answer

A)  a part of direct labour expense 
B)  a part of manufacturing overhead 
C)  associated with a particular product 
D)  a part of manufacturing overhead AND associated with a particular product 
A)  a part of direct labour expense 
B)  a part of manufacturing overhead 
C)  associated with a particular product 
D)  a part of manufacturing overhead AND associated with a particular product

Question 20

Barrett Industries began the month of June with a finished goods inventory of $15 000.The finished goods inventory at the end of June was $10 000 and the cost of goods sold during the month was $20 000.The cost of goods manufactured during the month of June was:

Accepted Answer

A)  $15 000 
B)  $25 000 
C)  $20 000 
D)  $5000 
A)  $15 000 
B)  $25 000 
C)  $20 000 
D)  $5000

Exam 2: Management Accounting: Cost Terms and Concepts

Which of the following costs of a manufactured product is a period cost?

To calculate the cost of goods sold during the period,you would use which of the following equations?

Which of the following is not a period cost?

Which is the correct order of cost incurrence in the value chain?

Eldervale Winery is a producer of premium wine.Which of the following is NOT an example of a downstream cost?

Cost of goods purchased includes the:

Product costs are:

The flow of manufacturing costs through the system is:

The equation to calculate total manufacturing costs = cost of goods manufactured - beginning work in process + ending work in process.

Mydas Ltd operates a large factory which manufactures three types of motor vehicles,including family sedans,sports cars and motorcycles.If the cost object is a family car,which of the following is an indirect cost?

Sally Strong is the production manager of Eldervale Winery.Her role includes overseeing the production and bottling processes of Eldervale Winery's three product lines: sparkling wine,red wine and white wine.Which of the following is most likely an example of an uncontrollable cost for Sally?

Which of the following is not an example of a manufacturing overhead?

With respect to the flow of manufacturing costs through the accounts,what does the ending balance of work in process account show?

If production increases,variable cost will:

A courier company may view kilometres driven as a possible cost driver.

Eldervale Winery is a producer of premium wine.Which of the following is NOT an example of an upstream cost?

The monthly cost of renting manufacturing equipment is:

As activity level decreases,unit variable cost:

Unless overtime and idle time are caused by a particular job,they are treated as:

Barrett Industries began the month of June with a finished goods inventory of $15 000.The finished goods inventory at the end of June was $10 000 and the cost of goods sold during the month was $20 000.The cost of goods manufactured during the month of June was:

Management Accounting: Information for Creating Value and Managing Resources

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters