Question 1

Conversion costs are:

Accepted Answer

A) direct material,direct labor,and manufacturing overhead. 
B) direct material and direct labor. 
C) direct labor and manufacturing overhead. 
D) prime costs. 
E) period costs.

Question 2

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

Accepted Answer

A) The number of units sold. 
B) The number of direct labor hours worked. 
C) The number of machine hours worked. 
D) The number of units produceD. 
E) The number of employees working in the factory.

Question 3

As activity decreases,unit variable cost:

Accepted Answer

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

Question 4

Which of the following is not a period cost?

Accepted Answer

A) Legal costs. 
B) Public relations costs. 
C) Sales commissions. 
D) Wages of assembly-line workers. 
E) The salary of a company's chief financial officer (CFO).

Question 5

Which of the following would not be characterized as a cost object?

Accepted Answer

A) An automobile manufactured by General Motors. 
B) The New York Fire Department. 
C) A Burger King restaurant located in Cleveland,Ohio. 
D) A Delta Airlines flight from Atlanta to Miami. 
E) All of these are examples of cost objects.

Question 6

Glass Industries reported the following data for the year just ended: sales revenue,$1,750,000;cost of goods sold,$980,000;cost of goods manufactured,$560,000;and selling and administrative expenses,$170,000.Glass' gross margin would be:

Accepted Answer

A) $940,000. 
B) $1,190,000. 
C) $1,020,000. 
D) $380,000. 
E) $770,000.

Question 7

Inventoriable costs are expensed when incurred.

Accepted Answer

A) True 
 B)False

Question 8

For the year just ended,Cole Corporation's manufacturing costs (raw materials used,direct labor,and manufacturing overhead)totaled $1,500,000.Beginning and ending work-in-process inventories were $60,000 and $90,000,respectively.Cole's balance sheet also revealed respective beginning and ending finished-goods inventories of $250,000 and $180,000.On the basis of this information,how much would the company report as cost of goods manufactured (CGM)and cost of goods sold (CGS)?

Accepted Answer

A) CGM,$1,430,000;CGS,$1,460,000. 
B) CGM,$1,470,000;CGS,$1,540,000. 
C) CGM,$1,530,000;CGS,$1,460,000. 
D) CGM,$1,570,000;CGS,$1,540,000. 
E) Some other amounts.

Question 9

Pumpkin Enterprises began operations on January 1,20x1,with all of its activities conducted from a single facility.The company's accountant concluded that the year's building depreciation should be allocated as follows: selling activities,20%;administrative activities,35%;and manufacturing activities,45%.If Pumpkin sold 60% of 20x1 production during that year,what percentage of the depreciation would appear (either directly or indirectly)on the 20x1 income statement?

Accepted Answer

A) 27%. 
B) 45%. 
C) 55%. 
D) 82%. 
E) 100%.

Question 10

The true statement about cost behavior is that:

Accepted Answer

A) variable costs change on a per-unit basis and change in total as activity changes. 
B) fixed costs are constant on a per-unit basis and change in total as activity changes. 
C) fixed costs are constant on a per-unit basis and constant in total as activity changes. 
D) fixed costs change on a per-unit basis and are constant in total as activity changes. 
E) variable costs are constant on a per-unit basis and are constant in total as activity changes.

Question 11

Hamilton Company had the following inventory balances at the beginning and end of the year:
A.Calculate cost of goods manufactured.
B.Calculate cost of goods sold.
C.Determine Hamilton's net income.

Accepted Answer

The answer of Hamilton Company had the following inventory balances...

Question 12

Costs that are expensed when incurred are called:

Accepted Answer

A) product costs. 
B) direct costs. 
C) inventoriable costs. 
D) period costs. 
E) indirect costs.

Question 13

The accounting records of Diego Company revealed the following costs,among others: 
Costs that would be considered in the calculation of manufacturing overhead total:

Accepted Answer

A) $149,000. 
B) $171,000. 
C) $186,000. 
D) $442,000. 
E) some other amount.

Question 14

Which of the following is a product cost?

Accepted Answer

A) Glass in an automobile. 
B) Advertising. 
C) The salary of the vice president-finance. 
D) Rent on a factory. 
E) Both "A" and "D."

Question 15

Which of the following would not be classified as a product cost?

Accepted Answer

A) Direct materials. 
B) Direct labor. 
C) Indirect materials. 
D) Insurance on a manufacturing plant. 
E) Sales commissions.

Question 16

Fixed costs are costs that:

Accepted Answer

A) vary directly with changes in activity. 
B) vary inversely with changes in activity. 
C) remain constant on a per-unit basis. 
D) remain constant as activity changes. 
E) increase on a per-unit basis as activity increases.

Question 17

If direct materials used during the year were $135,000,what was cost of goods manufactured?

Accepted Answer

A) $140,500. 
B) $539,000. 
C) $409,500. 
D) $544,500. 
E) some other amount.

Question 18

As activity increases,unit variable cost:

Accepted Answer