Question 1

When 50,000 units are produced the fixed costs are $10 per unit.Therefore when 100,000 units are produced fixed costs will remain at $10 per unit.

Accepted Answer

A) True 
 B)False

Question 2

Variable costs

Accepted Answer

A) are always indirect costs. 
B) increase in total when the actual level of activity increases. 
C) include most personnel costs and depreciation on machinery. 
D) can always be traced directly to the cost object. 
E) change in relation to selling price.

Question 3

Answer the following question using the information below.
Pederson Company reported the following:
 
-What is the average manufacturing cost per unit?

Accepted Answer

A) $40.00 
B) $42.55 
C) $75.50 
D) $35.00 
E) $42.25

Question 4

Product costs used for external reporting under GAAP include

Accepted Answer

A) manufacturing costs only. 
B) design costs plus manufacturing costs. 
C) all costs incurred along the value chain. 
D) prime costs but not conversion costs. 
E) only conversion costs.

Question 5

If each furnace required a hose that costs $20 and 2,000 furnaces are produced for the month,the $40,000 total cost for hoses

Accepted Answer

A) is considered to be a direct fixed cost. 
B) is considered to be a direct variable cost. 
C) is considered to be an indirect fixed cost. 
D) is considered to be an indirect variable cost. 
E) is considered to be variable or fixed,depending on the relevant range.

Question 6

"Cost" is defined by accountants as a resource sacrificed or foregone to achieve a specific objective.

Accepted Answer

A) True 
 B)False

Question 7

Whether a company traces costs directly to an output unit or not depends upon

Accepted Answer

A) the materiality of the contribution a cost makes to the total cost per output unit. 
B) the amount of similar costs in the cost assignment. 
C) the effect of cost tracing on overhead. 
D) the employment of cost management. 
E) the amount of customer satisfaction.

Question 8

The types of costs included in the product cost differ depending on the purpose of the costing.Describe the generic value chain categories that are pertinent to product costs regarding GAAP-compliant inventoriable costs;and,product costs for product pricing and product mix decisions.

Accepted Answer

The answer of The types of costs included in the...

Question 9

Use the information below to answer the following question(s).
Montreal Industries Inc.had the following activities during the year:
 
-What is Montreal's cost of goods manufactured during the year?

Accepted Answer

A) $268,000 
B) $248,000 
C) $240,000 
D) $238,000 
E) $260,000

Question 10

Cost tracing is

Accepted Answer

A) the assignment of direct costs to the chosen cost object. 
B) a function of cost allocation. 
C) the process of tracking both direct and indirect costs associated with a cost object. 
D) the process of determining the actual cost of the cost object. 
E) the assignment of both direct and indirect costs associated with a cost object.

Question 11

Assigning direct costs poses more problems than assigning indirect costs.

Accepted Answer

A) True 
 B)False

Question 12

Nearly all accounting systems accumulate forecasted costs.

Accepted Answer

A) True 
 B)False

Question 13

Answer the following question(s)using the information below.
The West Company manufactures several different products.Unit costs associated with Product ORD203 are as follows:
 
-What are the fixed costs per unit associated with Product ORD203?

Accepted Answer

A) $23 
B) $32 
C) $35 
D) $44 
E) $38

Question 14

A unit cost is computed by dividing a total cost by some number of units.

Accepted Answer

A) True 
 B)False

Question 15

Factors affecting direct/indirect cost classifications are the materiality of the cost in question,the information-gathering technology used,and the operations.

Accepted Answer

A) True 
 B)False

Question 16

Use the information below to answer the following question(s).
Frazer Inc.had the following activities in the year:
 
-What is Frazer's cost of goods sold?

Accepted Answer

A) $520,000 
B) $464,000 
C) $440,000 
D) $400,000 
E) $516,000

Question 17

Big Bird Pet Store had the following financial activities for June.Revenue was $860,000 with cost of goods sold equalling $440,000.Salaries and wages of all employees were $100,000.Fringe benefits were 15 percent of salaries and wages.Rent on the building was $100,000 and equipment amortization was $46,000.Office supplies and utilities totalled $28,000.Income taxes withheld from employees totalled $46,000 for the month while ending accounts payable were $24,680.Cash flows from accounts receivable totalled $880,000.
Required:
Using an income statement format,determine the operating income of the store.

Accepted Answer

The answer of Big Bird Pet Store had the following...

Question 18

Use the information below to answer the following question(s).
Big Island Coffee Co.produced and sold 120,000 units last year.Per unit revenue and costs were as follows:
  Fixed manufacturing overhead and administrative salaries are fixed costs.The per unit amounts are based on last year's production.
-Calculate this year's operating income if the company plans to produce and sell 200,000 units.

Accepted Answer

A) $460,000 
B) $0 
C) $ 
D) $900,000 
E) $980,000

Question 19

Merchandising-sector companies

Accepted Answer

A) purchase materials and convert them to finished goods. 
B) buy goods and resell them. 
C) provide services or intangible products. 
D) have only variable costs. 
E) have period and some manufacturing costs.

Question 20

Newfoundland Industries Inc.had the following account balances at the end of the current year:
  
Required:
Determine the amounts for direct material ending inventory,manufacturing costs incurred,ending work-in-process inventory,and ending finished goods inventory.

Accepted Answer

The answer of Newfoundland Industries Inc.had the following account balances...

Exam 2: An Introduction to Cost Terms and Purposes

When 50,000 units are produced the fixed costs are $10 per unit.Therefore when 100,000 units are produced fixed costs will remain at $10 per unit.

Variable costs

Answer the following question using the information below. Pederson Company reported the following: -What is the average manufacturing cost per unit?

Product costs used for external reporting under GAAP include

If each furnace required a hose that costs $20 and 2,000 furnaces are produced for the month,the $40,000 total cost for hoses

"Cost" is defined by accountants as a resource sacrificed or foregone to achieve a specific objective.

Whether a company traces costs directly to an output unit or not depends upon

The types of costs included in the product cost differ depending on the purpose of the costing.Describe the generic value chain categories that are pertinent to product costs regarding GAAP-compliant inventoriable costs;and,product costs for product pricing and product mix decisions.

Use the information below to answer the following question(s) . Montreal Industries Inc.had the following activities during the year: -What is Montreal's cost of goods manufactured during the year?

Cost tracing is

Assigning direct costs poses more problems than assigning indirect costs.

Nearly all accounting systems accumulate forecasted costs.

Answer the following question(s) using the information below. The West Company manufactures several different products.Unit costs associated with Product ORD203 are as follows: -What are the fixed costs per unit associated with Product ORD203?

A unit cost is computed by dividing a total cost by some number of units.

Factors affecting direct/indirect cost classifications are the materiality of the cost in question,the information-gathering technology used,and the operations.

Use the information below to answer the following question(s) . Frazer Inc.had the following activities in the year: -What is Frazer's cost of goods sold?

Merchandising-sector companies

Newfoundland Industries Inc.had the following account balances at the end of the current year: Required: Determine the amounts for direct material ending inventory,manufacturing costs incurred,ending work-in-process inventory,and ending finished goods inventory.