Question 1

The cash or cash equivalent value sacrificed for goods and services that are expected to bring a current or future benefit to the organization is/are called:

Accepted Answer

A)  Expenses 
B)  Cost 
C)  An activity 
D)  A loss

Question 2

Which of the following costs would NOT be included in operating product costs?

Accepted Answer

A)  production 
B)  marketing 
C)  research and development 
D)  all of the above

Question 3

Product costs are converted from cost to expense when

Accepted Answer

A)  units are completed. 
B)  materials are purchased. 
C)  units are sold. 
D)  materials are requisitioned.

Question 4

Figure 2-15
Information from the records of Chrome Ponies Enterprises for June 2016 is as follows:
  Inventories
  
-Refer to Figure 2-15. What is the cost of goods sold?

Accepted Answer

A)  $36,500 
B)  $28,600 
C)  $29,400 
D)  $29,500

Question 5

Which of the following costs incurred by a chair manufacturer would be traced to the product cost through direct tracing?

Accepted Answer

A)  the depreciation on factory equipment 
B)  the supervisor's salary 
C)  the insurance on the factory building 
D)  the woodworker's salary

Question 6

Which of the following would NOT be included in the conversion cost of an automobile?

Accepted Answer

A)  screws used in assembly 
B)  assembly worker wages 
C)  depreciation on machinery 
D)  steel

Question 7

Expired costs used up in the generation of revenues are called .

Accepted Answer

The answer of Expired costs used up in the generation...

Question 8

Product value-chain costs assist managers in meeting which of the following objectives?

Accepted Answer

A)  product mix decisions 
B)  tactical profitability analysis 
C)  external financial reporting 
D)  strategic design decisions

Question 9

Which of the following items would be associated with both a functional-based cost accounting information system and an activity based cost information system?

Accepted Answer

A)  Overhead is assigned on a plant-wide rate based on direct labor hours. 
B)  Customer service costs are assigned to products using number of complaints as the activity driver. 
C)  Direct labor cost is assigned to products using direct tracing. 
D)  None of these.

Question 10

Figure 2-12
Information from the records of the Conundrum Company for September 2016 was as follows:
  Inventories
  Conundrum Corporation produced 20,000 units.
-Refer to Figure 2-12. What is the total product cost per unit?

Accepted Answer

A)  $14.7375 
B)  $12.1125 
C)  $12.175 
D)  $12.2375

Question 11

Which of the following costs is a period cost?

Accepted Answer

A)  depreciation of factory equipment 
B)  transportation-in for material shipments 
C)  amortization of a patent for the company's product 
D)  depreciation of office computers

Question 12

In a company that supplies muffins to bakeries, which of the following would be considered a transforming process?

Accepted Answer

A)  delivered muffins 
B)  baking 
C)  egg 
D)  oil

Question 13

The cost management information system is primarily concerned with producing outputs for internal users using inputs and processes needed to satisfy management objectives.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a cost management subsystem designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities?

Accepted Answer

A)  financial accounting information system 
B)  operational control information system 
C)  cost accounting information system 
D)  all of the above

Question 15

The insurance paid on the factory is

Accepted Answer

A)  a direct cost if the cost object is the factory. 
B)  an indirect cost if the cost object is the product produced. 
C)  could be either a direct cost or an indirect cost, depending on the cost object. 
D)  all of the above.

Question 16

Figure 2-11
Information from the records of the Abel Corporation for July 2016 was as follows:
  Inventories
  
-Refer to Figure 2-11. The prime costs are

Accepted Answer

A)  $210,000 
B)  $264,000 
C)  $300,000 
D)  $564,000

Question 17

An example of a service, rather than a tangible product, would be

Accepted Answer

A)  medical exams. 
B)  cloths. 
C)  trucks. 
D)  radios.

Question 18

Which of the following is a major subsystem of the cost accounting information system?

Accepted Answer

A)  ERP 
B)  Operational control information system 
C)  OLAP 
D)  EDI

Question 19

In a cost management system, the cost view does NOT include

Accepted Answer

A)  resources. 
B)  activities. 
C)  driver analysis. 
D)  products and customers.

Exam 2: Basic Cost Management Concepts