Question 1

Product costs estimated using the direct method of cost allocation

Accepted Answer

A) the first step is to develop a reciprocal cost equation. 
B) the first step is to allocate the service department costs to the production departments. 
C) one service department is chosen to allocate costs first. 
D) service department costs are allocated directly to the production departments. 
A) the first step is to develop a reciprocal cost equation. 
B) the first step is to allocate the service department costs to the production departments. 
C) one service department is chosen to allocate costs first. 
D) service department costs are allocated directly to the production departments.

Question 2

Depreciation on factory equipment is best characterized as

Accepted Answer

A) direct costs. 
B) fixed manufacturing overhead. 
C) variable overhead. 
D) period costs. 
A) direct costs. 
B) fixed manufacturing overhead. 
C) variable overhead. 
D) period costs.

Question 3

For each cost pool,a(n)________ is identified that is the primary factor causing overhead costs to increase during the accounting period.

Accepted Answer

A) activity 
B) job 
C) level 
D) process 
A) activity 
B) job 
C) level 
D) process

Question 4

While costs are measured for individual jobs in a job order costing system,they are measured for individual process stages in a process costing system.

Accepted Answer

A) True 
 B)False

Question 5

Depreciation on computers at the corporate headquarters is best characterized as

Accepted Answer

A) direct costs. 
B) fixed manufacturing overhead. 
C) variable overhead. 
D) period costs. 
A) direct costs. 
B) fixed manufacturing overhead. 
C) variable overhead. 
D) period costs.

Question 6

A job that shows low profitability may be the result of all of the following except:

Accepted Answer

A) inefficient use of direct materials. 
B) inefficient direct manufacturing labor. 
C) overpricing the job. 
D) over-allocating overhead costs. 
A) inefficient use of direct materials. 
B) inefficient direct manufacturing labor. 
C) overpricing the job. 
D) over-allocating overhead costs.

Question 7

An example of a situation in which process costing might be used would be a consulting engagement.

Accepted Answer

A) True 
 B)False

Question 8

If a business offers both routine and specialized services,a single cost driver rate will overprice:

Accepted Answer

A) the routine service. 
B) the specialized service. 
C) both the routine and the specialized service. 
D) neither the routine nor the specialized service. 
A) the routine service. 
B) the specialized service. 
C) both the routine and the specialized service. 
D) neither the routine nor the specialized service.

Question 9

Explain how an activity cost driver rate is determined.

Accepted Answer

Overhead activity cost driver rates are

Question 10

Process costing:

Accepted Answer

A) allocates conversion costs. 
B) results in different costs for different jobs. 
C) is commonly used by general contractors who construct custom-built homes. 
D) assigns costs to unique jobs based on a overhead cost driver. 
A) allocates conversion costs. 
B) results in different costs for different jobs. 
C) is commonly used by general contractors who construct custom-built homes. 
D) assigns costs to unique jobs based on a overhead cost driver.

Question 11

Which of the following manufactured products would use process costing?

Accepted Answer

A) polo shirts imprinted with individualized logos 
B) picnic packs containing ketchup, mustard, and relish 
C) customized boats used for racing 
D) handmade stained-glass lamps for recreational rooms 
A) polo shirts imprinted with individualized logos 
B) picnic packs containing ketchup, mustard, and relish 
C) customized boats used for racing 
D) handmade stained-glass lamps for recreational rooms

Question 12

Long Island Manufacturing Company developed the following information for its service departments, S1 and S2, and its production departments, P1 and P2:  
-Using the reciprocal method of service department cost allocation,how much is the total overhead cost for P1 for the period if calculations are rounded to the nearest dollar?

Accepted Answer

A) $25,210 
B) $33,188 
C) $25,120 
D) $25,188 
A) $25,210 
B) $33,188 
C) $25,120 
D) $25,188

Question 13

Use of a single cost driver rate will always distort product costs.

Accepted Answer

A) True 
 B)False

Question 14

The normal cost of overhead activities includes:

Accepted Answer

A) costs of resources committed to the particular activity. 
B) amounts for additional overtime payments. 
C) allowances for idle time. 
D) All of the above are correct. 
A) costs of resources committed to the particular activity. 
B) amounts for additional overtime payments. 
C) allowances for idle time. 
D) All of the above are correct.

Question 15

In a job order costing system,explain why it is necessary to apply overhead costs to production through the use of a predetermined activity cost driver rate.

Accepted Answer

First, actual overhead costs are not kno

Question 16

The over-allocation of overhead to a product distorts the product's cost and therefore the evaluation of the product's profitability.

Accepted Answer

A) True 
 B)False

Question 17

Why is an accurate product cost important?

Accepted Answer

Accurate product costing is im

Question 18

Explain what accounts for the difference between each amount reported on the job bid sheet and the job cost sheet for an individual job.

Accepted Answer

The job bid sheet estimates costs for di

Question 19

What considerations are important in estimating product costs in continuous processing plants?

Accepted Answer

Continuous processing plants are charact

Question 20

A cost that is uniquely and unequivocally attributable to a single cost object is a:

Accepted Answer

A) capacity related resource. 
B) consumable resource. 
C) indirect cost. 
D) direct cost. 
A) capacity related resource. 
B) consumable resource. 
C) indirect cost. 
D) direct cost.

Product costs estimated using the direct method of cost allocation

Depreciation on factory equipment is best characterized as

For each cost pool,a(n)________ is identified that is the primary factor causing overhead costs to increase during the accounting period.

While costs are measured for individual jobs in a job order costing system,they are measured for individual process stages in a process costing system.

Depreciation on computers at the corporate headquarters is best characterized as

A job that shows low profitability may be the result of all of the following except:

An example of a situation in which process costing might be used would be a consulting engagement.

If a business offers both routine and specialized services,a single cost driver rate will overprice:

Explain how an activity cost driver rate is determined.

Process costing:

Which of the following manufactured products would use process costing?

Use of a single cost driver rate will always distort product costs.

The normal cost of overhead activities includes:

In a job order costing system,explain why it is necessary to apply overhead costs to production through the use of a predetermined activity cost driver rate.

The over-allocation of overhead to a product distorts the product's cost and therefore the evaluation of the product's profitability.

Why is an accurate product cost important?

Explain what accounts for the difference between each amount reported on the job bid sheet and the job cost sheet for an individual job.

What considerations are important in estimating product costs in continuous processing plants?

A cost that is uniquely and unequivocally attributable to a single cost object is a:

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

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Exam 4: Accumulating and Assigning Costs to Products

Product costs estimated using the direct method of cost allocation

Depreciation on factory equipment is best characterized as

For each cost pool,a(n)________ is identified that is the primary factor causing overhead costs to increase during the accounting period.

While costs are measured for individual jobs in a job order costing system,they are measured for individual process stages in a process costing system.

Depreciation on computers at the corporate headquarters is best characterized as

A job that shows low profitability may be the result of all of the following except:

An example of a situation in which process costing might be used would be a consulting engagement.

If a business offers both routine and specialized services,a single cost driver rate will overprice:

Explain how an activity cost driver rate is determined.

Process costing:

Which of the following manufactured products would use process costing?

Use of a single cost driver rate will always distort product costs.

The normal cost of overhead activities includes:

In a job order costing system,explain why it is necessary to apply overhead costs to production through the use of a predetermined activity cost driver rate.

The over-allocation of overhead to a product distorts the product's cost and therefore the evaluation of the product's profitability.

Why is an accurate product cost important?

Explain what accounts for the difference between each amount reported on the job bid sheet and the job cost sheet for an individual job.

What considerations are important in estimating product costs in continuous processing plants?

A cost that is uniquely and unequivocally attributable to a single cost object is a:

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters