Question 1

In the normal-costing system,managers understand that manufacturing costs of a job are available much later compared to the actual-costing system.

Accepted Answer

A) True 
 B)False

Question 2

Managers never have a problem when they calculate the actual indirect-cost rates on a timely basis,for example each week.

Accepted Answer

A) True 
 B)False

Question 3

Managers are not required to know the complete reciprocated costs of a support department for decisions about whether to outsource all the services that the support department provides.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following explains how managers compute the actual manufacturing overhead rate?

Accepted Answer

A) Add actual annual manufacturing overhead costs to the actual annual quantity of the cost-allocation base. 
B) Divide actual annual manufacturing overhead costs by the actual annual quantity of the cost-allocation base. 
C) Multiply actual annual manufacturing overhead costs by the actual annual quantity of the cost-allocation base. 
D) Subtract actual manufacturing overhead costs by the actual annual quantity of the cost-allocation base. 
E) Subtract forecasted manufacturing overhead costs from the actual annual quantity of the cost-allocation base. 
A) Add actual annual manufacturing overhead costs to the actual annual quantity of the cost-allocation base. 
B) Divide actual annual manufacturing overhead costs by the actual annual quantity of the cost-allocation base. 
C) Multiply actual annual manufacturing overhead costs by the actual annual quantity of the cost-allocation base. 
D) Subtract actual manufacturing overhead costs by the actual annual quantity of the cost-allocation base. 
E) Subtract forecasted manufacturing overhead costs from the actual annual quantity of the cost-allocation base.

Question 5

Westinghouse Company has an opportunity to bid on a new job.The manufacturing cost estimate to bid on the job is $25,000,which yields a markup of 50% over the manufacturing cost.How much should they bid on this project?

Accepted Answer

A) $12,500 
B) $25,000 
C) $37,500 
D) $50,000 
E) $75,000 
A) $12,500 
B) $25,000 
C) $37,500 
D) $50,000 
E) $75,000

Question 6

Which of the following is not an advantage of the direct method?

Accepted Answer

A) The benefit is simplicity. 
B) The direct method is easy to use. 
C) No need to predict the usage of support department services by other departments. 
D) It ignores information about reciprocal services provided among support departments. 
E) None of these are disadvantages. 
A) The benefit is simplicity. 
B) The direct method is easy to use. 
C) No need to predict the usage of support department services by other departments. 
D) It ignores information about reciprocal services provided among support departments. 
E) None of these are disadvantages.

Question 7

The cost-application base is referred to as the cost-allocation base when a cost object is a job,product,or customer.

Accepted Answer

A) True 
 B)False

Question 8

Under the ________ ________ once a support department's costs have been allocated,no subsequent support-department costs are allocated back to it.

Accepted Answer

A) direct method 
B) support method 
C) divisional method 
D) reciprocal method 
E) step-down method 
A) direct method 
B) support method 
C) divisional method 
D) reciprocal method 
E) step-down method

Question 9

The ideal cost-allocation base is:

Accepted Answer

A) the cost driver of indirect costs. 
B) the cost driver of direct costs. 
C) the cost driver of variable costs. 
D) the cost driver of mixed costs. 
E) the cost driver of fixed,mixed,and direct costs. 
A) the cost driver of indirect costs. 
B) the cost driver of direct costs. 
C) the cost driver of variable costs. 
D) the cost driver of mixed costs. 
E) the cost driver of fixed,mixed,and direct costs.

Question 10

Virginia Consultants employs 10 full-time management consultants.The budgeted annual compensation per employee is $75,000.The average time charged per client is 250 hours per year.The professional consultant labor costs are included in a single direct-cost category and they are allocated to jobs on a per-hour basis.
The other costs associated with the consultant firm are included in a single indirect-cost pool,allocated according to professional labor hours.The budgeted indirect costs for the year are $500,000,and the firm expects to have 50 new clients in the next year.
What is the budgeted direct-labor cost rate per hour?

Accepted Answer

A) $20 per hour. 
B) $30 per hour. 
C) $40 per hour. 
D) $50 per hour. 
E) $60 per hour. 
A) $20 per hour. 
B) $30 per hour. 
C) $40 per hour. 
D) $50 per hour. 
E) $60 per hour.

Question 11

The end-of-year adjustments are the same for both under- and overallocated direct costs are made in the same way as the indirect costs.

Accepted Answer

A) True 
 B)False

Question 12

In the service sector,an example of an organization that uses the process-costing method is a bank that uses bank-check clearing systems.

Accepted Answer

A) True 
 B)False

Question 13

Managers cost products to guide them in their long-term strategic planning process.

Accepted Answer

A) True 
 B)False

Question 14

Material-handling labor costs are included as part of the ________ labor costs of each department.

Accepted Answer

A) direct 
B) indirect 
C) support 
D) operating 
E) manufacturing 
A) direct 
B) indirect 
C) support 
D) operating 
E) manufacturing

Question 15

Like all other indirect manufacturing costs,indirect materials are accumulated in Manufacturing Overhead Control.

Accepted Answer

A) True 
 B)False

Question 16

Most managers believe that the ideal cost-allocation base is the ________ ________ of the indirect costs,since there is a cause-and-effect relationship between the cost allocation base and the indirect costs.

Accepted Answer

A) cost base 
B) cost driver 
C) cost period 
D) cost analysis 
E) costing systems 
A) cost base 
B) cost driver 
C) cost period 
D) cost analysis 
E) costing systems

Question 17

The assignment of indirect costs is:

Accepted Answer

A) cost allocation. 
B) cost tracing. 
C) cost assignment. 
D) job-costing system. 
E) cost allocation base. 
A) cost allocation. 
B) cost tracing. 
C) cost assignment. 
D) job-costing system. 
E) cost allocation base.

Question 18

Anything for which a measurement of costs is desired is a:

Accepted Answer

A) cost object. 
B) cost assignment. 
C) cost tracing. 
D) cost pooling. 
E) cost allocation. 
A) cost object. 
B) cost assignment. 
C) cost tracing. 
D) cost pooling. 
E) cost allocation.

Question 19

A disadvantage of the direct method is that it ignores information about reciprocal services provided among support departments.

Accepted Answer

A) True 
 B)False

Question 20

Managers use the job-cost record (job-cost sheet)to:

Accepted Answer

A) indicate the type of each product received. 
B) record raw material purchases from suppliers. 
C) indicate the quantity of each product received. 
D) record only manufacturing costs accrued on the job. 
E) record and accumulate all costs assigned to a specific job. 
A) indicate the type of each product received. 
B) record raw material purchases from suppliers. 
C) indicate the quantity of each product received. 
D) record only manufacturing costs accrued on the job. 
E) record and accumulate all costs assigned to a specific job.

In the normal-costing system,managers understand that manufacturing costs of a job are available much later compared to the actual-costing system.

Managers never have a problem when they calculate the actual indirect-cost rates on a timely basis,for example each week.

Managers are not required to know the complete reciprocated costs of a support department for decisions about whether to outsource all the services that the support department provides.

Which of the following explains how managers compute the actual manufacturing overhead rate?

Westinghouse Company has an opportunity to bid on a new job.The manufacturing cost estimate to bid on the job is $25,000,which yields a markup of 50% over the manufacturing cost.How much should they bid on this project?

Which of the following is not an advantage of the direct method?

The cost-application base is referred to as the cost-allocation base when a cost object is a job,product,or customer.

Under the once a support department's costs have been allocated,no subsequent support-department costs are allocated back to it.

The ideal cost-allocation base is:

The end-of-year adjustments are the same for both under- and overallocated direct costs are made in the same way as the indirect costs.

In the service sector,an example of an organization that uses the process-costing method is a bank that uses bank-check clearing systems.

Managers cost products to guide them in their long-term strategic planning process.

Material-handling labor costs are included as part of the ________ labor costs of each department.

Like all other indirect manufacturing costs,indirect materials are accumulated in Manufacturing Overhead Control.

Most managers believe that the ideal cost-allocation base is the of the indirect costs,since there is a cause-and-effect relationship between the cost allocation base and the indirect costs.

The assignment of indirect costs is:

Anything for which a measurement of costs is desired is a:

A disadvantage of the direct method is that it ignores information about reciprocal services provided among support departments.

Managers use the job-cost record (job-cost sheet)to:

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Exam 4: Job Costing

In the normal-costing system,managers understand that manufacturing costs of a job are available much later compared to the actual-costing system.

Managers never have a problem when they calculate the actual indirect-cost rates on a timely basis,for example each week.

Managers are not required to know the complete reciprocated costs of a support department for decisions about whether to outsource all the services that the support department provides.

Which of the following explains how managers compute the actual manufacturing overhead rate?

Westinghouse Company has an opportunity to bid on a new job.The manufacturing cost estimate to bid on the job is $25,000,which yields a markup of 50% over the manufacturing cost.How much should they bid on this project?

Which of the following is not an advantage of the direct method?

The cost-application base is referred to as the cost-allocation base when a cost object is a job,product,or customer.

Under the ________ ________ once a support department's costs have been allocated,no subsequent support-department costs are allocated back to it.

The ideal cost-allocation base is:

The end-of-year adjustments are the same for both under- and overallocated direct costs are made in the same way as the indirect costs.

In the service sector,an example of an organization that uses the process-costing method is a bank that uses bank-check clearing systems.

Managers cost products to guide them in their long-term strategic planning process.

Material-handling labor costs are included as part of the ________ labor costs of each department.

Like all other indirect manufacturing costs,indirect materials are accumulated in Manufacturing Overhead Control.

Most managers believe that the ideal cost-allocation base is the ________ ________ of the indirect costs,since there is a cause-and-effect relationship between the cost allocation base and the indirect costs.

The assignment of indirect costs is:

Anything for which a measurement of costs is desired is a:

A disadvantage of the direct method is that it ignores information about reciprocal services provided among support departments.

Managers use the job-cost record (job-cost sheet)to:

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Under the once a support department's costs have been allocated,no subsequent support-department costs are allocated back to it.

Most managers believe that the ideal cost-allocation base is the of the indirect costs,since there is a cause-and-effect relationship between the cost allocation base and the indirect costs.