Question 1

For a manufacturing firm,product costs first appear on the income statement and then on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 2

List and explain five reasons why more firms are adopting activity-based costing systems.

Accepted Answer

1.Fierce competitive pressure has result

Question 3

Square feet is a logical cost driver for allocating depreciation expense of heating equipment to cost objects.

Accepted Answer

A) True 
 B)False

Question 4

Which is NOT a purpose of cost allocation?

Accepted Answer

A) Predict the economic effects of strategic and operational control decisions. 
B) Obtain reimbursement. 
C) Provide motivation to managers. 
D) Identify cost drivers. 
A) Predict the economic effects of strategic and operational control decisions. 
B) Obtain reimbursement. 
C) Provide motivation to managers. 
D) Identify cost drivers.

Question 5

FAST Company has obtained the following data concerning a new product:   Production Costs,Using traditional costing method……..………......$3.00
Production Costs,Using activity-based costing method…………......$5.00
Nonproduction Costs,Using activity-based costing method…….....$2.50
FAST Company wants the price of the new product to cover all costs plus a 100% markup.The production process used for the low volume product is very complicated and it has a higher proportion of indirect costs than direct costs.
What price per unit should FAST Company charge for the new product?

Accepted Answer

A) $6.00 
B) $10.00 
C) $11.00 
D) $15.00 
A) $6.00 
B) $10.00 
C) $11.00 
D) $15.00

Question 6

Speedy Company has identified the following activities relating to indirect production costs:
   Speedy Company has obtained the following data concerning two products:
   Required:
Using the activity-based costing approach,calculate the manufacturing cost per unit for Speedy1 and Speedy2.

Accepted Answer

Speedy1: $11.75 ($47

Question 7

McBain Company,a manufacturer of windows,has prepared the following list of accounts and their balances:
   The company also made the following purchases of raw materials:
   There was no beginning or ending inventories.
Required:
Calculate the following: 
A)Direct materials used
B)Direct labor
C)Indirect production costs

Accepted Answer

A)Direct materials u

Question 8

A cost pool is anything for which a separate measurement of costs is desired.

Accepted Answer

A) True 
 B)False

Question 9

When work in process inventory ________,finished goods inventory ________.

Accepted Answer

A) increases; decreases 
B) decreases; increases 
C) increases; increases 
D) increases; decreases. 
A) increases; decreases 
B) decreases; increases 
C) increases; increases 
D) increases; decreases.

Question 10

Investors need more detailed information about products or services than managers.

Accepted Answer

A) True 
 B)False

Question 11

Benchmarking is the continuous process of comparing products to the average industry standards.

Accepted Answer

A) True 
 B)False

Question 12

Storing inventories and transporting incomplete products in a plant are examples of value-added activities.

Accepted Answer

A) True 
 B)False

Question 13

Cost assignment is attaching costs to one or more cost objects,such as activities and departments.

Accepted Answer

A) True 
 B)False

Question 14

Which is NOT an example of indirect production costs?

Accepted Answer

A) factory supplies 
B) depreciation expense on factory building 
C) depreciation expense on office equipment 
D) wages of material handlers in factory 
A) factory supplies 
B) depreciation expense on factory building 
C) depreciation expense on office equipment 
D) wages of material handlers in factory

Question 15

Companies must assign all production-related costs to cost objects for external financial reporting purposes.

Accepted Answer

A) True 
 B)False

Question 16

Physically tracing ________ costs is usually straightforward,but allocating ________ costs is usually more complex.

Accepted Answer

A) indirect; direct 
B) direct; product 
C) direct; indirect 
D) unallocated; indirect 
A) indirect; direct 
B) direct; product 
C) direct; indirect 
D) unallocated; indirect

Question 17

The manufacturing division of an electronics company uses activity-based costing.The company has identified three activities and the related cost drivers for indirect production costs.
   Three types of products are produced.Direct costs and cost-driver activity for each product for a month are as follows:
   Indirect production costs for the month are as follows:
   Required: 
A)Compute the indirect production costs allocated to each product using the ABC system.
B)Compute the indirect production costs allocated to each product using a traditional costing system.Assume indirect production costs are allocated to each product using the cost driver: direct labor hours.

Accepted Answer

A) Product A: @#IMG-DLM& Product B: @#IMG-DLM& Pro

Question 18

What types of firms need cost accounting?

Accepted Answer

A) manufacturing firms and service organizations 
B) service organizations and nonprofit organizations 
C) manufacturing firms and nonprofit organizations 
D) manufacturing firms,service organizations,and nonprofit organizations 
A) manufacturing firms and service organizations 
B) service organizations and nonprofit organizations 
C) manufacturing firms and nonprofit organizations 
D) manufacturing firms,service organizations,and nonprofit organizations

Question 19

Where do benchmarks come from?

Accepted Answer

A) organizations with dissimilar products 
B) organizations with dissimilar production processes 
C) organizations with similar ethics policies 
D) organizations with similar production processes 
A) organizations with dissimilar products 
B) organizations with dissimilar production processes 
C) organizations with similar ethics policies 
D) organizations with similar production processes

Question 20

Cost allocation is used to assign direct costs to cost objects.

Accepted Answer

A) True 
 B)False

For a manufacturing firm,product costs first appear on the income statement and then on the balance sheet.

List and explain five reasons why more firms are adopting activity-based costing systems.

Square feet is a logical cost driver for allocating depreciation expense of heating equipment to cost objects.

Which is NOT a purpose of cost allocation?

Speedy Company has identified the following activities relating to indirect production costs: Speedy Company has obtained the following data concerning two products: Required: Using the activity-based costing approach,calculate the manufacturing cost per unit for Speedy1 and Speedy2.

A cost pool is anything for which a separate measurement of costs is desired.

When work in process inventory ,finished goods inventory .

Investors need more detailed information about products or services than managers.

Benchmarking is the continuous process of comparing products to the average industry standards.

Storing inventories and transporting incomplete products in a plant are examples of value-added activities.

Cost assignment is attaching costs to one or more cost objects,such as activities and departments.

Which is NOT an example of indirect production costs?

Companies must assign all production-related costs to cost objects for external financial reporting purposes.

Physically tracing costs is usually straightforward,but allocating costs is usually more complex.

What types of firms need cost accounting?

Where do benchmarks come from?

Cost allocation is used to assign direct costs to cost objects.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 4: Cost Management Systems and Activity-Based Costing

For a manufacturing firm,product costs first appear on the income statement and then on the balance sheet.

List and explain five reasons why more firms are adopting activity-based costing systems.

Square feet is a logical cost driver for allocating depreciation expense of heating equipment to cost objects.

Which is NOT a purpose of cost allocation?

Speedy Company has identified the following activities relating to indirect production costs: Speedy Company has obtained the following data concerning two products: Required: Using the activity-based costing approach,calculate the manufacturing cost per unit for Speedy1 and Speedy2.

A cost pool is anything for which a separate measurement of costs is desired.

When work in process inventory ________,finished goods inventory ________.

Investors need more detailed information about products or services than managers.

Benchmarking is the continuous process of comparing products to the average industry standards.

Storing inventories and transporting incomplete products in a plant are examples of value-added activities.

Cost assignment is attaching costs to one or more cost objects,such as activities and departments.

Which is NOT an example of indirect production costs?

Companies must assign all production-related costs to cost objects for external financial reporting purposes.

Physically tracing ________ costs is usually straightforward,but allocating ________ costs is usually more complex.

What types of firms need cost accounting?

Where do benchmarks come from?

Cost allocation is used to assign direct costs to cost objects.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

When work in process inventory ,finished goods inventory .

Physically tracing costs is usually straightforward,but allocating costs is usually more complex.