Question 1

Fixed costs in total will NOT change in the short run, but may change in the long run.

Accepted Answer

A) True 
 B)False

Question 2

Wages paid to machine operators on an assembly line are classified as a:

Accepted Answer

A) direct material cost 
B) direct manufacturing labor cost 
C) manufacturing overhead cost 
D) period cost 
A) direct material cost 
B) direct manufacturing labor cost 
C) manufacturing overhead cost 
D) period cost

Question 3

Within the relevant range, if there is a change in the level of the cost driver, then:

Accepted Answer

A) total fixed costs and total variable costs will change 
B) total fixed costs and total variable costs will remain the same 
C) total fixed costs will remain the same and total variable costs will change 
D) total fixed costs will change and total variable costs will remain the same 
A) total fixed costs and total variable costs will change 
B) total fixed costs and total variable costs will remain the same 
C) total fixed costs will remain the same and total variable costs will change 
D) total fixed costs will change and total variable costs will remain the same

Question 4

Product costs used for government contracts generally include:

Accepted Answer

A) manufacturing costs only 
B) design costs plus manufacturing costs 
C) all costs incurred along the value chain 
D) distribution costs only 
A) manufacturing costs only 
B) design costs plus manufacturing costs 
C) all costs incurred along the value chain 
D) distribution costs only

Question 5

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 
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

Question 6

Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime. One week she worked 42 hours, which included 2 hours of overtime. Compensation would be reported as:

Accepted Answer

A) $800 of direct labor and $60 of manufacturing overhead 
B) $800 of direct labor and $0 of manufacturing overhead 
C) $840 of direct labor and $20 of manufacturing overhead 
D) $860 of direct labor and $0 of manufacturing overhead 
A) $800 of direct labor and $60 of manufacturing overhead 
B) $800 of direct labor and $0 of manufacturing overhead 
C) $840 of direct labor and $20 of manufacturing overhead 
D) $860 of direct labor and $0 of manufacturing overhead

Question 7

Answer the following questions using the information below:
Pederson Company reported the following:
  
-________ - sector companies provide intangible products.

Accepted Answer

A) Professional 
B) Manufacturing 
C) Merchandising 
D) Service 
A) Professional 
B) Manufacturing 
C) Merchandising 
D) Service

Question 8

When making decisions using fixed costs, the focus should be on total costs and not unit costs.

Accepted Answer

A) True 
 B)False

Question 9

At a plant where a union agreement sets annual salaries and conditions, annual labor costs usually:

Accepted Answer

A) are considered a variable cost 
B) are considered a fixed cost 
C) depend on the scheduling of floor workers 
D) depend on the scheduling of production runs 
A) are considered a variable cost 
B) are considered a fixed cost 
C) depend on the scheduling of floor workers 
D) depend on the scheduling of production runs

Question 10

Manufacturing overhead costs in an automobile manufacturing plant most likely include:

Accepted Answer

A) labor costs of the painting department 
B) indirect material costs such as lubricants 
C) sales commissions 
D) steering wheel costs 
A) labor costs of the painting department 
B) indirect material costs such as lubricants 
C) sales commissions 
D) steering wheel costs

Question 11

For a manufacturing company, indirect manufacturing costs may be included in:

Accepted Answer

A) direct materials inventory only 
B) merchandise inventory only 
C) both work-in-process inventory and finished goods inventory 
D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts 
A) direct materials inventory only 
B) merchandise inventory only 
C) both work-in-process inventory and finished goods inventory 
D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts

Question 12

Lucas Manufacturing has three cost objects that it uses to accumulate costs for its manufacturing plants. They are:
   The following manufacturing overhead cost categories are found in the accounting records:
   Required:
Assign each of the above costs to the most appropriate cost object.

Accepted Answer

Cost object # 1 includes categ

Question 13

Yahoo, an Internet search firm, would be classified as:

Accepted Answer

A) a manufacturing-sector company 
B) a merchandising-sector company 
C) a service sector company 
D) None of these answers are correct. 
A) a manufacturing-sector company 
B) a merchandising-sector company 
C) a service sector company 
D) None of these answers are correct.

Question 14

Which of the following is NOT a period cost?

Accepted Answer

A) marketing costs 
B) general and administrative costs 
C) research and development costs 
D) direct materials 
A) marketing costs 
B) general and administrative costs 
C) research and development costs 
D) direct materials

Question 15

The same cost may be direct for one cost object and indirect for another cost object.

Accepted Answer

A) True 
 B)False

Question 16

For manufacturing firms, inventoriable costs include:

Accepted Answer

A) plant supervisor salaries 
B) research and development costs 
C) costs of dealing with customers after the sale 
D) distribution costs 
A) plant supervisor salaries 
B) research and development costs 
C) costs of dealing with customers after the sale 
D) distribution costs

Question 17

Answer the following questions using the information below:
Pederson Company reported the following:
  
-What is the amount of ending finished goods inventory?

Accepted Answer

A) $1,880,000 
B) $120,000 
C) $225,000 
D) $105,000 
A) $1,880,000 
B) $120,000 
C) $225,000 
D) $105,000

Question 18

A product cost that is useful for one decision may not be useful information for another decision.

Accepted Answer

A) True 
 B)False

Question 19

Fixed costs depend on the:

Accepted Answer

A) amount of resources used 
B) amount of resources acquired 
C) volume of production 
D) volume of sales 
A) amount of resources used 
B) amount of resources acquired 
C) volume of production 
D) volume of sales

Question 20

An understanding of the underlying behavior of costs helps in all of the following EXCEPT:

Accepted Answer

A) costs can be better estimated as volume expands and contracts 
B) true costs can be better evaluated 
C) process inefficiencies can be better identified and as a result improved 
D) sales volume can be better estimated 
A) costs can be better estimated as volume expands and contracts 
B) true costs can be better evaluated 
C) process inefficiencies can be better identified and as a result improved 
D) sales volume can be better estimated

Exam 2: An Introduction to Cost Terms and Purposes

Fixed costs in total will NOT change in the short run, but may change in the long run.

Wages paid to machine operators on an assembly line are classified as a:

Within the relevant range, if there is a change in the level of the cost driver, then:

Product costs used for government contracts generally include:

Cost tracing is:

Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime. One week she worked 42 hours, which included 2 hours of overtime. Compensation would be reported as:

Answer the following questions using the information below: Pederson Company reported the following: -________ - sector companies provide intangible products.

When making decisions using fixed costs, the focus should be on total costs and not unit costs.

At a plant where a union agreement sets annual salaries and conditions, annual labor costs usually:

Manufacturing overhead costs in an automobile manufacturing plant most likely include:

For a manufacturing company, indirect manufacturing costs may be included in:

Lucas Manufacturing has three cost objects that it uses to accumulate costs for its manufacturing plants. They are: The following manufacturing overhead cost categories are found in the accounting records: Required: Assign each of the above costs to the most appropriate cost object.

Yahoo, an Internet search firm, would be classified as:

Which of the following is NOT a period cost?

The same cost may be direct for one cost object and indirect for another cost object.

For manufacturing firms, inventoriable costs include:

Answer the following questions using the information below: Pederson Company reported the following: -What is the amount of ending finished goods inventory?

A product cost that is useful for one decision may not be useful information for another decision.

Fixed costs depend on the:

An understanding of the underlying behavior of costs helps in all of the following EXCEPT:

The Accountants Role in the Organization

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

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