Question 1

Direct materials are an example of a

Accepted Answer

A)  fixed cost. 
B)  variable cost. 
C)  step cost. 
D)  mixed cost. 
A)  fixed cost. 
B)  variable cost. 
C)  step cost. 
D)  mixed cost.

Question 2

Mixed costs

Accepted Answer

A)  are step costs 
B)  in total, remain constant within a relevant range 
C)  have a fixed and variable component 
D)  on a per unit basis, are constant as activity increases or decreases 
A)  are step costs 
B)  in total, remain constant within a relevant range 
C)  have a fixed and variable component 
D)  on a per unit basis, are constant as activity increases or decreases

Question 3

Which of the following costs is a period cost for a manufacturing company?

Accepted Answer

A)  accountant's salary 
B)  wages of machine operators 
C)  insurance on factory equipment 
D)  fringe benefits on factory employees 
A)  accountant's salary 
B)  wages of machine operators 
C)  insurance on factory equipment 
D)  fringe benefits on factory employees

Question 4

When is direct labour a fixed cost?

Accepted Answer

A)  when a company is subject to union contracts and is prohibited from laying off labour 
B)  when a company pays employees on a piece-work basis 
C)  direct labour is always a variable cost 
D)  when a company can hire and lay off its labour quickly 
A)  when a company is subject to union contracts and is prohibited from laying off labour 
B)  when a company pays employees on a piece-work basis 
C)  direct labour is always a variable cost 
D)  when a company can hire and lay off its labour quickly

Question 5

An example of a period cost is

Accepted Answer

A)  insurance on factory equipment. 
B)  chief executive's salary. 
C)  property taxes on factory building. 
D)  wages of factory custodians. 
A)  insurance on factory equipment. 
B)  chief executive's salary. 
C)  property taxes on factory building. 
D)  wages of factory custodians.

Question 6

Harry has just received his bachelor's degree and is considering two alternatives. (1) He could obtain an entry-level accounting position paying £30,000 per year. (2) He could obtain his master's degree with one more year of study and work part-time for £8,000 per year. The opportunity cost associated with Harry obtaining his master's degree is

Accepted Answer

A)  £-0- 
B)  £22,000 
C)  £30,000 
D)  £38,000 
A)  £-0- 
B)  £22,000 
C)  £30,000 
D)  £38,000

Question 7

_____ are expensed in the period in which they are incurred.

Accepted Answer

A)  Direct materials 
B)  Product costs 
C)  Noninventoriable costs 
D)  Inventoriable costs 
A)  Direct materials 
B)  Product costs 
C)  Noninventoriable costs 
D)  Inventoriable costs

Question 8

Which of the following expenses is an example of a discretionary fixed expense?

Accepted Answer

A)  investment in production equipment 
B)  investment in the factory 
C)  electricity costs 
D)  employment costs 
A)  investment in production equipment 
B)  investment in the factory 
C)  electricity costs 
D)  employment costs

Question 9

A supervisor's salary of £2,000 per month is an example of a

Accepted Answer

A)  fixed cost 
B)  variable cost 
C)  mixed cost 
D)  step cost 
A)  fixed cost 
B)  variable cost 
C)  mixed cost 
D)  step cost

Question 10

Classify each of the following costs as variable, fixed, mixed, or step by writing an X under one of the following headings (Sales volume is the cost driver).

Accepted Answer

The answer of Classify each of the following costs as...

Question 11

Which of the following items would NOT be classified as part of factory overhead of a firm that makes sailboats?

Accepted Answer

A)  factory supplies used 
B)  canvas used in sail 
C)  depreciation of factory buildings 
D)  indirect materials 
A)  factory supplies used 
B)  canvas used in sail 
C)  depreciation of factory buildings 
D)  indirect materials

Question 12

Which statement describes step-cost behaviour?

Accepted Answer

A)  discontinuous 
B)  displays a constant level of cost for a range of output and then jumps to a higher level at some point 
C)  must be purchased in chunks 
D)  all of the above describe step-cost behaviour 
A)  discontinuous 
B)  displays a constant level of cost for a range of output and then jumps to a higher level at some point 
C)  must be purchased in chunks 
D)  all of the above describe step-cost behaviour

Question 13

Which of the following is an example of a possible cost object?

Accepted Answer

A)  a product 
B)  a customer 
C)  a department 
D)  All of these could be possible cost objects. 
A)  a product 
B)  a customer 
C)  a department 
D)  All of these could be possible cost objects.

Question 14

Which of the following is an example of a step-fixed cost?

Accepted Answer

A)  cost of disposable surgical scissors, which are purchased in increments of 100 
B)  cost of soaking solution to clean jewelry (Each jar can soak 50 rings before losing effectiveness.) 
C)  cost of tuition at £300 per credit hour up to 15 credit hours (Hours taken in excess of 15 hours are free.) 
D)  cost of disposable gowns used by patients in a hospital 
A)  cost of disposable surgical scissors, which are purchased in increments of 100 
B)  cost of soaking solution to clean jewelry (Each jar can soak 50 rings before losing effectiveness.) 
C)  cost of tuition at £300 per credit hour up to 15 credit hours (Hours taken in excess of 15 hours are free.) 
D)  cost of disposable gowns used by patients in a hospital

Question 15

Which of the following costs incurred by a furniture manufacturer would be a product cost?

Accepted Answer

A)  lumber 
B)  office salaries 
C)  commissions paid to sales staff 
D)  controller's salary 
A)  lumber 
B)  office salaries 
C)  commissions paid to sales staff 
D)  controller's salary

Question 16

Which of the following expenses is an example of a committed fixed expense?

Accepted Answer

A)  investment in production facilities 
B)  advertising 
C)  preventive maintenance 
D)  employee training programs 
A)  investment in production facilities 
B)  advertising 
C)  preventive maintenance 
D)  employee training programs

Question 17

Which of the following costs is NOT a product cost?

Accepted Answer

A)  rent on an office building 
B)  indirect labour 
C)  repairs on manufacturing equipment 
D)  steel used in inventory items produced 
A)  rent on an office building 
B)  indirect labour 
C)  repairs on manufacturing equipment 
D)  steel used in inventory items produced

Question 18

Process costing would be most applicable for

Accepted Answer

A)  an electronics producer. 
B)  custom machining. 
C)  high rise building construction. 
D)  Audits undertaken by a firm of accountants. 
A)  an electronics producer. 
B)  custom machining. 
C)  high rise building construction. 
D)  Audits undertaken by a firm of accountants.

Question 19

Which item is not an example of a sunk cost?

Accepted Answer

A)  materials needed for production 
B)  purchase cost of machinery 
C)  depreciation 
D)  All are sunk costs. 
A)  materials needed for production 
B)  purchase cost of machinery 
C)  depreciation 
D)  All are sunk costs.

Question 20

Which of the following costs is an indirect product cost?

Accepted Answer

A)  property taxes on plant facilities 
B)  wages of assembly workers 
C)  materials used 
D)  president's salary 
A)  property taxes on plant facilities 
B)  wages of assembly workers 
C)  materials used 
D)  president's salary

Direct materials are an example of a

Mixed costs

Which of the following costs is a period cost for a manufacturing company?

When is direct labour a fixed cost?

An example of a period cost is

_____ are expensed in the period in which they are incurred.

Which of the following expenses is an example of a discretionary fixed expense?

A supervisor's salary of £2,000 per month is an example of a

Classify each of the following costs as variable, fixed, mixed, or step by writing an X under one of the following headings (Sales volume is the cost driver).

Which of the following items would NOT be classified as part of factory overhead of a firm that makes sailboats?

Which statement describes step-cost behaviour?

Which of the following is an example of a possible cost object?

Which of the following is an example of a step-fixed cost?

Which of the following costs incurred by a furniture manufacturer would be a product cost?

Which of the following expenses is an example of a committed fixed expense?

Which of the following costs is NOT a product cost?

Process costing would be most applicable for

Which item is not an example of a sunk cost?

Which of the following costs is an indirect product cost?

Introduction to Management Accounting

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Performance Management

Filters

Exam 2: An Introduction to Cost Terms and Concepts

Direct materials are an example of a

Mixed costs

Which of the following costs is a period cost for a manufacturing company?

When is direct labour a fixed cost?

An example of a period cost is

_____ are expensed in the period in which they are incurred.

Which of the following expenses is an example of a discretionary fixed expense?

A supervisor's salary of £2,000 per month is an example of a

Classify each of the following costs as variable, fixed, mixed, or step by writing an X under one of the following headings (Sales volume is the cost driver).

Which of the following items would NOT be classified as part of factory overhead of a firm that makes sailboats?

Which statement describes step-cost behaviour?

Which of the following is an example of a possible cost object?

Which of the following is an example of a step-fixed cost?

Which of the following costs incurred by a furniture manufacturer would be a product cost?

Which of the following expenses is an example of a committed fixed expense?

Which of the following costs is NOT a product cost?

Process costing would be most applicable for

Which item is not an example of a sunk cost?

Which of the following costs is an indirect product cost?

Introduction to Management Accounting

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Performance Management

Filters