Question 1

Identify each of the following costs as fixed-committed or fixed-discretionary by writing an "X" under one of the following headings:

Accepted Answer

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

Question 2

A hospital requires one nurse for each eight patients. This is 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 3

Selling and administrative costs are classified as

Accepted Answer

A)  product costs. 
B)  conversion costs. 
C)  period costs. 
D)  factory overhead. 
A)  product costs. 
B)  conversion costs. 
C)  period costs. 
D)  factory overhead.

Question 4

An equipment lease that specifies payment of £1,000 per month plus £5 per machine hour used 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 5

An equipment lease that specifies a payment of £5,000 per month plus £8 per machine hour used is 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 6

Which of the following costs would be classified as fixed costs with respect to volume?

Accepted Answer

A)  the salary of the manager of the Research and Development Department 
B)  the cost of a copy machine in the Human Resource Department 
C)  the property taxes on the manufacturing facility 
D)  all of the above 
A)  the salary of the manager of the Research and Development Department 
B)  the cost of a copy machine in the Human Resource Department 
C)  the property taxes on the manufacturing facility 
D)  all of the above

Question 7

Fixed cost per unit is £9 when 20,000 units are produced and £6 when 30,000 units are produced. What is the total fixed cost when nothing is produced?

Accepted Answer

A)  £120,000 
B)  £270,000 
C)  £15 
D)  £180,000 
A)  £120,000 
B)  £270,000 
C)  £15 
D)  £180,000

Question 8

Which of the following products would NOT use job-order production?

Accepted Answer

A)  houses 
B)  chemicals 
C)  ships 
D)  custom-built furniture 
A)  houses 
B)  chemicals 
C)  ships 
D)  custom-built furniture

Question 9

Indirect costs are usually allocated rather than traced to cost objects because

Accepted Answer

A)  allocation is required by external reporting requirements 
B)  overall accuracy is improved by allocation 
C)  no causal relationship exists between indirect costs and the cost object 
D)  allocation is more convenient than tracing 
A)  allocation is required by external reporting requirements 
B)  overall accuracy is improved by allocation 
C)  no causal relationship exists between indirect costs and the cost object 
D)  allocation is more convenient than tracing

Question 10

Cost behaviour analysis focuses on

Accepted Answer

A)  how costs react to changes in profit. 
B)  how costs change over time. 
C)  how costs react to changes in activity level. 
D)  both a and c 
A)  how costs react to changes in profit. 
B)  how costs change over time. 
C)  how costs react to changes in activity level. 
D)  both a and c

Question 11

Which of the following costs would be included as part of factory overhead?

Accepted Answer

A)  depreciation of plant equipment 
B)  paint used for product finish 
C)  depreciation on the corporation's office building 
D)  paper used in the production of books 
A)  depreciation of plant equipment 
B)  paint used for product finish 
C)  depreciation on the corporation's office building 
D)  paper used in the production of books

Question 12

Which of the following is a period cost?

Accepted Answer

A)  the production supervisor's salary 
B)  direct labour 
C)  property taxes on the office building 
D)  property taxes on the production facilities 
A)  the production supervisor's salary 
B)  direct labour 
C)  property taxes on the office building 
D)  property taxes on the production facilities

Question 13

Which one of the following sentences about step costs is true?

Accepted Answer

A)  Step costs increase with each additional unit produced. 
B)  Step costs have no relation to number of units produced. 
C)  Step costs are constant within certain ranges of activity but differ outside those ranges of activity. 
D)  Step costs are variable within narrowly defined ranges of activity, but constant over wider ranges of activity. 
A)  Step costs increase with each additional unit produced. 
B)  Step costs have no relation to number of units produced. 
C)  Step costs are constant within certain ranges of activity but differ outside those ranges of activity. 
D)  Step costs are variable within narrowly defined ranges of activity, but constant over wider ranges of activity.

Question 14

A steep slope in the variable cost line indicates a

Accepted Answer

A)  low variable cost per unit. 
B)  high influence of activity on total variable costs. 
C)  low influence of activity on total variable costs. 
D)  large amount of fixed costs. 
A)  low variable cost per unit. 
B)  high influence of activity on total variable costs. 
C)  low influence of activity on total variable costs. 
D)  large amount of fixed costs.

Question 15

If production volume increases from 8,000 to 10,000 units,

Accepted Answer

A)  total costs will increase by 20 percent. 
B)  total costs will increase by 25 percent. 
C)  total variable costs will increase by 25 percent. 
D)  mixed and variable costs will increase by 25 percent. 
A)  total costs will increase by 20 percent. 
B)  total costs will increase by 25 percent. 
C)  total variable costs will increase by 25 percent. 
D)  mixed and variable costs will increase by 25 percent.

Question 16

Which of the following costs incurred by a bus manufacturer would NOT be directly attributable to the finished product?

Accepted Answer

A)  the wages paid to assembly-line production workers 
B)  the tires for buses 
C)  the windshields for buses 
D)  the depreciation on factory building 
A)  the wages paid to assembly-line production workers 
B)  the tires for buses 
C)  the windshields for buses 
D)  the depreciation on factory building

Question 17

A cost used up in the production of revenues is a(n)

Accepted Answer

A)  unexpired cost. 
B)  expense. 
C)  loss. 
D)  asset. 
A)  unexpired cost. 
B)  expense. 
C)  loss. 
D)  asset.

Question 18

Variable costs,

Accepted Answer

A)  in total, remain constant within a relevant range 
B)  on a per unit basis, are constant as activity increases or decreases 
C)  on a per unit basis, decreases as activity decreases 
D)  in total, decrease when activity increases 
A)  in total, remain constant within a relevant range 
B)  on a per unit basis, are constant as activity increases or decreases 
C)  on a per unit basis, decreases as activity decreases 
D)  in total, decrease when activity increases

Question 19

TEK, Inc., is considering whether to replace a production machine with a newer model of the same machine. If TEK keeps the old machine, the trade-in value of the old equipment is an example of a(n)

Accepted Answer

A)  sunk cost 
B)  opportunity cost 
C)  avoidable cost 
D)  imputed cost 
A)  sunk cost 
B)  opportunity cost 
C)  avoidable cost 
D)  imputed cost

Identify each of the following costs as fixed-committed or fixed-discretionary by writing an "X" under one of the following headings:

A hospital requires one nurse for each eight patients. This is an example of a

Selling and administrative costs are classified as

An equipment lease that specifies payment of £1,000 per month plus £5 per machine hour used is an example of a

An equipment lease that specifies a payment of £5,000 per month plus £8 per machine hour used is an example of a

Which of the following costs would be classified as fixed costs with respect to volume?

Fixed cost per unit is £9 when 20,000 units are produced and £6 when 30,000 units are produced. What is the total fixed cost when nothing is produced?

Which of the following products would NOT use job-order production?

Indirect costs are usually allocated rather than traced to cost objects because

Cost behaviour analysis focuses on

Which of the following costs would be included as part of factory overhead?

Which of the following is a period cost?

Which one of the following sentences about step costs is true?

A steep slope in the variable cost line indicates a

If production volume increases from 8,000 to 10,000 units,

Which of the following costs incurred by a bus manufacturer would NOT be directly attributable to the finished product?

A cost used up in the production of revenues is a(n)

Variable costs,

TEK, Inc., is considering whether to replace a production machine with a newer model of the same machine. If TEK keeps the old machine, the trade-in value of the old equipment is an example of a(n)

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

Identify each of the following costs as fixed-committed or fixed-discretionary by writing an "X" under one of the following headings:

A hospital requires one nurse for each eight patients. This is an example of a

Selling and administrative costs are classified as

An equipment lease that specifies payment of £1,000 per month plus £5 per machine hour used is an example of a

An equipment lease that specifies a payment of £5,000 per month plus £8 per machine hour used is an example of a

Which of the following costs would be classified as fixed costs with respect to volume?

Fixed cost per unit is £9 when 20,000 units are produced and £6 when 30,000 units are produced. What is the total fixed cost when nothing is produced?

Which of the following products would NOT use job-order production?

Indirect costs are usually allocated rather than traced to cost objects because

Cost behaviour analysis focuses on

Which of the following costs would be included as part of factory overhead?

Which of the following is a period cost?

Which one of the following sentences about step costs is true?

A steep slope in the variable cost line indicates a

If production volume increases from 8,000 to 10,000 units,

Which of the following costs incurred by a bus manufacturer would NOT be directly attributable to the finished product?

A cost used up in the production of revenues is a(n)

Variable costs,

TEK, Inc., is considering whether to replace a production machine with a newer model of the same machine. If TEK keeps the old machine, the trade-in value of the old equipment is an example of a(n)

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