Question 1

________ use(s)the output of an activity-based cost accounting system to improve the operational control of an organization.

Accepted Answer

A)  Cost accounting 
B)  Cost-volume-profit models 
C)  Activity-based management 
D)  Traditional costing system 
A)  Cost accounting 
B)  Cost-volume-profit models 
C)  Activity-based management 
D)  Traditional costing system

Question 2

Slocum Company has determined the following information about a new product.The manufacturing process used for the product is very complex and it has a higher proportion of indirect costs than direct costs.The company wants a 100% markup on cost.The following data is available:
$\begin{array} { l  }
 \text {Product cost according to traditional costing system }&\$ 4.00 \text { per unit}\
 \text {Product cost according to activity-based costing system }&\$ 7.00 \text { per unit}\
\end{array}$

What price per unit should Slocum Company use for this new product?

Accepted Answer

A)  $4.00 
B)  $7.00 
C)  $8.00 
D)  $14.00 
A)  $4.00 
B)  $7.00 
C)  $8.00 
D)  $14.00

Question 3

When comparing traditional costing systems to activity-based costing systems,the analysis reveals that ________.

Accepted Answer

A)  high volume products are undercosted with traditional costing systems 
B)  high volume products are overcosted with traditional costing systems 
C)  low volume products are overcosted with traditional costing systems 
D)  both high volume and low volume products are undercosted with traditional costing systems 
A)  high volume products are undercosted with traditional costing systems 
B)  high volume products are overcosted with traditional costing systems 
C)  low volume products are overcosted with traditional costing systems 
D)  both high volume and low volume products are undercosted with traditional costing systems

Question 4

A cost accounting system typically includes two processes: cost allocation and cost determination.

Accepted Answer

A) True 
 B)False

Question 5

When a laptop computer is the cost object,the keyboard would be classified as a(n)________.

Accepted Answer

A)  direct cost 
B)  allocated cost 
C)  indirect cost 
D)  unallocated cost 
A)  direct cost 
B)  allocated cost 
C)  indirect cost 
D)  unallocated cost

Question 6

When allocating indirect production costs to cost objects,which of the following is/are a cost-allocation base(s)?

Accepted Answer

A)  some measure of input or output that determines the amount of cost to be allocated to a cost object 
B)  a measure used to assign indirect costs to cost objects 
C)  a measure used to assign direct costs to cost objects 
D)  A and B 
A)  some measure of input or output that determines the amount of cost to be allocated to a cost object 
B)  a measure used to assign indirect costs to cost objects 
C)  a measure used to assign direct costs to cost objects 
D)  A and B

Question 7

For manufacturing companies,an example of a period cost is ________.

Accepted Answer

A)  direct materials 
B)  research and development expense 
C)  direct labor 
D)  factory overhead 
A)  direct materials 
B)  research and development expense 
C)  direct labor 
D)  factory overhead

Question 8

The McCain Company manufactures several products.The McCain Company has gathered the following information for the year ended December 31,2015:
 $\begin{array}{ll}
\text { Sales } & \$ 110,000 \
\text { Direct materials used } & \$ 10,700 \
\text { Fixed indirect production costs } & \$ 10,900 \
\text { Variable indirect production costs } & \$ 7,900 \
\text { Fixed direct labor } & \$ 10,300 \
\text { Variable direct labor } & \$ 12,300 \
\text { Fixed selling expenses } & \$ 33,040 \
\text { Variable selling expenses } & \$ 3,440 \
\text { Finished Goods Inventory, January 1, 2015 } & \$ 24,000 \
\text { Finished Goods Inventory, December 31,2015 } & \$ 22,000 \
\text { Work-In-Process Inventory, January 1, 2015 } & 0 \
\text { Work-In-Process Inventory, December 31,2015 } & 0
\end{array}$ 
Requirements: 
A) Compute the Cost of Goods Manufactured for the year ended December 31, 2015.
B) Compute the Cost of Goods Sold for the year ended December 31, 2015.
C) Compute the Net Income for the year ended December 31, 2015.

Accepted Answer

A)$52,100($10,700 + $10,900 +

Question 9

Rent Expense on the Factory Building of $100,000 is allocated to three departments.The cost-allocation base for this expense is number of square feet,which equals 50,000 square feet.Information for the three departments housed in the factory building are as follows:
$\begin{array}{lll}
 \text {Department }& \text { Square Feet}& \text { Cubic Feet}\
\text { Department A } & 15,000 & 15,000 \
\text { Department B } & 5,000 & 5,000 \
\text { Department C } & 30,000 & 20,000 \

\end{array}$
How much Rent Expense is allocated to the three departments?
$\begin{array}{lll}
&\text { Department A }&\text { Department B }&\text { Department C }\
A)&\$ 15,000 & \$ 5,000 & \$ 30,000 \
B)&\$ 37,500 & \$ 12,500 & \$ 50,000 \
C)&\$ 30,000 & \$ 10,000 & \$ 60,000
\end{array}$
D) none of the above

Accepted Answer

The answer of Rent Expense on the Factory Building of...

Question 10

Which of the following purposes of cost allocation provides information for operational control in an organization?

Accepted Answer

A)  to compute income and asset valuations for financial reports 
B)  to compute Cost of Goods Sold for financial reports 
C)  to determine the number of cost drivers for a product 
D)  to provide the desired motivation and to give feedback for performance evaluation 
A)  to compute income and asset valuations for financial reports 
B)  to compute Cost of Goods Sold for financial reports 
C)  to determine the number of cost drivers for a product 
D)  to provide the desired motivation and to give feedback for performance evaluation

Question 11

An unallocated cost in one company may be an allocated cost in another company.

Accepted Answer

A) True 
 B)False

Question 12

A cost accounting system called GPK uses ________ cost pools to allocate ________.

Accepted Answer

A)  10-20; indirect manufacturing costs 
B)  1-10; direct manufacturing costs 
C)  400 to 2000; indirect manufacturing costs 
D)  1-20; direct manufacturing costs 
A)  10-20; indirect manufacturing costs 
B)  1-10; direct manufacturing costs 
C)  400 to 2000; indirect manufacturing costs 
D)  1-20; direct manufacturing costs

Question 13

Which of the following statements about period costs is FALSE?

Accepted Answer

A)  Period costs refer to distribution costs and design costs. 
B)  Period costs include R&D expenses, marketing costs and customer service costs. 
C)  Merchandising and manufacturing firms treat period costs differently. 
D)  For merchandising firms, Cost of Goods Sold is not a period cost. 
A)  Period costs refer to distribution costs and design costs. 
B)  Period costs include R&D expenses, marketing costs and customer service costs. 
C)  Merchandising and manufacturing firms treat period costs differently. 
D)  For merchandising firms, Cost of Goods Sold is not a period cost.

Question 14

In general,more costs are direct when a department is the cost object than when a product or service is the cost object.

Accepted Answer

A) True 
 B)False

Question 15

In a manufacturing company,product costs used for external reporting include ________.

Accepted Answer

A)  direct material costs plus direct labor cost only 
B)  indirect production costs only 
C)  direct material costs plus direct labor cost plus indirect production costs 
D)  direct material costs plus nonproduction costs 
A)  direct material costs plus direct labor cost only 
B)  indirect production costs only 
C)  direct material costs plus direct labor cost plus indirect production costs 
D)  direct material costs plus nonproduction costs

Question 16

The wages of the janitor in the factory are direct costs for a manufactured product.

Accepted Answer

A) True 
 B)False

Question 17

Allocation of costs to cost objects may be described as absorb or apply.

Accepted Answer

A) True 
 B)False

Question 18

To determine the cost of a product,which of the following are followed?

Accepted Answer

A)  first step, cost assignment and second step, cost allocation 
B)  first step, cost accumulation and second step, cost assignment 
C)  first step, cost allocation and second step, cost apportionment 
D)  first step, cost absorption and second step, cost attribution 
A)  first step, cost assignment and second step, cost allocation 
B)  first step, cost accumulation and second step, cost assignment 
C)  first step, cost allocation and second step, cost apportionment 
D)  first step, cost absorption and second step, cost attribution

Question 19

An example of a strategic management decision is the decision to outsource a particular value-chain function.

Accepted Answer

A) True 
 B)False

Question 20

A value-added cost is the cost of an activity that a company can eliminate without affecting the product's value to the customer.

Accepted Answer

A) True 
 B)False

________ use(s)the output of an activity-based cost accounting system to improve the operational control of an organization.

When comparing traditional costing systems to activity-based costing systems,the analysis reveals that ________.

A cost accounting system typically includes two processes: cost allocation and cost determination.

When a laptop computer is the cost object,the keyboard would be classified as a(n)________.

When allocating indirect production costs to cost objects,which of the following is/are a cost-allocation base(s)?

For manufacturing companies,an example of a period cost is ________.

Which of the following purposes of cost allocation provides information for operational control in an organization?

An unallocated cost in one company may be an allocated cost in another company.

A cost accounting system called GPK uses cost pools to allocate .

Which of the following statements about period costs is FALSE?

In general,more costs are direct when a department is the cost object than when a product or service is the cost object.

In a manufacturing company,product costs used for external reporting include ________.

The wages of the janitor in the factory are direct costs for a manufactured product.

Allocation of costs to cost objects may be described as absorb or apply.

To determine the cost of a product,which of the following are followed?

An example of a strategic management decision is the decision to outsource a particular value-chain function.

A value-added cost is the cost of an activity that a company can eliminate without affecting the product's value to the customer.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

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

________ use(s)the output of an activity-based cost accounting system to improve the operational control of an organization.

When comparing traditional costing systems to activity-based costing systems,the analysis reveals that ________.

A cost accounting system typically includes two processes: cost allocation and cost determination.

When a laptop computer is the cost object,the keyboard would be classified as a(n)________.

When allocating indirect production costs to cost objects,which of the following is/are a cost-allocation base(s)?

For manufacturing companies,an example of a period cost is ________.

Which of the following purposes of cost allocation provides information for operational control in an organization?

An unallocated cost in one company may be an allocated cost in another company.

A cost accounting system called GPK uses ________ cost pools to allocate ________.

Which of the following statements about period costs is FALSE?

In general,more costs are direct when a department is the cost object than when a product or service is the cost object.

In a manufacturing company,product costs used for external reporting include ________.

The wages of the janitor in the factory are direct costs for a manufactured product.

Allocation of costs to cost objects may be described as absorb or apply.

To determine the cost of a product,which of the following are followed?

An example of a strategic management decision is the decision to outsource a particular value-chain function.

A value-added cost is the cost of an activity that a company can eliminate without affecting the product's value to the customer.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

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

A cost accounting system called GPK uses cost pools to allocate .