Question 1

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a mixed cost.

Accepted Answer

A) True 
 B)False

Question 2

A cost that has both fixed and variable components is known as a ____________________ cost.

Accepted Answer

The answer of A cost that has both fixed and...

Question 3

Jackson Company.
Jackson Company manufactures wood file cabinets.The following information is available for June of the current year.

Begining  Ending    Raw material inventory    $6,000     $7,500   Work in process inventory  17,300      11,700 Finished goods inventory21,000    16,300
The direct labor rate is $9.60 per hour and overhead for the month was $9,600.
Refer to Jackson Company.What are prime costs and conversion costs,respectively if there were 1,500 direct labor hours and $21,000 of raw material was purchased?

Accepted Answer

A) $29,100 and $33,900 
B) $33,900 and $24,000 
C) $33,900 and $29,100 
D) $24,000 and $33,900

Question 4

The relevant range is valid for all levels of activity.

Accepted Answer

A) True 
 B)False

Question 5

Distribution costs are an example of period costs.

Accepted Answer

A) True 
 B)False

Question 6

Stayton Enterprises
Inventories:  April 1   April 30 Raw material $20,000 $17,000  Work in process 12,000 8,000    Finished goods  30,000 39,000   Additional information for March:     Raw material purchased $45,000   Direct labor payroll  $36,000     Direct labor rate per hour  $ 8.00     Overhead rate per direct labor hour $ 10.00 
Refer to Stayton Enterprises.For April,conversion cost incurred was

Accepted Answer

A) $36,000 
B) $45,000. 
C) $81,000. 
D) $84,000.

Question 7

In June 20y0,the Johnson Company has Cost of Goods Manufactured of $296,000;beginning Finished Goods Inventory of $29,730;and ending Finished Goods Inventory of $19,990.Prepare an income statement in good form.(Ignore taxes. )The following additional information is available:
Selling Expenses                              $ 40,500 
Administrative Expenses                   $ 19,700 
Sales                                                     $ 475,600

Accepted Answer

The answer of In June 20y0,the Johnson Company has Cost...

Question 8

There is typically a direct relationship between prevention costs and failure costs.

Accepted Answer

A) True 
 B)False

Question 9

The three primary inventory accounts in a manufacturing company are

Accepted Answer

A) Merchandise Inventory,Supplies Inventory,and Finished Goods Inventory. 
B) Merchandise Inventory,Work in Process Inventory,and Finished Goods Inventory. 
C) Supplies Inventory,Work in Process Inventory,and Finished Goods Inventory. 
D) Raw Material Inventory,Work in Process Inventory,and Finished Goods Inventory.

Question 10

Period costs

Accepted Answer

A) are expensed in the same period in which they are incurred. 
B) are always variable costs. 
C) remain unchanged over a given period of time. 
D) are associated with the periodic inventory methoD.

Question 11

A variable cost will be an effective cost driver.

Accepted Answer

A) True 
 B)False

Question 12

The final figure in the Schedule of Cost of Goods Manufactured represents the

Accepted Answer

A) cost of goods sold for the period. 
B) total cost of manufacturing for the period. 
C) total cost of goods started and completed this period. 
D) total cost of goods completed for the perioD.

Question 13

Both accountants and economists view variable costs as linear in nature.

Accepted Answer

A) True 
 B)False

Question 14

In an actual cost system,actual production overhead costs are typically accumulated in an Overhead Control account and assigned to Work in Process at the end of the period.

Accepted Answer

A) True 
 B)False

Question 15

In a service industry,direct materials are usually significant in amount and can be easily traced to a cost object.

Accepted Answer

A) True 
 B)False

Question 16

Using the information below,prepare a Schedule of Cost of Goods Manufactured (in good form)for the Gleason Company for June 20y0:

	Begining	Ending
Raw material inventory	$6,700	$8,900
Work in process inventory	17,700	22,650
Finished goods inventory	29,730	19,900

Additional information: purchases of raw material were $46,700;19,700 direct labor hours were worked at $11.30 per hour;overhead costs were $33,300.

Accepted Answer

The answer of Using the information below,prepare a Schedule of...

Question 17

Petrie Company manufactures chairs.If raw material used was $100,000 and Raw Material Inventory at the beginning and end of the period,respectively,was $27,000 and $31,000,what was amount of raw material was purchased?

Accepted Answer

A) $ 96,000 
B) $104,000 
C) $158,000 
D) $131,000

Question 18

In a perpetual inventory system,the sale of items for cash consists of two entries.One entry is a debit to Cash and a credit to Sales.The other entry is a debit to

Accepted Answer

A) Work in Process Inventory and a credit to Finished Goods Inventory. 
B) Finished Goods Inventory and a credit to Cost of Goods Sold. 
C) Cost of Goods Sold and a credit to Finished Goods Inventory. 
D) Finished Goods Inventory and a credit to Work in Process Inventory.

Question 19

Which of the following would need to be allocated to a cost object?

Accepted Answer

A) direct material 
B) direct labor 
C) direct production costs 
D) indirect production costs

Question 20

Retailers generally have a much lower degree of conversion than do manufacturing or professional firms.

Accepted Answer

A) True 
 B)False

	Begining	Ending
Raw material inventory	$6,000	$7,500
Work in process inventory	17,300	11,700
Finished goods inventory	21,000	16,300

Inventories:	April 1	April 30
Raw material	$20,000	$17,000
Work in process	12,000	8,000
Finished goods	30,000	39,000
Additional information for March:
Raw material purchased	$45,000
Direct labor payroll	$36,000
Direct labor rate per hour	$ 8.00
Overhead rate per direct labor hour	$ 10.00

Exam 2: Cost Terminology and Cost Behaviors

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a mixed cost.

A cost that has both fixed and variable components is known as a ____________________ cost.

The relevant range is valid for all levels of activity.

Distribution costs are an example of period costs.

There is typically a direct relationship between prevention costs and failure costs.

The three primary inventory accounts in a manufacturing company are

Period costs

A variable cost will be an effective cost driver.

The final figure in the Schedule of Cost of Goods Manufactured represents the

Both accountants and economists view variable costs as linear in nature.

In an actual cost system,actual production overhead costs are typically accumulated in an Overhead Control account and assigned to Work in Process at the end of the period.

In a service industry,direct materials are usually significant in amount and can be easily traced to a cost object.

Petrie Company manufactures chairs.If raw material used was $100,000 and Raw Material Inventory at the beginning and end of the period,respectively,was $27,000 and $31,000,what was amount of raw material was purchased?

In a perpetual inventory system,the sale of items for cash consists of two entries.One entry is a debit to Cash and a credit to Sales.The other entry is a debit to

Which of the following would need to be allocated to a cost object?

Retailers generally have a much lower degree of conversion than do manufacturing or professional firms.