Cost Accounting Ch. 1,2,4,5,17

Which of the following statements is true of a peanut-butter costing system?

A peanut-butter costing system broadly averages or spreads the cost of resources uniformly to cost objects.

Put the following ABC implementation steps in order ________. A Compute the allocation rates. B Compute the total cost of the products. C Identify the products that are the cost objects. D Select the cost allocation bases.

CDAB

Which of the following companies is likely to use a hybrid-costing system?

Circuits Corp, which sells a limited range of televisions, which go through similar manufacturing process

Managers use management accounting information to ________.

Communicate, develop, and implement strategies

Which of the following differentiates cost accounting and financial accounting?

Cost accounting measures information related to the costs of acquiring or using resources in an organization, whereas financial accounting measures a financial position of a company to investors, banks, and external parties.

Which of the following statements about customer value is true?

Creating value for customers is an important part of planning and implementing strategy.

Which of the following companies is most likely to use process costing?

Dental Inc., a company manufacturing and selling toothpaste on a large scale

________ is the detailed planning and engineering and testing of products, services, or processes.

Design

Which of the following statements about normal costing is true?

Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate

Which of the following statements about the cost-benefit approach is true?

In a cost-benefit analysis, both costs and benefits are not easy to measure.

Which of the following statements is true of process costing?

In a period of falling prices, weighted-average process-costing method will increase tax payments as compared to FIFO process-costing method.

Which of the following statements is true?

In a process-costing system, each unit uses approximately the same amount of resources.

Which of the following is true of indirect costs?

Indirect costs cannot be traced to a particular cost object in an economically feasible way.

Which of the following is an assumption under FIFO process-costing method?

It assumes that the ending work in process consists of only the lower-cost current-period units.

________ is an example of an output unit-level cost in the cost hierarchy.

Machine depreciation

________ sector companies purchase materials and components and convert them into finished goods.

Manufacturing

Which of the following is a sign that an ABC system may be useful for an organization?

Operations staff disagrees with accountants about the costs of manufacturing and marketing products and services.

Which of the following differentiates job costing from process costing?

Process costing is used when each unit of output is identical, and job costing deals with unique products not produced in batches.

Which item is an indication of integrity under the Standards of Ethical Conduct?

Refrain from engaging in any conduct that would prejudice carrying out duties ethically.

________ is a philosophy in which management improves operations throughout the value chain to deliver products and services that exceed customer expectations.

Total quality management

Transferred-in costs are treated as if they are ________.

a separate direct material added at the beginning of the process

Job-costing is likely to be used by________.

advertising agencies

Fixed costs depend on the ________.

amount of unchanged costs for a given time period

Direct costs ________.

are costs related to a particular cost object that can be traced to that cost object in a cost-effective manner

Control measures should ________.

be linked by feedback to help future planning

For a manufacturing company, direct labor costs may be included in ________.

both work-in-process inventory and finished goods inventory

In a process-costing system average unit costs are calculated ________.

by dividing total costs in a given accounting period by total units produced in that period

Strategy is formulated ________.

by identifying the most important customers

The Standards of Ethical Conduct for management accountants include concepts related to ________.

competence, confidentiality, integrity, and credibility

The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is ________.

cost assignment

Which of the following includes both traced direct costs and allocated indirect costs?

cost assignments

Inventoriable costs are costs of a product that are ________.

costs of a product that are considered assets in a company's balance sheet when the costs are incurred and that are expensed as cost of goods sold only when the product is sold

Prime costs include ________.

direct materials and direct manufacturing labor costs

Which of the following issues is addressed by the Sarbanes-Oxley legislation?

disclosure practices of public corporations

ABC systems ________.

highlight the different levels of activities

Strategy specifies ________.

how an organization matches its own capabilities with the opportunities in the marketplace

The advantage of using normal costing instead of actual costing is ________.

indirect costs are assigned to a job on a timely basis

A job that shows low profitability may be the result of ________.

inefficient direct manufacturing labor

Under the weighted-average method, the stage of completion of beginning work in process ________.

is irrelevant in determining the equivalent-unit calculation

An actual cost is ________.

is the cost incurred

A budget serves as much as a control tool as a planning tool because ________

it is a benchmark against which actual performance can be compared

Which of the following is a responsibility of the CFO?

managing short-term and long-term financing

Product-cost cross-subsidization ________.

means that if a company undercosts one of its products, it will overcost at least one of its other products

Under GAAP, for the purposes of calculating inventory costs, product costs include ________.

only inventoriable costs

Unit-level cost drivers are most appropriate as an overhead assignment base when ________.

only one product is manufactured

A report showing the actual financial results for a period compared to the budgeted financial results for that same period would most likely be called a ________.

performance report

Budgeted costs are ________.

planned or forecasted costs

Financial accounting provides the primary source of information for ________.

preparing the income statement for shareholders

For a given job the direct costs associated with the job are ________.

raw materials

A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of indirect cost for the soccer equipment line is the ________.

salary paid to plant supervisor

Products S5 and CP8 each are assigned $100.00 in indirect costs by a traditional costing system. An activity analysis revealed that although production requirements are identical, S5 requires 45 minutes less setup time than CP8. According to an ABC system, S5 uses a disproportionately ________.

smaller amount of batch-level costs

Which of the following is not a concern for management accountants in formulating a strategy?

strategizing compliance with GAAP (Generally Accepted Accounting Principles)

A well-conceived plan allows managers the ability to ________.

take advantage of unforeseen opportunities

An example of a numerator reason for calculating annual indirect-cost rates includes ________.

the number of units produced

Customer response time involves ________.

the speed at which an organization responds to customer requests

A single indirect-cost rate distort product costs because ________.

there is an assumption that all support activities affect all products

The value chain is the sequence of business functions in which ________.

usefulness is added to the products or services of an organization

Which of the following is true if the volume of sales increases (within a relevant range)?

variable cost increases

Inventoriable costs are expensed on the income statement ________.

when the products are sold

Classifying a cost as either direct or indirect depends upon ________.

whether the cost can be easily traced with the cost object

A distinct feature of the FIFO process-costing method is that the ________.

work done on beginning inventory before the current period is kept separate from the work done during the current period in the calculation of equivalent units