Cost Accounting Exam 1

Which of the following is part of the service sector of our economy? a. a bank b. a shoe store c. a shoe producer d. a florist

a. a bank

Actual costs are defined as a. costs incurred b. direct costs c. indirect costs d. predicted costs

a. costs incurred

Financial accounting provides a historical perspective, whereas management accounting a. emphasizes the future in addition to historical reports b. only enables managers to make decisions c. emphasizes a current perspective decisions d. emphasizes reports to shareholders

a. emphasizes the future in addition to historical reports

____ measures and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization a. management accounting b. financial accounting c. planning d. control

a. management accounting

Which of the following statement is FALSE? a. product costs and inventoriable costs are the same b. inventoriable costs are important for GAAP c. inventoriable costs are a special case of product costs d. "product costs" refers to the particular costs allocated to a product for the purpose at hand

a. product costs and inventoriable costs are the same

____ is the generation of, and experimentation with, ideas related to new products, services, or processes a. research and development b. design of products, services, and processes c. production d. marketing

a. research and development

Cost tracing is a. the assignment of direct costs to the chosen cost object b. a function of cost allocation c. the process of tracking both direct and indirect costs associated with a cost object d. the process of determining the actual cost of the cost object

a. the assignment of direct costs to the chosen cost object

What is the professional designation for management accountants a. certified public accountant b. certified management accountant c. certified internal auditor d. certified financial executive

b. certified management accountant

____ is the term used to identify both the tracing of accumulated costs and the allocation of those costs to a cost object a. cost accumulation b. cost assignment c. cost tracing d. supervisory costing

b. cost assignment

Anything for which a separate measurement of cost is desired is a a. cost item b. cost object c. fixed cost item d. variable cost object

b. cost object

All of the following statements are correct EXCEPT a. costs may be indirect and variable b. costs may not be indirect and fixed c. costs may be direct and variable d. costs may be direct and fixed

b. costs may be indirect and fixed

____ is the after-sale support activities provided to customers a. distribution b. customer service c. production d. marketing

b. customer service

Management accounting may be deemed most successful if it a. helps creditors evaluate the company's performance b. helps managers improve their decisions c. is accurate d. is easily understood by the user

b. helps managers improve their decisions

____ is responsible for accumulating and reporting reliable results to all levels of management a. an accounting system b. scorekeeping c. management accounting d. attention directing

b. scorekeeping

Which of the following examples could be classified as a direct cost? a. the costs of an entire factory's electricity related to a product; the product line is the cost object b. the printing costs incurred for payroll check processing; the payroll check processing is the cost object c. the salary of a maintenance supervisor in the manufacturing plant; Product A is the cost object d. the costs incurred for electricity in the office; accounting department is the cost object

b. the printing costs incurred for payroll check processing; the payroll check processing is the cost object

Which statement about conversion costs is CORRECT using the two-part classification of costs? a. they include only direct manufacturing labor costs b. they include manufacturing overhead costs c. they include both direct manufacturing labor costs and manufacturing overhead costs d. they include indirect manufacturing labor costs but not manufacturing overhead costs

b. they include manufacturing overhead costs

The most common certification of internal accountants is a. CIA b. CPA c. CMA d. IMA

c. CMA

Which of the following includes both traced direct costs and allocated indirect costs? a. cost tracing b. cost pools c. cost assigned d. cost allocation

c. costs assigned

____ is the acquisition, coordination and assembly of resources to produce a product or deliver a service a. distribution b. customer service c. production d. marketing

c. production

Which one of the following is a variable cost in an insurance company? a. rent b. president's salary c. sales commissions d. property taxes

c. sales commissions

Using information obtained for a cost object, a manager may be able to able to determine all of the following EXCEPT a. the direct manufacturing labor costs of a job b. the direct manufacturing labor costs of a work station c. which customers should be denied discounts d. which customers' accounts require the most effort to maintain

c. which customers should be denied discounts

The process of assigning costs to groups of similar products or services by using an average basis is called a. a cost allocation system b. a cost assigned system c. a job costing system d. a process costing system

d. a process costing system

____ is (1) deciding on and taking actions that implement the planning and decisions and (2) deciding on performance evaluation and the related feedback that will help future decision making a. management accounting b. financial accounting c. planning d. control

d. control

All of the following are cost objects EXCEPT a. activities or processes b. customers c. outputs of processes d. cost assignments

d. cost assignments

Which of the following formulas would determine cost of goods sold in a manufacturing entity? a. beginning inventory + ending inventory - cost of goods manufactured = cost of goods sold b. cost of goods manufactured + ending inventory + beginning inventory = cost of goods sold c. beginning inventory - ending inventory - cost of goods manufactured = cost of goods sold d. cost of goods manufactured - ending inventory + beginning inventory = cost of goods sold

d. cost of goods manufactured - ending inventory + beginning inventory = cost of goods sold

Assigning direct costs to the chosen cost object is called a. cost allocation b. costs assignment c. cost pool d. cost tracing

d. cost tracing

Which of the following statements about normal costing is TRUE? a. direct costs and indirect costs are allocated using an actual rate b. direct costs and indirect costs are traced using budgeted rates c. direct costs are traced using a budgeted rate, and direct costs are allocated using an actual rate d. direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate

d. direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate

Which of the following statements would be INCORRECT in a manufacturing plant? a. completed goods are included in the finished goods inventory b. partially completed goods are part of the work-in-process category c. work-in-process may also be goods in process d. materials put into production are included in the direct materials

d. materials put into production are included in the direct materials

Many organizations now have management accountants whose responsibilities concentrate on a. financing the purchase of fixed assets b. internal auditing of multi-divisional units c. external reporting d. only the attention-directing or the problem-solving function

d. only the attention-directing or the problem-solving function

The total of the costs designated for a particular commodity is called its a. direct costs b. inventoriable costs c. marketing costs d. product costs

d. product costs

Which of the following lists a scorekeeping activity first, followed by an attention directing activity, followed by a problem-solving activity? a. recording sales to customers, customer returns, and accounts receivable b. recording sales, comparing the financial advantages of leasing a fleet of vehicles, and highlighting rapidly growing markets where the company may be underfunding its investment c. recording sales to customers, explaining ways to avoid cost overruns, and recording purchases from vendors d. recording sales, highlighting rapidly growing markets where the company may be underfunding its investment, and comparing the financial advantages of leasing a fleet of vehicles

d. recording sales, highlighting rapidly growing markets where the company may be underfunding its investment, and comparing the financial advantages of leasing a fleet of vehicles