Module 1 Quiz

Which of the following is a period cost? Select one: a. sales promotion expenses b. direct material cost c. direct labor cost d. indirect manufacturing costs like plant insurance

a. sales promotion expenses

Sky High Company has two departments, X and Y. The following estimates are for the coming year: X Y Direct manufacturing labor-hours 20,000 40,000 Machine-hours 40,000 20,000 Manufacturing overhead $200,000 $400,000 A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is ________. Select one: a. $15 per direct labor-hour b. $10 per direct labor-hour c. $21 per direct labor-hour d. $12 per direct labor-hour

b. $10 per direct labor-hour

The East Company manufactures several different products. Unit costs associated with Product ORD210 are as follows: Direct materials $54 Direct manufacturing labor 8 Variable manufacturing overhead 11 Fixed manufacturing overhead 25 Sales commissions (2% of sales) 5 Administrative salaries 12 Total $115 What is the percentage of the total variable costs per unit associated with Product ORD105 with respect to total cost? Select one: a. 72% b. 68% c. 75% d. 70%

b. 68%

Which of the following statements about the direct/indirect cost classification is true? Select one: a. Indirect costs are always traced. b. Indirect costs are always allocated. c. The design of sales target affects the direct/indirect classification. d. The direct/indirect classification depends on the cost control measures.

b. Indirect costs are always allocated.

One reason indirect costs may be overapplied is because ________. Select one: a. the actual allocation base quantity exceeds the budgeted quantity b. budgeted indirect costs exceed actual indirect costs c. requisitioned direct materials exceed budgeted material costs d. Both A and B are correct.

b. budgeted indirect costs exceed actual indirect costs

The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is ________. Select one: a. cost accumulation b. cost assignment c. cost tracing d. conversion costing

b. cost assignment

If indirect-cost rates are calculated monthly, distortions might occur because of ________. Select one: a. rental costs paid monthly b. property tax payments made in July and December c. routine monthly preventive-maintenance costs that benefit future months d. salary hikes at the beginning of the financial year

b. property tax payments made in July and December

For a given job the direct costs associated with the job are ________. Select one: a. actual overhead b. raw materials c. sunk costs d. fixed costs

b. raw materials

Which of the following differentiates job costing from process costing? Select one: a. Job costing is used when each unit of output is identical, and process costing deals with unique products. b. Job costing is used when each unit of output is identical and not produced in batches, and process costing deals with unique products produced on large scale. c. Process costing is used when each unit of output is identical, and job costing deals with unique products not produced in batches. d. Job costing is used by manufacturing industries, and process costing is used by service industries.

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

Within the relevant range, if there is a change in the level of the cost driver, then ________. Select one: a. total fixed costs and total variable costs will change b. total fixed costs and total variable costs will remain the same c. total fixed costs will remain the same and total variable costs will change d. total fixed costs will change and total variable costs will remain the same

c. total fixed costs will remain the same and total variable costs will change

Which of the following statements about normal costing is true? Select one: a. Direct costs and indirect costs are traced 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 indirect 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.

The ________ approach carries the underallocated or overallocated amounts to overhead accounts in the following year. Select one: a. adjusted allocation-rate b. proration c. write-off to cost of goods sold d. None of these answers are correct.

d. None of these answers are correct.