314 MC
Product costs used for pricing and product-mix decisions generally include: A) manufacturing costs only B) design costs plus manufacturing costs C) all costs incurred along the value chain D) distribution costs only
c
The most likely cost driver of direct labor costs is the: A) number of machine setups for the product B) number of miles driven C) number of production hours D) number of machine hours
c
Which of the following companies is part of the merchandising sector of our economy? A) Ford B) Hewlett Packard C) Macy's D) Michael Toback Accounting Firm
c
Which of the following is a mixed cost? A) monthly rent payment B) manager's salary C) monthly electric bill D) direct materials
c
Which of the following statements is FALSE? A) Product costs and inventoriable costs are interchangeable terms. B) Inventoriable costs are important for GAAP. C) Inventoriable costs are a special case of period costs. D) "Product costs" refers to the particular costs of a product for the purpose at hand.
c
Which of the following would be LEAST likely to be a cost driver for a company's human resource costs? A) the number of employees in the human resource department B) the number of job applications processed C) the number of units sold D) the square footage of the office space used by the human resource department
c
Which one of the following is a variable cost for an insurance company? A) rent B) president's salary C) sales commissions D) property taxes
c
Which statement is true? A) A direct cost of one cost object cannot be an indirect cost of another cost object. B) All variable costs are direct costs. C) A direct cost of one cost object can be an indirect cost of another cost object. D) All fixed costs are direct costs.
c
Within the relevant range, if there is a change in the level of the cost driver, then: 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
Yahoo, an Internet search firm, would be classified as: A) a manufacturing-sector company B) a merchandising-sector company C) a service sector company D) None of these answers are correct
c
________ - sector companies purchase materials and components and convert them into finished goods. A) Merchandising B) Service C) Manufacturing D) Professional
c
________ are all manufacturing costs that are related to the cost object but CANNOT be traced to that cost object. A) Direct material costs B) Period costs C) Indirect manufacturing costs D) Direct manufacturing labor costs
c
A band of normal activity or volume in which specific cost-volume relationships are maintained is referred to as the: A) average range B) cost-allocation range C) cost driver range D) relevant range
d
A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of indirect cost for the soccer equipment line is: A) material used to make the soccer balls B) labor to shape the leather used to make the soccer ball C) shift supervisor for the soccer line D) plant supervisor
d
An understanding of the underlying behavior of costs helps in all of the following EXCEPT: A) costs can be better estimated as volume expands and contracts B) true costs can be better evaluated C) process inefficiencies can be better identified and as a result improved D) sales volume can be better estimated
d
Cost objects include: A) products B) customers C) departments D) All of these answers are correct.
d
Debated items that some companies include as direct manufacturing labor include: A) fringe benefits B) vacation pay C) training time D) All of these answers are correct.
d
For a manufacturing company, direct material costs may be included in: A) direct materials inventory only B) merchandise inventory only C) both work-in-process inventory and finished goods inventory D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts
d
For merchandising companies, inventoriable costs include all of the following EXCEPT: A) the cost of the goods themselves B) incoming freight costs C) insurance costs for the goods D) outgoing freight costs
d
In the cost classification system used by manufacturing firms, assembly workers' wages would be included in all of the following EXCEPT: A) product cost B) prime cost C) conversion cost D) period cost
d
Indirect manufacturing costs: A) can be traced to the product that created the costs B) can be easily identified with the cost object C) generally include the cost of material and the cost of labor D) may include both variable and fixed costs
d
Job costing information is used: A) to develop strategies B) to make pricing decisions C) for external financial reporting D) All of these answers are correct.
d
Manufacturing costs include all of the following EXCEPT: A) costs incurred inside the factory B) both direct and indirect costs C) both variable and fixed costs D) both direct and period costs
d
Product cost for pricing and product-mix decisions may include all costs EXCEPT: A) research and development costs B) customer-service costs C) marketing costs D) all of the above costs may be included in pricing and product mix decisions
d
Product costs may refer to: A) inventoriable costs for external reporting B) design costs plus manufacturing costs for government contracts C) all costs incurred along the value chain for pricing decisions D) All of these answers are correct
d
Service-sector companies report: A) only merchandise inventory B) only finished goods inventory C) direct materials inventory, work-in-process inventory, and finished goods inventory accounts D) no inventory accounts
d
The determination of a cost as either direct or indirect depends upon the: A) accounting system B) allocation system C) cost tracing system D) cost object chosen
d
When making decisions: A) it is best to use average costs B) it is best to use unit costs C) it is best to use total costs rather than unit costs D) All of these types of costs can be used for decision making; it varies depending on the decision required.
d
Which of the following formulas determine cost of goods sold in a manufacturing entity? A) Beginning work-in-process inventory + Cost of goods manufactured - Ending work-in-process inventory = Cost of goods sold B) Beginning work-in-process inventory + Cost of goods manufactured + Ending work-in-process inventory = Cost of goods sold C) Cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold D) Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold
d
Which of the following is NOT a period cost? A) marketing costs B) general and administrative costs C) research and development costs D) direct materials
d
Within the relevant range, if there is a change in the level of the cost driver, then: A) fixed and variable costs per unit will change B) fixed and variable costs per unit will remain the same C) fixed costs per unit will remain the same and variable costs per unit will change D) fixed costs per unit will change and variable costs per unit will remain the same
d
________ - sector companies provide intangible products. A) Professional B) Manufacturing C) Merchandising D) Service
d
A cost system determines the cost of a cost object by: A) accumulating and then assigning costs B) accumulating costs C) assigning and then accumulating costs D) assigning costs
a
Actual costs are: A) the costs incurred B) budgeted costs C) estimated costs D) forecasted costs
a
All of the following are true EXCEPT that indirect costs: A) may be included in prime costs B) are not easily traced to products or services C) vary with the selection of the cost object D) may be included in manufacturing overhead
a
Cost behavior refers to: A) how costs react to a change in the level of activity B) whether a cost is incurred in a manufacturing, merchandising, or service company C) classifying costs as either inventoriable or period costs D) whether a particular expense has been ethically incurred
a
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
Direct materials inventory would normally include: A) direct materials in stock and awaiting use in the manufacturing process B) goods partially worked on but not yet fully completed C) goods fully completed but not yet sold D) products in their original form intended to be sold without changing their basic form
a
Fixed costs: A) may include either direct or indirect costs B) vary with production or sales volumes C) include parts and materials used to manufacture a product D) can be adjusted in the short run to meet actual demands
a
For a printing company, the cost of paper is classified as a: A) direct material cost B) direct manufacturing labor cost C) manufacturing overhead cost D) period cost
a
For external reporting: A) costs are classified as either inventoriable or period costs B) costs reflect current values C) there are no prescribed rules since no one is exactly sure how investors and creditors will use these numbers D) costs include amounts that reflect both current and future benefits
a
For manufacturing firms, inventoriable costs include: A) plant supervisor salaries B) research and development costs C) costs of dealing with customers after the sale D) distribution costs
a
Inventoriable costs for external reporting purposes are also called: A) product costs B) period costs C) variable costs D) direct manufacturing costs
a
Manufacturing overhead costs are also referred to as: A) indirect manufacturing costs B) prime costs C) period costs D) direct material
a
Merchandising companies normally report: A) only merchandise inventory B) only finished goods inventory C) direct materials inventory, work-in-process inventory, and finished goods inventory accounts D) no inventory accounts
a
Period costs: A) are treated as expenses in the period they are incurred B) are directly traceable to products C) include direct labor D) are also referred to as manufacturing overhead costs
a
Prime costs include: A) direct materials and direct manufacturing labor costs B) direct manufacturing labor and manufacturing overhead costs C) direct materials and manufacturing overhead costs D) only direct materials
a
Product cost for reimbursement under government contracts may include all costs EXCEPT: A) marketing costs B) design costs C) production costs D) research and development costs
a
Product costs used for external reporting generally include: A) manufacturing costs only B) design costs plus manufacturing costs C) all costs incurred along the value chain D) All of these answers are correct.
a
The collection of accounting data in some organized way is: A) cost accumulation B) cost assignment C) cost tracing D) conversion costing
a
The cost of inventory reported on the balance sheet may include all of the following EXCEPT: A) customer-service costs B) wages of the plant supervisor C) depreciation of the factory equipment D) the cost of parts used in the manufacturing process
a
The income statement of a service-sector firm reports: A) period costs only B) inventoriable costs only C) both period and inventoriable costs D) period and inventoriable costs but at different times; the reporting varies
a
Which of the following companies is part of the manufacturing sector of our economy? A) Nike B) Barnes & Noble C) Corvette Law Firm D) Sears, Roebuck, and Company
a
Which of the following does NOT affect the direct/indirect classification of a cost? A) the level of budgeted profit for the next year B) the materiality of the cost in question C) available technology to gather information about the cost D) the design of the operation
a
Which of the following is a fixed cost for an automobile manufacturing plant? A) administrative salaries B) electricity used by assembly-line machines C) sales commissions D) windows for each car produced
a
Which of the following statements about the direct/indirect cost classification is NOT true? A) Indirect costs are always traced. B) Indirect costs are always allocated. C) The design of operations affects the direct/indirect classification. D) The direct/indirect classification depends on the choice of cost object.
a
________ - sector companies purchase and then sell tangible products without changing their basic form. A) Merchandising B) Professional C) Service D) Manufacturing
a
________ include the compensation of all manufacturing labor that can be traced to the cost object. A) Direct manufacturing labor costs B) Indirect manufacturing costs C) Direct material costs D) Manufacturing overhead costs
a
48) Which of the following formulas determine cost of goods sold in a merchandising entity? A) Beginning inventory + Purchases + Ending inventory = Cost of goods sold B) Beginning inventory + Purchases - Ending inventory = Costs of goods sold C) Beginning inventory - Purchases + Ending inventory = Cost of goods sold D) Beginning inventory - Ending inventory - Purchases = Cost of goods sold
b
A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of direct costs for the golf equipment line are: A) beverages provided daily in the plant break room B) monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver C) salaries of the clerical staff that work in the company administrative offices D) utilities paid for the manufacturing plant
b
A mixed cost is: A) a fixed cost B) a cost with fixed and variable elements C) a variable cost D) always an indirect cost
b
A plant manufactures several different products. The wages of the plant supervisor can be classified as a(n): A) direct cost B) inventoriable cost C) variable cost D) period cost
b
A unit cost is computed by: A) multiplying total cost by the number of units B) dividing total cost by the number of units C) dividing variable cost by the number of units D) adding variable cost to fixed cost
b
At a plant where a union agreement sets annual salaries and conditions, annual labor costs usually: A) are considered a variable cost B) are considered a fixed cost C) depend on the scheduling of floor workers D) depend on the scheduling of production runs
b
Conversion costs include: A) direct materials and direct manufacturing labor costs B) direct manufacturing labor and manufacturing overhead costs C) direct materials and manufacturing overhead costs D) only direct materials
b
Cost assignment : A) is always arbitrary B) is includes tracing and allocating C) is the same as cost accumulation D) is finding the difference between budgeted and actual costs
b
Costs that are initially recorded as assets and expensed when sold are called: A) period costs B) inventoriable costs C) variable costs D) fixed costs
b
Fixed costs depend on the: A) amount of resources used B) amount of resources acquired C) volume of production D) volume of sales
b
If each motorcycle requires a belt that costs $20 and 2,000 motorcycles are produced for the month, the total cost for belts is: A) considered to be a direct fixed cost B) considered to be a direct variable cost C) considered to be an indirect fixed cost D) considered to be an indirect variable cost
b
Inventoriable costs: A) include administrative and marketing costs B) are expensed in the accounting period in which the products are sold C) are particularly useful in management accounting D) are also referred to as nonmanufacturing costs
b
Manufacturing overhead costs in an automobile manufacturing plant most likely include: A) labor costs of the painting department B) indirect material costs such as lubricants C) sales commissions D) steering wheel costs
b
Manufacturing overhead costs may include all of the following EXCEPT: A) salary of the plant supervisor B) labor that can be traced to individual products C) material that can be traced to individual products D) overtime premiums paid to plant workers
b
Product costs used for government contracts generally include: A) manufacturing costs only B) design costs plus manufacturing costs C) all costs incurred along the value chain D) distribution costs only
b
The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is: A) cost accumulation B) cost assignment C) cost tracing D) conversion costing
b
The most likely cost driver of distribution costs is the: A) number of parts within the product B) number of miles driven C) number of products manufactured D) number of production hours
b
Total manufacturing costs equal: A) direct materials + prime costs B) direct materials + conversion costs C) direct manufacturing labor costs + prime costs D) direct manufacturing labor costs + conversion costs
b
Variable costs: A) are always indirect costs B) increase in total when the actual level of activity increases C) include most personnel costs and depreciation on machinery D) can always be traced directly to the cost object
b
Wages paid to machine operators on an assembly line are classified as a: A) direct material cost B) direct manufacturing labor cost C) manufacturing overhead cost D) period cost
b
Which of the following companies is part of the service sector of our economy? A) Target B) Citibank C) Ford D) Amazon.com
b
Which of the following statements is FALSE? A) There is a cause-and-effect relationship between the cost driver and the amount of cost. B) Fixed costs have cost drivers over the short run. C) Over the long run all costs have cost drivers. D) Volume of production is a cost driver of direct manufacturing costs
b
Which one of the following items is a direct cost? A) Customer-service costs of a multiproduct firm; Product A is the cost object. B) Printing costs incurred for payroll check processing; payroll check processing is the cost object. C) The salary of a maintenance supervisor in a multiproduct manufacturing plant; Product B is the cost object. D) Utility costs of the administrative offices; the accounting department is the cost object.
b
Which statement is true? A) All variable costs are direct costs. B) Because of a cost-benefit tradeoff, some direct costs may be treated as indirect costs. C) All fixed costs are indirect costs. D) All direct costs are variable costs
b
Work-in-process inventory would normally include: A) direct materials in stock and awaiting use in the manufacturing process B) goods partially worked on but not yet fully completed C) goods fully completed but not yet sold D) products in their original form intended to be sold without changing their basic form
b
XIAN Manufacturing produces a unique valve, and has the capacity to produce 50,000 valves annually. Currently XIAN produces 40,000 valves and is thinking about increasing production to 45,000 valves next year. What is the most likely behavior of total manufacturing costs and unit manufacturing costs given this change? A) Total manufacturing costs will increase and unit manufacturing costs will stay the same. B) Total manufacturing costs will increase and unit manufacturing costs will decrease. C) Total manufacturing costs will stay the same and unit manufacturing costs will stay the same. D) Total manufacturing costs will stay the same and unit manufacturing costs will decrease.
b
________ are the acquisition costs of all materials that eventually become part of the cost object and can be traced to the cost object. A) Direct manufacturing labor costs B) Direct material costs C) Indirect manufacturing costs D) Manufacturing overhead costs
b
) Inventoriable costs are expensed on the income statement: A) when direct materials for the product are purchased B) after the products are manufactured C) when the products are sold D) not at any particular time, it varies
c
Budgeted costs are: A) the costs incurred this year B) the costs incurred last year C) planned or forecasted costs D) competitor's costs
c
Classifying a cost as either direct or indirect depends upon: A) the behavior of the cost in response to volume changes B) whether the cost is expensed in the period in which it is incurred C) whether the cost can be easily identified with the cost object D) whether an expenditure is avoidable or not in the future
c
Cost allocation is: A) the process of tracking both direct and indirect costs associated with a cost object B) the process of determining the actual cost of the cost object C) the assignment of indirect costs to the chosen cost object D) a function of cost tracing
c
Costs expensed on the income statement in the accounting period incurred are called: A) direct costs B) indirect costs C) period costs D) inventoriable costs
c
Finished goods inventory would normally include: A) direct materials in stock and awaiting use in the manufacturing process B) goods partially worked on but not yet fully completed C) goods fully completed but not yet sold D) products in their original form intended to be sold without changing their basic form
c
For a automobile manufacturer, period costs include the cost of: A) the dashboard B) labor used for assembly C) advertising D) assembly-line equipment
c
For a manufacturing company, direct labor costs may be included in: A) direct materials inventory only B) merchandise inventory only C) both work-in-process inventory and finished goods inventory D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts
c
For a manufacturing company, indirect manufacturing costs may be included in: A) direct materials inventory only B) merchandise inventory only C) both work-in-process inventory and finished goods inventory D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts
c
For a manufacturing-sector company, the cost of factory depreciation is classified as a: A) direct material cost B) direct manufacturing labor cost C) manufacturing overhead cost D) period cost
c
In making product mix and pricing decisions, managers should focus on: A) total costs B) unit costs C) variable costs D) fixed costs
c
In order to make decisions, managers need to know: A) actual costs B) budgeted costs C) both costs D) neither cost
c
In the cost classification system used by manufacturing firms, total manufacturing costs would include all of the following EXCEPT: A) direct materials costs and conversion costs B) direct materials costs, direct manufacturing labor costs, and manufacturing overhead costs C) indirect materials costs, indirect manufacturing labor costs, and manufacturing overhead costs D) prime costs and manufacturing overhead costs
c
Manufacturing-sector companies report: A) only merchandise inventory B) only finished goods inventory C) direct materials inventory, work-in-process inventory, and finished goods inventory accounts D) no inventory accounts
c
Period costs: A) include only fixed costs B) seldom influence financial success or failure C) include the cost of selling, delivering, and after-sales support for customers D) should be treated as an indirect cost rather than as a direct manufacturing cost
c
Product cost for financial statement purposes may include: A) all costs allowed by government agencies B) all costs included for pricing and product-mix decisions C) production costs D) all costs except marketing costs
c
