Accounting 305 Final

The cost to be predicted is referred to as the a) dependent variable b) independent variable c) cost driver d) regression

a) dependent variable

In the manufacturing sector, a) fixed overhead costs are subtracted to determine gross margin b) only variable costs are subtracted to determine gross margin c) fixed overhead costs are subtracted to determine contribution margin d) all operating costs are subtracted to determine contribution margin

a) fixed overhead costs are subtracted to determine gross margin

In the estimation of a cost function using quantitative analysis, the independent variable a) is the factor used to predict the dependent variable b) is the product of total costs and slope coefficient c) is the cost to be predicted d) is the product of fixed costs and slope coefficient

a) is the factor used to predict the dependent variable

For a manufacturing sector company, the cost of factory depreciation is classified as a: a) manufacturing overhead cost b) direct material cost c) direct manufacturing labor cost d) period cost

a) manufacturing overhead cost

A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of indirect cost for the soccer equipment line is the a) salary paid to plant supervisor b) labor to shape the leather used to make the soccer ball c) material used to manufacture the soccer studs d) material used to make the soccer balls

a) salary paid to plant supervisor

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

a) sales promotion expenses

Direct materials inventory would normally include: a) products in their original form intended to be sold without changing their basic form b) direct materials in stock and awaiting use in the manufacturing process c) goods fully completed but not yet sold d) goods partially worked on but not yet fully completed

b) direct materials in stock and awaiting use in the manufacturing process

Which of the following is true if the production volume decreases? a) variable cost per unit increases b) fixed cost per unit increases c) variable cost per unit decreases d) average cost per unit decreases

b) fixed cost per unit increases

Which of the following costs is included in cost of goods sold? a) customer service cost b) manufacturing labor cost c) marketing cost d) distribution cost

b) manufacturing labor cost

The most likely cost driver of direct labor costs is the a) number of machine setups of the product b) number of direct labor hours c) number of machine hours d) number of miles driven

b) number of direct labor hours

Costs expensed on the income statement in the accounting period incurred are called a) inventoriable costs b) period costs c) direct costs d) indirect costs

b) period costs

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 will remain the same and total variable costs will change c) total fixed costs and total variable costs will remain the same d) total fixed costs will change and the total variable costs will remain the same

b) total fixed costs will remain the same and total variable costs will change

A major concern that arises with multiple regression is multicollinearity, which exists when a) the R2 statistic is low b) two or more independent variables are highly correlated with one another c) the standard errors of the coefficients of the individual variables decrease d) the dependent variable is not normally distributed

b) two or more independent variables are highly correlated with one another

When 20,000 units are produced, variable costs are $8 per unit. Therefore, when 10,000 units are produced: a) variable unit costs will increase to $12 per unit b) variable costs will remain at $8 per unit c) variable unit costs will decrease to $3 per unit d) variable costs will total $60,000

b) variable costs will remain at $8 per unit

The cost to be predicted is referred to as the a) regression b) cost driver c) dependent variable d) independent variable

c) dependent variable

Conversion costs include a) direct materials and manufacturing overhead costs b) only direct materials c) direct manufacturing labor and manufacturing overhead costs d) direct materials and direct manufacturing labor costs

c) direct manufacturing labor and manufacturing overhead costs

Prime costs include a) only direct materials b) direct materials and manufacturing overhead costs c) direct materials and direct manufacturing labor costs d) direct manufacturing labor and manufacturing overhead costs

c) direct materials and direct manufacturing labor costs

Total manufacturing costs is comprised of a) direct materials costs and period costs b) prime costs and period costs c) direct materials costs, direct manufacturing labor costs, and manufacturing overhead costs d) indirect materials costs, indirect manufacturing labor costs, and manufacturing overhead costs

c) direct materials costs, direct manufacturing labor costs, and manufacturing overhead costs

Finished goods inventory would normally include a) goods returned after being sold to be re-worked on further improvements and quality b) direct materials in stock and awaiting use in the manufacturing process c) goods fully completed but not yet sold d) goods partially worked on but not yet fully completed

c) goods fully completed but not yet sold

Which of the following is a fixed cost? a) direct material costs b) travel expenses c) monthly rent payment d) electricity expenses

c) monthly rent payment

Which of the following statements is true of direct costs? a) all fixed costs are direct costs b) all variable costs are direct costs c) a direct cost of one cost object is a true sense of the budgeted costs d) a direct cost of one cost object can be an indirect cost of another cost object

d) a direct cost of one cost object can be an indirect cost of another cost object

Inventoriable costs a) are also referred to as non manufacturing costs b) include administrative and marketing costs c) are expensed in the accounting period in which the products are manufactured d) are expensed in the accounting period in which the products are sold

d) are expensed in the accounting period in which the products are sold

When using the high low method, the two observations used are the high and low observations of the a) fixed cost component b) sloper coefficient c) direct cost d) cost driver

d) cost driver

Which of the following is true if the production volume decreases? a) average cost per unit decreases b) variable cost per unit decreases c) variable cost per unit increases d) fixed cost per unit increases

d) fixed cost per unit increases

Work in process inventory would normally include: a) goods fully completed but not yet sold b) goods returned after being sold to be re-worked on further improvements and quality c) direct materials in stock and awaiting use in the manufacturing process d) goods partially worked on but not yet fully completed

d) goods partially worked on but not yet fully completed

Variable costs a) are never considered a part of prime cost b) include most personnel costs and depreciation on machinery c) are always indirect costs d) increase in total when the actual level f activity increases

d) increase in total when the actual level f activity increases

Indirect manufacturing costs a) generally include the cost of material and the cost of labor b) can be traced to the product that created the costs c) can easily be traced to the cost object d) may include both variable and fixed costs

d) may include both variable and fixed costs

Gross margin is a) contribution margin less fixed costs b) sales revenue less variable costs c) contribution margin less variable costs d) sales revenue less the cost of goods sold

d) sales revenue less the cost of goods sold

Which of the following is true if the volume of sales increases? a) fixed cost increases b) variable cost decreases c) fixed cost decreases d) variable cost increases

d) variable cost increases