cap 3 2023
Total cost of resources consumed divided by the number of units of output is the ___________ ____________
Blank 1: average or unit Blank 2: cost
When a resource is used for some purpose, a(n)-------- is incurred.
Blank 1: cost
Enabling the assignment of costs to cost objects and explaining cost behavior are the two important roles provided by
Blank 1: cost Blank 2: drivers
A cost that can be conveniently and economically traced to a cost pool or cost object is called a(n) __ _______
Blank 1: direct Blank 2: cost
A cost that does not change with the volume of a designated cost driver within the relevant range is a(n)---------- cost
Blank 1: fixed
There is no convenient or economical way to trace a(n) ____________ _______________ to a cost pool or cost object. (Enter only one word per blank.)
Blank 1: indirect Blank 2: cost
The cost of goods finished and transferred out of the Work-in-Process Inventory account during a specified period is called cost of goods ________________
Blank 1: manufactured
The cost of goods finished and transferred out of the Work-in-Process Inventory account during a specified period is called cost of goods_________
Blank 1: manufactured
The total cost curve is approximately linear within the _____ _____________ . (Enter only one word per blank.)
Blank 1: relevant Blank 2: range
The total cost curve is approximately linear within the _____________ _______________. (Enter only one word per blank.)
Blank 1: relevant Blank 2: range
Many types of costs are _________ -______________ , meaning they vary with the amount produced or quantity provided.
Blank 1: volume Blank 2: based or base
Which of the following is an example of a decision involving structural cost drivers? Supplier relations Workforce empowerment Design of production process Complexity
Complexity scale experience technology
The accounting records of Caldwell Company revealed the following costs: direct labor used, $170,000; direct materials used, $350,000; manufacturing overhead, $400,000; and selling and administrative expenses, $250,000. Caldwell's product costs total ______. Multiple choice question. $520,000 $920,000 $1,170,000 $750,000
DIRECT MATERIALS DIRECT LABOR FACTORY OVERHEAD $920,000 Reason: $170,000 + $350,000 + $400,000 = $920,000
True or false: A cost is only incurred when cash changes hands.
FALSE Costs are incurred when a resource is used, which may or may not be when cash changes hands.
Which of the following is NOT an example of a volume-based cost driver? Hours of direct labor Quantity of direct materials Hours of research and development Number of units produced
Hours of research and development
A summary of the records of Davidson Co reveals the following: DIRECT MATERIALS USED 75 DIRECT LABOR 80 MANUFACTURING OVERHEAD 100 BEGINNING WORK IN PROCESS 10 ENDING WORK IN PROCESS 50 The cost of goods manufactured was _____. Multiple choice question. $215 $265 $295 $255
Reason: $75 + $80 + $100 + $10 - $50 = $215 215
True or false: To properly interpret total average unit cost, it must be separated into unit variable and unit fixed costs.
True
True or false: The cost driver for a variable cost can be either volume-based or activity based.
True Reason: A variable cost is a cost that changes in total in response to changes in one or more cost drivers. While the cost driver can be activity-based or volume-based, typically management accountants in practice use the term variable costs in connection with volume-based cost drivers. Correct Answer
Which of the following is NOT an example of a decision involving structural cost drivers? Scale Technology Workforce empowerment Experience level of workforce
Workforce empowerment
A direct cost is ______. a cost that can be conveniently and economically traced to a cost pool or cost object a product, service, customer, or organizational unit to which a cost is assigned the use of a resource for some purpose a factor the affects the amount of total cost
a cost that can be conveniently and economically traced to a cost pool or cost object
fixed cost
a portion of the total cost within the relevant range does not change with the volume of a designated cost driver.
Womble Incorporated has beginning inventory of $200 and an ending inventory of $400 for a given period in which it purchased $13,400 worth of materials. What is the dollar amount of materials used in this period?
amount of materials used= 13,200
cost driver
any factor that has the effect of changing the amount of total cost
cost object
any product, service, customer , activity or organizational unit to which costs are assigned
Internal accounting controls ______. are designed to prevent or detect errors and fraud restrict and guide financial processing activities guarantee accurate financial and managerial accounting data consist of policies and procedures
are designed to prevent or detect errors and fraud restrict and guide financial processing activities consist of policies and procedures
direct cost
can be conveniently and economically traced directly to a cost pool or cost object
Lucas Diving Supplies Company, in its first year of business, had labor costs of $66,000, overhead costs of $98,000, materials purchases of $22,000, and ending Materials and Work-in-Process Inventories of $1,000 and $2,000, respectively. What is the amount of cost of goods manufactured in the first year of operations?
cost of good manufactured = 183,000
If a merchandising company has a beginning inventory of $400,000 and an ending inventory of $200,000, and the company purchased $1,600,000 of inventory during the month, what is the company's cost of goods sold?
cost of good sold= 1,800,000
variable cost
cost that change in total in response to changes in one or more cost drivers
cost pool
costs assigned into meaningful groups
Cost behavior is explained by cost ______. allocation drivers objects assignment
drivers
Product costs include ______. advertising sales commission cost of shipping goods to a customer factory depreciation
factory depreciation direct material direct labor factory overhead
A cost that does not change with the volume of a designated cost driver within the relevant range is a ______ cost. step variable mixed fixed
fixed
Cornelius company collected the following information for one of its operating costs. unit produced total cost 100 10000 200 10000 300 10000 400 10000 Based on the available information, this cost would be classified as ______. Multiple choice question. mixed step variable fixed
fixed
fixed
horizontal line portion of the cost that within the relevant range, does not change with the volume of a designated cost driver.
Having a detailed description of the firm's activities ______. improves operational and management control reduces the cost of producing a product or service helps the firm achieve its strategic objectives
improves operational and management control helps the firm achieve its strategic objectives
activity analysis
include each step in manufacturing the product or in providing the service
A primary way to ensure accurate data is to have effective ______. tax preparation specialists on payroll information systems managers and employees internal accounting controls
internal accounting controls
A primary way to ensure accurate data is to have effective ______. Multiple choice question. internal accounting controls information systems tax preparation specialists on payroll managers and employees
internal accounting controls
periodic inventory system
involves a count of inventory at the end of each accounting period to determine the ending balance in inventory
fixed cost
is that portion of the cost that within the relevant range, does not change with the volume of a designated cost driver
Activity analysis ______. is necessary to determine the relevant range is used to identify activity-based cost drivers is needed to identify fixed and variable costs helps improve operational and management control in the firm
is used to identify activity-based cost drivers helps improve operational and management control in the firm
Activity analysis ______. is used to identify activity-based cost drivers is needed to identify fixed and variable costs is necessary to determine the relevant range helps improve operational and management control in the firm
is used to identify activity-based cost drivers helps improve operational and management control in the firm
The three basic components of manufacturing (product) cost are direct labor costs, direct material costs, and ______. Multiple choice question. prime costs conversion costs cost of goods manufactured manufacturing (factory) overhead costs
manufacturing (factory) overhead costs
indirect costs
no convenient or economical way to trace.
Cost of goods manufactured includes ______. Multiple choice question. only conversion costs only product costs only prime costs some period and some product costs
only product costs
Cost of goods manufactured includes ______. Multiple choice question. some period and some product costs only prime costs only conversion costs only product costs
only product costs
cost drivers
output of complete units quantity (in pounds) of direct materials hours of direct labor
The ending balance of inventory is determined by a count when using a(n) ______ inventory system. Multiple choice question. periodic indirect costing perpetual direct costing
periodic
Point-of-sale updates to inventory levels occur when using the ______ inventory system. . direct costing perpetual periodic indirect costing
perpetual
total fixed costs and unit variable cost are expected to
remain approximately constant within the relevant range
flow of cost assigment
resource cost cost diver cost pool cost driver cost object
Internal accounting controls ______. Multiple select question. guarantee accurate financial and managerial accounting data restrict and guide financial processing activities are designed to prevent or detect errors and fraud consist of policies and procedures
restrict and guide financial processing activities are designed to prevent or detect errors and fraud consist of policies and procedures
INTERNAL ACCOUNTING CONTROLS
set of policies and procedures that restrict and guide activities in the processing of financial data with the objective of preventing or detecting errors and fraudulent acts
cost assignment
the process of assigning resource costs to cost pools and then from cost pools to cost objects. two types of assignment: direct and allocation
If the actual value of a volume-based cost driver is expected to fall somewhere between 2,000 and 4,000 units, then 2,000 to 4,000 units represents ______. marginal productivity the relevant range linear approximation
the relevant range
If the actual value of a volume-based cost driver is expected to fall somewhere between 2,000 and 4,000 units, then 2,000 to 4,000 units represents ______. the relevant range linear approximation marginal productivity
the relevant range
Within the relevant range of activity ______ costs are expected to remain approximately constant. total fixed and variable total fixed and per unit variable per unit fixed and total variable per unit fixed and variable
total fixed and per unit variable
Jordan Sports Incorporated has labor costs and overhead totaling $2.6 million during a given period. The company purchased $10.5 million of materials during the period and used $10 million of this amount. What is the amount of total manufacturing cost for the period? (Enter your answer in millions rounded to 1 decimal place.)
total manufacturing cost = 12.6 million
The Walden Manufacturing Corporation has office support salaries of $4,000, factory supplies of $1,000, indirect labor of $6,000, direct materials of $16,000, advertising expense of $2,500, office expense of $14,000, and direct labor of $20,000. What is the total period cost?
total period cost= 20,500
True or false: The cost driver for a variable cost can be either volume-based or activity based. True false
true Reason: A variable cost is a cost that changes in total in response to changes in one or more cost drivers. While the cost driver can be activity-based or volume-based, typically management accountants in practice use the term variable costs in connection with volume-based cost drivers.
A cost that changes in total, both directionally and proportionately within the relevant range is a ______ cost. variable step fixed
variable
A cost that changes in total, both directionally and proportionately within the relevant range is a ______ cost. Multiple choice question. fixed step variable
variable
Cornelius company collected the following information for one of its operating costs. Units produced------------Total cost 100 $5000 200 $10000 300 $15000 400 $20000 Based on the available information, this cost would be classified as ______. Multiple choice question. mixed variable fixed step
variable
Within the relevant range of activity, per unit _________costs and total __________ costs are expected to remain approximately constant.
variable fixed Blank 1: variable Blank 2: fixed
The classification as either an indirect or a direct cost depends upon ______. whether or not the cost can be easily traced to a specific cost object whether the cost is a period or product cost whether the cost is fixed or variable the role of the manager responsible for incurring the cost
whether or not the cost can be easily traced to a specific cost object
executional cost drivers
workforce empowerment design of the production process supplier relationshipss
