Question 1

In the cost classification system used by manufacturing firms, assembly workers' wages would be included in all of the following EXCEPT:

Accepted Answer

A)  product cost
B)  prime cost
C)  conversion cost
D)  period costE) A) and D)
F) None of the above

Question 2

________ are all manufacturing costs that are related to the cost object but CANNOT be traced to that cost object.

Accepted Answer

A)  Direct material costs
B)  Period costs
C)  Indirect manufacturing costs
D)  Direct manufacturing labor costsE) B) and C)
F) A) and D)

Question 3

For a manufacturing company, direct labor costs may be included in:

Accepted Answer

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 accountsE) A) and D)
F) All of the above

Question 4

The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is:

Accepted Answer

A)  cost accumulation
B)  cost assignment
C)  cost tracing
D)  conversion costingE) A) and C)
F) A) and B)

Question 5

Which of the following statements about the direct/indirect cost classification is NOT true?

Accepted Answer

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.E) B) and D)
F) A) and D)

Question 6

Cost of goods sold refers to the products brought to completion, whether they were started before or during the current accounting period.

Accepted Answer

A) True 
 B)False

Question 7

The collection of accounting data in some organized way is:

Accepted Answer

A)  cost accumulation
B)  cost assignment
C)  cost tracing
D)  conversion costingE) A) and B)
F) A) and C)

Question 8

Budgeting often plays a major role in affecting behavior and decisions.

Accepted Answer

A) True 
 B)False

Question 9

Within the relevant range, if there is a change in the level of the cost driver, then:

Accepted Answer

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 sameE) All of the above
F) A) and B)

Question 10

Inventoriable costs are expensed on the income statement:

Accepted Answer

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 variesE) A) and B)
F) A) and C)

Question 11

In the cost classification system used by manufacturing firms, total manufacturing costs would include all of the following EXCEPT:

Accepted Answer

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 costsE) None of the above
F) A) and B)

Question 12

Work-in-process inventory would normally include:

Accepted Answer

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 formE) C) and D)
F) A) and C)

Question 13

Answer the following questions using the information below:
The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows:
 
-For last year, Wampum Enterprises reported revenues of $420,000, cost of goods sold of $108,000, cost of goods manufactured of $101,000, and total operating costs of $70,000. Operating income for that year was:

Accepted Answer

A)  $319,000
B)  $312,000
C)  $249,000
D)  $242,000E) All of the above
F) A) and B)

Question 14

Answer the following questions using the information below:
Pederson Company reported the following:
 
-What is the amount of gross margin?

Accepted Answer

A)  $1,750,000
B)  $3,525,000
C)  $5,405,000
D)  $1,645,000E) A) and B)
F) A) and C)

Question 15

For a manufacturing-sector company, the cost of factory depreciation is classified as a:

Accepted Answer

A)  direct material cost
B)  direct manufacturing labor cost
C)  manufacturing overhead cost
D)  period costE) All of the above
F) B) and C)

Question 16

Answer the following questions using the information below:
The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows:
 
-What are the inventoriable costs per unit associated with Product ORD203?

Accepted Answer

A)  $60
B)  $66
C)  $48
D)  $91E) A) and B)
F) A) and C)

Question 17

Kym Manufacturing provided the following information for last month:  If sales double next month, what is the projected operating income?

Accepted Answer

A)  $14,000
B)  $15,000
C)  $18,000
D)  $19,000E) B) and C)
F) C) and D)

Question 18

When 20,000 units are produced, fixed costs are $16 per unit. Therefore, when 40,000 units are produced fixed costs will:

Accepted Answer

A)  increase to $32 per unit
B)  remain at $16 per unit
C)  decrease to $8 per unit
D)  total $640,000E) C) and D)
F) B) and D)

Question 19

A decision maker CANNOT adjust capacity over the short run.

Accepted Answer

A) True 
 B)False

Question 20

In determining product cost, what concerns does a manufacturing firm have when contracting with a government agency?

Accepted Answer

Government contracts often reimburse on ...

Exam 2: An Introduction to Cost Terms and Purposes

A decision maker CANNOT adjust capacity over the short run.

Correct Answer
verified

For a manufacturing company, direct labor costs may be included in:

Correct Answer
verified

The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is:

Correct Answer
verified

Correct Answer
verified

Inventoriable costs are expensed on the income statement:

Correct Answer
verified

________ are all manufacturing costs that are related to the cost object but CANNOT be traced to that cost object.

Correct Answer
verified

Work-in-process inventory would normally include:

Correct Answer
verified

When 20,000 units are produced, fixed costs are $16 per unit. Therefore, when 40,000 units are produced fixed costs will:

Correct Answer
verified

Which of the following statements about the direct/indirect cost classification is NOT true?

Correct Answer
verified

For a manufacturing-sector company, the cost of factory depreciation is classified as a:

Correct Answer
verified

The collection of accounting data in some organized way is:

Correct Answer
verified

Kym Manufacturing provided the following information for last month: If sales double next month, what is the projected operating income?

Correct Answer
verified

Budgeting often plays a major role in affecting behavior and decisions.

Correct Answer
verified

Within the relevant range, if there is a change in the level of the cost driver, then:

Correct Answer
verified

In the cost classification system used by manufacturing firms, total manufacturing costs would include all of the following EXCEPT:

Correct Answer
verified

Cost of goods sold refers to the products brought to completion, whether they were started before or during the current accounting period.

Correct Answer
verified

Answer the following questions using the information below: The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows: -What are the inventoriable costs per unit associated with Product ORD203?

Correct Answer
verified

In the cost classification system used by manufacturing firms, assembly workers' wages would be included in all of the following EXCEPT:

Correct Answer
verified

Answer the following questions using the information below: Pederson Company reported the following: -What is the amount of gross margin?

Correct Answer
verified

In determining product cost, what concerns does a manufacturing firm have when contracting with a government agency?

Correct Answer
verified
Government contracts often reimburse on ...
View Answer

Exam 2: An Introduction to Cost Terms and Purposes

A decision maker CANNOT adjust capacity over the short run.

Correct AnswerverifiedShow Answer

For a manufacturing company, direct labor costs may be included in:

Correct AnswerverifiedShow Answer

The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Inventoriable costs are expensed on the income statement:

Correct AnswerverifiedShow Answer

________ are all manufacturing costs that are related to the cost object but CANNOT be traced to that cost object.

Correct AnswerverifiedShow Answer

Work-in-process inventory would normally include:

Correct AnswerverifiedShow Answer

When 20,000 units are produced, fixed costs are $16 per unit. Therefore, when 40,000 units are produced fixed costs will:

Correct AnswerverifiedShow Answer

Which of the following statements about the direct/indirect cost classification is NOT true?

Correct AnswerverifiedShow Answer

For a manufacturing-sector company, the cost of factory depreciation is classified as a:

Correct AnswerverifiedShow Answer

The collection of accounting data in some organized way is:

Correct AnswerverifiedShow Answer

Kym Manufacturing provided the following information for last month: If sales double next month, what is the projected operating income?

Correct AnswerverifiedShow Answer

Budgeting often plays a major role in affecting behavior and decisions.

Correct AnswerverifiedShow Answer

Within the relevant range, if there is a change in the level of the cost driver, then:

Correct AnswerverifiedShow Answer

In the cost classification system used by manufacturing firms, total manufacturing costs would include all of the following EXCEPT:

Correct AnswerverifiedShow Answer

Cost of goods sold refers to the products brought to completion, whether they were started before or during the current accounting period.

Correct AnswerverifiedShow Answer

Answer the following questions using the information below: The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows: -What are the inventoriable costs per unit associated with Product ORD203?

Correct AnswerverifiedShow Answer

In the cost classification system used by manufacturing firms, assembly workers' wages would be included in all of the following EXCEPT:

Correct AnswerverifiedShow Answer

Answer the following questions using the information below: Pederson Company reported the following: -What is the amount of gross margin?

Correct AnswerverifiedShow Answer

In determining product cost, what concerns does a manufacturing firm have when contracting with a government agency?

Correct AnswerverifiedGovernment contracts often reimburse on ...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Government contracts often reimburse on ...
View Answer