Question 1

What is the cost of goods manufactured for 2018?

Accepted Answer

A)   $404,000
B)   $399,000
C)   $301,000
D)   $311,000

Question 2

Pederson Company reported the following:

What is the average manufacturing cost per unit?

Accepted Answer

A)   $11.20
B)   $11.00
C)   $22.00
D)   $22.40

Question 3

Idle time wages consists of the wages paid to all workers (for both direct labor and indirect labor) in excess of their straight-time wage rates.

Accepted Answer

A) True 
 B)False

Question 4

Ridez Manufacturing currently produces 4,000 bicycles per month. The following per unit data apply for sales to regular customers:

The plant has capacity for 6,000 bicycles and is considering expanding production to 5,000 bicycles. What is the per unit cost of producing 5,000 bicycles?

Accepted Answer

A)   $91.80 per unit
B)   $111.25 per unit
C)   $69.80 per unit
D)   $86.20 per unit

Question 5

Period costs ________.

Accepted Answer

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

Question 6

Costs expensed on the income statement in the accounting period incurred are called ________.

Accepted Answer

A)   direct costs
B)   indirect costs
C)   period costs
D)   inventoriable costs

Question 7

Cost drivers casually affect total costs of a cost object over a given time span.

Accepted Answer

A) True 
 B)False

Question 8

Management accountants help managers identify what information is relevant and what information is
irrelevant that help in decision making.

Accepted Answer

A) True 
 B)False

Question 9

The cost system of Charlton Frabricators indicates that a product cost $30 to make in house. Of that $30 cost, $7 consists of plant costs that have already been paid for. A supplier proposes to make the same product for $26 but Charlton's plant will have idle time and because of budgetary constraints, will not be retooled to take advantage of that idle time. Should the product be outsourced to the supplier?

Accepted Answer

A)   No because the relevant cost for making the product is only $23 .
B)   Yes because the Supplier can produce the product for $4.00 less per unit than Charlton can.
C)   Yes because the Supplier can produce the product for $11.00 less per unit than Charlton can.
D)   No because the plant can be utilized for other purposes and either save the company even more money or produce additional revenue.

Question 10

For a manufacturing company, indirect manufacturing costs would 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 accounts

Question 11

Variable costs per unit vary with the level of production or sales volume.

Accepted Answer

A) True 
 B)False

Question 12

Using the following information find the unknown amounts. Assume each set of information is an independent case.

Accepted Answer

a.Ending balance of merchandise inventor...

Question 13

Period costs are included in the cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 14

The most likely cost driver of direct labor costs is the ________.

Accepted Answer

A)   number of machine setups for the product
B)   number of miles driven
C)   number of production hours
D)   number of machine hours

Question 15

A unit cost is computed by ________.

Accepted Answer

A)   multiplying total cost by the number of units produced
B)   dividing total cost by the number of units produced
C)   dividing variable cost by the number of units produced
D)   dividing fixed cost by the number of units produced

Question 16

Cost assignment ________.

Accepted Answer

A)   includes future and arbitrary costs
B)   associates accumulated costs with certain cost objects
C)   is the same as cost accumulation
D)   is the difference between budgeted and actual costs

Question 17

A cost system determines the cost of a cost object by ________.

Accepted Answer

A)   accumulating and then assigning costs
B)   accumulating costs
C)   assigning and then accumulating costs
D)   assigning costs

Question 18

A cost driver is a variable, such as the level of activity or volume that causally affects costs over a given time span.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following might explain why one manager might assign certain costs to a cost object while a different manager might assign some different costs to that same cost object?

Accepted Answer

A)   one manager might classify one cost as direct while another might classify that same cost as indirect
B)   For financial statement purposes, one manager might include all the costs of the value chain while the other might only only include GAAP cost
C)   one manager might value an inventory item for the balance sheet as the sum of all the value chain costs while another manager might choose to only recognize variable costs as inventoribale costs for GAAP purposes.
D)   one manager might be pricing a cost object while the other manager might be seeking the inventoriable cost

Question 20

What are the factors that affect the classification of a cost as direct or indirect?

Accepted Answer

Several factors affect whether a cost is...

Exam 2: An Introduction to Cost Terms and Purposes

What is the cost of goods manufactured for 2018?

Correct Answer
verified

Period costs ________.

Correct Answer
verified

The most likely cost driver of direct labor costs is the ________.

Correct Answer
verified

Which of the following might explain why one manager might assign certain costs to a cost object while a different manager might assign some different costs to that same cost object?

Correct Answer
verified

For a manufacturing company, indirect manufacturing costs would be included in ________.

Correct Answer
verified

Ridez Manufacturing currently produces 4,000 bicycles per month. The following per unit data apply for sales to regular customers: The plant has capacity for 6,000 bicycles and is considering expanding production to 5,000 bicycles. What is the per unit cost of producing 5,000 bicycles?

Correct Answer
verified

Cost assignment ________.

Correct Answer
verified

Period costs are included in the cost of goods sold.

Correct Answer
verified

Correct Answer
verified

A unit cost is computed by ________.

Correct Answer
verified

A cost system determines the cost of a cost object by ________.

Correct Answer
verified

Using the following information find the unknown amounts. Assume each set of information is an independent case.

Correct Answer
verified
a.Ending balance of merchandise inventor...
View Answer

A cost driver is a variable, such as the level of activity or volume that causally affects costs over a given time span.

Correct Answer
verified

Idle time wages consists of the wages paid to all workers (for both direct labor and indirect labor) in excess of their straight-time wage rates.

Correct Answer
verified

Management accountants help managers identify what information is relevant and what information is irrelevant that help in decision making.

Correct Answer
verified

Cost drivers casually affect total costs of a cost object over a given time span.

Correct Answer
verified

Costs expensed on the income statement in the accounting period incurred are called ________.

Correct Answer
verified

Pederson Company reported the following: What is the average manufacturing cost per unit?

Correct Answer
verified

Variable costs per unit vary with the level of production or sales volume.

Correct Answer
verified

What are the factors that affect the classification of a cost as direct or indirect?

Correct Answer
verified
Several factors affect whether a cost is...
View Answer

Exam 2: An Introduction to Cost Terms and Purposes

What is the cost of goods manufactured for 2018?

Correct AnswerverifiedShow Answer

Period costs ________.

Correct AnswerverifiedShow Answer

The most likely cost driver of direct labor costs is the ________.

Correct AnswerverifiedShow Answer

Which of the following might explain why one manager might assign certain costs to a cost object while a different manager might assign some different costs to that same cost object?

Correct AnswerverifiedShow Answer

For a manufacturing company, indirect manufacturing costs would be included in ________.

Correct AnswerverifiedShow Answer

Ridez Manufacturing currently produces 4,000 bicycles per month. The following per unit data apply for sales to regular customers: The plant has capacity for 6,000 bicycles and is considering expanding production to 5,000 bicycles. What is the per unit cost of producing 5,000 bicycles?

Correct AnswerverifiedShow Answer

Cost assignment ________.

Correct AnswerverifiedShow Answer

Period costs are included in the cost of goods sold.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A unit cost is computed by ________.

Correct AnswerverifiedShow Answer

A cost system determines the cost of a cost object by ________.

Correct AnswerverifiedShow Answer

Using the following information find the unknown amounts. Assume each set of information is an independent case.

Correct Answerverifieda.Ending balance of merchandise inventor...View AnswerShow Answer

A cost driver is a variable, such as the level of activity or volume that causally affects costs over a given time span.

Correct AnswerverifiedShow Answer

Idle time wages consists of the wages paid to all workers (for both direct labor and indirect labor) in excess of their straight-time wage rates.

Correct AnswerverifiedShow Answer

Management accountants help managers identify what information is relevant and what information is irrelevant that help in decision making.

Correct AnswerverifiedShow Answer

Cost drivers casually affect total costs of a cost object over a given time span.

Correct AnswerverifiedShow Answer

Costs expensed on the income statement in the accounting period incurred are called ________.

Correct AnswerverifiedShow Answer

Pederson Company reported the following: What is the average manufacturing cost per unit?

Correct AnswerverifiedShow Answer

Variable costs per unit vary with the level of production or sales volume.

Correct AnswerverifiedShow Answer

What are the factors that affect the classification of a cost as direct or indirect?

Correct AnswerverifiedSeveral factors affect whether a cost is...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
verified
a.Ending balance of merchandise inventor...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified
Several factors affect whether a cost is...
View Answer