Question 1

Universal Works Inc. ,reports the following information for September sales:
  
Promotional expenses for September were $1,000.
Required:
If sales double in October,what is the impact on the variable costs?

Accepted Answer

The variable costs also double...

Question 2

Costs are accounted for in two basic stages: assignment followed by accumulation.

Accepted Answer

A) True 
 B)False

Question 3

The American West Company manufactures several different products.Unit costs associated with Product ORD210 are as follows:

What are the inventoriable costs per unit associated with Product ORD210?

Accepted Answer

A)  $134
B)  $124
C)  $144
D)  $114

Question 4

Which of the following statements about the direct/indirect cost classification is true?

Accepted Answer

A)  Indirect costs are always traced.
B)  Indirect costs are always allocated.
C)  The design of sales target affects the direct/indirect classification.
D)  The direct/indirect classification depends on the cost control measures.

Question 5

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 6

Finished goods 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)  goods returned after being sold to be re-worked on further improvements and quality

Question 7

Inventoriable costs ________.

Accepted Answer

A)  include administrative and marketing costs
B)  are expensed in the accounting period in which the products are sold
C)  are expensed in the accounting period in which the products are manufactured
D)  are also referred to as nonmanufacturing costs

Question 8

Which one of the following items is a direct cost?

Accepted Answer

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.

Question 9

Which of the following is true if the volume of sales increases (within a relevant range) ?

Accepted Answer

A)  total fixed cost increases
B)  total variable cost decreases
C)  total variable cost increases
D)  total fixed cost decreases

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Direct materials inventory costs would normally include ________.

Accepted Answer

A)  the cost of materials in stock are part of the cost object (product) and can be traced to that cost object in an economically feasible way
B)  the cost of goods partially worked on but not yet fully completed
C)  the cost of goods fully completed but not yet sold
D)  the cost of products in their original form intended to be sold without changing their basic form

Question 12

The East Company manufactures several different products.Unit costs associated with Product ORD105 are as follows:

What is the percentage of the total fixed costs per unit associated with Product ORD105 with respect to total cost?

Accepted Answer

A)  37%
B)  32%
C)  15%
D)  26%

Question 13

Many government agency contracts exclude all but which of the following costs from reimbursement under cost-plus agreements?

Accepted Answer

A)  marketing costs
B)  design costs
C)  production costs
D)  part of the research and development costs

Question 14

Manufacturing overhead costs are also referred to as ________.

Accepted Answer

A)  indirect manufacturing costs
B)  prime costs
C)  direct manufacturing costs
D)  direct material

Question 15

Acquisition costs of direct materials include freight-in charges,sales taxes,and custom duties.

Accepted Answer

A) True 
 B)False

Question 16

Puritan Apparels is a clothing retailer.Unit costs associated with one of its products,Product AHF 130,are as follows:

What are the direct variable manufacturing costs per unit associated with Product AHF 130?

Accepted Answer

A)  $288
B)  $200
C)  $245
D)  $255

Question 17

Managers use assigned cost information to make decisions and implement them.

Accepted Answer

A) True 
 B)False

Question 18

Wages paid to machine operators on an assembly line are classified as a ________.

Accepted Answer

A)  direct material cost
B)  direct manufacturing labor cost
C)  manufacturing overhead cost
D)  period cost

Question 19

For last year,Watson Limited reported revenues of $420,000,cost of goods sold of $118,000,cost of goods manufactured of $105,000,and total operating costs of $60,000.Operating income for that year was ________.

Accepted Answer

A)  $315,000
B)  $302,000
C)  $255,000
D)  $242,000

Question 20

Work-in-process inventory are goods partially worked on but not yet completed.

Accepted Answer

A) True 
 B)False

Exam 2: An Introduction to Cost Terms and Purposes

Manufacturing overhead costs are also referred to as ________.

Correct AnswerverifiedShow Answer

Wages paid to machine operators on an assembly line are classified as a ________.

Correct AnswerverifiedShow Answer

The American West Company manufactures several different products.Unit costs associated with Product ORD210 are as follows: What are the inventoriable costs per unit associated with Product ORD210?

Correct AnswerverifiedShow Answer

Costs are accounted for in two basic stages: assignment followed by accumulation.

Correct AnswerverifiedShow Answer

Which of the following statements about the direct/indirect cost classification is true?

Correct AnswerverifiedShow Answer

Many government agency contracts exclude all but which of the following costs from reimbursement under cost-plus agreements?

Correct AnswerverifiedShow Answer

Which of the following is true if the volume of sales increases (within a relevant range) ?

Correct AnswerverifiedShow Answer

Acquisition costs of direct materials include freight-in charges,sales taxes,and custom duties.

Correct AnswerverifiedShow Answer

Managers use assigned cost information to make decisions and implement them.

Correct AnswerverifiedShow Answer

Universal Works Inc. ,reports the following information for September sales: Promotional expenses for September were $1,000. Required: If sales double in October,what is the impact on the variable costs?

Correct AnswerverifiedThe variable costs also double...View AnswerShow Answer

For last year,Watson Limited reported revenues of $420,000,cost of goods sold of $118,000,cost of goods manufactured of $105,000,and total operating costs of $60,000.Operating income for that year was ________.

Correct AnswerverifiedShow Answer

The East Company manufactures several different products.Unit costs associated with Product ORD105 are as follows: What is the percentage of the total fixed costs per unit associated with Product ORD105 with respect to total cost?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Direct materials inventory costs would normally include ________.

Correct AnswerverifiedShow Answer

Finished goods inventory would normally include ________.

Correct AnswerverifiedShow Answer

Which one of the following items is a direct cost?

Correct AnswerverifiedShow Answer

Work-in-process inventory are goods partially worked on but not yet completed.

Correct AnswerverifiedShow Answer

Puritan Apparels is a clothing retailer.Unit costs associated with one of its products,Product AHF 130,are as follows: What are the direct variable manufacturing costs per unit associated with Product AHF 130?

Correct AnswerverifiedShow Answer

Inventoriable costs ________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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The variable costs also double...
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