Question 1

Which of the following is a fixed cost?

Accepted Answer

A)   monthly rent payment
B)   electricity expenses
C)   travel expenses
D)   direct material costsE) None of the above
F) A) and B)

Question 2

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) None of the above
F) A) and C)

Question 3

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

Question 4

Bosely Manufacturing Co.wants to classify costs for the product produced at its facility.The company produces only one product at the facility and operates continually.The cost categories are:
Product cost
Prime cost
Conversion cost
Period cost
The following costs are found in the accounting records:
a.Quality control inspection wages
b.Raw material purchases
c.Sales commissions
d.Factory depreciation
e.Assembly wages
Required:
Assign each of the above costs to the most appropriate cost categories.

Accepted Answer

Product cost includes a,b,d,e....

Question 5

Cost behavior refers to ________.

Accepted Answer

A)   how costs react to a change in the level of activity
B)   whether a cost is incurred in a manufacturing, merchandising, or service company
C)   classifying costs as either perpetual or period costs
D)   whether a particular expense is expensed in the same or the following periodE) None of the above
F) A) and B)

Question 6

Manufacturing overhead costs in an automobile manufacturing plant most likely include ________.

Accepted Answer

A)   labor costs of the painting department
B)   indirect material costs such as lubricants
C)   leather seat costs
D)   tyre costsE) A) and C)
F) A) and B)

Question 7

Indirect manufacturing costs are also referred to as manufacturing overhead costs or factory overhead costs.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Variable costs depend on the resources used.

Accepted Answer

A) True 
 B)False

Question 10

Rework labor time is considered an overhead cost and not a direct labor cost.

Accepted Answer

A) True 
 B)False

Question 11

Answer the following questions using the information below:
Zephyr Apparels is a clothing retailer. Unit costs associated with one of its products, Product DCT121, are as follows:
   Direct materials $70 Direct manufacturing labor 20 Variable manufacturing overhead 15 Fixed manufacturing overhead 32 Sales commissions ( 2% of sales)  5 Administrative salaries 16 Total $158\begin{array} { l r } 	ext { Direct materials } & \$ 70 \	ext { Direct manufacturing labor } & 20 \	ext { Variable manufacturing overhead } & 15 \	ext { Fixed manufacturing overhead } & 32 \	ext { Sales commissions ( } 2 \% 	ext { of sales)  } & 5 \	ext { Administrative salaries } & 16 \\quad 	ext { Total } & \$ 158\end{array} Direct materials  Direct manufacturing labor  Variable manufacturing overhead  Fixed manufacturing overhead  Sales commissions ( 2% of sales)   Administrative salaries  Total ​$70201532516$158​ 
-What are the direct variable manufacturing costs per unit associated with Product DCT121?

Accepted Answer

A)   $142
B)   $90
C)   $105
D)   $110 E) All of the above
F) A) and B)

Question 12

Answer the following questions using the information below:
   Beginning finished goods, 1/1/2015$46,000 Ending finished goods, 12/31/201538,000 Cost of goods sold 250,000 Sales revenue 488,000 Operating expenses 112,000\begin{array}{lr}	ext { Beginning finished goods, } 1 / 1 / 2015 & \$ 46,000 \	ext { Ending finished goods, } 12 / 31 / 2015 & 38,000 \	ext { Cost of goods sold } & 250,000 \	ext { Sales revenue } & 488,000 \	ext { Operating expenses } & 112,000\end{array} Beginning finished goods, 1/1/2015 Ending finished goods, 12/31/2015 Cost of goods sold  Sales revenue  Operating expenses ​$46,00038,000250,000488,000112,000​ 
-What is gross margin for 2015?

Accepted Answer

A)   $243,000
B)   $238,000
C)   $318,000
D)   $228,000 E) B) and D)
F) B) and C)

Question 13

Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime.One week she worked 42 hours,which included 2 hours of overtime.What is the overhead incurred to the company?

Accepted Answer

A)   $60
B)   $10
C)   $30
D)   $20E) A) and B)
F) A) and D)

Question 14

Direct manufacturing labor includes plant rent and salaries paid to plant supervisors.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following factors affect the direct/indirect classification of a cost?

Accepted Answer

A)   the level of budgeted profit for the next year
B)   the estimation of time required to complete the order
C)   the ability to execute an order in the most cost-efficient manner
D)   the design of the operationE) A) and D)
F) All of the above

Question 16

Which of the following companies is part of the service sector of our economy?

Accepted Answer

A)   Target
B)   Ernst & Young
C)   Nokia
D)   Amazon.comE) A) and B)
F) A) and D)

Question 17

Which of the following formulas determine cost of goods sold in a merchandising entity?

Accepted Answer

A)   Beginning inventory + Purchases + Ending inventory = Cost of goods sold
B)   Beginning inventory + Purchases - Ending inventory = Costs of goods sold
C)   Beginning inventory - Purchases + Ending inventory = Cost of goods sold
D)   Beginning inventory - Ending inventory - Purchases = Cost of goods soldE) None of the above
F) B) and D)

Question 18

Which of the following formulas determine cost of goods sold in a manufacturing entity?

Accepted Answer

A)   Beginning work-in-process inventory + Cost of goods manufactured - Ending work-in-process inventory = Cost of goods sold
B)   Beginning work-in-process inventory + Cost of goods manufactured + Ending work-in-process inventory = Cost of goods sold
C)   Cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold
D)   Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods soldE) A) and B)
F) B) and C)

Question 19

Answer the following questions using the information below:
Leslie Manufacturing reported the following:
   Revenue $450,000 Beginning inventory of direct materials, January 1, 2015 20,000 Purchases of direct materials 156,000 Ending inventory of direct materials, December 31, 2015 18,000 Direct manufacturing labor 21,000 Indirect manufacturing costs 42,000 Beginning inventory of finished goods, January 1, 2015 40,000 Cost of goods manufactured 114,000 Ending inventory of finished goods, December 31, 2015 45,000 Operating costs 150,000\begin{array} { | l | r | } \hline	ext { Revenue } & \$ 450,000 \\hline 	ext { Beginning inventory of direct materials, January 1, 2015 } & 20,000 \\hline 	ext { Purchases of direct materials } & 156,000 \\hline 	ext { Ending inventory of direct materials, December 31, 2015 } & 18,000 \\hline 	ext { Direct manufacturing labor } & 21,000 \\hline 	ext { Indirect manufacturing costs } & 42,000 \\hline 	ext { Beginning inventory of finished goods, January 1, 2015 } & 40,000 \\hline 	ext { Cost of goods manufactured } & 114,000 \\hline 	ext { Ending inventory of finished goods, December 31, 2015 } & 45,000 \\hline 	ext { Operating costs } & 150,000 \\hline\end{array} Revenue  Beginning inventory of direct materials, January 1, 2015  Purchases of direct materials  Ending inventory of direct materials, December 31, 2015  Direct manufacturing labor  Indirect manufacturing costs  Beginning inventory of finished goods, January 1, 2015  Cost of goods manufactured  Ending inventory of finished goods, December 31, 2015  Operating costs ​$450,00020,000156,00018,00021,00042,00040,000114,00045,000150,000​​ 
-What is Leslie's gross margin (or gross profit) ?

Accepted Answer

A)   $103,000
B)   $152,000
C)   $341,000
D)   $317,000 E) A) and D)
F) B) and C)

Question 20

Total manufacturing costs equal ________.

Accepted Answer

A)   direct materials plus prime costs
B)   direct materials plus conversion costs
C)   direct manufacturing labor costs plus sunk costs
D)   direct manufacturing labor costs plus conversion costsE) All of the above
F) A) and B)

Exam 2: An Introduction to Cost Terms and Purposes

Direct manufacturing labor includes plant rent and salaries paid to plant supervisors.

Correct Answer
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Variable costs depend on the resources used.

Correct Answer
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The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is ________.

Correct Answer
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Which of the following is a fixed cost?

Correct Answer
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Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime.One week she worked 42 hours,which included 2 hours of overtime.What is the overhead incurred to the company?

Correct Answer
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For a manufacturing company,direct labor costs may be included in ________.

Correct Answer
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Indirect manufacturing costs are also referred to as manufacturing overhead costs or factory overhead costs.

Correct Answer
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Cost behavior refers to ________.

Correct Answer
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Rework labor time is considered an overhead cost and not a direct labor cost.

Correct Answer
verified

Which of the following formulas determine cost of goods sold in a manufacturing entity?

Correct Answer
verified

Manufacturing overhead costs in an automobile manufacturing plant most likely include ________.

Correct Answer
verified

Which of the following factors affect the direct/indirect classification of a cost?

Correct Answer
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Correct Answer
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Which of the following companies is part of the service sector of our economy?

Correct Answer
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Product cost includes a,b,d,e....
View Answer

Which of the following formulas determine cost of goods sold in a merchandising entity?

Correct Answer
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Correct Answer
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Total manufacturing costs equal ________.

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

Correct Answer
verified

Exam 2: An Introduction to Cost Terms and Purposes

Direct manufacturing labor includes plant rent and salaries paid to plant supervisors.

Correct AnswerverifiedShow Answer

Variable costs depend on the resources used.

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

Which of the following is a fixed cost?

Correct AnswerverifiedShow Answer

Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime.One week she worked 42 hours,which included 2 hours of overtime.What is the overhead incurred to the company?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Indirect manufacturing costs are also referred to as manufacturing overhead costs or factory overhead costs.

Correct AnswerverifiedShow Answer

Cost behavior refers to ________.

Correct AnswerverifiedShow Answer

Rework labor time is considered an overhead cost and not a direct labor cost.

Correct AnswerverifiedShow Answer

Which of the following formulas determine cost of goods sold in a manufacturing entity?

Correct AnswerverifiedShow Answer

Manufacturing overhead costs in an automobile manufacturing plant most likely include ________.

Correct AnswerverifiedShow Answer

Which of the following factors affect the direct/indirect classification of a cost?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following companies is part of the service sector of our economy?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedProduct cost includes a,b,d,e....View AnswerShow Answer

Which of the following formulas determine cost of goods sold in a merchandising entity?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Total manufacturing costs equal ________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Product cost includes a,b,d,e....
View Answer

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