Cost Management MCQs

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The terms direct cost and indirect cost are commonly used in accounting. A particular cost might be considered a direct cost of a manufacturing depar...






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Which one of the following best describes direct labor?






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Which one of the following best describes direct labor?






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Inventoriable costs






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In cost terminology, conversion costs consist of






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Conversion costs do not include






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Conversion cost pricing






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The term prime costs refers to






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Costs are allocated to cost objects in many ways and for many reasons. Which one of the following is a purpose of cost allocation?






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Cost drivers are






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Which of the following is a period cost rather than a product cost of a manufacturer?






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Direct labor costs are wages paid to Machine Operators Factory Supervisors Corporate Vice-President






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"Bright Co. manufactures light bulbs. The following salaries were included in Brights manufacturing costs for the year:" Mac...






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Butler Co.s production costs for July are Direct materials $120,000 Direct labor 108,000 Factory overhead 6,000 ...






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Atlantic Co. used $200,000 of direct materials during June. At June 30, Atlantics direct materials inventory was $30,000 more than it was at June 1. ...






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A firm calculates that its annual cost to hold excess goods in order to avoid any chance of running out of inventory is $50,000. This $50,000 is an e...






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Roberta Johnson is the manager of Sleep-Well Inn, one of a chain of motels located throughout the U.S. An example of an operating cost at Sleep-Well ...






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Mello Joy produces 200,000 units of a good that has the following costs: Direct material costs $2,000,000 Direct manufact...






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Using absorption costing, fixed manufacturing overhead costs are best described as






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The allocation of costs to particular cost objects allows a firm to analyze all of the following except






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Many companies recognize three major categories of costs of manufacturing a product. These are direct materials, direct labor, and overhead. Which of...






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A company experienced a machinery breakdown on one of its production lines. As a consequence of the breakdown, manufacturing fell behind schedule, an...






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A cost incurred for the benefit of more than one cost objective is






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A cost that always can be directly traced to a cost object is






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Conversion costs are






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The allocation of general overhead costs to operating departments can be least justified in determining






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A computer company charges indirect manufacturing costs to a project at a fixed percentage of a cost pool. This project is covered by a cost-plus gove...






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In a traditional manufacturing operation, direct costs would normally include






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In practice, items such as wood screws and glue used in the production of school desks and chairs wouldmost likely be classified as






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Which one of the following items would not be considered a manufacturing cost?






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Finley Painters Co., a painting contractor, maintains a job-order cost system. Job costs are accumulated by tracking the actual cost of paint and oth...






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Rose Co.’s fixed manufacturing overhead costs totaled $150,000 and variable selling costs totaled $75,000. How should these costs be classified unde...






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All of the following would be considered manufacturing overhead costs by a book publisher except






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An assembly plant accumulates its variable and fixed manufacturing overhead costs in a single cost pool, which is then applied to work in process usin...






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Which one of the following categories of cost is most likely not considered a component of fixed factory overhead?






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The difference between variable costs and fixed costs is






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Which of the following is the best example of a variable cost?






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A company has the following budget formula for annual electricity expense in its shop: Expense = $7,200 + (Units produced $0.60) If management expec...






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The sum of the costs necessary to effect a one-unit increase in the activity level is a(n)






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Scott Company uses the following formula for annual maintenance costs: Total cost = $6,000 + $0.70 per machine hour The current months budget is base...






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Management has prepared a graph showing the total costs of operating branch warehouses throughout the country. The cost line crosses the vertical axi...






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Management has prepared a graph showing the total costs of operating branch warehouses throughout the country. The cost line crosses the vertical axi...






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Parker Company pays each member of its sales staff a salary as well as a commission on each unit sold. For the coming year, Parker plans to increase ...






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Production levels are expected to increase within the relevant range. What are the anticipated effects on the following? Fixed Costs per Unit Variab...






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A fixed cost that would be considered a direct cost is






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Which one of the following is correct regarding a relevant range?






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Which one of the following refers to a cost that remains the same as the volume of activity decreases within the relevant range?






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The relevant range refers to the activity levels over which






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Cell Company has discovered that the cost of processing customer invoices is strictly variable within the relevant range. Which one of the following ...






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When identifying fixed and variable costs, which one of the following is a typical assumption concerning cost behavior?






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Lar Company has found that its total electricity cost has both a fixed component and a variable component within the relevant range. The variable com...






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The least exact method for separating fixed and variable costs is






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A company prepares a budget each month for manufacturing costs. Formulas have been developed for all costs within a relevant range of 5,000 to 15,000...






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Brogan Co. operated four sales offices last year. Brogans costs were $400,000, of which $60,000 were fixed. Brogans total costs are significantly i...






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Waggoner Company produces a product that contains 9 ounces of materials in each unit of finished goods. During the production process, 4% of the mate...






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Committed costs are






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Discretionary costs are costs that






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Controllable costs are costs that






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In joint-product costing and analysis, which one of the following costs is relevant when deciding the point at which a product should be sold to maxi...






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The assignment of raw material costs to the major end products resulting from refining a barrel of crude oil isbest described as






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The amount of raw materials left over from a production process or production cycle for which there is no further use is






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The upper limit of a companys productive output capacity given its existing resources is called






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"Jacob Corp. wishes to determine the fixed portion of its maintenance expense (a semivariable expense), as measured against d...






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When compared with normal spoilage, abnormal spoilage






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Practical capacity as a plant capacity concept






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A controllable expense






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A cost that bears an observable and known relationship to a quantifiable activity base is a(n)






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The cost associated with abnormal spoilage ordinarily is charged to






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An imputed cost is






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Committed costs are costs that






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Costs that arise from periodic budgeting decisions that have no strong input-output relationship are commonly called






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The costs included in Huron’s fixed overhead are






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A cost that may be eliminated by performing an activity more efficiently is a(n)






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Spoilage that is not expected to occur under normal, efficient operating conditions is considered






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Products of relatively small total value that are produced simultaneously from a common manufacturing process with products of greater value and quan...






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A company produces stereo speakers for automobile manufacturers. The automobile manufacturers reject approximately 3% of the stereo speakers received...






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A joint process is a manufacturing operation yielding two or more identifiable products from the resources employed in the process. The two character...






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Abnormal spoilage






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Johnson waits two hours in line to buy a ticket to an NCAA Final Four Tournament. The opportunity cost of buying the $200 ticket is






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The advertising expense estimated by Gleason for the introduction of the new products is an example of a(n)






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Providence Companys practical capacity is 80% of its theoretical capacity. The company writes off any variances to the cost of goods sold at the end...






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Which one of the following alternatives correctly classifies the business application to the appropriate costing system? Job Costing System..... Pro...






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Which one of the following considers the impact of fixed overhead costs?






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An accounting system that collects financial and operating data on the basis of the underlying nature and extent of the cost drivers is






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Because this allocation method recognizes that service departments often provide each other with interdepartmental service, it is theoretically consi...






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In target costing,






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In target costing,






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Which one of the following is least likely to be involved in establishing standard costs for evaluation purposes?






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Which of the following statements is true for a firm that uses variable costing?






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Which method of inventory costing treats direct manufacturing costs and manufacturing overhead costs, both variable and fixed, as inventoriable costs...






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The difference between the sales price and total variable costs is






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A difference between standard costs used for cost control and budgeted costs






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A standard costing system is most often used by a firm in conjunction with






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The term gross margin for a manufacturing firm refers to excess of sales over






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Companies characterized by the production of basically homogeneous products will most likely use which of the following methods for the purpose of av...






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A standard-cost system may be used in Process Costing Job-Order Costing Activity-Based Costing






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Consider the cost of goods sold calculation shown below. Beginning inventory $100,000 Plus cost of goods manufactured 2,...






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Sully, Inc., manufactures wall clocks. Sully sells each clock for $30. Variable manufacturing expense for each clock is $18. Sully plans to sell 400 ...






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Which one of the following is least likely to be a reason to adopt a standard cost system?






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Lucy Sportswear manufactures a specialty line of T-shirts using a job-order costing system. During March, the following costs were incurred in comple...