Multiple choice question based on cost accounting.
1. Period costs for a manufacturing company would flow directly to:
a.Job cost sheet.
b.The current balance sheet.
c.The current manufacturing statement.
d.Factory overhead.
e.The current income statement.
2. Equivalent units of production are equal to:
a.The number of units introduced into the process that period.
b.The number of units that could have been completed if all effort had been applied to units that were started and completed that period.
c.Physical units that were completed this period from all effort being applied to them.
d.The num units actually produced that period.
e.The number of units still in process that period.
3. Using a traditional costing approach, which of the following manufacturing costs are assigned to products?
a.Fixed manuFacturing overhead, direct materials and direct labor.
b.Variable manufacturing overhead, direct materials, direct labor and fixed manufacturing overhead.
c.Variable manufacturing overhead, direct materials and direct labor.
d.Direct labor and variable manufacturing head.
e.Direct materials and direct labor.
4. What are three advantages of activity-based costing over traditional volume-based allocation methods?
a.Fewer allocation bases, ease of use, and a direct correlation to production volume.
b.More accurate product costing, fewer cost objects, and a direct correlation to production volume.
c.More accurate product costing, ease of use, less costly to implement.
d.What are three advantages of activity-based costing over traditional volume-based allocation methods?
e.More accurate product costing, more effective cost control, and better focus on the relevant factors for decision making.
5. Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products called are:
a.Direct labor.
b.Sunk labor.
c.All of the above.
d.Finished labor.
e.Indirect labor.
6. A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:
a.Cost of goods purchased.
b.Cost of goods available.
c.Beginning merchandise inventory.
d.Ending merchandise inventory.
e.Cost of goods sold.
7. At the current year-end, Hardly Company found that its overhead was under applied by $2,500, and this amount was not deemed to be a material amount. Based on this information, Hardly should
a.Carry the $2,500 to the next period.
b.Do nothing about the $2,500, since it is not material, and it is likely that overhead will be over applied by the same amount next year.
c.Close the $2,500 to Finished Goods Inventory.
d.Carry the $2,500 to the income statement as "Other Expense"
e.Close the $2,500 to Cost of Goods Sold.
8. The three major cost components of a manufactured product are:
a.General, selling, and administrative costs.
b.Marketing, selling, and administrative costs.
c.Differential costs, opportunity costs, and sunk costs.
d.Indirect labor, indirect materials, and miscellaneous factory expenses.
e.Direct materials, direct labor, and factory overhead.
9. The sales level at which a company neither earns a profit nor incurs a loss is the:
a.Step-wise variable level.
b.Relevant range.
c.Break-even point.
d.Contribution margin.
e.Margin of safety.
10. Regardless of the system used in departmental cost analysis:
a.Direct costs are allocated, indirect costs are not.
b0Indirect costs are allocated, direct costs are not.
c.Total departmental costs will always be the same.
d.Neither direct nor indirect costs are allocated.
e.Both direct and indirect costs are allocated.