1. Which one of the following is least to be an objective of a cost accounting system?
a. Product costing and Inventory valuation
b. Department efficiency
c. Sales commission determination
d. Income determination
2. In cost terminology, conversion cost consists of
a. Direct and indirect labor
b. Direct materials and direct labor
c. Direct labor and factory overhead
d. Indirect labor and variable overhead
3. All costs related to the manufacturing function in a company are
a. Prime costs
b. Direct costs
c. Product cost
d. Direct cost
4. The wages of the factory janitorial staff should be classified as
a. Prime cost
b. Period cost
c. Factory overhead
d. Direct cost
5. Relevant costs are
a. all fixed and variable costs
b. costs that would be incurred within the relevant range of production
c. past costs that are expected to be different in the future
d. anticipated future costs that will differ among various alternatives
6. Differential cost is
a. The difference in total costs that results from selecting one choice instead of another
b. The profit foregone by selecting one choice over another
c. A cost that constitutes to be incurred in the absence of activity
d. A cost common to tall choices in question and not clearly or feasibly allocable to any of them.
7. An imputed cost is
a. The difference in total costs that results from selecting one choice instead of another
b. A cost that may be shifted to the future with little or no effect on current operations
c. A cost that cannot be avoided because it has already been incurred
d. A cost that does not entail any peso outlay but is relevant to the decision making process
8. Out of pocket costs
a. Are not recoverable
b. Are under the influence of a supervisor
c. Require expeenditure of cash
d. Are irrelevant
9. Work in process is a (an)
a. Inventory account
b. Cost of good sold account
c. Productivity measure
d. Nominal account
10. Theoretically, cash discounts permitted on purchased raw materials should be
a. Added to other income, whether taken or not
b. Added to other income, only if taken
c. Deducted from inventory, whether taken or not
d. Deducted from inventory, only if taken
11. The difference between variable costs and fixed costs is
a. Unit variable coasts fluctuate, and unit fixed costs remain constant
b. Unit variable costs are fixed over the relevant range; and unit fixed costs are variable
c. Total variable costs are variable over the relevant range and fixed in the long term; while fixed costs never change
d. Unit variable costs change in varying increments. While unit fixed coasts change in equal increments.
12. The relevant range is the range over which
a. Costs may fluctuate
b. Cost relationship are valid
c. Production may vary
d. Relevant costs are incurred
13. What type of cost is depreciation based on the number of units produced
a. Out of pocket
b. Marginal
c. Variable
d. Fixed cost
14. Depreciation based on the straight line method is classified as what type of cost?
a. Opportunity
b. Relevant
c. Variable
d. Fixed
15. Costs that increase as the volume of activity decreases within the relevant range are
a. Average costs per unit
b. Average variable costs per unit
c. Total fixed costs
d. Total variable costs