Question 1

Sebastian Muﬄer, Inc.operates an automobile service facility.The table below shows the cost incurred during a month when 500 muﬄers were replaced.  Required: Fill in the missing amounts, labeled A through O, in the table above.

Accepted Answer

Explanatory notes:
A and C each equal $...

Question 2

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

Accepted Answer

A)  Differential cost.
B)  Opportunity cost.
C)  Marginal cost.
D)  Sunk cost.
E)  None of the answers is correct.F) A) and B)
G) A) and C)

Question 3

Gisano's Pizza operates a restaurant that serves double-decker pizzas.The table below shows the cost incurred during a month when 900 pizzas were served.  Required: Fill in the missing amounts, labeled A through O, in the table above.

Accepted Answer

Explanatory notes:
A and C each equal $...

Question 4

The true statement about cost behavior is that:

Accepted Answer

A)  variable costs are constant on a per-unit basis and change in total as activity changes.
B)  ﬁxed costs are constant on a per-unit basis and change in total as activity changes.
C)  ﬁxed costs are constant on a per-unit basis and constant in total as activity changes.
D)  variable costs change on a per-unit basis and change in total as activity changes.
E)  variable costs are constant on a per-unit basis and are constant in total as activity changes.F) A) and E)
G) D) and E)

Question 5

Beckett Industries has the following beginning and ending inventories for the month of April.  Beckett uses one overhead control account and charges overhead to production at 70% of direct labor cost.The company does not formally recognize over- or underapplied overhead until year-end. What is Beckett's cost of goods sold for April?

Accepted Answer

A)  $476,000.
B)  $484,000.
C)  $491,000.
D)  $502,000.
E)  None of the answers is correct.F) B) and D)
G) A) and D)

Question 6

At the most basic level, a cost may be deﬁned as a(n) :

Accepted Answer

A)  long-term asset.
B)  data classiﬁed for a speciﬁc application.
C)  sacriﬁce made to achieve a particular purpose.
D)  useful information for planning.
E)  suggestion for improvement.F) None of the above
G) B) and D)

Question 7

Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000. What are the total costs when 13,000 units are produced?

Accepted Answer

A)  $199,200.
B)  $214,800.
C)  $234,000.
D)  Total costs cannot be calculated based on the information presented.
E)  None of the answers is correct.F) A) and D)
G) None of the above

Question 8

Frontline Industries has the following beginning and ending inventories for the month of June.  Production data for the month of June is:  Frontline uses one overhead control account and charges overhead to production at 70% of direct labor cost.The company does not formally recognize over- or underapplied overhead until year-end. (a) What was the cost of the materials used by Frontline in June? (b) What is Frontline's total manufacturing cost for June? (c) What is Frontline's cost of goods transferred to ﬁnished goods inventory for June? (d) What is Frontline's cost of goods sold for June?

Accepted Answer

(a) Materials used: <img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> (b) Total manufactu...

Question 9

Which of the following would not be considered a direct cost with respect to the service department of a new car dealership?

Accepted Answer

A)  Wages of repair technicians.
B)  Property taxes paid by the dealership.
C)  Repair parts consumed.
D)  Salary of the department manager.
E)  Depreciation on new equipment used to analyze engine problems.F) B) and C)
G) A) and B)

Question 10

Finished goods inventory is ordinarily held for sale by a manufacturing company.

Accepted Answer

A) True 
 B)False

Question 11

Dorsett Technologies had ﬁnished goods inventory on January 1, 20X8 of $29,300 and ﬁnished goods inventory on December 31, 20X8 of $24,100.If the cost of goods sold for the year was $427,500, what was the cost of goods manufactured for the year?

Accepted Answer

A)  $402,100.
B)  $422,300.
C)  $417,100.
D)  $427,500.
E)  None of the answers is correct.F) A) and B)
G) None of the above

Question 12

Your brother is trying to sell his bicycle for $200.He refuses to lose more than $50 on the sale because it originally cost him $229 when he purchased it two years ago.Which of the following would be his sunk cost?

Accepted Answer

A)  $50.
B)  $200.
C)  $229.
D)  $179.
E)  None of the answers is correct.F) A) and E)
G) None of the above

Question 13

Which of the following is not a period cost?

Accepted Answer

A)  Legal costs.
B)  Public relations costs.
C)  Sales commissions.
D)  Wages of assembly-line workers.
E)  The salary of a company's chief ﬁnancial oﬃcer (CFO) .F) None of the above
G) D) and E)

Question 14

Work-in-process inventory is composed of:

Accepted Answer

A)  direct material and direct labor.
B)  direct labor and manufacturing overhead.
C)  direct material and manufacturing overhead.
D)  direct material, direct labor, and manufacturing overhead.
E)  direct material only.F) A) and E)
G) A) and D)

Question 15

Which of the following would not be characterized as a cost object?

Accepted Answer

A)  A vehicle manufactured by an automobile manufacturer.
B)  A large city's ﬁre department.
C)  A fast food restaurant located in a Midwest town.
D)  A regional airline ﬂight from Atlanta to Miami.
E)  All of these are examples of cost objects.F) A) and B)
G) A) and C)

Question 16

The true statement about cost behavior is that:

Accepted Answer

A)  variable costs change on a per-unit basis and change in total as activity changes.
B)  ﬁxed costs are constant on a per-unit basis and change in total as activity changes.
C)  ﬁxed costs are constant on a per-unit basis and are constant in total as activity changes.
D)  ﬁxed costs change on a per-unit basis and are constant in total as activity changes.
E)  variable costs are constant on a per-unit basis and are constant in total as activity changes.F) B) and E)
G) C) and E)

Question 17

Prime costs are comprised of:

Accepted Answer

A)  direct materials and manufacturing overhead.
B)  direct labor and manufacturing overhead.
C)  direct materials, direct labor, and manufacturing overhead.
D)  direct materials and direct labor.
E)  direct materials and indirect materials.F) None of the above
G) A) and B)

Question 18

Which of the following entities would most likely have raw materials, work in process, and ﬁnished goods?

Accepted Answer

A)  A petroleum reﬁner.
B)  A national department store.
C)  A carpet cleaning company.
D)  A regional airline.
E)  A state university.F) None of the above
G) A) and D)

Question 19

What would the cost of ﬁre insurance for a manufacturing plant generally be categorized as?

Accepted Answer

A)  Prime cost.
B)  Direct material cost.
C)  Period cost.
D)  Direct labor cost.
E)  Product cost.F) D) and E)
G) B) and C)

Question 20

Which of the following would not be a period cost?

Accepted Answer

A)  Sales salaries.
B)  Sales commissions.
C)  Tamper-proof packaging.
D)  Legal costs.
E)  Accounting costs.F) All of the above
G) A) and E)

Exam 2: Basic Cost Management Concepts

Which of the following would not be considered a direct cost with respect to the service department of a new car dealership?

Correct Answer
verified

Your brother is trying to sell his bicycle for $200.He refuses to lose more than $50 on the sale because it originally cost him $229 when he purchased it two years ago.Which of the following would be his sunk cost?

Correct Answer
verified

Gisano's Pizza operates a restaurant that serves double-decker pizzas.The table below shows the cost incurred during a month when 900 pizzas were served. Required: Fill in the missing amounts, labeled A through O, in the table above.

Correct Answer
verified
Explanatory notes:
A and C each equal $...
View Answer

Which of the following would not be a period cost?

Correct Answer
verified

Correct Answer
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(a) Materials used: (b) Total manufactu...
View Answer

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

Correct Answer
verified

Finished goods inventory is ordinarily held for sale by a manufacturing company.

Correct Answer
verified

Prime costs are comprised of:

Correct Answer
verified

Dorsett Technologies had ﬁnished goods inventory on January 1, 20X8 of $29,300 and ﬁnished goods inventory on December 31, 20X8 of $24,100.If the cost of goods sold for the year was $427,500, what was the cost of goods manufactured for the year?

Correct Answer
verified

Which of the following would not be characterized as a cost object?

Correct Answer
verified

Which of the following is not a period cost?

Correct Answer
verified

Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000. What are the total costs when 13,000 units are produced?

Correct Answer
verified

The true statement about cost behavior is that:

Correct Answer
verified

Correct Answer
verified

Which of the following entities would most likely have raw materials, work in process, and ﬁnished goods?

Correct Answer
verified

Work-in-process inventory is composed of:

Correct Answer
verified

At the most basic level, a cost may be deﬁned as a(n) :

Correct Answer
verified

Sebastian Muﬄer, Inc.operates an automobile service facility.The table below shows the cost incurred during a month when 500 muﬄers were replaced. Required: Fill in the missing amounts, labeled A through O, in the table above.

Correct Answer
verified
Explanatory notes:
A and C each equal $...
View Answer

What would the cost of ﬁre insurance for a manufacturing plant generally be categorized as?

Correct Answer
verified

The true statement about cost behavior is that:

Correct Answer
verified

Exam 2: Basic Cost Management Concepts

Which of the following would not be considered a direct cost with respect to the service department of a new car dealership?

Correct AnswerverifiedShow Answer

Your brother is trying to sell his bicycle for $200.He refuses to lose more than $50 on the sale because it originally cost him $229 when he purchased it two years ago.Which of the following would be his sunk cost?

Correct AnswerverifiedShow Answer

Gisano's Pizza operates a restaurant that serves double-decker pizzas.The table below shows the cost incurred during a month when 900 pizzas were served. Required: Fill in the missing amounts, labeled A through O, in the table above.

Correct Answerverified Explanatory notes:A and C each equal $...View AnswerShow Answer

Which of the following would not be a period cost?

Correct AnswerverifiedShow Answer

Correct Answerverified(a) Materials used: (b) Total manufactu...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Finished goods inventory is ordinarily held for sale by a manufacturing company.

Correct AnswerverifiedShow Answer

Prime costs are comprised of:

Correct AnswerverifiedShow Answer

Dorsett Technologies had ﬁnished goods inventory on January 1, 20X8 of $29,300 and ﬁnished goods inventory on December 31, 20X8 of $24,100.If the cost of goods sold for the year was $427,500, what was the cost of goods manufactured for the year?

Correct AnswerverifiedShow Answer

Which of the following would not be characterized as a cost object?

Correct AnswerverifiedShow Answer

Which of the following is not a period cost?

Correct AnswerverifiedShow Answer

Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000. What are the total costs when 13,000 units are produced?

Correct AnswerverifiedShow Answer

The true statement about cost behavior is that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following entities would most likely have raw materials, work in process, and ﬁnished goods?

Correct AnswerverifiedShow Answer

Work-in-process inventory is composed of:

Correct AnswerverifiedShow Answer

At the most basic level, a cost may be deﬁned as a(n) :

Correct AnswerverifiedShow Answer

Sebastian Muﬄer, Inc.operates an automobile service facility.The table below shows the cost incurred during a month when 500 muﬄers were replaced. Required: Fill in the missing amounts, labeled A through O, in the table above.

Correct Answerverified Explanatory notes:A and C each equal $...View AnswerShow Answer

What would the cost of ﬁre insurance for a manufacturing plant generally be categorized as?

Correct AnswerverifiedShow Answer

The true statement about cost behavior is that:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Explanatory notes:
A and C each equal $...
View Answer

Correct Answer
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Correct Answer
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(a) Materials used: (b) Total manufactu...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Explanatory notes:
A and C each equal $...
View Answer

Correct Answer
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Correct Answer
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