Question 1

Glass Industries reported the following data for the year just ended: sales revenue,$1,750,000;cost of goods sold,$980,000;cost of goods manufactured,$560,000;and selling and administrative expenses,$170,000.Glass' gross margin would be:

Accepted Answer

A)  $940,000.
B)  $1,190,000.
C)  $1,020,000.
D)  $380,000.
E)  $770,000.F) A) and B)
G) A) and C)

Question 2

Hamilton Company had the following inventory balances at the beginning and end of the year:
A.Calculate cost of goods manufactured.
B.Calculate cost of goods sold.
C.Determine Hamilton's net income.

Accepted Answer

During the year,the company purchased ...

Question 3

Which of the following is a product cost?

Accepted Answer

A)  Glass in an automobile.
B)  Advertising.
C)  The salary of the vice president-finance.
D)  Rent on a factory.
E)  Both "A" and "D."F) C) and E)
G) B) and E)

Question 4

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

Accepted Answer

A)  The number of units sold.
B)  The number of direct labor hours worked.
C)  The number of machine hours worked.
D)  The number of units produceD.
E)  The number of employees working in the factory.F) B) and C)
G) C) and D)

Question 5

Depreciation of factory equipment would be classified as:

Accepted Answer

A)  operating cost.
B)  "other" cost.
C)  manufacturing overhead.
D)  period cost.
E)  administrative cost.F) A) and E)
G) All of the above

Question 6

As activity increases,unit variable cost:

Accepted Answer

A)  increases proportionately with activity.
B)  decreases proportionately with activity.
C)  remains constant.
D)  increases by a fixed amount.
E)  decreases by a fixed amount.F) A) and E)
G) A) and D)

Question 7

For the year just ended,Cole Corporation's manufacturing costs (raw materials used,direct labor,and manufacturing overhead) totaled $1,500,000.Beginning and ending work-in-process inventories were $60,000 and $90,000,respectively.Cole's balance sheet also revealed respective beginning and ending finished-goods inventories of $250,000 and $180,000.On the basis of this information,how much would the company report as cost of goods manufactured (CGM) and cost of goods sold (CGS) ?

Accepted Answer

A)  CGM,$1,430,000;CGS,$1,460,000.
B)  CGM,$1,470,000;CGS,$1,540,000.
C)  CGM,$1,530,000;CGS,$1,460,000.
D)  CGM,$1,570,000;CGS,$1,540,000.
E)  Some other amounts.F) A) and B)
G) B) and E)

Question 8

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

Accepted Answer

A)  An automobile manufactured by General Motors.
B)  The New York Fire Department.
C)  A Burger King restaurant located in Cleveland,Ohio.
D)  A Delta Airlines flight from Atlanta to Miami.
E)  All of these are examples of cost objects.F) B) and E)
G) A) and B)

Question 9

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 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 D)
G) All of the above

Question 10

Pumpkin Enterprises began operations on January 1,20x1,with all of its activities conducted from a single facility.The company's accountant concluded that the year's building depreciation should be allocated as follows: selling activities,20%;administrative activities,35%;and manufacturing activities,45%.If Pumpkin sold 60% of 20x1 production during that year,what percentage of the depreciation would appear (either directly or indirectly) on the 20x1 income statement?

Accepted Answer

A)  27%.
B)  45%.
C)  55%.
D)  82%.
E)  100%.F) A) and B)
G) A) and C)

Question 11

Fixed costs are costs that:

Accepted Answer

A)  vary directly with changes in activity.
B)  vary inversely with changes in activity.
C)  remain constant on a per-unit basis.
D)  remain constant as activity changes.
E)  increase on a per-unit basis as activity increases.F) A) and E)
G) C) and E)

Question 12

Inventoriable costs are expensed when incurred.

Accepted Answer

A) True 
 B)False

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) B) and C)
G) A) and C)

Question 14

Conversion costs are:

Accepted Answer

A)  direct material,direct labor,and manufacturing overhead.
B)  direct material and direct labor.
C)  direct labor and manufacturing overhead.
D)  prime costs.
E)  period costs.F) A) and E)
G) All of the above

Question 15

As activity decreases,unit variable cost:

Accepted Answer

A)  increases proportionately with activity.
B)  decreases proportionately with activity.
C)  remains constant.
D)  increases by a fixed amount.
E)  decreases by a fixed amount.F) B) and E)
G) D) and E)

Question 16

Which of the following would not be classified as a product cost?

Accepted Answer

A)  Direct materials.
B)  Direct labor.
C)  Indirect materials.
D)  Insurance on a manufacturing plant.
E)  Sales commissions.F) A) and D)
G) A) and E)

Question 17

Which of the following is an example of a fixed cost?

Accepted Answer

A)  Paper used in the manufacture of textbooks.
B)  Property taxes paid by a firm to the City of Los Angeles.
C)  The wages of part-time workers who are paid $8 per hour.
D)  Gasoline consumed by salespersons' cars.
E)  Surgical supplies used in a hospital's operating room.F) None of the above
G) All of the above

Question 18

Costs that are expensed when incurred are called:

Accepted Answer

A)  product costs.
B)  direct costs.
C)  inventoriable costs.
D)  period costs.
E)  indirect costs.F) A) and B)
G) A) and E)

Question 19

The accounting records of Diego Company revealed the following costs,among others: 
Costs that would be considered in the calculation of manufacturing overhead total:

Accepted Answer

A)  $149,000.
B)  $171,000.
C)  $186,000.
D)  $442,000.
E)  some other amount.F) All of the above
G) D) and E)

Question 20

If direct materials used during the year were $135,000,what was cost of goods manufactured?

Accepted Answer

A)  $140,500.
B)  $539,000.
C)  $409,500.
D)  $544,500.
E)  some other amount.F) A) and B)
G) C) and E)

Exam 2: Basic Cost Management Concepts and Accounting for Mass Customization Operations

Which of the following would not be classified as a product cost?

Correct Answer
verified

Costs that are expensed when incurred are called:

Correct Answer
verified

Fixed costs are costs that:

Correct Answer
verified

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

Correct Answer
verified

Glass Industries reported the following data for the year just ended: sales revenue,$1,750,000;cost of goods sold,$980,000;cost of goods manufactured,$560,000;and selling and administrative expenses,$170,000.Glass' gross margin would be:

Correct Answer
verified

As activity increases,unit variable cost:

Correct Answer
verified

Which of the following is a product cost?

Correct Answer
verified

The accounting records of Diego Company revealed the following costs,among others: Costs that would be considered in the calculation of manufacturing overhead total:

Correct Answer
verified

The true statement about cost behavior is that:

Correct Answer
verified

If direct materials used during the year were $135,000,what was cost of goods manufactured?

Correct Answer
verified

As activity decreases,unit variable cost:

Correct Answer
verified

Conversion costs are:

Correct Answer
verified

Depreciation of factory equipment would be classified as:

Correct Answer
verified

Which of the following is an example of a fixed cost?

Correct Answer
verified

Inventoriable costs are expensed when incurred.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Which of the following is not a period cost?

Correct Answer
verified

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

Correct Answer
verified

Hamilton Company had the following inventory balances at the beginning and end of the year: A.Calculate cost of goods manufactured. B.Calculate cost of goods sold. C.Determine Hamilton's net income.

Correct Answer
verified

During the year,the company purchased ...
View Answer

Exam 2: Basic Cost Management Concepts and Accounting for Mass Customization Operations

Which of the following would not be classified as a product cost?

Correct AnswerverifiedShow Answer

Costs that are expensed when incurred are called:

Correct AnswerverifiedShow Answer

Fixed costs are costs that:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Glass Industries reported the following data for the year just ended: sales revenue,$1,750,000;cost of goods sold,$980,000;cost of goods manufactured,$560,000;and selling and administrative expenses,$170,000.Glass' gross margin would be:

Correct AnswerverifiedShow Answer

As activity increases,unit variable cost:

Correct AnswerverifiedShow Answer

Which of the following is a product cost?

Correct AnswerverifiedShow Answer

The accounting records of Diego Company revealed the following costs,among others: Costs that would be considered in the calculation of manufacturing overhead total:

Correct AnswerverifiedShow Answer

The true statement about cost behavior is that:

Correct AnswerverifiedShow Answer

If direct materials used during the year were $135,000,what was cost of goods manufactured?

Correct AnswerverifiedShow Answer

As activity decreases,unit variable cost:

Correct AnswerverifiedShow Answer

Conversion costs are:

Correct AnswerverifiedShow Answer

Depreciation of factory equipment would be classified as:

Correct AnswerverifiedShow Answer

Which of the following is an example of a fixed cost?

Correct AnswerverifiedShow Answer

Inventoriable costs are expensed when incurred.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a period cost?

Correct AnswerverifiedShow Answer

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

Correct AnswerverifiedShow Answer

Hamilton Company had the following inventory balances at the beginning and end of the year: A.Calculate cost of goods manufactured. B.Calculate cost of goods sold. C.Determine Hamilton's net income.

Correct Answerverified During the year,the company purchased ...View AnswerShow Answer

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Correct Answer
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During the year,the company purchased ...
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