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1 | |
A job order costing system would probably be appropriate for a firm that produces: |
| | A) | Automobiles. |
| | B) | Stained glass windows. |
| | C) | Video cassettes. |
| | D) | Microcomputers. |
| | E) | None of the above. |
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2 | |
Suppose your accounting textbook is the cost object of concern. The paper used to print the textbook is a(n): |
| | A) | Fixed cost. |
| | B) | Labor cost. |
| | C) | Direct cost. |
| | D) | Indirect cost. |
| | E) | Period cost. |
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3 | |
An example of a period cost is: |
| | A) | Salary of a production supervisor. |
| | B) | Raw materials used in production. |
| | C) | Property taxes on a factory building. |
| | D) | Advertising and promotion expenditures. |
| | E) | None of the above. |
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4 | |
An example of a product cost is: |
| | A) | Advertising expense for the product. |
| | B) | A portion of the president's travel expense. |
| | C) | Interest expense on a loan to finance inventory. |
| | D) | Production line maintenance costs. |
| | E) | None of the above. |
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5 | |
Costs may be allocated to a product or activity for many purposes, but care must be exercised when using allocated costs because: |
| | A) | Direct costs identified with the product or activity may not be accurately assigned. |
| | B) | Fixed costs will change in total if the volume of activity changes. |
| | C) | All costs may not have been allocated to the product or activity. |
| | D) | Arbitrarily allocated costs may not behave in the way assumed in the allocation method. |
| | E) | Variable costs will remain constant in total if the volume of activity changes. |
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6 | |
Common costs pertain to costs that: |
| | A) | Are directly traceable to a cost object. |
| | B) | Are not directly traceable to a cost object. |
| | C) | Are commonly incurred. |
| | D) | Are mixed costs. |
| | E) | Are direct costs. |
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7 | |
Which of the following best describes the correct sequence of flow of costs for a manufacturing firm? |
| | A) | Raw materials, finished goods, work-in-process, cost of goods sold. |
| | B) | Work-in-process, raw materials, finished goods, cost of goods sold. |
| | C) | Raw materials, work-in-process, finished goods, cost of goods sold. |
| | D) | Raw materials, work-in-process, cost of goods sold, finished goods. |
| | E) | None of the above. |
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8 | |
An industry most likely to use process costing is: |
| | A) | Coal mining. |
| | B) | Textbook publishing. |
| | C) | Aircraft manufacturing. |
| | D) | Construction. |
| | E) | Legal services. |
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9 | |
When a manufacturing firm has a highly automated plant, the most probable basis for applying manufacturing overhead costs to units produced would be: |
| | A) | Units produced. |
| | B) | Machine hours. |
| | C) | Direct labor cost. |
| | D) | Material cost. |
| | E) | Direct labor hours. |
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10 | |
Overapplied overhead would result when: |
| | A) | Overhead costs budgeted for the period exceeds actual overhead cost incurred. |
| | B) | Actual overhead costs incurred exceed overhead applied to production. |
| | C) | Overhead applied to production exceeds actual overhead costs incurred. |
| | D) | The plant operated at fewer hours than were budgeted. |
| | E) | None of the above. |
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2002 McGraw-Hill Higher Education