1. (TCO 1) A difference between actual costs and planned costs (Points: 4)
should
be investigated if the amount is exceptional.
indicates that the planned cost was
poorly estimated.
indicates that the manager is doing a poor job.
should be
ignored unless it involves the cost of ingredients.
2. (TCO 1) A company has a cost that is $2.00 per unit at a volume of 12,000 units and
$2.00 per unit at a volume of 16,000 units. What type of cost is this? (Points:
4)
Fixed
Variable
Sunk
Incremental
3. (TCO 2) Ice Box Company manufactures refrigerators. Which of the following items is
most likely to be an indirect material cost for Ice Box Company? (Points: 4)
Factory
supervisor’s salary
Lubricant for refrigerator door hinges
Glass shelves for
the refrigerators
Refrigerator motors
4. (TCO 2) A form used to accumulate the cost of producing an item is called a(n) (Points:
4)
job-cost sheet
material requisition
balance sheet
invoice
5. (TCO 3) Why is it necessary to compute equivalent units separately for materials and
conversion costs? (Points: 4)
Mistakes are made in the accounting for these
costs
Materials and conversion enter the production process at different
rates
Conversion costs are more difficult to estimate
None of the above reasons
are true
6. (TCO 3) In the assembly department, all the direct materials are added at the beginning
of the processing. Beginning Work in Process inventory consists of 2,000 units with a
direct materials cost of $31,860. During the period, 15,000 units are started and direct
materials costing $250,000 are charged to the department. If there are 1,000 units in
ending inventory, what is the cost per equivalent unit? (Points:
4)
$15.93
$15.63
$14.83
$16.58
7. (TCO 4) Regression analysis (Points: 4)
uses all the available data points to
estimate a cost equation
can be performed by many spreadsheet
programs
provides an equation that can be used to estimate total costs at different
levels
all of the above
8. (TCO 4) Beaudreaux Motors is operating at its break-even point of 16,000 units.
Which of the following statements is not true? (Points: 4)
The amount of the
company’s total costs equals the amount of its revenues.
The company’s fixed costs
equal its variable costs.
The company’s profit equals zero.
Assuming no other
changes, if the company sold more units, it would earn a profit.
9. (TCO 5) Which of the following is treated as a product cost in full costing? (Points:
4)
Sales commissions
Administrative salaries
Factory
supervisor
Security at corporate headquarters
10. (TCO 5) When the number of units sold is equal to the number of units produced, net
income using full costing will be (Points: 4)
greater than net income under variable
costing
equal to net income using variable costing
less than income using
variable costing
none of the above
11. (TCO 6) A major problem with cost-plus contracts is that they (Points: 4)
are not
acceptable under GAAP.
cause the supplier to take significant financial
risks.
require the supplier to use variable costing.
create an incentive to allocate
as much cost as possible to the goods produced under the cost-plus contract.
12. (TCO 6) Which of the following steps is not involved in the ABC approach? (Points:
4)
Identify activities which cause costs to be incurred.
Allocate costs to products
based on activity usage.
Group costs of activities into cost pools.
Improve
processes based on benchmarking
13. (TCO 7) Which of the following is not a term used to describe the additional costs
incurred as a result of selecting one decision over another? (Points: 4)
Differential
costs
Sunk costs
Relevant costs
Incremental costs
1. (TCO 7) Common costs (Points: 4)
are fixed costs that are not directly traceable to
an individual product line.
normally not avoidable.
Both A and B are
true.
Neither A nor B is true.
2. (TCO 8) Activity based pricing seeks to (Points: 4)
charge customers with the
costs they are creating.
make greater profits by charging all customers
more.
maintain all customers in the customer base.
all of the above.
3. (TCO 8) Which of the following should be true in order for a company to accept a
special order? (Points: 4)
Variable costs are less than fixed costs
Incremental
revenues exceed incremental costs
Opportunity costs are zero
The order is for
a current customer
4. (TCO 9) Present value techniques (Points: 4)
ignore cash flows that will occur
more than ten years in the future.
are a way of converting future dollars into
equivalent current dollars.