-
1. Cost allocation is the
tracing and reassigning of costs to one or more
cost objectives such
as
departments, customers, or products.
True
assignment is the
tracing or allocating of costs to one or more cost
objectives, such as
activities and departments.
True
3. A cost pool is a
group of individual costs that is allocated to
cost objectives using multiple
cost drivers.
False
contribution approach is a method of internal
reporting that emphasizes the distinction
between variable and fixed
costs for the purpose of better decision
making.
True
5.
Relevant information is
the historical costs and revenues that differ
because of alternative courses of actions.
False
6.
Relevant
information might have an element of difference
among alternatives.
False
7.
The absorption approach
emphasizes the distribution between fixed and
variable costs.
False
8.
The contribution margin
is computed using variable manufacturing costs,
and variable selling and administrative
costs.
True
9.
Opportunity costs need to
be considered when deciding on the use of limited
resources.
True
10. Opportunity cost depends on
alternatives available.
True
11. Opportunity costs and outlay costs
are widely used
synonyms.
False
12.
Sunk cost is another
term for historical cost or past cost.
True
1._____ is
a method of approximating cost functions.
a.
Cost driver
analysis
b.
Account analysis
t analysis
d.
Account analysis
2.______ is the application of cost
measures to expected future activity levels to
forecast future costs.
ty analysis
b. Cost prediction
ement of cost behavior
d.
A cost function
3. The
process of identifying appropriate cost drivers
and their effects on the costs of making a product
or providing a
service is
called _____.
a.
cost prediction
b.
cost measurement
ty
analysis
d.
budgeting
4. _____ is the
process of reassigning cost to a cost object.
a.
Cost
accumulation
b.
Cost
accounting
c. Cost
allocation
d.
Cost application
5. Where a
specific product is the cost object, the hourly
wages of assembly workers who work on only that
product
would be classified
as a(n) _____.
, variable
cost
b. direct, fixed cost
c.
indirect, variable cost
d. indirect,
fixed cost
6.
Where a
specific product is the cost object, the wages of
a security guard
w
ould probably be classified
as
a(n) _____.
,
variable cost
, fixed cost
c.
indirect, variable cost
d.
indirect, fixed cost
a specific product is the cost object,
the materials used to manufacture
the
product would probably be
classified as a(n) _____.
,
variable cost
b. direct,
fixed cost
c.
indirect,
variable cost
d. indirect, fixed cost
8.
_____ is the predicted future costs and revenues
that will differ among alternative courses of
action.
nt information
costs and revenues
ical information
d. Predictable information
9. In a special order decision, fixed
costs that do not differ between two alternatives
are _____.
a.
of
major importance to the decision
ered
opportunity costs
c.
important only if they are a material
dollar amount
d.
irrelevant
10._____ is the
additional cost resulting from producing and
selling one additional unit.
al cost
cost
c.
Opportunity
cost
d.
Markup
11. Price elasticity measures the
_____.
a.
amount
customers are willing to pay for a product or
service
b. effect of price
changes on sales volume
c.
number of units a company is willing to
sell
d.
amount of competition in a given
industry
12. In perfect competition,
the profit-maximizing volume is the quantity at
which _____.
a.
marginal
cost equals marginal revenue
bution margin equals fixed cost
c.
marginal
revenue equals price
exceeds marginal cost
13. Sue is
considering leav
ing her current
position to open a coffee shop.
Sue’s current salary is $$83,000. Annual
coffee
shop revenue and
costs are estimated at $$260,000 and $$210,000,
respectively.
_____ is the
opportunity cost of opening
the coffee shop.
a.
$$83,000
b.
$$210,000
c.
$$343,000
d.
$$40,000
14.
Mary is considering
leaving her current position to open an ice cream
shop. Mary’s current salary is $$77,000. Annual
ice cream shop revenue and
costs are estimated at $$260,000 and $$210,000,
respectively.
_____ is the
opportunity cost of
remaining employed.
a.
$$77,000
b.$$210,000
c.$$287,000
d.$$50,
000
(
$$260,000 - $$210,000 =
$$50,000)
15_____ costs will
not continue if an ongoing operation is changed or
deleted.
a.
Avoidable
b.
Common
c. Sunk
d.
Differential
16. _____ costs
are costs that continue even if an operation is
halted.
a.
Common
b. Sunk
c.
Unavoidable
d.
Variable
cturing costs incurred after the split-
off
are known as _____costs.
a.
joint
t
-off
d.
separable
18. The _____ is the juncture in
manufacturing where the joint products become
individually identifiable.
processing juncture
b. split-off point
point
icant juncture
19._____ costs are costs of
manufacturing two or more products that are not
separately identifiable as individual products
until their split-off
point.
a.
Separable
c.
Incremental
20.
In absorption costing, costs are separated into
the major categories of_____.
a.
manufacturing and
nonmanufacturing
b.
manufacturing and fixed
c.
fixed and variable
d.
variable and
nonmanufacturing
21. _____ is (are)
used for external reporting.
tion
costing
b.
Variable costing
c.
Direct costing
d.
Absorption costing and
variable costing
22. Absorption costing
assigns _____ to the product.
a.
variable manufacturing
costs
b.
all variable costs
c.
variable and
fixed manufacturing costs
d.
all fixed and variable costs
23. The production-volume variance is
the difference between_____.
a.
applied fixed overhead
and budgeted fixed overhead
b.
expected fixed overhead
and actual fixed overhead
c.
expected fixed overhead
and budgeted fixed overhead
d.
budgeted fixed overhead
and actual fixed overhead
te whether each of the following costs
is an Inventoriable cost (I) or a Period cost (P):
______ 1.
depreciation on factory equipment
______ 2.
depreciation on treasurer's desk
______ 3.
direct materials
______ 4.
factory supplies
______ 5.
indirect labor
______ 6.
factory equipment repairs and
maintenance
______ 7.
office supplies
______ 8.
advertising expense
______ 9.
depreciation on office equipment
______10. direct labor
______11.
factory supervisor's salary
______12.
factory utilities
______13. indirect
materials
______14. office salaries
______15. sales
commissions
Answer:
__I__ 1.
__I__
6.
__I__11.
__P__ 2.
__P__ 7.
__I__12.
__I__ 3.
__P__ 8.
__I__13.
__I__ 4.
__P__ 9.
__P__14.
__I__ 5.
__I__10.
__P__15.