Question 1

Which of the following statements is (are) false? (1) .In general,the term expense is used for managerial purposes,while the term cost refers to external financial reports.(2) .An opportunity cost is the benefit forgone by selecting one alternative over another.

Accepted Answer

A)  Only (1) is false.
B)  Only (2) is false.
C)  Both (1) and (2) are false.
D)  Neither (1) nor (2) are false.E) C) and D)
F) B) and C)

Question 2

The Work-in-Process Inventory of the Rapid Fabricating Corp.was $3,000 higher on December 31,2012 than it was on January 1,2012.This implies that in 2012

Accepted Answer

A)  cost of goods manufactured was higher than cost of goods sold.
B)  cost of goods manufactured was less than total manufacturing costs.
C)  manufacturing costs were higher than cost of goods sold.
D)  manufacturing costs were less than cost of goods manufactureD.E) A) and C)
F) C) and D)

Question 3

Which of the following should be considered part of a manufacturing company's direct labor cost?

Accepted Answer

A)  Factory supervisor's salary
B)  Forklift operator's hourly wages
C)  Employer-paid health insurance on factory assemblers' wages
D)  Cost of idle timeE) C) and D)
F) A) and B)

Question 4

Calculate the conversion costs from the following information:

Accepted Answer

A)  $3,000
B)  $4,000
C)  $4,500
D)  $5,000E) All of the above
F) B) and C)

Question 5

Makwa Industries has developed two new products but has only enough plant capacity to introduce one product during the current year.The following data will assist management in deciding which product should be selected.Makwa's fixed overhead includes rent and utilities,equipment depreciation,and supervisory salaries.Selling and administrative expenses are not allocated to individual products.  The total overhead cost of $27 for Makwa's Product W is a

Accepted Answer

A)  Sunk cost.
B)  Opportunity cost.
C)  Variable cost.
D)  Mixed cost.E) None of the above
F) A) and D)

Question 6

Which of the following statements is (are) true? (1) .An asset is a cost that will be matched with revenues in a future accounting period.(2) .Opportunity costs are recorded as intangible assets in the current accounting period.

Accepted Answer

A)  Only (1) is true.
B)  Only (2) is true.
C)  Both (1) and (2) are true.
D)  Neither (1) nor (2) are true.E) None of the above
F) A) and D)

Question 7

An opportunity cost is

Accepted Answer

A)  a cost that is charged against revenue in an accounting period.
B)  the foregone benefit from the best alternative course of action.
C)  the excess of operating revenues over operating costs.
D)  the cost assigned to the products sold during the perioD.E) None of the above
F) B) and D)

Question 8

The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows:  What are the estimated conversion costs per unit?

Accepted Answer

A)  $35
B)  $41
C)  $44
D)  $48E) A) and C)
F) None of the above

Question 9

Laner Company has the following data for the production and sale of 2,000 units.  What is the contribution margin per unit?

Accepted Answer

A)  $70
B)  $320
C)  $370
D)  $430E) None of the above
F) B) and D)

Question 10

Accounting systems typically record opportunity costs as assets and treat them as intangible items on the financial statements.Opportunity costs are not reflected in the accounting system-they are what did not happen.

Accepted Answer

A) True 
 B)False

Question 11

Variable marketing and administrative costs are included in determining full absorption costs.The two costs are included in full cost and not in determining full absorption costs.

Accepted Answer

A) True 
 B)False

Question 12

Makwa Industries has developed two new products but has only enough plant capacity to introduce one product during the current year.The following data will assist management in deciding which product should be selected.Makwa's fixed overhead includes rent and utilities,equipment depreciation,and supervisory salaries.Selling and administrative expenses are not allocated to individual products.  Research and development costs for Makwa's two new products are

Accepted Answer

A)  Prime costs.
B)  Conversion costs.
C)  Opportunity costs.
D)  Sunk costs.E) A) and B)
F) None of the above

Question 13

The amount of direct materials issued to production is found by

Accepted Answer

A)  subtracting ending work in process from total work in process during the period.
B)  adding beginning direct materials inventory and the delivered cost of direct materials.
C)  subtracting ending direct materials from direct materials available for production.
D)  adding delivered cost of materials,labor,and manufacturing overheaD.E) B) and C)
F) A) and C) C

Question 14

The costs of direct materials are classified as:

Accepted Answer

A)  Choice A
B)  Choice B
C)  Choice C
D)  Choice DE) C) and D)
F) B) and C) D

Question 15

The beginning Finished Goods Inventory plus the cost of goods manufactured equals

Accepted Answer

A)  ending finished goods inventory.
B)  cost of goods sold for the period.
C)  total work-in-process during the period.
D)  total cost of goods manufactured for the perioD.
E)  cost of goods available for sale for the period.F) B) and C)
G) A) and E)

Question 16

The difference between variable costs and fixed costs is (CMA adapted)

Accepted Answer

A)  Unit variable costs fluctuate and unit fixed costs remain constant.
B)  Unit variable costs are fixed over the relevant range and unit fixed costs are variable.
C)  Total variable costs are constant over the relevant range,while fixed costs change in the long-term.
D)  Total variable costs are variable over the relevant range but fixed in the long-term,while fixed costs never change.E) B) and C)
F) B) and D)

Question 17

Total cost of goods purchased minus beginning merchandise inventory plus ending merchandise inventory equals cost of goods sold.Purchases plus beginning inventory minus ending inventory equals cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 18

Which terms below correctly describe the cost of the black paint used to paint the dots on a pair of dice?

Accepted Answer

A)  Choice A
B)  Choice B
C)  Choice C
D)  Choice DE) B) and C)
F) A) and D)

Question 19

The difference between the variable ending inventory cost and the absorption ending inventory cost is:

Accepted Answer

A)  800 units times $15 per unit indirect manufacturing cost.
B)  800 units times $10 per unit material cost.
C)  800 units times $20 per unit variable conversion cost plus $15 per unit indirect manufacturing cost.
D)  800 units times $20 per unit variable conversion cost plus $15 per unit indirect manufacturing cost plus $16.67 per unit indirect operating costs.E) A) and B)
F) None of the above A

Question 20

An expense is an expired cost matched with revenues in a specific accounting period.This statement is the definition of expense.

Accepted Answer

A) True 
 B)False

Exam 2: Cost Concepts and Behavior

Which of the following statements is (are) false? (1) .In general,the term expense is used for managerial purposes,while the term cost refers to external financial reports.(2) .An opportunity cost is the benefit forgone by selecting one alternative over another.

Correct Answer
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The Work-in-Process Inventory of the Rapid Fabricating Corp.was $3,000 higher on December 31,2012 than it was on January 1,2012.This implies that in 2012

Correct Answer
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Which of the following should be considered part of a manufacturing company's direct labor cost?

Correct Answer
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Calculate the conversion costs from the following information:

Correct Answer
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Correct Answer
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Which of the following statements is (are) true? (1) .An asset is a cost that will be matched with revenues in a future accounting period.(2) .Opportunity costs are recorded as intangible assets in the current accounting period.

Correct Answer
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An opportunity cost is

Correct Answer
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The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows: What are the estimated conversion costs per unit?

Correct Answer
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Laner Company has the following data for the production and sale of 2,000 units. What is the contribution margin per unit?

Correct Answer
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Accounting systems typically record opportunity costs as assets and treat them as intangible items on the financial statements.Opportunity costs are not reflected in the accounting system-they are what did not happen.

Correct Answer
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Variable marketing and administrative costs are included in determining full absorption costs.The two costs are included in full cost and not in determining full absorption costs.

Correct Answer
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The amount of direct materials issued to production is found by

Correct Answer
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C

The costs of direct materials are classified as:

Correct Answer
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D

The beginning Finished Goods Inventory plus the cost of goods manufactured equals

Correct Answer
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The difference between variable costs and fixed costs is (CMA adapted)

Correct Answer
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Total cost of goods purchased minus beginning merchandise inventory plus ending merchandise inventory equals cost of goods sold.Purchases plus beginning inventory minus ending inventory equals cost of goods sold.

Correct Answer
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Which terms below correctly describe the cost of the black paint used to paint the dots on a pair of dice?

Correct Answer
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The difference between the variable ending inventory cost and the absorption ending inventory cost is:

Correct Answer
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A

An expense is an expired cost matched with revenues in a specific accounting period.This statement is the definition of expense.

Correct Answer
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Exam 2: Cost Concepts and Behavior

Which of the following statements is (are) false? (1) .In general,the term expense is used for managerial purposes,while the term cost refers to external financial reports.(2) .An opportunity cost is the benefit forgone by selecting one alternative over another.

Correct AnswerverifiedShow Answer

The Work-in-Process Inventory of the Rapid Fabricating Corp.was $3,000 higher on December 31,2012 than it was on January 1,2012.This implies that in 2012

Correct AnswerverifiedShow Answer

Which of the following should be considered part of a manufacturing company's direct labor cost?

Correct AnswerverifiedShow Answer

Calculate the conversion costs from the following information:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is (are) true? (1) .An asset is a cost that will be matched with revenues in a future accounting period.(2) .Opportunity costs are recorded as intangible assets in the current accounting period.

Correct AnswerverifiedShow Answer

An opportunity cost is

Correct AnswerverifiedShow Answer

The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows: What are the estimated conversion costs per unit?

Correct AnswerverifiedShow Answer

Laner Company has the following data for the production and sale of 2,000 units. What is the contribution margin per unit?

Correct AnswerverifiedShow Answer

Accounting systems typically record opportunity costs as assets and treat them as intangible items on the financial statements.Opportunity costs are not reflected in the accounting system-they are what did not happen.

Correct AnswerverifiedShow Answer

Variable marketing and administrative costs are included in determining full absorption costs.The two costs are included in full cost and not in determining full absorption costs.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The amount of direct materials issued to production is found by

Correct AnswerverifiedC

The costs of direct materials are classified as:

Correct AnswerverifiedD

The beginning Finished Goods Inventory plus the cost of goods manufactured equals

Correct AnswerverifiedShow Answer

The difference between variable costs and fixed costs is (CMA adapted)

Correct AnswerverifiedShow Answer

Total cost of goods purchased minus beginning merchandise inventory plus ending merchandise inventory equals cost of goods sold.Purchases plus beginning inventory minus ending inventory equals cost of goods sold.

Correct AnswerverifiedShow Answer

Which terms below correctly describe the cost of the black paint used to paint the dots on a pair of dice?

Correct AnswerverifiedShow Answer

The difference between the variable ending inventory cost and the absorption ending inventory cost is:

Correct AnswerverifiedA

An expense is an expired cost matched with revenues in a specific accounting period.This statement is the definition of expense.

Correct AnswerverifiedShow Answer

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C

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D

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A

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