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Work-in-process consists of partially completed goods not yet ready for sale.

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Total variable costs change in direct proportion to changes in cost drivers.

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Office Supply Company manufactures office furniture. Recently the company decided to develop a formal cost accounting system. The company is currently converting all costs into classifications as related to its manufacturing processes. Required: For the following items, label each as being appropriate for ā€¢ direct cost tracing of the finished furniture, ā€¢ indirect cost allocation of an indirect manufacturing cost to the finished furniture, or ā€¢ as a nonmanufacturing item. Office Supply Company manufactures office furniture. Recently the company decided to develop a formal cost accounting system. The company is currently converting all costs into classifications as related to its manufacturing processes. Required: For the following items, label each as being appropriate for ā€¢ direct cost tracing of the finished furniture, ā€¢ indirect cost allocation of an indirect manufacturing cost to the finished furniture, or ā€¢ as a nonmanufacturing item.

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Which of the following statements is true?


A) Product costs and period costs are the same.
B) Inventoriable costs are expensed as incurred according to GAAP.
C) Inventoriable costs are costs that remain in inventory after the product is sold.
D) "Product costs" refers to the particular costs allocated to a product to make a specific decision.
E) Conversion costs are non-manufacturing costs.

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Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company), Gregory Food Retailers (a merchandising company), and Larson Real Estate (a service sector company). Classify each item as either inventoriable (I) costs or period (P) costs. Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company), Gregory Food Retailers (a merchandising company), and Larson Real Estate (a service sector company). Classify each item as either inventoriable (I) costs or period (P) costs.

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Which of the following statements about the key features of cost accounting and cost management is true?


A) When making decisions about what products to produce, managers need to know how revenue and costs vary with changes in output levels.
B) Managers need to understand that period costs remain the same from one period to the next.
C) The costing system allocates direct costs and traces indirect costs to products.
D) When making decisions, managers must understand that all revenue and costs are relevant.
E) Cost accounting is used for managerial decision making, not for financial statements.

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Prime costs consist of direct and indirect manufacturing labour.

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Which one of the following examples could be classified as a direct cost?


A) The costs of an entire factory's electricity related to a product; the product line is the cost object.
B) The printing costs incurred for payroll cheque processing; the payroll cheque processing is the cost object.
C) The salary of a maintenance supervisor in the manufacturing plant; Product A is the cost object.
D) The costs incurred for electricity in the office; the accounting office is the cost object.
E) The cost of advertising the products.

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Delivery charges are typically considered to be an indirect cost because it cannot be traced to each customer.

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Fixed costs depend on the


A) amount of resources used.
B) amount of resources acquired.
C) volume of production.
D) volume of sales.
E) allocation method.

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The total of the costs assigned to a particular product for a specific purpose is called


A) direct cost.
B) inventoriable cost.
C) marketing cost.
D) product cost.
E) prime cost.

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Costs of Sales is another way of phrasing Cost of Goods Sold.

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Use the information below to answer the following question(s) . The following information pertains to Payton's Shoe Manufacturing: Use the information below to answer the following question(s) . The following information pertains to Payton's Shoe Manufacturing: 99,500 pairs of shoes are sold during the year for $18. -What is Payton's manufacturing cost per pair of shoes? A) $10.00 B) $10.05 C) $100.00 D) $18.00 E) $9.95 99,500 pairs of shoes are sold during the year for $18. -What is Payton's manufacturing cost per pair of shoes?


A) $10.00
B) $10.05
C) $100.00
D) $18.00
E) $9.95

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When should the overtime premium of direct manufacturing labour be considered an indirect manufacturing cost? A direct manufacturing cost?

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The overtime premium of direct manufactu...

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What is the meaning of the term "cost object"? Give an example of a cost object that would be used in a manufacturing company, a merchandising company, and a service sector company?

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A cost object is anything for which a me...

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Whether a company traces costs directly to an output unit or not depends upon


A) the materiality of the contribution a cost makes to the total cost per output unit.
B) the amount of similar costs in the cost assignment.
C) the effect of cost tracing on overhead.
D) the employment of cost management.
E) the amount of customer satisfaction.

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Use the information below to answer the following question(s) . Frazer Inc. had the following activities in the year: Use the information below to answer the following question(s) . Frazer Inc. had the following activities in the year: -Which of the following is true of period costs? A) They are also called fixed costs. B) They are part of the cost of goods sold. C) They are expected to benefit future periods. D) They are costs incurred to generate revenue in a specific time period except the cost of manufacturing accumulated as cost of goods sold. E) For merchandising sector companies they include all costs not related to the cost of goods purchased for resale. -Which of the following is true of period costs?


A) They are also called fixed costs.
B) They are part of the cost of goods sold.
C) They are expected to benefit future periods.
D) They are costs incurred to generate revenue in a specific time period except the cost of manufacturing accumulated as cost of goods sold.
E) For merchandising sector companies they include all costs not related to the cost of goods purchased for resale.

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Products, services, departments, and customers may be cost objects.

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Answer the following question(s) using the information below. The West Company manufactures several different products. Unit costs associated with Product ORD203 are as follows: Answer the following question(s) using the information below. The West Company manufactures several different products. Unit costs associated with Product ORD203 are as follows: -What are the variable costs per unit associated with Product ORD203? A) $60 B) $83 C) $66 D) $48 E) $12 -What are the variable costs per unit associated with Product ORD203?


A) $60
B) $83
C) $66
D) $48
E) $12

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Overtime premium is normally considered as a component of direct labour.

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Showing 41 - 60 of 165

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