Cost and Managerial Accounting: Review Sheet

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ACG 4341 - Review Sheet - Spring 2012

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____1.Which of the following defines variable cost behavior?

Total cost reactionto increase in activity|Cost per unit reactionto increase in activity|

a.|remains constant remains constant|
b.|remains constant increases|
c.|increases increases|
d.|increases remains constant|

____2.When cost relationships are linear, total variable prime costs will vary in proportion to changes in a.|direct labor hours.|
b.|total material cost.|
c.|total overhead cost.|
d.|production volume.|

____3.Which of the following would generally be considered a fixed factory overhead cost?

Straight-line|Factory|Units-of-production|
depreciation|insurance|depreciation|

a.| no no no|
b.| yes no yes|
c.| yes yes no|
d.| no yes no|

____4.A(n) ____ cost increases or decreases in intervals as activity changes. a.|historical cost|
b.|fixed cost|
c.|step cost|
d.|budgeted cost|

____5.When the number of units manufactured increases, the most significant change in unit cost will be reflected as a(n) a.|increase in the fixed element.|
b.|decrease in the variable element.|
c.|increase in the mixed element.|
d.|decrease in the fixed element.|

____6.Which of the following always has a direct cause-effect relationship to a cost?

Predictor|Cost driver|

a.|yes yes|
b.|yes no|
c.|no yes|
d.|no no|

____7.A cost driver
a.|causes fixed costs to rise because of production changes.| b.|has a direct cause-effect relationship to a cost.|
c.|can predict the cost behavior of a variable, but not a fixed, cost.| d.|is an overhead cost that causes distribution costs to change in distinct increments with changes in production volume.|

____8.Product costs are deducted from revenue
a.|as expenditures are made.|
b.|when production is completed.|
c.|as goods are sold.|
d.|to minimize taxable income.|

____9.Which of the following is not a product cost component? a.|rent on a factory building|
b.|indirect production labor wages|
c.|janitorial supplies used in a factory|
d.|commission on the sale of a product|

____10.The three primary inventory accounts in a manufacturing company are a.|Merchandise Inventory, Supplies Inventory, and Finished Goods Inventory.| b.|Merchandise Inventory, Work in Process Inventory, and Finished Goods Inventory.| c.|Supplies Inventory, Work in Process Inventory, and Finished Goods Inventory.| d.|Raw Material Inventory, Work in Process Inventory, and Finished Goods Inventory.|

____11.Cost of Goods Sold is an
a.|unexpired product cost.|
b.|expired product cost.|
c.|unexpired period cost.|
d.|expired period cost.|

____12.The indirect costs of converting raw material into finished goods are called a.|period costs.|
b.|prime costs.|
c.|overhead costs.|
d.|conversion costs.|

____13.Conversion cost does not include
a.|direct labor.|
b.|direct material.|
c.|factory depreciation.|
d.|supervisors' salaries.|

____14.The distinction between direct and indirect costs depends on whether a cost a.|is controllable or non-controllable.|
b.|is variable or fixed.|
c.|can be conveniently and physically traced to a cost object under consideration.| d.|will increase with changes in levels of activity.|

____15.Moore Company is a construction company that builds greenhouses on special request. What is the proper classification of the carpenters' wages?

Product|Period|Direct|

a.|yes yes no|
b.|yes no yes|
c.|no no no|
d.|no yes yes|

____16.Moore Company is a construction company that builds greenhouses on...
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