Cost and Managerial Accounting: Review Sheet
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
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