Ac505 Midterm

1. Question: (TCO A) Wages paid to a timekeeper in a factory are a: Your Answer:
Prime Cost YES.....Conversion Cost NO Prime Cost YES.....Conversion Cost YES Prime Cost NO....Conversion Cost NO Prime Cost NO.....Conversion Cost YES CORRECT

Instructor Explanation: Chapter 2 Points Received: 6 of 6
2. Question: (TCO A) A cost incurred in the past that is not relevant to any current decision is classified as a(n): Your Answer: period cost. opportunity cost. sunk cost. CORRECT differential cost.

Instructor Explanation: Chapter 2 Points Received: 6 of 6
3. Question: (TCO A) The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n): Your Answer: period cost direct material cost indirect manufacturing cost CORRECT direct labor cost none of the above

Instructor Explanation: Chapter 2 Points Received: 6 of 6
4. Question: (TCO A) When the activity level is expected to decline within the relevant range, what effects would be anticipated with respect to each of the following?
Fixed Cost Per Unit Variable Cost Per Unit Your Answer:
Increase No Change CORRECT Increase Increase No Change No Change No Change Increase

Instructor Explanation: Chapter 5 Points Received: 6 of 6
5. Question: (TCO F) When manufacturing overhead is applied to production, it is added to: Your Answer: the Cost of Goods Sold account the Raw Materials account the Work in Process account CORRECT ANSWER the Finished Goods inventory account INCORRECT

Instructor