Ac505 Midterm

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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

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