Test Bank Cost Accounting

Cost Accounting, 14e (Horngren/Datar/Rajan) Chapter 2 An Introduction to Cost Terms and Purposes Objective 2.1 1) Cost objects include: A) products B) customers C) departments D) All of these answers are correct. Answer: D Diff: 2 Terms: cost object Objective: 1 AACSB: Reflective thinking 2) Actual costs are: A) the costs incurred B) budgeted costs C) estimated costs D) forecasted costs Answer: A Diff: 1 Terms: actual costing Objective: 1 AACSB: Reflective thinking 3) The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is: A) cost accumulation B) cost assignment C) cost tracing D) conversion costing Answer: B Diff: 1 Terms: cost assignment Objective: 1 AACSB: Reflective thinking 4) In order to make decisions, managers need to know: A) actual costs B) budgeted costs C) both costs D) neither cost Answer: C Diff: 1 Terms: budgeted costs Objective: 1 AACSB: Ethical reasoning
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5) The collection of accounting data in some organized way is: A) cost accumulation B) cost assignment C) cost tracing D) conversion costing Answer: A Diff: 1 Terms: cost accumulation Objective: 1 AACSB: Reflective thinking 6) Budgeted costs are: A) the costs incurred this year B) the costs incurred last year C) planned or forecasted costs D) competitor's costs Answer: C Diff: 2 Terms: budgeted costs Objective: 1 AACSB: Reflective thinking 7) Cost assignment : A) is always arbitrary B) is includes tracing and allocating C) is the same as cost accumulation D) is finding the difference between budgeted and actual costs Answer: B Diff: 2 Terms: cost assignment Objective: 1 AACSB: Reflective thinking 8) A cost system determines the cost of a cost object by: A) accumulating and then assigning costs B) accumulating costs C) assigning and then accumulating costs D) assigning costs Answer: A Diff: 2 Terms: cost accumulation Objective: 1 AACSB: Reflective thinking

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