ACTY 2110 EXAM 1 – 2 QUESTIONS WITH VERIFIED
ACCURATE ANSWERS
Primarily concerned with internal users and information that is relevant and future-
oriented. - Answers -Managerial accounting
Primarily concerned with external users and information that is objective, historical and
reliable. - Answers -Financial accounting
Which of the following is not one of the categories used to sort costs in managerial
accounting? - Answers -Manufacturing or merchandising Correct
Cost that can be traced to a product are: - Answers -Direct costs
Costs that can be easily traced to individual units, or cost objects, are called: - Answers
-Direct costs Correct
What determines the difference between a product cost and a period cost? - Answers -
When the cost will be matched against revenue on the income statement.
If the total cost changes when the activity levels change, the cost is classified as: -
Answers -Variable costs
If a cost is classified as relevant, it must: - Answers -Differ between decision
alternatives
Cartwell Incorporated makes picture frames that are sold in a local retail store and
through various websites.
Wood for frames$ 19,000
Rent for retail store $4,800
Depreciation on office equipment $760
Assembly worker wages $2,900
CEO's salary $4,400
Glue and nails $1,100
Online sales commissions $2,350
Glass for frames $7,600
Depreciation on factory equipment $1,500
Factory utilities $825
Stain for frames $875
Required:
Determine the cost of direct material.
Determine the cost of direct labor.
Determine the cost of manufacturing overhead.
Determine the total manufacturing cost.
, Determine the total period cost.
Determine the total variable cost.
Determine the total fixed cost.
Determine the total prime cost.
Determine the total conversion cost. - Answers -1. Direct materials cost $26,600
2. Direct labor cost $2,900
3. Manufacturing overhead cost $4,300
4. Total manufacturing cost $33,800
5. Total period cost $12,310
6. Total variable cost $34,650
7. Total fixed cost $11,460
8. Total prime cost $29,500
9. Total conversion cost $7,200
Cost information is used for: - Answers -All of the above
Which of the following will likely use a job order costing system to track costs? -
Answers -An interior designer
Which of the following is an appropriate costing method for companies that produce
identical units of product? - Answers -Process costing
Which of the following is not used by job order costing system? - Answers -Mass
production
Which of the following is not used by process costing system? - Answers -Customized
jobs Correct
All of the following are broad categories of manufacturing costs except for: - Answers -
Indirect materials
Which of the following will be listed in a materials requisition form? - Answers -Quantity
and cost of direct materials used on a specific job
Which of the following is true of direct labor time tickets? - Answers -They are used to
record direct labor costs in a job order cost system.
Which of the following statements are true?
a. outside of the relevant range cost behavior conclusions may not be valid
b. the relevant range of activity is approximated by a straight line
c. within the relevant range of activity, fixed costs remain constant in total
d. within the relevant range of activity total variable costs do not change - Answers -a,
b, and c
ACCURATE ANSWERS
Primarily concerned with internal users and information that is relevant and future-
oriented. - Answers -Managerial accounting
Primarily concerned with external users and information that is objective, historical and
reliable. - Answers -Financial accounting
Which of the following is not one of the categories used to sort costs in managerial
accounting? - Answers -Manufacturing or merchandising Correct
Cost that can be traced to a product are: - Answers -Direct costs
Costs that can be easily traced to individual units, or cost objects, are called: - Answers
-Direct costs Correct
What determines the difference between a product cost and a period cost? - Answers -
When the cost will be matched against revenue on the income statement.
If the total cost changes when the activity levels change, the cost is classified as: -
Answers -Variable costs
If a cost is classified as relevant, it must: - Answers -Differ between decision
alternatives
Cartwell Incorporated makes picture frames that are sold in a local retail store and
through various websites.
Wood for frames$ 19,000
Rent for retail store $4,800
Depreciation on office equipment $760
Assembly worker wages $2,900
CEO's salary $4,400
Glue and nails $1,100
Online sales commissions $2,350
Glass for frames $7,600
Depreciation on factory equipment $1,500
Factory utilities $825
Stain for frames $875
Required:
Determine the cost of direct material.
Determine the cost of direct labor.
Determine the cost of manufacturing overhead.
Determine the total manufacturing cost.
, Determine the total period cost.
Determine the total variable cost.
Determine the total fixed cost.
Determine the total prime cost.
Determine the total conversion cost. - Answers -1. Direct materials cost $26,600
2. Direct labor cost $2,900
3. Manufacturing overhead cost $4,300
4. Total manufacturing cost $33,800
5. Total period cost $12,310
6. Total variable cost $34,650
7. Total fixed cost $11,460
8. Total prime cost $29,500
9. Total conversion cost $7,200
Cost information is used for: - Answers -All of the above
Which of the following will likely use a job order costing system to track costs? -
Answers -An interior designer
Which of the following is an appropriate costing method for companies that produce
identical units of product? - Answers -Process costing
Which of the following is not used by job order costing system? - Answers -Mass
production
Which of the following is not used by process costing system? - Answers -Customized
jobs Correct
All of the following are broad categories of manufacturing costs except for: - Answers -
Indirect materials
Which of the following will be listed in a materials requisition form? - Answers -Quantity
and cost of direct materials used on a specific job
Which of the following is true of direct labor time tickets? - Answers -They are used to
record direct labor costs in a job order cost system.
Which of the following statements are true?
a. outside of the relevant range cost behavior conclusions may not be valid
b. the relevant range of activity is approximated by a straight line
c. within the relevant range of activity, fixed costs remain constant in total
d. within the relevant range of activity total variable costs do not change - Answers -a,
b, and c
