Cost Exam 1 with all Correct & 100% Verified Answers |
Actual Complete Update |Already Graded A+ |
Guaranteed to Pass
True/False
An actual cost is the cost incurred - a historical or past cost. ✔Correct Answer-True
True/False
A cost is a resource sacrificed or forgone to achieve a specific objective. ✔Correct Answer-
True
The determination of a cost as either direct or indirect depends upon the ________.
A. accounting standards
B. tax system chosen
C. inventory valuation
D. cost object chosen ✔Correct Answer-D. cost object chosen
Which one of the following items is a direct cost?
A. The salary of a maintenance supervisor in a multi-product manufacturing plant; Product B is
the cost object.
B. Printing costs incurred for payroll check processing; payroll check processing is the cost
object.
C. Customer service costs of a multi-product firm; Product A is the cost object.
D. Utility costs of the administrative offices; the accounting department is the cost object.
✔Correct Answer-B. Printing costs incurred for payroll check processing; payroll check
processing is the cost object.
True/False
A cost may be direct for one cost object and indirect for another cost object. ✔Correct
Answer-True
True/False
Improvements in information-gathering technologies are making it possible to trace more costs
as direct. ✔Correct Answer-True
,True/False
A direct cost of one cost object cannot be an indirect cost of another cost object. ✔Correct
Answer-False
True/False
The broader the cost object definition (i.e., plant versus product), the more confident the
manager will be about the accuracy of the direct cost amounts. ✔Correct Answer-True
Rally Synthesis Inc. manufactures and sells 80 bottles per day. Fixed costs are $24,000 and the
variable costs for manufacturing 80 bottles are $40,000. Each bottle is sold for $1,700.
How would the daily profit be affected if the daily volume of sales drop by 20%?
A. profits are reduced by $27,200
B. profits are reduced by $8,000
C. profits are reduced by $19,200
D. profits are reduced by $52,800 ✔Correct Answer-C. profits are reduced by $19,200
Which one of the following is a variable cost for an insurance company?
A. rent of the building
B. CEO's salary
C electricity expenses
D. property taxes ✔Correct Answer-C. electricity expenses
If each motorcycle requires a belt that costs $20 and 2,000 motorcycles are produced for the
month, the total cost for belts is ________.
A. considered to be an indirect variable cost
B. considered to be an indirect fixed cost
C. considered to be a direct variable cost
D. considered to be a direct fixed cost ✔Correct Answer-C. considered to be a direct variable
cost
When 25,000 units are produced, variable costs are $14 per unit. Therefore, when 20,000 units
are produced ________.
A. variable costs will remain at $14 per unit
B. variable costs will total $350,000
C. variable unit costs will increase to $17.50 per unit
D. variable unit costs will decrease to $11.20 per unit ✔Correct Answer-A. variable costs will
remain at $14 per unit
, Swansea Manufacturing currently produces 2,000 tires per month. The following per unit data
for 2,000 tires apply for sales to regular customers:
Direct materials - $34
Direct manufacturing labor- $6
Variable manufacturing overhead- $12
Fixed manufacturing overhead- $19
Total manufacturing costs- $71
The plant has capacity for 4,000 tires and is considering expanding production to 3,000 tires.
What is the total cost of producing 3,000 tires?
A.$ 126,000
B.$ 176,000
C.$ 213,000
D.$ 194,000 ✔Correct Answer-D. $ 194,000
The following information pertains to Alleigh's Mannequins:
Manufacturing costs - $2,100,000
Units manufactured - 30,000
Units sold - 26,000 units sold for $100 per unit
Beginning inventory - 0 units
What is the amount of gross margin?
A.$ 780,000
B.$ 2,600,000
C.$ 500,000
D.$ 1,820,000 ✔Correct Answer-A. $ 780,000
Puritan Apparels is a clothing manufacturer. Unit costs associated with one of its products,
Product FGS1156 are as follows:
Direct materials - $80
Direct manufacturing labor- $10
Variable manufacturing overhead- $45
Fixed manufacturing overhead- $32
Sales commissions (2% of sales)- $8
Administrative salaries- $24
Total- $199
What are the inventoriable costs per unit associated with Product FGS1156?
Actual Complete Update |Already Graded A+ |
Guaranteed to Pass
True/False
An actual cost is the cost incurred - a historical or past cost. ✔Correct Answer-True
True/False
A cost is a resource sacrificed or forgone to achieve a specific objective. ✔Correct Answer-
True
The determination of a cost as either direct or indirect depends upon the ________.
A. accounting standards
B. tax system chosen
C. inventory valuation
D. cost object chosen ✔Correct Answer-D. cost object chosen
Which one of the following items is a direct cost?
A. The salary of a maintenance supervisor in a multi-product manufacturing plant; Product B is
the cost object.
B. Printing costs incurred for payroll check processing; payroll check processing is the cost
object.
C. Customer service costs of a multi-product firm; Product A is the cost object.
D. Utility costs of the administrative offices; the accounting department is the cost object.
✔Correct Answer-B. Printing costs incurred for payroll check processing; payroll check
processing is the cost object.
True/False
A cost may be direct for one cost object and indirect for another cost object. ✔Correct
Answer-True
True/False
Improvements in information-gathering technologies are making it possible to trace more costs
as direct. ✔Correct Answer-True
,True/False
A direct cost of one cost object cannot be an indirect cost of another cost object. ✔Correct
Answer-False
True/False
The broader the cost object definition (i.e., plant versus product), the more confident the
manager will be about the accuracy of the direct cost amounts. ✔Correct Answer-True
Rally Synthesis Inc. manufactures and sells 80 bottles per day. Fixed costs are $24,000 and the
variable costs for manufacturing 80 bottles are $40,000. Each bottle is sold for $1,700.
How would the daily profit be affected if the daily volume of sales drop by 20%?
A. profits are reduced by $27,200
B. profits are reduced by $8,000
C. profits are reduced by $19,200
D. profits are reduced by $52,800 ✔Correct Answer-C. profits are reduced by $19,200
Which one of the following is a variable cost for an insurance company?
A. rent of the building
B. CEO's salary
C electricity expenses
D. property taxes ✔Correct Answer-C. electricity expenses
If each motorcycle requires a belt that costs $20 and 2,000 motorcycles are produced for the
month, the total cost for belts is ________.
A. considered to be an indirect variable cost
B. considered to be an indirect fixed cost
C. considered to be a direct variable cost
D. considered to be a direct fixed cost ✔Correct Answer-C. considered to be a direct variable
cost
When 25,000 units are produced, variable costs are $14 per unit. Therefore, when 20,000 units
are produced ________.
A. variable costs will remain at $14 per unit
B. variable costs will total $350,000
C. variable unit costs will increase to $17.50 per unit
D. variable unit costs will decrease to $11.20 per unit ✔Correct Answer-A. variable costs will
remain at $14 per unit
, Swansea Manufacturing currently produces 2,000 tires per month. The following per unit data
for 2,000 tires apply for sales to regular customers:
Direct materials - $34
Direct manufacturing labor- $6
Variable manufacturing overhead- $12
Fixed manufacturing overhead- $19
Total manufacturing costs- $71
The plant has capacity for 4,000 tires and is considering expanding production to 3,000 tires.
What is the total cost of producing 3,000 tires?
A.$ 126,000
B.$ 176,000
C.$ 213,000
D.$ 194,000 ✔Correct Answer-D. $ 194,000
The following information pertains to Alleigh's Mannequins:
Manufacturing costs - $2,100,000
Units manufactured - 30,000
Units sold - 26,000 units sold for $100 per unit
Beginning inventory - 0 units
What is the amount of gross margin?
A.$ 780,000
B.$ 2,600,000
C.$ 500,000
D.$ 1,820,000 ✔Correct Answer-A. $ 780,000
Puritan Apparels is a clothing manufacturer. Unit costs associated with one of its products,
Product FGS1156 are as follows:
Direct materials - $80
Direct manufacturing labor- $10
Variable manufacturing overhead- $45
Fixed manufacturing overhead- $32
Sales commissions (2% of sales)- $8
Administrative salaries- $24
Total- $199
What are the inventoriable costs per unit associated with Product FGS1156?
