CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
Test Bank For Principles Of Cost Accounting,
17th Edition Edward J. Vanderbeck
Chapters 1 - 10, Complete
Cengage Learning Testing, Powered by Cognero Page 1
, CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
Contents
1. Ch 1: Introduction to Cost Accounting
2. Ch 2: Accounting for Materials
3. Ch 3: Accounting for Labor
4. Ch 4: Accounting for Factory Overhead
5. Ch 5: Process Cost Accounting-General Procedures
6. Ch 6: Process Cost Accounting-Additional Procedures; Accounting for Joint Products and By-Products
7. Ch 7: The Master Budget and Flexible Budgeting
8. Ch 8: Standard Cost Accounting-Materials, Labor, and Factory Overhead
9. Ch 9: Cost Accounting for Service Businesses, the Balanced Scorecard, and Quality Costs
10. Ch 10: Cost Analysis for Management Decision Making
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,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
The business entity that converts purchased raw materials into finished goods by using labor, technology,
and facilities is a:
a. Manufacturer.
b. Merchandiser.
c. Service business.
d. Not-for-profit service agency.
ANSWER: a
RATIONALE: The business entity that converts purchased raw materials into finished goods by using labor,
technology, and facilities is a manufacturer.
POINTS: 1
DIFFICULTY: Easy
LEARNING PRIN.EDWA.16.1 - Introduction
OBJECTIVES:
ACCREDITING STAN AACSB Analytic
DARDS ACCT.AICPA.FN.03 -
: MeasurementBUSPROG.03 -
Analytic
IMA-Business Applications
OTHER: Bloom's: Remembering
2. The business entity that purchases finished goods for resale is a:
a. Manufacturer.
b. Merchandiser.
c. Service business.
d. Wholesaler.
ANSWER: b
RATIONALE: The business entity that purchases finished goods for resale is a merchandiser.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES PRIN.EDWA.16.1 - Introduction
:
ACCREDITING AACSB Analytic
STANDARDS: ACCT.AICPA.FN.03 -
MeasurementBUSPROG.03 -
Analytic
IMA-Business Applications
OTHER: Bloom's: Remembering
3. The type of merchandiser who purchases goods from the producer and sells them to retailers that sell
them to theconsumer is a:
a. Manufacturer.
b. Retailer.
c. Wholesaler.
d. Service business.
ANSWER: c
Cengage Learning Testing, Powered by Cognero Page 3
,RATIONALE: A wholesaler
CHAPTER 1: INTRODUCTION TOpurchases goods from the producer and sells them to the retailer.
COST ACCOUNTING
POINTS: 1
DIFFICULTY: Easy
Cengage Learning Testing, Powered by Cognero Page 4
,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
LEARNING OBJECTIVES PRIN.EDWA.16.1 - Introduction
:
ACCREDITING AACSB Analytic
STANDARDS: ACCT.AICPA.FN.03 -
MeasurementBUSPROG.03 -
Analytic
IMA-Business Applications
OTHER: Bloom's: Remembering
4. Examples of service businesses include:
a. Airlines, accountants, and hair stylists.
b. Department stores, poster shops, and wholesalers.
c. Aircraft producers, home builders, and machine tool makers.
d. None of these are correct.
ANSWER: a
RATIONALE: Examples of service businesses include airlines, architects, and hair stylists.
POINTS: 1
DIFFICULTY: Moderate
LEARNING PRIN.EDWA.16.1 - Introduction
OBJECTIVES:
ACCREDITING STAN AACSB Reflective Thinking
DARDS ACCT.AICPA.FN.03 -
: Measurement BUSPROG.06 -
Reflective Thinking IMA-Business
Applications
OTHER: Bloom's: Understanding
5. ISO 9000 is a set of international standards for:
a. determining the selling price of a product.
b. cost control.
c. quality management.
d. delivering product,
ANSWER: c
RATIONALE: ISO 9000 is a set of international standards for quality management.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PRIN.EDWA.16.1 - Introduction
ACCREDITING STANDAR AACSB Analytic
DS: ACCT.AICPA.FN.03 -
MeasurementBUSPROG.03 -
Analytic
IMA-Strategic Planning
OTHER: Bloom's: Remembering
Cengage Learning Testing, Powered by Cognero Page 5
,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
6. Unit cost information is important for making all of the following marketing decisions except:
a. Determining the selling price of a product.
b. Bidding on contracts.
c. Determining the amount to spend on social media to promote the product.
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,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
d. Determining the amount of profit that each product earns.
ANSWER: c
RATIONALE: Unit cost information is used in determining selling price, bidding on contracts and
determining product profitability, but would not have a bearing on determining how much
the product would needto be advertised.
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECPRIN.EDWA.16.2 - LO1: Explain the uses of cost accounting information
TIVES:
ACCREDITING ST AACSB Analytic
ANDARD ACCT.AICPA.FN.03 -
S: MeasurementBUSPROG.03 -
Analytic
IMA-Strategic Marketing
TOPICS: Uses of Cost Accounting Information
OTHER: Bloom's: Remembering
7. The process of establishing objectives or goals for the firm and determining the means by which they will be met
is:
a. controlling.
b. analyzing profitability.
c. planning.
d. assigning responsibility.
ANSWER: c
RATIONALE: The process of establishing goals and objectives for a firm is planning. Controlling, analyzing
profitability and assigning responsibility are functions that take place after the planning process
todetermine whether or how successfully goals have been obtained.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECPRIN.EDWA.16.2 - LO1: Explain the uses of cost accounting information
TIVES:
ACCREDITING ST AACSB Analytic
ANDARD ACCT.AICPA.FN.03 -
S: MeasurementBUSPROG.03 -
Analytic
IMA-Budget Preparation
TOPICS: Uses of Cost Accounting Information
OTHER: Bloom's: Remembering
8. Effective control of a company's operations is achieved through all of the following except:
a. periodically measuring and comparing company results.
b. assigning responsibility for costs to employees responsible for those costs.
c. constantly monitoring employees to ensure they do exactly as they are told.
d. taking necessary corrective action when variances suggest it is needed.
Cengage Learning Testing, Powered by Cognero Page 7
,ANSWER: c
CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
RATIONALE: While periodically measuring and comparing company results, assigning responsibility for
those results to employees and taking necessary corrective action are all part of control; it
does not includeconstantly monitoring employees to make sure they are following
directions.
POINTS: 1
Cengage Learning Testing, Powered by Cognero Page 8
,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
DIFFICULTY: Moderate
LEARNING OBJECPRIN.EDWA.16.2 - LO1: Explain the uses of cost accounting information
TIVES:
ACCREDITING ST AACSB Analytic
ANDARD ACCT.AICPA.FN.03 -
S: MeasurementBUSPROG.03 -
Analytic
IMA-Performance Measurement
TOPICS: Uses of Cost Accounting Information
OTHER: Bloom's: Remembering
9. Dan Louis is the supervisor of the Assembly Department of Wiggerman Corporation. He has control
over and is responsible for manufacturing costs traced to the department. The Assembly Department is
an example of a(n):
a. cost center.
b. inventory center.
c. supervised work center.
d. worker’s center.
ANSWER: a
RATIONALE: The criteria for a cost center are 1) a reasonable basis on which manufacturing costs may be traced
and 2) a person who has control over and is accountable for many of the costs charged to that center.
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECPRIN.EDWA.16.2 - LO1: Explain the uses of cost accounting information
TIVES:
ACCREDITING ST AACSB Reflective Thinking
ANDARD ACCT.AICPA.FN.03 -
S: Measurement BUSPROG.06 -
Reflective Thinking IMA-
Performance Measurement
TOPICS: Uses of Cost Accounting Information
OTHER: Bloom's: Understanding
10. Which of the following costs would be least likely to appear on a responsibility accounting report for the
supervisor ofan assembly line in a large manufacturing situation?
a. Direct labor
b. Indirect materials
c. Selling expenses
d. Repairs and maintenance
ANSWER: c
RATIONALE: Selling expenses would be least likely to appear on a performance report, because the supervisor
would not have responsibility for the sales function.
POINTS: 1
DIFFICULTY: Moderate
Cengage Learning Testing, Powered by Cognero Page 9
, LEARNING
CHAPTEROBJECT PRIN.EDWA.16.2
1: INTRODUCTION TO- LO1:
COST Explain the uses of cost accounting information
ACCOUNTING
IVES:
ACCREDITING STA AACSB Reflective Thinking
NDARDS ACCT.AICPA.FN.03 -
: Measurement BUSPROG.06 -
Reflective Thinking IMA-
Performance Measurement
Cengage Learning Testing, Powered by Cognero Page 10
Test Bank For Principles Of Cost Accounting,
17th Edition Edward J. Vanderbeck
Chapters 1 - 10, Complete
Cengage Learning Testing, Powered by Cognero Page 1
, CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
Contents
1. Ch 1: Introduction to Cost Accounting
2. Ch 2: Accounting for Materials
3. Ch 3: Accounting for Labor
4. Ch 4: Accounting for Factory Overhead
5. Ch 5: Process Cost Accounting-General Procedures
6. Ch 6: Process Cost Accounting-Additional Procedures; Accounting for Joint Products and By-Products
7. Ch 7: The Master Budget and Flexible Budgeting
8. Ch 8: Standard Cost Accounting-Materials, Labor, and Factory Overhead
9. Ch 9: Cost Accounting for Service Businesses, the Balanced Scorecard, and Quality Costs
10. Ch 10: Cost Analysis for Management Decision Making
Cengage Learning Testing, Powered by Cognero Page 2
,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
The business entity that converts purchased raw materials into finished goods by using labor, technology,
and facilities is a:
a. Manufacturer.
b. Merchandiser.
c. Service business.
d. Not-for-profit service agency.
ANSWER: a
RATIONALE: The business entity that converts purchased raw materials into finished goods by using labor,
technology, and facilities is a manufacturer.
POINTS: 1
DIFFICULTY: Easy
LEARNING PRIN.EDWA.16.1 - Introduction
OBJECTIVES:
ACCREDITING STAN AACSB Analytic
DARDS ACCT.AICPA.FN.03 -
: MeasurementBUSPROG.03 -
Analytic
IMA-Business Applications
OTHER: Bloom's: Remembering
2. The business entity that purchases finished goods for resale is a:
a. Manufacturer.
b. Merchandiser.
c. Service business.
d. Wholesaler.
ANSWER: b
RATIONALE: The business entity that purchases finished goods for resale is a merchandiser.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES PRIN.EDWA.16.1 - Introduction
:
ACCREDITING AACSB Analytic
STANDARDS: ACCT.AICPA.FN.03 -
MeasurementBUSPROG.03 -
Analytic
IMA-Business Applications
OTHER: Bloom's: Remembering
3. The type of merchandiser who purchases goods from the producer and sells them to retailers that sell
them to theconsumer is a:
a. Manufacturer.
b. Retailer.
c. Wholesaler.
d. Service business.
ANSWER: c
Cengage Learning Testing, Powered by Cognero Page 3
,RATIONALE: A wholesaler
CHAPTER 1: INTRODUCTION TOpurchases goods from the producer and sells them to the retailer.
COST ACCOUNTING
POINTS: 1
DIFFICULTY: Easy
Cengage Learning Testing, Powered by Cognero Page 4
,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
LEARNING OBJECTIVES PRIN.EDWA.16.1 - Introduction
:
ACCREDITING AACSB Analytic
STANDARDS: ACCT.AICPA.FN.03 -
MeasurementBUSPROG.03 -
Analytic
IMA-Business Applications
OTHER: Bloom's: Remembering
4. Examples of service businesses include:
a. Airlines, accountants, and hair stylists.
b. Department stores, poster shops, and wholesalers.
c. Aircraft producers, home builders, and machine tool makers.
d. None of these are correct.
ANSWER: a
RATIONALE: Examples of service businesses include airlines, architects, and hair stylists.
POINTS: 1
DIFFICULTY: Moderate
LEARNING PRIN.EDWA.16.1 - Introduction
OBJECTIVES:
ACCREDITING STAN AACSB Reflective Thinking
DARDS ACCT.AICPA.FN.03 -
: Measurement BUSPROG.06 -
Reflective Thinking IMA-Business
Applications
OTHER: Bloom's: Understanding
5. ISO 9000 is a set of international standards for:
a. determining the selling price of a product.
b. cost control.
c. quality management.
d. delivering product,
ANSWER: c
RATIONALE: ISO 9000 is a set of international standards for quality management.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PRIN.EDWA.16.1 - Introduction
ACCREDITING STANDAR AACSB Analytic
DS: ACCT.AICPA.FN.03 -
MeasurementBUSPROG.03 -
Analytic
IMA-Strategic Planning
OTHER: Bloom's: Remembering
Cengage Learning Testing, Powered by Cognero Page 5
,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
6. Unit cost information is important for making all of the following marketing decisions except:
a. Determining the selling price of a product.
b. Bidding on contracts.
c. Determining the amount to spend on social media to promote the product.
Cengage Learning Testing, Powered by Cognero Page 6
,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
d. Determining the amount of profit that each product earns.
ANSWER: c
RATIONALE: Unit cost information is used in determining selling price, bidding on contracts and
determining product profitability, but would not have a bearing on determining how much
the product would needto be advertised.
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECPRIN.EDWA.16.2 - LO1: Explain the uses of cost accounting information
TIVES:
ACCREDITING ST AACSB Analytic
ANDARD ACCT.AICPA.FN.03 -
S: MeasurementBUSPROG.03 -
Analytic
IMA-Strategic Marketing
TOPICS: Uses of Cost Accounting Information
OTHER: Bloom's: Remembering
7. The process of establishing objectives or goals for the firm and determining the means by which they will be met
is:
a. controlling.
b. analyzing profitability.
c. planning.
d. assigning responsibility.
ANSWER: c
RATIONALE: The process of establishing goals and objectives for a firm is planning. Controlling, analyzing
profitability and assigning responsibility are functions that take place after the planning process
todetermine whether or how successfully goals have been obtained.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECPRIN.EDWA.16.2 - LO1: Explain the uses of cost accounting information
TIVES:
ACCREDITING ST AACSB Analytic
ANDARD ACCT.AICPA.FN.03 -
S: MeasurementBUSPROG.03 -
Analytic
IMA-Budget Preparation
TOPICS: Uses of Cost Accounting Information
OTHER: Bloom's: Remembering
8. Effective control of a company's operations is achieved through all of the following except:
a. periodically measuring and comparing company results.
b. assigning responsibility for costs to employees responsible for those costs.
c. constantly monitoring employees to ensure they do exactly as they are told.
d. taking necessary corrective action when variances suggest it is needed.
Cengage Learning Testing, Powered by Cognero Page 7
,ANSWER: c
CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
RATIONALE: While periodically measuring and comparing company results, assigning responsibility for
those results to employees and taking necessary corrective action are all part of control; it
does not includeconstantly monitoring employees to make sure they are following
directions.
POINTS: 1
Cengage Learning Testing, Powered by Cognero Page 8
,CHAPTER 1: INTRODUCTION TO COST ACCOUNTING
DIFFICULTY: Moderate
LEARNING OBJECPRIN.EDWA.16.2 - LO1: Explain the uses of cost accounting information
TIVES:
ACCREDITING ST AACSB Analytic
ANDARD ACCT.AICPA.FN.03 -
S: MeasurementBUSPROG.03 -
Analytic
IMA-Performance Measurement
TOPICS: Uses of Cost Accounting Information
OTHER: Bloom's: Remembering
9. Dan Louis is the supervisor of the Assembly Department of Wiggerman Corporation. He has control
over and is responsible for manufacturing costs traced to the department. The Assembly Department is
an example of a(n):
a. cost center.
b. inventory center.
c. supervised work center.
d. worker’s center.
ANSWER: a
RATIONALE: The criteria for a cost center are 1) a reasonable basis on which manufacturing costs may be traced
and 2) a person who has control over and is accountable for many of the costs charged to that center.
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECPRIN.EDWA.16.2 - LO1: Explain the uses of cost accounting information
TIVES:
ACCREDITING ST AACSB Reflective Thinking
ANDARD ACCT.AICPA.FN.03 -
S: Measurement BUSPROG.06 -
Reflective Thinking IMA-
Performance Measurement
TOPICS: Uses of Cost Accounting Information
OTHER: Bloom's: Understanding
10. Which of the following costs would be least likely to appear on a responsibility accounting report for the
supervisor ofan assembly line in a large manufacturing situation?
a. Direct labor
b. Indirect materials
c. Selling expenses
d. Repairs and maintenance
ANSWER: c
RATIONALE: Selling expenses would be least likely to appear on a performance report, because the supervisor
would not have responsibility for the sales function.
POINTS: 1
DIFFICULTY: Moderate
Cengage Learning Testing, Powered by Cognero Page 9
, LEARNING
CHAPTEROBJECT PRIN.EDWA.16.2
1: INTRODUCTION TO- LO1:
COST Explain the uses of cost accounting information
ACCOUNTING
IVES:
ACCREDITING STA AACSB Reflective Thinking
NDARDS ACCT.AICPA.FN.03 -
: Measurement BUSPROG.06 -
Reflective Thinking IMA-
Performance Measurement
Cengage Learning Testing, Powered by Cognero Page 10
