COST MANAGEMENT CONCEPTS AND ACCOUNTING FOR
MASS CUSTOMIZATION OPERATIONS
CHAPTER 02 BASIC
TRUE / FALSE QUESTIONS
1. INVENTORIABLE COSTS ARE EXPENSED WHEN INCURRED. TRUE FALSE
2. FINISHED GOODS INVENTORY IS ORDINARILY HELD FOR SALE BY A MANUFACTURING COMPANY.
TRUE FALSE
3. INDIRECT LABOR IS NOT A COMPONENT OF MANUFACTURING OVERHEAD. TRUE FALSE
4. THE FOLLOWING EQUATION -- BEGINNING FINISHED GOODS + COST OF GOODS
MANUFACTURED - ENDING FINISHED GOODS -- IS USED TO CALCULATE COST OF GOODS SOLD DURING
THE PERIOD.
TRUE FALSE
,5. A SUITABLE COST DRIVER FOR THE AMOUNT OF DIRECT MATERIALS USED IS THE NUMBER OF
DIRECT LABOR HOURS WORKED.
TRUE FALSE
MULTIPLE CHOICE QUESTIONS
6. WHICH OF THE FOLLOWING STATEMENTS IS TRUE?
A. THE WORD "COST" HAS THE SAME MEANING IN ALL SITUATIONS IN WHICH IT IS USED.
B. COST DATA, ONCE CLASSIFIED AND RECORDED FOR A SPECIFIC APPLICATION, ARE APPROPRIATE
FOR USE IN ANY APPLICATION.
C. DIFFERENT COST CONCEPTS AND CLASSIFICATIONS ARE USED FOR DIFFERENT PURPOSES.
D. ALL ORGANIZATIONS INCUR THE SAME TYPES OF COSTS.
E. COSTS INCURRED IN ONE YEAR ARE ALWAYS MEANINGFUL IN THE FOLLOWING YEAR.
7. PRODUCT COSTS ARE:
A. EXPENSED WHEN INCURRED.
B. INVENTORIED.
C. TREATED IN THE SAME MANNER AS PERIOD COSTS.
D. TREATED IN THE SAME MANNER AS ADVERTISING COSTS.
E. SUBTRACTED FROM COST OF GOODS SOLD.
8. WHICH OF THE FOLLOWING IS A PRODUCT COST?
A. GLASS IN AN AUTOMOBILE.
,B. ADVERTISING.
C. THE SALARY OF THE VICE PRESIDENT-FINANCE.
D. RENT ON A FACTORY.
E. BOTH "A" AND "D."
9. WHICH OF THE FOLLOWING WOULD NOT BE CLASSIFIED AS A PRODUCT COST?
A. DIRECT MATERIALS.
B. DIRECT LABOR.
C. INDIRECT MATERIALS.
D. INSURANCE ON A MANUFACTURING PLANT.
E. SALES COMMISSIONS.
10. THE ACCOUNTING RECORDS OF GEORGIA COMPANY REVEALED THE FOLLOWING COSTS: DIRECT
MATERIALS USED, $250,000; DIRECT LABOR, $425,000; MANUFACTURING OVERHEAD, $375,000; AND
SELLING AND ADMINISTRATIVE EXPENSES, $220,000. GEORGIA'S PRODUCT COSTS TOTAL:
A. $1,050,000.
B. $830,000.
C. $895,000.
D. $1,270,000.
E. SOME OTHER AMOUNT.
11. COSTS THAT ARE EXPENSED WHEN INCURRED ARE CALLED:
A. PRODUCT COSTS.
B. DIRECT COSTS.
C. INVENTORIABLE COSTS.
, D. PERIOD COSTS.
E. INDIRECT COSTS.
12. WHICH OF THE FOLLOWING IS A PERIOD COST?
A. DIRECT MATERIAL.
B. ADVERTISING EXPENSE.
C. INDIRECT LABOR.
D. MISCELLANEOUS SUPPLIES USED IN PRODUCTION ACTIVITIES.
E. BOTH "B" AND "C."
13. WHICH OF THE FOLLOWING IS NOT A PERIOD COST?
A. LEGAL COSTS.
B. PUBLIC RELATIONS COSTS.
C. SALES COMMISSIONS.
D. WAGES OF ASSEMBLY-LINE WORKERS.
E. THE SALARY OF A COMPANY'S CHIEF FINANCIAL OFFICER (CFO).
14. THE ACCOUNTING RECORDS OF REYNOLDS CORPORATION REVEALED THE FOLLOWING
SELECTED COSTS: SALES COMMISSIONS, $65,000; PLANT SUPERVISION, $190,000; AND ADMINISTRATIVE
EXPENSES,
$185,000. REYNOLDS'S PERIOD COSTS TOTAL:
A. $250,000.
B. $440,000.
C. $375,000.
D. $255,000.
MASS CUSTOMIZATION OPERATIONS
CHAPTER 02 BASIC
TRUE / FALSE QUESTIONS
1. INVENTORIABLE COSTS ARE EXPENSED WHEN INCURRED. TRUE FALSE
2. FINISHED GOODS INVENTORY IS ORDINARILY HELD FOR SALE BY A MANUFACTURING COMPANY.
TRUE FALSE
3. INDIRECT LABOR IS NOT A COMPONENT OF MANUFACTURING OVERHEAD. TRUE FALSE
4. THE FOLLOWING EQUATION -- BEGINNING FINISHED GOODS + COST OF GOODS
MANUFACTURED - ENDING FINISHED GOODS -- IS USED TO CALCULATE COST OF GOODS SOLD DURING
THE PERIOD.
TRUE FALSE
,5. A SUITABLE COST DRIVER FOR THE AMOUNT OF DIRECT MATERIALS USED IS THE NUMBER OF
DIRECT LABOR HOURS WORKED.
TRUE FALSE
MULTIPLE CHOICE QUESTIONS
6. WHICH OF THE FOLLOWING STATEMENTS IS TRUE?
A. THE WORD "COST" HAS THE SAME MEANING IN ALL SITUATIONS IN WHICH IT IS USED.
B. COST DATA, ONCE CLASSIFIED AND RECORDED FOR A SPECIFIC APPLICATION, ARE APPROPRIATE
FOR USE IN ANY APPLICATION.
C. DIFFERENT COST CONCEPTS AND CLASSIFICATIONS ARE USED FOR DIFFERENT PURPOSES.
D. ALL ORGANIZATIONS INCUR THE SAME TYPES OF COSTS.
E. COSTS INCURRED IN ONE YEAR ARE ALWAYS MEANINGFUL IN THE FOLLOWING YEAR.
7. PRODUCT COSTS ARE:
A. EXPENSED WHEN INCURRED.
B. INVENTORIED.
C. TREATED IN THE SAME MANNER AS PERIOD COSTS.
D. TREATED IN THE SAME MANNER AS ADVERTISING COSTS.
E. SUBTRACTED FROM COST OF GOODS SOLD.
8. WHICH OF THE FOLLOWING IS A PRODUCT COST?
A. GLASS IN AN AUTOMOBILE.
,B. ADVERTISING.
C. THE SALARY OF THE VICE PRESIDENT-FINANCE.
D. RENT ON A FACTORY.
E. BOTH "A" AND "D."
9. WHICH OF THE FOLLOWING WOULD NOT BE CLASSIFIED AS A PRODUCT COST?
A. DIRECT MATERIALS.
B. DIRECT LABOR.
C. INDIRECT MATERIALS.
D. INSURANCE ON A MANUFACTURING PLANT.
E. SALES COMMISSIONS.
10. THE ACCOUNTING RECORDS OF GEORGIA COMPANY REVEALED THE FOLLOWING COSTS: DIRECT
MATERIALS USED, $250,000; DIRECT LABOR, $425,000; MANUFACTURING OVERHEAD, $375,000; AND
SELLING AND ADMINISTRATIVE EXPENSES, $220,000. GEORGIA'S PRODUCT COSTS TOTAL:
A. $1,050,000.
B. $830,000.
C. $895,000.
D. $1,270,000.
E. SOME OTHER AMOUNT.
11. COSTS THAT ARE EXPENSED WHEN INCURRED ARE CALLED:
A. PRODUCT COSTS.
B. DIRECT COSTS.
C. INVENTORIABLE COSTS.
, D. PERIOD COSTS.
E. INDIRECT COSTS.
12. WHICH OF THE FOLLOWING IS A PERIOD COST?
A. DIRECT MATERIAL.
B. ADVERTISING EXPENSE.
C. INDIRECT LABOR.
D. MISCELLANEOUS SUPPLIES USED IN PRODUCTION ACTIVITIES.
E. BOTH "B" AND "C."
13. WHICH OF THE FOLLOWING IS NOT A PERIOD COST?
A. LEGAL COSTS.
B. PUBLIC RELATIONS COSTS.
C. SALES COMMISSIONS.
D. WAGES OF ASSEMBLY-LINE WORKERS.
E. THE SALARY OF A COMPANY'S CHIEF FINANCIAL OFFICER (CFO).
14. THE ACCOUNTING RECORDS OF REYNOLDS CORPORATION REVEALED THE FOLLOWING
SELECTED COSTS: SALES COMMISSIONS, $65,000; PLANT SUPERVISION, $190,000; AND ADMINISTRATIVE
EXPENSES,
$185,000. REYNOLDS'S PERIOD COSTS TOTAL:
A. $250,000.
B. $440,000.
C. $375,000.
D. $255,000.
