MBA 613 EXAM 1 2025/2026 QUESTIONS
AND ANSWERS 100% PASS
The twentieth century saw an accelerating shift from traditional manufacturing activities to
production procedures requiring large investments in raw materials and labor. True or False? -
ANS False
An object to which costs are assigned is called: - ANS A cost object
Which procedure best describes activity-based costing? - ANS Overhead costs are assigned
to activities; then costs are assigned to products.
Which of the following aspects of manufacturing must be understood in order to implement
activity based costing in a production setting?
The activities that occur in the production process must be known
The cost drivers that generate activities within the production process
The production process
All of the above - ANS All of the above
Activity-based costing systems tend to _____________________ high-volume, low-complexity
products. - ANS Accurately cost
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, Activity-based costing's primary benefit is that it provides: - ANS More precise cost data for
internal decision-making purposes
When goods are transferred from the factory to the finished goods warehouse, Work-In-
Process is reduced and Cost of Goods Sold Expense is recorded.
True or False? - ANS False
Partially completed goods that are in the process of being converted into a finish product are
defined as: - ANS Work-in-process inventories
When is the cost of manufacturing equipment recognized as an expense? - ANS When
finished goods inventory is sold
What are the three major components of product costs? - ANS Direct materials
Direct labor
Manufacturing overhead
What is the most reasonable cost driver for direct material costs? - ANS The quantity of
direct materials used
Which of the following results in an increase in work-in-process inventory?
Purchasing raw materials
Finishing a job in process
Selling finished goods inventory
Using direct manufacturing labor hours - ANS Using direct manufacturing labor hours
Which of the following accounts increases when raw materials are used?
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
AND ANSWERS 100% PASS
The twentieth century saw an accelerating shift from traditional manufacturing activities to
production procedures requiring large investments in raw materials and labor. True or False? -
ANS False
An object to which costs are assigned is called: - ANS A cost object
Which procedure best describes activity-based costing? - ANS Overhead costs are assigned
to activities; then costs are assigned to products.
Which of the following aspects of manufacturing must be understood in order to implement
activity based costing in a production setting?
The activities that occur in the production process must be known
The cost drivers that generate activities within the production process
The production process
All of the above - ANS All of the above
Activity-based costing systems tend to _____________________ high-volume, low-complexity
products. - ANS Accurately cost
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, Activity-based costing's primary benefit is that it provides: - ANS More precise cost data for
internal decision-making purposes
When goods are transferred from the factory to the finished goods warehouse, Work-In-
Process is reduced and Cost of Goods Sold Expense is recorded.
True or False? - ANS False
Partially completed goods that are in the process of being converted into a finish product are
defined as: - ANS Work-in-process inventories
When is the cost of manufacturing equipment recognized as an expense? - ANS When
finished goods inventory is sold
What are the three major components of product costs? - ANS Direct materials
Direct labor
Manufacturing overhead
What is the most reasonable cost driver for direct material costs? - ANS The quantity of
direct materials used
Which of the following results in an increase in work-in-process inventory?
Purchasing raw materials
Finishing a job in process
Selling finished goods inventory
Using direct manufacturing labor hours - ANS Using direct manufacturing labor hours
Which of the following accounts increases when raw materials are used?
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
