TEST BANK FOR COST MANAGEMENT
MEASURING, MONITORING, AND
MOTIVATING PERFORMANCE, 3RD
CANADIAN EDITION, LESLIE G.
ELDENBURG, SUSAN K. WOLCOTT, LIANG-
HSUAN CHEN, GAIL COOK
Susan K. Wolcott
GRIZLI777 [Company address]
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
,2-1 Test Bank for Cost Management, Third Canadian Edition
CHAPTER 2
Cost Concepts, Behaviour, and Estimation
CHAPTER LEARNING OBJECTIVES
1. Explain cost concepts and cost terms.
2. Describe the different types of cost behaviour.
3. Describe cost estimation techniques.
4. Apply cost estimation techniques to determine future costs.
5. Utilize regression analysis in cost estimation.
6. Appreciate the uses and limitations of cost estimates.
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
, Cost Concepts, Behaviour, and Estimation 2-2
TRUE-FALSE STATEMENTS
1. Steel used in the production of automobiles would generally be classified as a direct cost.
Answer: True
Difficulty: Easy
Learning Objective: Explain the cost concept and cost terms.
CPA: Management Accounting
Bloomcode: Knowledge
2. Traceability can be used as a criterion to differentiate direct and indirect costs.
Answer: True
Difficulty: Easy
Learning Objective: Explain the cost concept and cost terms.
CPA: Management Accounting
Bloomcode: Knowledge
3. Textbook costs are an opportunity cost of earning a college degree.
Answer: False
Difficulty: Easy
Learning Objective: Explain the cost concept and cost terms.
CPA: Management Accounting
Bloomcode: Knowledge
4. Salaries and wages you could earn while in college constitute a sunk cost.
Answer: False
Difficulty: Easy
Learning Objective: Explain the cost concept and cost terms.
CPA: Management Accounting
Bloomcode: Knowledge
5. The learning curve refers to declines in the cost of materials as production volume increases.
Answer: False
Difficulty: Easy
Learning Objective: Describe the different types of cost behaviour.
CPA: Management Accounting
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
, 2-3 Test Bank for Cost Management, Third Canadian Edition
Bloomcode: Knowledge
6. The learning curve refers to increases in sunk costs as production volume decreases.
Answer: False
Difficulty: Easy
Learning Objective: Describe the different types of cost behaviour.
CPA: Management Accounting
Bloomcode: Knowledge
7. A new product’s learning curve rate can be expressed as (direct material cost/total cost).
Answer: False
Difficulty: Easy
Learning Objective: Describe the different types of cost behaviour.
CPA: Management Accounting
Bloomcode: Knowledge
8. Learning curves lead to greater productivity over time.
Answer: True
Difficulty: Easy
Learning Objective: Describe the different types of cost behaviour.
CPA: Management Accounting
Bloomcode: Knowledge
9. Past costs are irrelevant for decision-making and possibly relevant for predicting future costs.
Answer: True
Difficulty: Easy
Learning Objective: Describe cost estimation techniques.
CPA: Management Accounting
Bloomcode: Comprehension
10. Past costs are relevant for decision-making, but irrelevant for predicting future costs.
Answer: False
Difficulty: Easy
Learning Objective: Describe cost estimation techniques.
CPA: Management Accounting
Bloomcode: Comprehension
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
MEASURING, MONITORING, AND
MOTIVATING PERFORMANCE, 3RD
CANADIAN EDITION, LESLIE G.
ELDENBURG, SUSAN K. WOLCOTT, LIANG-
HSUAN CHEN, GAIL COOK
Susan K. Wolcott
GRIZLI777 [Company address]
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
,2-1 Test Bank for Cost Management, Third Canadian Edition
CHAPTER 2
Cost Concepts, Behaviour, and Estimation
CHAPTER LEARNING OBJECTIVES
1. Explain cost concepts and cost terms.
2. Describe the different types of cost behaviour.
3. Describe cost estimation techniques.
4. Apply cost estimation techniques to determine future costs.
5. Utilize regression analysis in cost estimation.
6. Appreciate the uses and limitations of cost estimates.
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
, Cost Concepts, Behaviour, and Estimation 2-2
TRUE-FALSE STATEMENTS
1. Steel used in the production of automobiles would generally be classified as a direct cost.
Answer: True
Difficulty: Easy
Learning Objective: Explain the cost concept and cost terms.
CPA: Management Accounting
Bloomcode: Knowledge
2. Traceability can be used as a criterion to differentiate direct and indirect costs.
Answer: True
Difficulty: Easy
Learning Objective: Explain the cost concept and cost terms.
CPA: Management Accounting
Bloomcode: Knowledge
3. Textbook costs are an opportunity cost of earning a college degree.
Answer: False
Difficulty: Easy
Learning Objective: Explain the cost concept and cost terms.
CPA: Management Accounting
Bloomcode: Knowledge
4. Salaries and wages you could earn while in college constitute a sunk cost.
Answer: False
Difficulty: Easy
Learning Objective: Explain the cost concept and cost terms.
CPA: Management Accounting
Bloomcode: Knowledge
5. The learning curve refers to declines in the cost of materials as production volume increases.
Answer: False
Difficulty: Easy
Learning Objective: Describe the different types of cost behaviour.
CPA: Management Accounting
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
, 2-3 Test Bank for Cost Management, Third Canadian Edition
Bloomcode: Knowledge
6. The learning curve refers to increases in sunk costs as production volume decreases.
Answer: False
Difficulty: Easy
Learning Objective: Describe the different types of cost behaviour.
CPA: Management Accounting
Bloomcode: Knowledge
7. A new product’s learning curve rate can be expressed as (direct material cost/total cost).
Answer: False
Difficulty: Easy
Learning Objective: Describe the different types of cost behaviour.
CPA: Management Accounting
Bloomcode: Knowledge
8. Learning curves lead to greater productivity over time.
Answer: True
Difficulty: Easy
Learning Objective: Describe the different types of cost behaviour.
CPA: Management Accounting
Bloomcode: Knowledge
9. Past costs are irrelevant for decision-making and possibly relevant for predicting future costs.
Answer: True
Difficulty: Easy
Learning Objective: Describe cost estimation techniques.
CPA: Management Accounting
Bloomcode: Comprehension
10. Past costs are relevant for decision-making, but irrelevant for predicting future costs.
Answer: False
Difficulty: Easy
Learning Objective: Describe cost estimation techniques.
CPA: Management Accounting
Bloomcode: Comprehension
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
