Cost Accounting (Horngren 15th Ed.)
Chapter 2 Exam Questions with
Complete Solutions
Actual cost - Correct Answers: The cost incurred (a historical or past cost)
Average cost - Correct Answers: A unit cost, also called an average cost, is calculated by dividing the
total cost by the related number of units produced.
Budgeted cost - Correct Answers: A predicted, or forecasted, cost (a future cost)
Conversion costs - Correct Answers: All manufacturing costs other than direct material costs. Conversion
costs represent all manufacturing costs incurred to convert direct materials into finished goods.
Cost - Correct Answers: A resource sacrificed or forgone to achieve a specific objective. A cost is usually
measured as the monetary amount that must be paid to acquire goods or services.
Chapter 2 Exam Questions with
Complete Solutions
Actual cost - Correct Answers: The cost incurred (a historical or past cost)
Average cost - Correct Answers: A unit cost, also called an average cost, is calculated by dividing the
total cost by the related number of units produced.
Budgeted cost - Correct Answers: A predicted, or forecasted, cost (a future cost)
Conversion costs - Correct Answers: All manufacturing costs other than direct material costs. Conversion
costs represent all manufacturing costs incurred to convert direct materials into finished goods.
Cost - Correct Answers: A resource sacrificed or forgone to achieve a specific objective. A cost is usually
measured as the monetary amount that must be paid to acquire goods or services.
