9/5/23,1011:5410 Test10Bank10and10Solutions10For10Fundamentals10of10Cost10Accountin
AM 0 g107th10Edition10…
For10All10Chapters 10à
Fundamentals10of10Cost10Accounting,107e10(Lan
en)1 0 Chapter1021 0 Cost10Concepts10and10Beh
avior
1) The10cost10of10an10item10is10the10sacrifice10of10resources10made10to10 acquire10it.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10statement10is10the10definit
ion10of10cost.1 0 Difficulty:10110Easy
Topic:1 0 What10is10a10Cost?
Learning10Objective:1 0 02-
0110Explain10the10basic10concept10of10"cost."1 0 Bloom's:1
0 Remember
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
2) An10expense10is10 a10cost10charged10against10revenue10 in10an10accounting10period.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10the10definition10of10an1
0expense.1 0 Difficulty:10110Easy
Topic:1 0 What10is10a10Cost?
Learning10Objective:1 0 02-
0110Explain10the10basic10concept10of10"cost."1 0 Bloom's:1
0 Remember
AACSB:1 0 Analytical10 Thinking
Accessibility:1 0 Keyboard10 Navigation
3) If10a10cost10is10recorded10as10an10asset10(for10example,10prepaid10rent10for10an
10office10building),10it10becomes1 0 an10expense10when10the10asset10has10been10co
nsumed.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10statement10describes10the10appropriat
e10transition10between1 0 assets10and10expenses.
Difficulty:10210Mediu
m1 0 Topic:1 0 What1
0is10a10Cost?
Learning10Objective:1 0 02-
0110Explain10the10basic10concept10of10"cost."1 0 Bloom's:1
0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
1
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,9/5/23,1011:5410 Test10Bank10and10Solutions10For10Fundamentals10of10Cost10Accountin
AM g107th10Edition10…
For10All10Chapters 10à
4) Accounting10systems10typically10record10opportunity10costs10as10assets10and10treat
10them10as10intangible1 0 items10on10the10financial10statements.
Answer:1 0 FALSE
Explanation:1 0 Opportunity10costs10are10not10reflected10in10the10accounting10system
—they10are10what10did1 0 not10happen.
Difficulty:10210Mediu
m1 0 Topic:1 0 What1
0is10a10Cost?
Learning10Objective:1 0 02-
0110Explain10the10basic10concept10of10"cost."1 0 Bloom's:1
0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
5) Total10cost10of10goods10purchased10minus10beginning10merchandise10inve
ntory10plus10ending1 0 merchandise10inventory10equals10cost10of10goods10so
ld.
Answer:1 0 FALSE
Explanation:1 0 This10statement10is10false.10Purchases10plus10beginning10inventory10m
inus10ending1 0 inventory10equals10cost10of10goods10sold.
Difficulty:10210Medium
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
6) Cost10of10goods10sold10includes10the10actual10costs10of10the10goods10sold10an
d10the10costs10required10to10sell1 0 them10to10the10customer.
Answer:1 0 FALSE
Explanation:1 0 This10statement10is10false.10Cost10of10goods10sold10does10not10inclu
de10selling10costs.1 0 Difficulty:10210Medium
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
2
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,9/5/23,1011:5410 Test10Bank10and10Solutions10For10Fundamentals10of10Cost10Accountin
AM g107th10Edition10…
For10All10Chapters 10à
7) Period10costs10are10those10costs10assigned10to10units10of10production10in10the1
0period10in10which10they10are1 0 incurred.
Answer:1 0 FALSE
Explanation:1 0 This10statement10is10false.10This10statement10describes10product10costs
,10not10period10costs.1 0 Difficulty:10210Medium
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
8) Only10direct10costs10can10be10classified10as10product10costs;10indirect10costs1
0are10classified10as10period1 0 costs.
Answer:1 0 FALSE
Explanation:1 0 This10statement10is10false.10Product10costs10can10include10both10direc
t10and10indirect10costs.1 0 Difficulty:10210Medium
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
9) The10three10categories10of10product10costs10are10direct10materials,10direct10lab
or,10and10manufacturing1 0 overhead.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10statement10is10the10definit
ion10of10product10cost.1 0 Difficulty:10110Easy
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Remember
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
3
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, 9/5/23,1011:5410 Test10Bank10and10Solutions10For10Fundamentals10of10Cost10Accountin
AM g107th10Edition10…
For10All10Chapters 10à
10) The10first10step10in10determining10whether10a10cost10is10direct10or10indir
ect10is10to10specify10the10cost1 0 allocation10rule.
Answer:1 0 FALSE
Explanation:1 0 The10first10step10in10determining10whether10a10cost10is10direct10or10in
direct10is10defining10the10cost1 0 object.
Difficulty:10210Mediu
m1 0 Topic:10 Cost10
Allocation
Learning10Objective:1 0 02-
0310Explain10the10process10of10cost10allocation.1 0 Bloom's:
1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
11) Total10work-in-
process10during10the10period10is10the10sum10of10the10beginning10work-in-
process1 0 inventory10and10the10total10manufacturing10costs10incurred10during10
the10period.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10is10the10correct10formula10for10tota
l10work-in-process.1 0 Difficulty:10210Medium
Topic:1 0 How10Costs10Flow10through10the10Statements
Learning10Objective:1 0 02-
0410Understand10how10material,10labor,10and10overhead10costs10are10added10to10a1
0 product10at10each10stage10of10the10production10process.
Bloom's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
12) Cost10of10goods10sold10plus10the10ending10finished10goods10inventory10 minus1
0the10beginning10finished1 0 goods10inventory10equals10the10cost10of10goods10manu
factured.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10statement10works10backwards10from10c
ost10of10goods10sold10to1 0 cost10of10goods10manufactured.
Difficulty:10210Medium
Topic:1 0 How10Costs10Flow10through10the10Statements
Learning10Objective:1 0 02-
0410Understand10how10material,10labor,10and10overhead10costs10are10added10to10a1
0 product10at10each10stage10of10the10production10process.
Bloom's:1 0 Understand1 0 A
ACSB:1 0 Analytical10Thinki
ng
Accessibility:1 0 Keyboard10 Navigation
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AM 0 g107th10Edition10…
For10All10Chapters 10à
Fundamentals10of10Cost10Accounting,107e10(Lan
en)1 0 Chapter1021 0 Cost10Concepts10and10Beh
avior
1) The10cost10of10an10item10is10the10sacrifice10of10resources10made10to10 acquire10it.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10statement10is10the10definit
ion10of10cost.1 0 Difficulty:10110Easy
Topic:1 0 What10is10a10Cost?
Learning10Objective:1 0 02-
0110Explain10the10basic10concept10of10"cost."1 0 Bloom's:1
0 Remember
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
2) An10expense10is10 a10cost10charged10against10revenue10 in10an10accounting10period.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10the10definition10of10an1
0expense.1 0 Difficulty:10110Easy
Topic:1 0 What10is10a10Cost?
Learning10Objective:1 0 02-
0110Explain10the10basic10concept10of10"cost."1 0 Bloom's:1
0 Remember
AACSB:1 0 Analytical10 Thinking
Accessibility:1 0 Keyboard10 Navigation
3) If10a10cost10is10recorded10as10an10asset10(for10example,10prepaid10rent10for10an
10office10building),10it10becomes1 0 an10expense10when10the10asset10has10been10co
nsumed.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10statement10describes10the10appropriat
e10transition10between1 0 assets10and10expenses.
Difficulty:10210Mediu
m1 0 Topic:1 0 What1
0is10a10Cost?
Learning10Objective:1 0 02-
0110Explain10the10basic10concept10of10"cost."1 0 Bloom's:1
0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
1
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,9/5/23,1011:5410 Test10Bank10and10Solutions10For10Fundamentals10of10Cost10Accountin
AM g107th10Edition10…
For10All10Chapters 10à
4) Accounting10systems10typically10record10opportunity10costs10as10assets10and10treat
10them10as10intangible1 0 items10on10the10financial10statements.
Answer:1 0 FALSE
Explanation:1 0 Opportunity10costs10are10not10reflected10in10the10accounting10system
—they10are10what10did1 0 not10happen.
Difficulty:10210Mediu
m1 0 Topic:1 0 What1
0is10a10Cost?
Learning10Objective:1 0 02-
0110Explain10the10basic10concept10of10"cost."1 0 Bloom's:1
0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
5) Total10cost10of10goods10purchased10minus10beginning10merchandise10inve
ntory10plus10ending1 0 merchandise10inventory10equals10cost10of10goods10so
ld.
Answer:1 0 FALSE
Explanation:1 0 This10statement10is10false.10Purchases10plus10beginning10inventory10m
inus10ending1 0 inventory10equals10cost10of10goods10sold.
Difficulty:10210Medium
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
6) Cost10of10goods10sold10includes10the10actual10costs10of10the10goods10sold10an
d10the10costs10required10to10sell1 0 them10to10the10customer.
Answer:1 0 FALSE
Explanation:1 0 This10statement10is10false.10Cost10of10goods10sold10does10not10inclu
de10selling10costs.1 0 Difficulty:10210Medium
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
2
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,9/5/23,1011:5410 Test10Bank10and10Solutions10For10Fundamentals10of10Cost10Accountin
AM g107th10Edition10…
For10All10Chapters 10à
7) Period10costs10are10those10costs10assigned10to10units10of10production10in10the1
0period10in10which10they10are1 0 incurred.
Answer:1 0 FALSE
Explanation:1 0 This10statement10is10false.10This10statement10describes10product10costs
,10not10period10costs.1 0 Difficulty:10210Medium
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
8) Only10direct10costs10can10be10classified10as10product10costs;10indirect10costs1
0are10classified10as10period1 0 costs.
Answer:1 0 FALSE
Explanation:1 0 This10statement10is10false.10Product10costs10can10include10both10direc
t10and10indirect10costs.1 0 Difficulty:10210Medium
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
9) The10three10categories10of10product10costs10are10direct10materials,10direct10lab
or,10and10manufacturing1 0 overhead.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10statement10is10the10definit
ion10of10product10cost.1 0 Difficulty:10110Easy
Topic:1 0 Presentation10of10Costs10in10Financial10Statements
Learning10Objective:1 0 02-
0210Explain10how10costs10are10presented10in10financial10statements.1 0 Blo
om's:1 0 Remember
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
3
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, 9/5/23,1011:5410 Test10Bank10and10Solutions10For10Fundamentals10of10Cost10Accountin
AM g107th10Edition10…
For10All10Chapters 10à
10) The10first10step10in10determining10whether10a10cost10is10direct10or10indir
ect10is10to10specify10the10cost1 0 allocation10rule.
Answer:1 0 FALSE
Explanation:1 0 The10first10step10in10determining10whether10a10cost10is10direct10or10in
direct10is10defining10the10cost1 0 object.
Difficulty:10210Mediu
m1 0 Topic:10 Cost10
Allocation
Learning10Objective:1 0 02-
0310Explain10the10process10of10cost10allocation.1 0 Bloom's:
1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
11) Total10work-in-
process10during10the10period10is10the10sum10of10the10beginning10work-in-
process1 0 inventory10and10the10total10manufacturing10costs10incurred10during10
the10period.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10is10the10correct10formula10for10tota
l10work-in-process.1 0 Difficulty:10210Medium
Topic:1 0 How10Costs10Flow10through10the10Statements
Learning10Objective:1 0 02-
0410Understand10how10material,10labor,10and10overhead10costs10are10added10to10a1
0 product10at10each10stage10of10the10production10process.
Bloom's:1 0 Understand
AACSB:1 0 Analytical10Thinking1 0 Ac
cessibility:1 0 Keyboard10Navigation
12) Cost10of10goods10sold10plus10the10ending10finished10goods10inventory10 minus1
0the10beginning10finished1 0 goods10inventory10equals10the10cost10of10goods10manu
factured.
Answer:1 0 TRUE
Explanation:1 0 This10statement10is10true.10This10statement10works10backwards10from10c
ost10of10goods10sold10to1 0 cost10of10goods10manufactured.
Difficulty:10210Medium
Topic:1 0 How10Costs10Flow10through10the10Statements
Learning10Objective:1 0 02-
0410Understand10how10material,10labor,10and10overhead10costs10are10added10to10a1
0 product10at10each10stage10of10the10production10process.
Bloom's:1 0 Understand1 0 A
ACSB:1 0 Analytical10Thinki
ng
Accessibility:1 0 Keyboard10 Navigation
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