ACC 241 Exam #1 Multiple choice well
answered to pass
If the finished goods inventory decreases between the beginning and the end of a period, then
the cost of goods manufactured for the period is larger than the cost of goods sold. T/F - correct
answer ✔✔ False (Finished Goods T-Account)
Predetermined overhead rates are based on actual cost and activity data. T/F - correct answer
✔✔ False (Total ESTIMATED manufacturing overhead cost/Total ESTIMATED cost driver)
Since actual MOH is $20,000 less than estimated MOH, then overhead must have been over-
allocated by $20,000. T/F - correct answer ✔✔ False (Compare applied to estimated, not actual)
In activity-based costing, a separate activity rate (i.e., predetermined overhead rate) is
computed for each activity cost pool by dividing the estimated overhead cost in the activity cost
pool by the total expected activity for the activity cost pool. T/F - correct answer ✔✔ True
Choosing the method of allocating costs to products (i.e. plantwide vs ABC) can have an impact
on the total manufacturing costs. T/F - correct answer ✔✔ False (Has impact on product level
not total manufacturing cost)
Machine set-up would be most likely be considered a unit-level cost. T/F - correct answer ✔✔
False
Which of the following statements correctly distinguishes between financial and managerial
accounting? - correct answer ✔✔ Managerial accounting uses both financial and non-financial
measures of performance
, If a frozen pizza plant is the cost object, classify each of the following costs as direct or indirect,
respectively: property insurance, plant supervisor wages, and janitorial supplies. - correct
answer ✔✔ All are direct, because cost object is the frozen pizza PLANT (factory)
Product (inventoriable) costs differ from period expenses because? - correct answer ✔✔
Product costs may appear on the balance sheet as assets
Products and their costs flow through a production facility in the following order: - correct
answer ✔✔ Raw materials, work-in-process, finished goods, cost of goods sold
Dallas, Inc. an appliance manufacturer, is developing a new line of ovens that uses controlled-
laser technology. The research and testing costs associated with the new ovens is said to arise
from a: - correct answer ✔✔ Product-level activity
Volume-based (traditional, plant-wide)) cost systems tend to - correct answer ✔✔ Under-cost
low-volume products and over-cost high-volume products
The cost of warranty work is an example of a(n): - correct answer ✔✔ External failure cost
Which of the following items could be an example of a cost object? - correct answer ✔✔ The
accounting department, a manufacturing plant and an international plant
Which of the following is an example of a manufacturing overhead expense (an indirect product
cost) in a factory?
A. Salaries of salespersons
B. Wages of machine operators
C. Wages of administrators in the corporate office
D. Wages of factory maintenance personnel - correct answer ✔✔ Wages of factory maintenance
personnel
answered to pass
If the finished goods inventory decreases between the beginning and the end of a period, then
the cost of goods manufactured for the period is larger than the cost of goods sold. T/F - correct
answer ✔✔ False (Finished Goods T-Account)
Predetermined overhead rates are based on actual cost and activity data. T/F - correct answer
✔✔ False (Total ESTIMATED manufacturing overhead cost/Total ESTIMATED cost driver)
Since actual MOH is $20,000 less than estimated MOH, then overhead must have been over-
allocated by $20,000. T/F - correct answer ✔✔ False (Compare applied to estimated, not actual)
In activity-based costing, a separate activity rate (i.e., predetermined overhead rate) is
computed for each activity cost pool by dividing the estimated overhead cost in the activity cost
pool by the total expected activity for the activity cost pool. T/F - correct answer ✔✔ True
Choosing the method of allocating costs to products (i.e. plantwide vs ABC) can have an impact
on the total manufacturing costs. T/F - correct answer ✔✔ False (Has impact on product level
not total manufacturing cost)
Machine set-up would be most likely be considered a unit-level cost. T/F - correct answer ✔✔
False
Which of the following statements correctly distinguishes between financial and managerial
accounting? - correct answer ✔✔ Managerial accounting uses both financial and non-financial
measures of performance
, If a frozen pizza plant is the cost object, classify each of the following costs as direct or indirect,
respectively: property insurance, plant supervisor wages, and janitorial supplies. - correct
answer ✔✔ All are direct, because cost object is the frozen pizza PLANT (factory)
Product (inventoriable) costs differ from period expenses because? - correct answer ✔✔
Product costs may appear on the balance sheet as assets
Products and their costs flow through a production facility in the following order: - correct
answer ✔✔ Raw materials, work-in-process, finished goods, cost of goods sold
Dallas, Inc. an appliance manufacturer, is developing a new line of ovens that uses controlled-
laser technology. The research and testing costs associated with the new ovens is said to arise
from a: - correct answer ✔✔ Product-level activity
Volume-based (traditional, plant-wide)) cost systems tend to - correct answer ✔✔ Under-cost
low-volume products and over-cost high-volume products
The cost of warranty work is an example of a(n): - correct answer ✔✔ External failure cost
Which of the following items could be an example of a cost object? - correct answer ✔✔ The
accounting department, a manufacturing plant and an international plant
Which of the following is an example of a manufacturing overhead expense (an indirect product
cost) in a factory?
A. Salaries of salespersons
B. Wages of machine operators
C. Wages of administrators in the corporate office
D. Wages of factory maintenance personnel - correct answer ✔✔ Wages of factory maintenance
personnel
