1) Which of the following would most likely be a direct cost in a manufacturing company? A) supervision and engineering B) utilities C) repairs D) utilities and repairs E) raw materials 2) A grouping of individual cost items is called a A) cost objective. B) costing group. C) cost department. D) cost pool. E) cost base. 3) Which of the following would be appropriately costed using a process costing system? A) oil refining B) a law firm managing individual legal cases C) assembly of individual aircraft by Bombardier D) movies produced by Lions Gate Entertainment E) audit engagements performed by KPMG 4) The first step in job costing is to A) identify the cost object. B) identify the direct costs. C) select the cost allocation base. D) identify the indirect costs. E) compute the rate per unit. 5) Managers and accountants collect most of the cost information that goes into their information systems through A) an information databank. B) computer programs. C) source documents. D) time surveys. E) interviewing workers. 6) Which of the following statements about normal costing is TRUE? A) Direct costs and indirect costs are allocated using an actual rate. B) Direct costs and indirect costs are traced using budgeted rates. C) Direct costs are traced using a budgeted rate, and indirect costs are allocated using an actual rate. D) Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate. E) Direct costs are traced by using the actual direct-cost rate times the budgeted quantity of the direct costs input.
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Direct costs are costs that can be directly traced to a specific cost object, such as a product or service. Raw materials are directly used in the manufacturing process and can be easily traced to the final product. 2) A grouping of individual cost items is Show more…
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1. How would the answer to Problem $2-34$ be modified if you were asked for a schedule of cost of goods manufactured and sold instead of a schedule of cost of goods manufactured? Be specific. 2. Would the sales manager's salary (included in marketing, distribution, and customer-service costs) be accounted for any differently if the Howell Corporation were a merchandising-sector company instead of a manufacturing-sector company? Using the flow of manufacturing costs outlined in Exhibit $2-9$ (p. 42 ), describe how the wages of an assembler in the plant would be accounted for in this manufacturing company. 3. Plant supervisory salaries are usually regarded as manufacturing overhead costs. When might some of these costs be regarded as direct manufacturing costs? Give an example. 4. Suppose that both the direct materials used and the plant and equipment depreciation are related to the manufacture of 1 million units of product. What is the unit cost for the direct materials assigned to those units? What is the unit cost for plant and equipment depreciation? Assume that yearly plant and equipment depreciation is computed on a straight-line basis. 5. Assume that the implied cost-behavior patterns in requirement 4 persist. That is, direct material costs behave as a variable cost, and plant and equipment depreciation behaves as a fixed cost. Repeat the computations in requirement $4,$ assuming that the costs are being predicted for the manufacture of 1.2 million units of product. How would the total costs be affected? 6. As a management accountant, explain concisely to the president why the unit costs differed in requirements 4 and 5.
Which of the following represents a proper sequencing (correct order) in which the budgets below are prepared? Select one: a. Sales, Manufacturing Overhead, Production b. Sales; Balance Sheet; Direct Labor c. None of the given answers d. Sales; Direct Material Purchases; Cash e. Production; Sales; Income Statement Which of the following statements is false? Select one: a. The budgeted variable selling and administrative expense is calculated by multiplying the budgeted sales by the variable selling and administrative expense per unit. b. The master budget consists of a number of separate but interdependent budgets: 12-month budget that rolls forward one month (or quarter) a continuous or perpetual budget current month (or quarter) is completed. c. None of the given answers. d. Product budget.
Jennifer S.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
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