Cost Accounting Chapter 1-4

Question 1

A cost that remains constant in totals but varies in per unit with changes in activity

Answer 1

Fixed Cost

Question 2

Indirect cost of converting raw material into finished goods are called

Answer 2

Overhead costs

Question 3

Conversation does not include

Answer 3

Direct Materials

Question 4

Costs that are related to manufacturing of a company

Answer 4

Product Cost

Question 5

All costs are applicable and valid only within contemplated level of activity. Hence, total variable costs may be constant in total outside such range.

Answer 5

True

Question 6

Fixed Cist increase per unit as the activity level increases and decreases per unit as the activity level falls

Answer 6

False

Question 7

Party Company .. formula

Answer 7

Y = a + bX

Question 8

There is no single definition of cost.

Answer 8

False

Question 9

A cost that is useful for one decision may not be useful for another decision.

Answer 9

True

Question 10

Opportunity costs are the additional costs incurred when the best alternative is chosen.

Answer 10

False

Question 11

Product cost are expenses on the income statement when raw materials are issued to production.

Answer 11

False

Question 12

Advertising cost is an example of period cost expensed in the period incurred.

Answer 12

True

Question 13

An example of direct costs to an educational institution is the wages paid to its faculty members.

Answer 13

True

Question 14

Salary of company driver who delivers finished goods to distributors is treated as factory overhead.

Answer 14

False

Question 15

In a RTW cost of threads, buttons, and zippers are treated as direct costs.

Answer 15

True

Question 16

For a cost to be variable it must be variable to uts activity base. Such activity base should directly affect variability of this cost and is synonymous to the cost driver.

Answer 16

True

Question 17

Fixed costs increase per unit as the activity level rises and decreases per unit as the activity level falls.

Answer 17

False

Question 18

In analyzing mixed cost, the variable portion represents the costs incurred for the actual consumption of the service. This means that its fixed component does not necessarily represent the level of activity that actually took place

Answer 18

True

Question 19

Itemizing each major class of factory overhead which is later divided into variable and fixed components is a step involved under work measurement method of cost estimation.

Answer 19

False

Question 20

For a purposes of profit analysis and control, a peso increase in contribution margin is a peso increase in operating profit. Fixed costs constant, decrease in CM directly reduces operating profit too.

Answer 20

True

Question 21

Wages of raw materials inventory clerk

Answer 21

MOH

Question 22

Transportation and representation allowance of plant managers and supervisors

Answer 22

MOH

Question 23

Transportation and representation allowance of sales managers

Answer 23

Marketing

Question 24

Paper and plastic bags used by supermarket

Answer 24

Marketing

Question 25

Lubricating oil used by factories

Answer 25

MOH

Question 26

Freight in cost of direct materials

Answer 26

DM

Question 27

Depreciation of delivery truck of manufacturing company used in transporting finised goods to customers.

Answer 27

Marketing

Question 28

Cloth used by advertising companied in making billboards

Answer 28

DM

Question 29

OT paid to employee who repaired company's copying machine

Answer 29

G&A

Question 30

Depreciation of sports equipment by fitness center

Answer 30

MOH

Question 31

Salaries paid to factory workers during idle time

Answer 31

MOH

Question 32

Factory supplies such as glue, soap, floorwax etc

Answer 32

MOH

Question 33

Manufacturing costs include raw materials used and wages paid to factory workers but do not include costs of wages paid to factory personnel who are not directly involved in the conversion of raw materials into finished product.

Answer 33

False

Question 34

A manufacturing plant produces two product lines: canned meat products and bottled drinks. Direct costs for the two product lines include the compensation and benefits paid to the company president since he is the overall in-charge person to supervise the whole company's operations.

Answer 34

False

Question 35

For a company engaged in the manufacture of books, the bond paper used in printing company announcements are indirect costs.

Answer 35

True

Question 36

Product costs for a trading company include the costs of merchandise purchased and the freight costs to bring the goods to the place of thebuyer.

Answer 36

False

Question 37

Management accounting produces certain information that are exclusively available for internal users only at all times, unlike the reports furnished by financial accounting which are available to both internal and external users.

Answer 37

False

Question 38

Even though accounting in general needs to follow the promulgated standards by standard-setting bodies, management accounting is an exception since it need not follow such rules.

Answer 38

True

Question 39

Product costs are deducted from revenue when cash is already paid for them and the production is completed.

Answer 39

False

Question 40

Signing off on financial statements is an activity done by the chief financial officer; not by the treasurer or the controller.

Answer 40

True

Question 41

Cost and expenses can be interchangeably used since both of them refer to the expenditures recorded in a business.

Answer 41

False

Question 42

An increase in the cost driver would always increase the cost related to it.

Answer 42

True

Question 43

Compliance with the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management means maintaining a fair level of ethical conduct.

Answer 43

False

Question 44

In analyzing a mixed cost, the variable portion represents the costs incurred for the actual consumption of the service. This means that its fixed component does not necessarily represent the level of activitythat actually took place.

Answer 44

True

Question 45

The state where costs do not react with changes in the factor selected for estimating their behavior would produce a low coefficient of determination. This means that the performance of the entity withregards to controlling such costs is poor.

Answer 45

False

Question 46

An increase in the contribution margin rate would always result to an increase in the net income after taxes even if total fixed costs behave outside the relevant range

Answer 46

False

Question 47

The breakeven point formula used in firms selling multi-products is thesame with that of single-product businesses except that thedenominator is average contribution margin per unit or peso

Answer 47

False

Question 48

A facet of accounting that determines the cist of services, products, and processes with the goals of reporting the correct amounts on a company's financial statements, assisting management in the planning and control of the organization, and preparing special analysis in arriving at the best decision.

Answer 48

Cost Accounting

Question 49

Set of activities that transforms raw resources into the goods and services that end users purchase and consume and the treatment of disposal of any waste generated by them.

Answer 49

Value Chain

Question 50

Business Functions in the Value Chain: (6)

Answer 50

Research and Development Design of products... Production Marketing Distribution Customer Service

Question 51

What kind of cost is marketing and administrative

Answer 51

Period Costs

Question 52

Control Account

Answer 52

Actual Costs

Question 53

Applied Account

Answer 53

Actual or Budgeted Costs

Question 54

process of accumulating, classifying, and assigning direct materials, direct labor and factory overhead costs to products or services.

Answer 54

Product Costing

Question 55

Nag accumulate/absorb ng cost

Answer 55

Cost object

Question 56

Cost object: Job or Batch of products

Answer 56

Job order

Question 57

Costing system used for heterogeneous items or products.

Answer 57

Job order

Question 58

Costing system which is more costly.

Answer 58

Job order

Question 59

What costing system is used for construction companies

Answer 59

Job order

Question 60

What costing system is used for printing companies

Answer 60

Job order

Question 61

What costing system is used for medical services

Answer 61

Job order

Question 62

Costing system used for homogeneous items or products

Answer 62

Process Costing

Question 63

In this costing system the cost object is process

Answer 63

Process Costing

Question 64

What costing system is used for petroleum companies

Answer 64

Process Costing

Question 65

What costing system is used for bottling companies and food products

Answer 65

Process Costing

Question 66

Types of Cost: Normal Costing FOH- inaassume or nag eestimate ka based sa mga pased data mo then iaaverage

Answer 66

Applied

Question 67

Types of Costs Desired level of activity/cost

Answer 67

Standard Cost

Question 68

Overhead Assignment: Uses one common cost driver (DLH, no. of units produced)

Answer 68

Volume-based

Question 69

Overhead Assignment: Uses multiple cost drivers based on a cause and effect association

Answer 69

Activity Based

Question 70

Raw Materials Inventory and Direct Materials Inventory are synonymous

Answer 70

False Raw Materials Inventory can have both/either Direct or Indirect

Question 71

Is a factory janitor cost a product or period cost? Product Period

Answer 71

Product

Question 72

Is the cost of market research a product or period cost?

Answer 72

period