THEORETICALS Flashcards
The three basic elements of cost for a manufactured products are:
A. indirect materials, indirect labor, and manufacturing overhead
B. merchandise inventory, work in process, and finished goods inventory
C. Direct materials, work in process, and finished goods inventory
D. Direct materials, direct labor, and manufacturing overhead
D. Direct materials, direct labor, and manufacturing overhead
Which of the following is not an element of conversion cost?
A. direct materials cost
B. indirect labor cost
C. depreciation on factory equipment
D. indirect materials cost
E. salary and the factory superintendent
A. direct materials cost
Prime cost and conversion cost have one particular cost element in common, which is:
A. raw materials used in production
B. manufacturing overhead
C. period costs
D. factory rent
E. None of the above
D. factory rent
Which of the following is not an element of manufacturing overhead?
A. indirect labor and indirect materials
B. depreciation of maintenance equipment
C. the salary of plant supervisor
D. Property of taxes on factory buildings
E. The salary of a marketing manager
E. The salary of a marketing manager
Which of the following is a period cost?
A. direct materials cost
B. indirect material cost
C. factory utilities cost
D. administrative cost
E. all of the above are period cost
D. administrative cost
Period costs are:
A. synonym with administrative cost
B. a function of production
C. reported as assets on the balance sheet
D. reported as a part of the cost of goods sold on the income statement
E. unrelated to production
D. reported as a part of the cost of goods sold on the income statement
Which of the following is not an inventoriable cost?
A. direct labor
B. factory supervisor salaries
C. factory utilities
D. sales commissions
E. indirect materials
D. sales commissions
The cost of goods manufactured may be determined as:
A. beginning raw materials + direct labor costs + manuf overhead
B. beg. finished goods + cost of goods sold - ending finished goods
C. period costs + direct labor + direct materials
D. raw materials used + direct labor + manuf overhead
E. none of the above
E. none of the above
Which of the following is an example of a fixed cost?
A. direct material
B. electricity cost to operate assembly line of equipment
C. a commission paid to sales personnel
D. direct labor
E. the salary of a factory supervisor
E. the salary of a factory supervisor
Direct labor might be classified as a/n:
A. direct cost, a variable cost, or a period cost
B. indirect cost, a fixed, or a product cost
C. direct cost, a variable cost, or a product cost
D. direct cost, a fixed cost, or a product cost
E. direct cost, a fixed cost, or a prime cost
C. direct cost, a variable cost, or a product cost
Which of the following is an indirect cost?
A. salary of maintenance supervisor
B. electricity cost to operate a plant security system
C. depreciation of factory equipment
D. cost of materials to maintain factory equipment in working order
E. all of the above are indirect cost
E. all of the above are indirect cost
Which of the following statement is false?
A. raw materials are any materials going into a manufactured product
B. order-getting and order-filling costs are treated as marketing cost
C. variable cost per unit is a synonym for product cost
D. inventoriable cost is a synonym for product cost
E. common costs are a synonym for direct cost
E. common costs are a synonym for direct cost
Which is NOT TRUE of a differential cost?
A. it is always a variable cost
B. it can be an incremental cost
C. it is present under one alternative but is absent under another
D. it can be a decremental cost
A. it is always a variable cost
A potential benefit that is lost or sacrificed when the choice of one course of action requires the giving up of a competing course of action is known as:
A. period cost
B. sunk cost
C. variable cost
D. differential cost
E. none of the above
E. none of the above
Within two weeks after rebuilding a piece of assembly-line equipment, at a cost of 45,000, management decided to replace the equipment with a newer, faster model. They received no trade-in on the old equipment. The 45,000 expenditure should be considered a/n:
A. period cost
B. opportunity cost
C. sunk cost
D. differential cost
E. decremental cost
C. sunk cost
