Question 1

The Cycle Centre currently produces 1000 bicycles per month.The following per unit data apply for sales to regular customers:
  Direct materials $50 Direct manufacturing labour 5 Variable manufacturing overhead 14 Fixed manufacturing overhead 10‾ Total manufacturing costs $79\begin{array}{lr}	ext { Direct materials } & \$ 50 \	ext { Direct manufacturing labour } & 5 \	ext { Variable manufacturing overhead } & 14 \	ext { Fixed manufacturing overhead } & \underline{10} \{	ext { Total manufacturing costs }} & \$ 79\end{array} Direct materials  Direct manufacturing labour  Variable manufacturing overhead  Fixed manufacturing overhead  Total manufacturing costs ​$5051410​$79​ 
The plant has capacity for 3000 bicycles and is considering expanding production to 2000 bicycles.What is the per unit cost of producing 2000 bicycles?

Accepted Answer

A)  $134 per unit
B)  $158 per unit
C)  $74 per unit
D)  $79 per unit E) B) and C)
F) A) and D)

Question 2

At a plant where a union agreement sets annual salaries and conditions,annual labour costs usually:

Accepted Answer

A)  depend on the scheduling of floor workers.
B)  are considered a variable cost.
C)  are considered a fixed cost.
D)  depend on the scheduling of production runs.E) None of the above
F) All of the above

Question 3

Budgeted costs are:

Accepted Answer

A)  the costs incurred this year.
B)  competitor's costs.
C)  the costs incurred last year.
D)  planned or forecasted costs.E) B) and C)
F) A) and D)

Question 4

Conversion costs include all direct manufacturing costs.

Accepted Answer

A) True 
 B)False

Question 5

The only inventoriable cost for a retailer is the cost of merchandise,which corresponds to the cost of finished goods manufactured for a manufacturing company.

Accepted Answer

A) True 
 B)False

Question 6

Explain the difference between an inventoriable cost and a period cost.What potential problems does an inaccurate classification of product and period costs cause?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Inventoriable costs are all costs of a p...

Question 7

A variable cost changes per unit in proportion to changes in the related level of total activity or volume.

Accepted Answer

A) True 
 B)False

Question 8

A cost object is anything for which a measurement of costs is desired.

Accepted Answer

A) True 
 B)False

Question 9

Ways to 'produce for inventory' that result in increasing operating profit include:

Accepted Answer

A)  delaying items that absorb the greatest amount of fixed manufacturing costs.
B)  switching production to products that absorb the least amounts of fixed manufacturing costs.
C)  deferring maintenance to accelerate production.
D)  All of these answers are correct.E) A) and B)
F) None of the above

Question 10

Answer the following questions using the information below:
Jindabyne Pillows produces and sells a decorative pillow for $75.00 per unit.In the first month of operation,
2000 units were produced and 1750 units were sold.Actual fixed costs are the same as the amount budgeted for the month.Other information for the month includes:
   Variable manufacturing costs $20.00 per unit  Variable marketing costs $3.00 per unit  Fixed manufacturing costs $7.00 per unit  Administrative expenses, all fixed $15.00 per unit  Ending inventories:  Direct materials −0− WIP −0− Finished goods 250 urits \begin{array}{lr}	ext { Variable manufacturing costs } & \$ 20.00 	ext { per unit } \	ext { Variable marketing costs } & \$ 3.00 	ext { per unit } \	ext { Fixed manufacturing costs } & \$ 7.00 	ext { per unit } \	ext { Administrative expenses, all fixed } & \$ 15.00 	ext { per unit }\	ext { Ending inventories: }\	ext { Direct materials } & -0- \	ext { WIP } & -0- \	ext { Finished goods } & 250 	ext { urits }\end{array} Variable manufacturing costs  Variable marketing costs  Fixed manufacturing costs  Administrative expenses, all fixed  Ending inventories:  Direct materials  WIP  Finished goods ​$20.00 per unit $3.00 per unit $7.00 per unit $15.00 per unit −0−−0−250 urits ​ 
-What is 'operating profit' using variable costing?

Accepted Answer

A)  $78 750
B)  $65 750
C)  $52 500
D)  $47 000 E) A) and B)
F) None of the above

Question 11

Under Australian Accounting Standards,only manufacturing costs can be assigned to inventories in the financial statements.

Accepted Answer

A) True 
 B)False

Question 12

Costs are accounted for in two basic stages: assignment followed by accumulation.

Accepted Answer

A) True 
 B)False

Question 13

Variable costing is a less than perfect term to describe this inventory costing method because not all variable costs are inventoriable costs;only ________ manufacturing costs are inventoriable.

Accepted Answer

A)  indirect
B)  fixed
C)  variable
D)  directE) A) and B)
F) None of the above

Question 14

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company),Gregory Food Retailers (a merchandising company),and Larson Real Estate (a service sector company).Classify each item as either inventoriable (I)costs or period (P)costs.
  
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Each of the following items pertains to...

Question 15

Retail sector companies only hold two types of inventories: retail inventory,and direct material.

Accepted Answer

A) True 
 B)False

Question 16

Companies have recently been able to reduce inventory levels because:

Accepted Answer

A)  there is better sharing of information between suppliers and manufacturers.
B)  just-in-time production strategies are being implemented.
C)  production quotas are being implemented.
D)  Both A and B are correct.E) A) and B)
F) B) and C)

Question 17

Products,services,departments,and customers may be cost objects.

Accepted Answer

A) True 
 B)False

Question 18

The contribution-margin format of the income statement:

Accepted Answer

A)  calculates gross margin.
B)  distinguishes manufacturing costs from nonmanufacturing costs.
C)  is used with absorption costing.
D)  highlights the lump sum of fixed manufacturing costs.E) None of the above
F) All of the above

Question 19

When 50 000 units are produced the fixed cost is $10 per unit.Therefore,when 100 000 units are produced fixed costs will remain at $10 per unit.

Accepted Answer

A) True 
 B)False

Question 20

Cost objects may be jobs,products,or customers.

Accepted Answer

A) True 
 B)False

Exam 2: Different Costs for Different Purposes

The only inventoriable cost for a retailer is the cost of merchandise,which corresponds to the cost of finished goods manufactured for a manufacturing company.

Correct Answer
verified

Costs are accounted for in two basic stages: assignment followed by accumulation.

Correct Answer
verified

A cost object is anything for which a measurement of costs is desired.

Correct Answer
verified

Explain the difference between an inventoriable cost and a period cost.What potential problems does an inaccurate classification of product and period costs cause? _ _

Correct Answer
verified
Inventoriable costs are all costs of a p...
View Answer

The contribution-margin format of the income statement:

Correct Answer
verified

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company),Gregory Food Retailers (a merchandising company),and Larson Real Estate (a service sector company).Classify each item as either inventoriable (I)costs or period (P)costs. _ _

Correct Answer
verified

Under Australian Accounting Standards,only manufacturing costs can be assigned to inventories in the financial statements.

Correct Answer
verified

Products,services,departments,and customers may be cost objects.

Correct Answer
verified

Retail sector companies only hold two types of inventories: retail inventory,and direct material.

Correct Answer
verified

Conversion costs include all direct manufacturing costs.

Correct Answer
verified

Correct Answer
verified

Cost objects may be jobs,products,or customers.

Correct Answer
verified

Variable costing is a less than perfect term to describe this inventory costing method because not all variable costs are inventoriable costs;only ________ manufacturing costs are inventoriable.

Correct Answer
verified

When 50 000 units are produced the fixed cost is $10 per unit.Therefore,when 100 000 units are produced fixed costs will remain at $10 per unit.

Correct Answer
verified

Budgeted costs are:

Correct Answer
verified

Correct Answer
verified

A variable cost changes per unit in proportion to changes in the related level of total activity or volume.

Correct Answer
verified

At a plant where a union agreement sets annual salaries and conditions,annual labour costs usually:

Correct Answer
verified

Ways to 'produce for inventory' that result in increasing operating profit include:

Correct Answer
verified

Companies have recently been able to reduce inventory levels because:

Correct Answer
verified

Exam 2: Different Costs for Different Purposes

The only inventoriable cost for a retailer is the cost of merchandise,which corresponds to the cost of finished goods manufactured for a manufacturing company.

Correct AnswerverifiedShow Answer

Costs are accounted for in two basic stages: assignment followed by accumulation.

Correct AnswerverifiedShow Answer

A cost object is anything for which a measurement of costs is desired.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedInventoriable costs are all costs of a p...View AnswerShow Answer

The contribution-margin format of the income statement:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under Australian Accounting Standards,only manufacturing costs can be assigned to inventories in the financial statements.

Correct AnswerverifiedShow Answer

Products,services,departments,and customers may be cost objects.

Correct AnswerverifiedShow Answer

Retail sector companies only hold two types of inventories: retail inventory,and direct material.

Correct AnswerverifiedShow Answer

Conversion costs include all direct manufacturing costs.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cost objects may be jobs,products,or customers.

Correct AnswerverifiedShow Answer

Variable costing is a less than perfect term to describe this inventory costing method because not all variable costs are inventoriable costs;only ________ manufacturing costs are inventoriable.

Correct AnswerverifiedShow Answer

When 50 000 units are produced the fixed cost is $10 per unit.Therefore,when 100 000 units are produced fixed costs will remain at $10 per unit.

Correct AnswerverifiedShow Answer

Budgeted costs are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A variable cost changes per unit in proportion to changes in the related level of total activity or volume.

Correct AnswerverifiedShow Answer

At a plant where a union agreement sets annual salaries and conditions,annual labour costs usually:

Correct AnswerverifiedShow Answer

Ways to 'produce for inventory' that result in increasing operating profit include:

Correct AnswerverifiedShow Answer

Companies have recently been able to reduce inventory levels because:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Inventoriable costs are all costs of a p...
View Answer

Correct Answer
verified

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Correct Answer
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