Question 1: Which of the following is not a name for indirect resources?
A) Overhead costs
B) Burden
C) Direct costs
D) Common costs
Question 2: Which of the following companies would most likely use a job-order costing system?
A) A textbook manufacturer
B) A lumber company
C) A paint manufacturer
D) A sweater manufacturer
Question 3: Which of the following is not a "red flag" indicating problems with an organization's costing system?
A) Goods and services are complex and require many different processes and inputs.
B) Different departments within the company believe that the costs identified for producing goods and providing services are not accurate.
C) Standard high-volume goods and services show significant profits.
D) Indirect costs are significant in proportion to direct costs.
Question 4: Measuring the costs of current process activities involves five steps. Which of the following is the first step?
A) Identify cost driver bases and measure activity cost driver rates.
B) Assign activity costs to products, jobs or services by multiplying the use of cost driver base by the cost driver rate.
C) Identify and measure the different levels of resource spending.
D) Measure the costs of individual activities.
Question 5: Measuring the costs of current process activities involves five steps. Which of the following is the last step?
A) Identify cost driver bases and measure activity cost driver rates.
B) Assign activity costs to products, jobs or services by multiplying the use of cost driver base by the cost driver rate.
C) Identify and measure the different levels of resource spending.
D) Analyze the profitability of products using ABC unit-level and full-costing.
Question 6: As part of customer profitability analysis, the relative use of certain activities by customers is compared to a norm. When the comparison shows excessive use of an activity by a customer, which of the following questions might be asked?
A) Is the problem a recent one?
B) Is the problem an ongoing one?
C) Is the problem getting worse?
D) All are possible questions.
Question 7: Which of the following is not a customer-related activity?
A) Processing shipments
B) Special packaging
C) Sales contracts
D) All are customer-related activities.
Question 8: Which of the following is not an explanation of why a company would operate at less than theoretical capacity?
A) Scheduled maintenance of equipment
B) Breakdowns in equipment
C) Customer demand is less than anticipated
D) Customer demand is more than anticipated.
Question 9: Chin Corporation finds that 60% of the time spent in its manufacturing process is on non-value added activities such as moving parts and inspection. Chin needs to improve:
A) Its throughput
B) Its customer-response time
C) Its throughput time ratio
D) Its average cycle time
Question 10: Which of the following would be nonfinancial factors to consider in a long-term capital investment decision?
A) Impact on employee morale.
B) Impact on the environment.
C) Ethical issues.
D) All of the above.
Question 11: In the cost equation TC = F + VX, F is best described as the:
A) slope of the equation.
B) activity level used to estimate the dependent variable.
C) dependent variable.
D) costs that do not vary with changes in the activity level.
Question 12: Which of the following cost estimation methods is typically more expensive to use to analyze a company's costs?
A) Regression method.
B) Account analysis.
C) The costs would be relatively the same amount using each method.
D) Cannot be determined
Question 13: Which of the following is not a step in the preparation of a flexible budget?
A) Determining budgeted variable cost per output unit.
B) Determining budgeted fixed costs for the period.
C) Determining actual quantity of output units.
D) Determining actual selling price per unit.