Question 1: Costs in a process cost system are traced to? Would it be:
1. Specific jobs
2. Specific customers
3. Specific production departments
4. Specific corporate administrators
Question 2: Which of the following is a period cost? Would it be:
1. Manufacturing plant maintenance
2. Wages for production line workers
3. Raw material costs
4. Salary for the vice president of finance
Question 3: The ideal example of a business requiring a process costing system? Would it be:
1. Custom cabinet shop
2. Automobile repair shop
3. Antique furniture restorer
4. Soap manufacturer
Question 4: Which is most likely to be a variable cost? Would it be:
1. Rent
2. Advertising
3. Cost of material used in production
4. Depreciation?
Question 5: Full costing includes which of the following in determining product cost? Would it be:
1. All fixed and variable costs of production
2. Administrative overhead
3. Only variable costs of production
4. Only fixed costs of production
Question 6: Which of the following is likely to be a fixed cost? Would it be:
1. Rent
2. Assembly labor cost
3. Commission
4. The cost of material used in production
Question 7: The contribution margin ratio measures? Would it be:
1. Profit per dollar of sales
2. Profit per unit
3. Contribution margin per dollar of sales
4. Ratio of variable to fixed costs
Question 8: To determine the profit-maximizing price, a manager must do what? Would it be:
1. Estimate the quantity demanded for various prices
2. Estimate variable costs
3. Both 1 and 2
4. None of the above
Question 9: Controllable costs for a manager of department A include what? Would it be:
1. All costs related to department A's final product
2. Costs of material and labor used in department A
3. Cost of the finance department
4. All of the above
Question 10: Allocation of indirect costs? Would it be:
1. Can often be justified in a variety of ways that lead to substantially different costs being allocated.
2. Is an inherently arbitrary process, a characteristic that can lead to problems.
3. Can be done with great accuracy and precision, if the proper techniques are used.
4. Both 1 and 2
Question 11: In the cost allocation process, an allocation base? Would it be:
1. Ideally should result in cost being allocated based on a cause and effect relationship
2. Must be some characteristic that is common to all of the cost objectives
3. Both 1 and 2
4. None of the above
Question 12: Full costing differs from variable costing in that?
1. Full costing includes fixed manufacturing overhead in inventory
2. Full costing includes variable manufacturing overhead in inventory
3. Full costing excludes selling costs from consideration
4. Full costing excludes administration costs from consideration