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Manal Elkhoshkhany
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1. Product costs are expensed on the income statement when: (Points: 2)
raw materials for the product are purchased
raw materials are requisitioned for the product
the product completes the manufacturing process
the product is sold


2. A plant manufactures several different products. The wages of the maintenance staff in the plant can be classified as a (an): (Points: 2)
direct cost
product cost
opportunity cost
nonmanufacturing cost


3. A manufacturing plant for Vanguard produces two product lines: Optimist sailboats and 420 sailboats. An indirect cost for the Optimist line is the: (Points: 2)
cloth used to make Optimist sails
labor to pour 420 hull molds
shift supervisor for the Optimist line
plant supervisor


4. Sammy's Salsa, Inc. sells a single product. This year, 10,000 units were sold resulting in $65,000 of sales revenue, $30,000 of variable costs, and $17,500 of fixed costs.The contribution margin per unit is: (Points: 2)
$6.50
$3.50
$3.00
$1.75


5. Sammy's Salsa, Inc. sells a single product. This year, 10,000 units were sold resulting in $65,000 of sales revenue, $30,000 of variable costs, and $17,500 of fixed costs. The number of units that must be sold annually to achieve $52,500 of profits is: (Points: 2)
20,000 units
15,000 units
10,000 units
5,000 units


6. An example of a cost object is: (Points: 2)
a product
a customer
a department
All of these are correct.


7. Manufacturing costs include: (Points: 2)
machinery used inside of the factory
research and development costs
costs of dealing with customers after the sale
general and administrative costs


8. Product costs are expensed on the income statement when: (Points: 2)
raw materials for the product are purchased
raw materials are requisitioned for the product
the product completes the manufacturing process
the product is sold


9. Advertising is an example of a ________ cost expensed on the income statement in the accounting period incurred. (Points: 2)
direct
manufacturing
period
product


10. (CMA adapted, June 1992) The terms "direct cost" and "indirect cost" are commonly used in cost accounting. Classifying a cost as either direct or indirect depends upon: (Points: 2)
the behavior of the cost in response to volume changes
whether the cost is expended in the period in which it is incurred
whether the cost can be related readily to resources consumed for a cost object
whether an expenditure is unavoidable because it cannot be changed regardless of any action taken


11. A manufacturing plant produces two product lines: football equipment and hockey equipment. An indirect cost for the hockey equipment line is the: (Points: 2)
material used to make the hockey sticks
labor to bind the shaft to the blade of the hockey stick
shift supervisor for the hockey line
plant supervisor


12. A manufacturing plant produces two product lines: football equipment and hockey equipment. Direct costs for the football equipment line are the: (Points: 2)
beverages provided daily in the plant break room
monthly lease payments for a specialized piece of equipment needed to manufacture the football helmet
salaries of the clerical staff that work in the company administrative offices
utilities paid for the manufacturing plant



13. Cost behavior refers to: (Points: 2)
how costs react to a change in the level of activity
whether a cost is incurred in a manufacturing, merchandising, or service company
classifying costs as either product or period costs
whether a particular expense has been ethically incurred


14. Currently, most companies consider annual labor costs as: (Points: 2)
a capacity-related cost
a flexible cost
an opportunity cost
a period cost


15. Which of the following does NOT describe a flexible cost? (Points: 2)
Flexible cost are always indirect costs.
Flexible costs increase in total when the actual level of activity increases.
Flexible costs include most personnel costs and depreciation on machinery.
Flexible costs can always be traced directly to the cost object.


16. To sustain the profitability of a product, the list price of a product must cover its: (Points: 2)
flexible costs
capacity-related costs
indirect costs
long-run costs


17. In recent years, the manufacturing cost structure has changed as a result of: (Points: 2)
greater automation
better customer service
the proliferation of multiple products
All of these are correct.


18. Cost distortion is common in conventional costing systems because: (Points: 2)
of the recent change in cost structure
the number of products being manufactured is increasing
capacity-related costs are allocated using a volume measure
capacity-related costs create higher risks for a company


19. Which of the following activities is a unit-related activity? (Points: 2)
preparing and filing the annual tax return for the organization
machine setups for each production run
quality inspections of 2% of the items produced
obtaining patents and regulatory approval for each product produced


20. Which of the following activities is a product-sustaining activity? (Points: 2)
preparing and filing the annual tax return for the organization
machine setups for each production run
quality inspections of 2% of the items produced
obtaining patents and regulatory approval for each product produce
Submitted: 4 years ago.
Category: Finance
Expert:  Milan Vaishnav replied 4 years ago.

Dear Friend,

 

I am highlighting the answers here...

 

1. Product costs are expensed on the income statement when: (Points: 2)
raw materials for the product are purchased
raw materials are requisitioned for the product
the product completes the manufacturing process
the product is sold


2. A plant manufactures several different products. The wages of the maintenance staff in the plant can be classified as a (an): (Points: 2)
direct cost
product cost
opportunity cost
nonmanufacturing cost


3. A manufacturing plant for Vanguard produces two product lines: Optimist sailboats and 420 sailboats. An indirect cost for the Optimist line is the: (Points: 2)
cloth used to make Optimist sails
labor to pour 420 hull molds
shift supervisor for the Optimist line
plant supervisor


4. Sammy's Salsa, Inc. sells a single product. This year, 10,000 units were sold resulting in $65,000 of sales revenue, $30,000 of variable costs, and $17,500 of fixed costs.The contribution margin per unit is: (Points: 2)
$6.50
$3.50
$3.00
$1.75


5. Sammy's Salsa, Inc. sells a single product. This year, 10,000 units were sold resulting in $65,000 of sales revenue, $30,000 of variable costs, and $17,500 of fixed costs. The number of units that must be sold annually to achieve $52,500 of profits is: (Points: 2)
20,000 units
15,000 units
10,000 units
5,000 units


6. An example of a cost object is: (Points: 2)
a product
a customer
a department
All of these are correct.


7. Manufacturing costs include: (Points: 2)
machinery used inside of the factory
research and development costs
costs of dealing with customers after the sale
general and administrative costs


8. Product costs are expensed on the income statement when: (Points: 2)
raw materials for the product are purchased
raw materials are requisitioned for the product
the product completes the manufacturing process
the product is sold


9. Advertising is an example of a ________ cost expensed on the income statement in the accounting period incurred. (Points: 2)
direct
manufacturing
period
product


10. (CMA adapted, June 1992) The terms "direct cost" and "indirect cost" are commonly used in cost accounting. Classifying a cost as either direct or indirect depends upon: (Points: 2)
the behavior of the cost in response to volume changes
whether the cost is expended in the period in which it is incurred
whether the cost can be related readily to resources consumed for a cost object
whether an expenditure is unavoidable because it cannot be changed regardless of any action taken


11. A manufacturing plant produces two product lines: football equipment and hockey equipment. An indirect cost for the hockey equipment line is the: (Points: 2)
material used to make the hockey sticks
labor to bind the shaft to the blade of the hockey stick
shift supervisor for the hockey line
plant supervisor


12. A manufacturing plant produces two product lines: football equipment and hockey equipment. Direct costs for the football equipment line are the: (Points: 2)
beverages provided daily in the plant break room
monthly lease payments for a specialized piece of equipment needed to manufacture the football helmet
salaries of the clerical staff that work in the company administrative offices
utilities paid for the manufacturing plant



13. Cost behavior refers to: (Points: 2)
how costs react to a change in the level of activity
whether a cost is incurred in a manufacturing, merchandising, or service company
classifying costs as either product or period costs
whether a particular expense has been ethically incurred


14. Currently, most companies consider annual labor costs as: (Points: 2)
a capacity-related cost
a flexible cost
an opportunity cost
a period cost


15. Which of the following does NOT describe a flexible cost? (Points: 2)
Flexible cost are always indirect costs.
Flexible costs increase in total when the actual level of activity increases.
Flexible costs include most personnel costs and depreciation on machinery.
Flexible costs can always be traced directly to the cost object.


16. To sustain the profitability of a product, the list price of a product must cover its: (Points: 2)
flexible costs
capacity-related costs
indirect costs
long-run costs


17. In recent years, the manufacturing cost structure has changed as a result of: (Points: 2)
greater automation
better customer service
the proliferation of multiple products
All of these are correct.


18. Cost distortion is common in conventional costing systems because: (Points: 2)
of the recent change in cost structure
the number of products being manufactured is increasing
capacity-related costs are allocated using a volume measure
capacity-related costs create higher risks for a company


19. Which of the following activities is a unit-related activity? (Points: 2)
preparing and filing the annual tax return for the organization
machine setups for each production run
quality inspections of 2% of the items produced
obtaining patents and regulatory approval for each product produced


20. Which of the following activities is a product-sustaining activity? (Points: 2)
preparing and filing the annual tax return for the organization
machine setups for each production run
quality inspections of 2% of the items produced
obtaining patents and regulatory approval for each product produce

 

I hope the above helps...

Regards,

Expert:  Manal Elkhoshkhany replied 4 years ago.

Hello again Chrystal

 

I am not sure if you still need the solutions, but I will post them anyway because the answers provided by the other experts are not all correct

 

Please click here for the solutions

 

Regards,

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