1. A manufacturing plant produces two product lines: football equipment and hockey equipment. Direct costs for the football equipment line are the:
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
2. An understanding of the underlying behavior of costs helps in all of the following EXCEPT:
sales volume can be better estimated
costs can be better estimated as volume expands and contracts
true costs of processes can be better evaluated
process inefficiencies can be better identified and, as a result, improved
3. The cost of the cushions that are used to manufacture sofas is best described as a:
manufacturing overhead cost.
4. Direct costs:
are incurred to benefit a particular accounting period.
are incurred due to a specific decision.
can be easily traced to a particular cost object.
are the variable costs of producing a product.
5. The annual insurance premium for the factory building would be a:
fixed cost, period cost, and indirect cost with regard to units of product.
fixed cost, product cost, and direct cost with regards XXXXX XXXXX of product.
variable cost, product cost, direct cost with regard to units of product.
fixed cost, product cost, indirect cost with regard to units of product.
6. Within the relevant range, as the number of units produced increases:
the variable cost per unit remains the same.
fixed costs in total remain the same.
variable costs increase in total.
all of these.
7. Which of the following is correct concerning reactions to INCREASES in activity?
a. Total Variable Cost
b. Variable Cost Per Unit
a. Increases, b. Decreases
a. Constant, b. Decreases
a. Decreases, b. Constant
a. Increases, b. Constant
8. An example of a fixed cost that would be considered a direct cost is:
a cost accountant's salary when the cost object is a unit of product.
the rental cost of a warehouse to store a finished goods when the cost object is the Purchasing Department.
a production supervisor's salary when the cost objective is the Production department.
Board of Director's fees when the cost object is the Marketing Department.
9. The potential benefit that is given up when one alternative is selected over another is called:
A sunk cost.
An opportunity cost.
Both a sunk cost and an opportunity cost.
Neither a sunk cost nor an opportunity cost.
10. Gabrio Inc. is a mechandising company. Last month the company's merchandise purchases totaled $87,000. The company's beginning merchandise inventory was $19,000 and its ending merchanise inventory was $11,000. What was the company's cost of goods sold for the month?
11. Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device.
The salary that Mark earns at his present employ is:
a variable cost
a fixed cost
a product cost
an opportunity cost
12. At a sales volume of 38,000 units, Tirri Corporation's property taxes (a cost that is fixed with respect to sales volume) total $733,400.
To the nearest whole dollar, what should be the total property taxes at a sales volume of 37,200 units? (Assume that this sales volume is within the relevant range.)
13. At a sales volume of 38,000 units, Tirri Corporation's property taxes (a cost that is fixed with respect to sales volume) total $733,400.
To the nearest whole center, what should be the average property tax per unit at a sales volume of 37,300 units? (Assume that this sales volume is within the relevant range.)
14. Leas Corporation staffs a helpline to answer questions from customers. The costs of operating the helpline are variable with respect to the number of calls in a month. At a volume of 25,000 calls in a month, the costs of operating the helpline total $452,500.
To the nearest whole dollar, what should be the total cost of operating the helpline costs at a volume of 23,900 calls in a month? (Assume that this call volume is within the relevant range.)
15. The following cost data pertains to the operations of Ladwig Department Stores, Inc., for the month of December.
Corporate legal office salaries: $68,000
Shoe Department cost of sales, Brentwood Store: $66,000
Corporate headquarters building lease: $86,000
Store manager's salary, Brentwood Store: $10,000
Shoe Department sales commissions, Brentwood Store: $5,000
Store utilities, Brentwood Store: $11,000
Shoe Department manager's salary, Brentwood Store: $3,000
Central warehouse lease cost: $3,000
Janitorial costs, Brentwood Store: $11,000
The Brentwood store is just one of many stores owned and operated by the company. The Shoe department is one of the many departments at the Brentwood store. The central warehouse serves all of the company's stores.
What is the total amount of the costs listed above that are NOT direct costs of the Brentwood store?