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1. Which of the following costs are referred to as conversion

Customer Question

1.
Which of the following costs are referred to as conversion costs?
(Points: 1)
       Direct labor cost and factory overhead cost
       Direct materials cost and direct labor cost
       Factory overhead cost
       Direct materials cost and factory overhead cost


2.
Which of the following is considered a part of factory overhead cost?
(Points: 1)
       Sales commissions
       Depreciation of factory buildings
       Depreciation of office equipment
       Direct materials used


3.
Which of the following is not a prime cost?
(Points: 1)
       Supervisor’s wages
       Direct labor wages
       Machine operator wages
       Assembly line wages


4.
The following are all product costs except:
(Points: 1)
       Direct materials
       Sales and administrative expenses
       Direct labor
       Factory overhead


5.
What is the purpose of the Statement of Cost of Goods Manufactured?
(Points: 1)
       to determine the ending materials inventory
       to determine the ending work in process inventory
       to determine the amounts transferred to finished goods
       all of the answers are true


6.
Which of the following accounts will be found on the income statement?
(Points: 1)
       inventory
       work in process
       finished goods
       cost of merchandise sold


7.
Which of the following would most likely use a job order costing system?
(Points: 1)
       A paper mill
       A swimming pool installer
       A company that manufactures chlorine for swimming pools
       An oil refinery


8.
Which of the following is not a characteristic of a job order costing system?
(Points: 1)
       It accumulates cost for each department within the factory.
       It provides a separate record for the cost of each quantity of product that passes through the factory.
       It is best suited for industries that manufactures custom goods.
       Uses only one work in process account.


9.
Which of the following is the correct flow of manufacturing costs?
(Points: 1)
       Raw materials, work in process, finished goods, cost of goods sold
       Raw materials, finished goods, cost of goods sold, work in process.
       Work in process, finished goods, raw materials, cost of goods sold
       Cost of goods sold, raw materials, work in process, finished goods.


10.
The document authorizing the issuance of materials from the storeroom is the:
(Points: 1)
       materials requisition
       purchase requisition
       receiving report
       purchase order


11.
In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count, inspect the goods, and complete a:
(Points: 1)
       purchase order
       sales invoice
       receiving report
       purchase requisition


12.
At the end of the fiscal year, the balance in Factory Overhead is small. This balance would normally be:
(Points: 1)
       transferred to Work in Process
       transferred to Cost of Goods Sold
       transferred to Finished Goods
       allocated between Work in Process and Finished Goods


13.
In process cost accounting, the costs of direct materials and direct labor are charged directly to:
(Points: 1)
       service departments
       processing departments
       customer accounts receivable
       job orders


14.
Which of the following entities would probably use a process costing system?
(Points: 1)
       A custom boat builder
       A custom furniture manufacturer
       A one of a kind jewelry creator
       An oil refinery.


15.
If a company uses a process costing system to account for the costs in its four production departments, how many Work-in-Process will it use?
(Points: 1)
       3
       4
       1
       2


16.
The four steps necessary to determine the cost of goods completed and the ending inventory valuation in a process cost system are:

1.     allocate costs to transferred and partially completed units
2.     determine the units to be assigned costs
3.     determine the cost per equivalent unit
4.     calculate equivalent units of production
     

The correct ordering of the steps is:
(Points: 1)
       2, 4, 3, 1
       4, 2, 3, 1
       2, 3, 4, 1
       2, 3, 1, 4


17.
Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?
(Points: 1)
       Direct labor
       Salary of a factory supervisor
       Units of production depreciation on factory equipment
       Direct materials


18.
Which of the following describes the behavior of the fixed cost per unit?
(Points: 1)
       Decreases with increasing production
       Decreases with decreasing production
       Remains constant with changes in production
       Increases with increasing production


19.
Costs that vary in total in direct proportion to changes in an activity level are called:
(Points: 1)
       fixed costs
       sunk costs
       variable costs
       differential costs


20.
Which of the following is an example of a cost that varies in total as the number of units produced changes?
(Points: 1)
       Salary of a production supervisor
       Direct materials cost
       Property taxes on factory buildings
       Straight-line depreciation on factory equipment


21.
Which of the following costs is a mixed cost?
(Points: 1)
       Salary of a factory supervisor
       Electricity costs of $2 per kilowatt-hour
       Rental costs of $5,000 per month plus $.30 per machine hour of use
       Straight-line depreciation on factory equipment


22.
For purposes of analysis, mixed costs are generally:
(Points: 1)
       classified as fixed costs
       classified as variable costs
       classified as period costs
       separated into their variable and fixed cost components


23.
Which of the following statements is true regarding fixed and variable costs?
(Points: 1)
       Both costs are constant when considered on a per unit basis.
       Both costs are constant when considered on a total basis.
       Fixed costs are fixed in total, and variable costs are fixed per unit.
       Variable costs are fixed in total, and fixed costs vary in total.


24.
As production increases, what would you expect to happen to fixed cost per unit?
(Points: 1)
       Increase
       Decrease
       Remain the same
       Either increase or decrease, depending on the variable costs


25.
The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed:
(Points: 1)
       contribution margin analysis
       cost-volume-profit analysis
       budgetary analysis
       gross profit analysis


26.
In cost-volume-profit analysis, all costs are classified into the following two categories:
(Points: 1)
       mixed costs and variable costs
       sunk costs and fixed costs
       discretionary costs and sunk costs
       variable costs and fixed costs


27.
Contribution margin is:
(Points: 1)
       the excess of sales revenue over variable cost
       another term for volume in the "cost-volume-profit" analysis
       profit
       the same as sales revenue


28.
Which of the following conditions would cause the break-even point to decrease?
(Points: 1)
       Total fixed costs increase
       Unit selling price decreases
       Unit variable cost decreases
       Unit variable cost increases


29.
The relative distribution of sales among the various products sold by a business is termed the:
(Points: 1)
       business's basket of goods
       contribution margin mix
       sales mix
       product portfolio


30.
The difference between the current sales revenue and the sales at the break-even point is called the:
(Points: 1)
       contribution margin
       margin of safety
       price factor
       operating leverage


31.
The budgeting process does not involve which of the following activities:
(Points: 1)
       specific goals are established
       Periodic comparison of actual results to goals
       Execution of plans to achieve goals
       Increase of sales by increasing marketing efforts.


32.
Which of the following budgets allow for adjustments in activity levels?
(Points: 1)
       Static Budget
       Continuous Budget
       Zero-Based Budget
       Flexible Budget


33.
The primary difference between a fixed budget and a flexible budget is that a fixed budget
(Points: 1)
       cannot be changed after the period begins, whereas flexible budget can be changed after the period begins.
       is concerned only with future acquisitions of fixed assets, whereas a flexible budget is concerned with expenses that vary with sales.
       includes only fixed costs, whereas a flexible budget includes only variable costs.
       is a plan for a single level of production, whereas a flexible budget can be converted to any level of production.


34.
The budget that needs to be completed first when preparing the master budget is the:
(Points: 1)
       Production Budget
       Sales Budget
       Cash Budget
       Capital Expenditures Budget


35.
Which of the following budgets is not directly associated with the production budget?
(Points: 1)
       Direct materials purchases budget
       Factory overhead cost budget
       Capital Expenditures budget
       Direct labor cost budget


36.
Which of the following budgets provides the starting point for the preparation of the direct labor cost budget?
(Points: 1)
       Direct materials purchases budget
       Cash budget
       Production budget
       Sales budget


37.
The budget that summarizes future plans for the acquisition of fixed assets is the:
(Points: 1)
       direct materials purchases budget
       production budget
       sales budget
       capital expenditures budget


38.
Management accountants usually provide for a minimum cash balance in their cash budgets for which of the following reasons:
(Points: 1)
       stockholders demand a minimum cash balance
       it is an important way of effectively managing cash
       it provides a safety buffer for variations in estimates
       to have funds available for major capital expenditures


39.
Periodic comparisons between planned objectives and actual performance are reported in:
(Points: 1)
       zero-base reports
       budget performance reports
       master budgets
       budgets


40.
The standard price and quantity of direct materials are separated because:
(Points: 1)
       GAAP reporting requires this separation
       direct materials prices are controlled by the purchasing department, and quantity used is controlled by the production department
       standard quantities are more difficult to estimate than standard prices
       standard prices change more frequently than standard quantities


41.
Standard costs are divided into which of the following components?
(Points: 1)
       Price Standard and Quantity Standard
       Materials Standard and Labor Standard
       Quality Standard and Quantity Standard
       Price Standard and Quantity Standard


42.
A favorable cost variance occurs when
(Points: 1)
       Actual costs are more than standard costs.
       Standard costs are more than actual costs.
       Standard costs are less than actual costs.
       None of the above.


43.
If the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is termed:
(Points: 1)
       time variance
       price variance
       quantity variance
       rate variance


44.
Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the:
(Points: 1)
       factory overhead cost volume variance
       direct labor cost time variance
       direct labor cost rate variance
       factory overhead cost controllable variance


45.
Variances from standard costs are usually reported to:
(Points: 1)
       suppliers
       stockholders
       management
       creditors


46.
If at the end of the fiscal year the variances from standard are significant, the variances should be transferred to the:
(Points: 1)
       work in process account
       cost of goods sold account
       finished goods account
       work in process, cost of goods sold, and finished goods accounts


47.
The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed:
(Points: 1)
       manufacturing margin
       contribution margin
       differential cost
       differential revenue


48.
The amount of increase or decrease in cost that is expected from a particular course of action as compared with an alternative is termed:
(Points: 1)
       period cost
       product cost
       differential cost
       discretionary cost


49.
A cost that will not be affected by later decisions is termed a(n):
(Points: 1)
       historical cost
       differential cost
       sunk cost
       replacement cost


50.
Discontinuing a product or segment is a huge decision that must be carefully analyzed. Which of the following would be a valid reason not to discontinue an operation?
(Points: 1)
       when the losses are minimal
       when the variable costs are less than revenues
       when the variable costs are more than revenues
       when fixed costs are more than revenues
Submitted: 5 years ago.
Category: Homework
Expert:  Aun Ali replied 5 years ago.
<p><a href="/uploads/Haider78605/2009-06-22_062649_nachoo.docx" target="_blank" title="click here for the solution">click here for the solution</a></p><p>if you like my answer accept it and leave a postive feed back ..</p>
Expert:  Aun Ali replied 5 years ago.
<p>1. <br />Which of the following costs are referred to as conversion costs? <br />(Points: 1) <br />       Direct labor cost and factory overhead cost <br />       <br /><br />2. <br />Which of the following is considered a part of factory overhead cost? <br />(Points: 1) <br /><br />       Depreciation of factory buildings <br /><br />3. <br />Which of the following is not a prime cost? <br />(Points: 1) <br />       Supervisor's wages <br />       <br />4. <br />The following are all product costs except: <br />(Points: 1) <br />       <br />       Sales and administrative expenses <br />       <br /><br /><br />5. <br />What is the purpose of the Statement of Cost of Goods Manufactured? <br />(Points: 1) <br />       <br />       to determine the amounts transferred to finished goods <br />       <br /><br /><br />6. <br />Which of the following accounts will be found on the income statement? <br />(Points: 1) <br />       <br />       cost of merchandise sold <br /><br /><br />7. <br />Which of the following would most likely use a job order costing system? <br />(Points: 1) <br />       <br />       A swimming pool installer <br />       <br /><br /><br />8. <br />Which of the following is not a characteristic of a job order costing system? <br />(Points: 1) <br />       It accumulates cost for each department within the factory. <br />       <br /><br /><br />9. <br />Which of the following is the correct flow of manufacturing costs? <br />(Points: 1) <br />       Raw materials, work in process, finished goods, cost of goods sold <br />       <br />10. <br />The document authorizing the issuance of materials from the storeroom is the: <br />(Points: 1) <br />       materials requisition <br />       <br />11. <br />In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count, inspect the goods, and complete a: <br />(Points: 1) <br />       <br />       receiving report <br />       <br />12. <br />At the end of the fiscal year, the balance in Factory Overhead is small. This balance would normally be: <br />(Points: 1) <br />       <br />       transferred to Cost of Goods Sold <br />       <br />13. <br />In process cost accounting, the costs of direct materials and direct labor are charged directly to: <br />(Points: 1) <br />              processing departments <br />       <br /><br />14. <br />Which of the following entities would probably use a process costing system? <br />(Points: 1) <br />       <br />       An oil refinery. <br /><br /><br />15. <br />If a company uses a process costing system to account for the costs in its four production departments, how many Work-in-Process will it use? <br />(Points: 1) <br />       <br />       4 <br />       <br /><br /><br />16. <br />The four steps necessary to determine the cost of goods completed and the ending inventory valuation in a process cost system are: <br /><br />1.     allocate costs to transferred and partially completed units <br />2.     determine the units to be assigned costs <br />3.     determine the cost per equivalent unit <br />4.     calculate equivalent units of production <br />      <br /><br />The correct ordering of the steps is: <br />(Points: 1) <br />       2, 4, 3, 1 <br />       <br /><br /><br />17. <br />Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes? <br />(Points: 1) <br />       <br />       Salary of a factory supervisor <br />       <br />18. <br />Which of the following describes the behavior of the fixed cost per unit? <br />(Points: 1) <br />       Decreases with increasing production <br />       <br />19. <br />Costs that vary in total in direct proportion to changes in an activity level are called: <br />(Points: 1) <br />       <br />       variable costs <br />       <br />20. <br />Which of the following is an example of a cost that varies in total as the number of units produced changes? <br />(Points: 1) <br />       <br />       Direct materials cost <br />       <br />21. <br />Which of the following costs is a mixed cost? <br />(Points: 1) <br />       <br />       Rental costs of $5,000 per month plus $.30 per machine hour of use <br />       <br /><br /><br />22. <br />For purposes of analysis, mixed costs are generally: <br />(Points: 1) <br />       <br />       separated into their variable and fixed cost components <br /><br /><br />23. <br />Which of the following statements is true regarding fixed and variable costs? <br />(Points: 1) <br />       <br />       Fixed costs are fixed in total, and variable costs are fixed per unit. <br />       . <br /><br /><br />24. <br />As production increases, what would you expect to happen to fixed cost per unit? <br />(Points: 1) <br />              Decrease <br />       <br />25. <br />The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed: <br />(Points: 1) <br />       cost-volume-profit analysis <br /><br />26. <br />In cost-volume-profit analysis, all costs are classified into the following two categories: <br />(Points: 1) <br />       <br />       variable costs and fixed costs <br /><br /><br />27. <br />Contribution margin is: <br />(Points: 1) <br />       the excess of sales revenue over variable cost <br />       <br /><br /><br />28. <br />Which of the following conditions would cause the break-even point to decrease? <br />(Points: 1) <br />       <br />       Unit variable cost decreases <br />       <br /><br /><br />29. <br />The relative distribution of sales among the various products sold by a business is termed the: <br />(Points: 1) <br />       sales mix <br />       <br />30. <br />The difference between the current sales revenue and the sales at the break-even point is called the: <br />(Points: 1) <br />       <br />       margin of safety <br />       <br /><br /><br />31. <br />The budgeting process does not involve which of the following activities: <br />(Points: 1) <br />              Increase of sales by increasing marketing efforts. <br /><br /><br />32. <br />Which of the following budgets allow for adjustments in activity levels? <br />(Points: 1) <br />              Flexible Budget <br /><br /><br />33. <br />The primary difference between a fixed budget and a flexible budget is that a fixed budget <br />(Points: 1) <br /><br />       is a plan for a single level of production, whereas a flexible budget can be converted to any level of production. <br /><br /><br />34. <br />The budget that needs to be completed first when preparing the master budget is the: <br />(Points: 1) <br />       <br />       Sales Budget <br /><br /><br /><br />35. <br />Which of the following budgets is not directly associated with the production budget? <br />(Points: 1) <br />              Capital Expenditures budget <br />       <br /><br />36. <br />Which of the following budgets provides the starting point for the preparation of the direct labor cost budget? <br />(Points: 1) <br />       <br />       Production budget <br />       <br /><br /><br />37. <br />The budget that summarizes future plans for the acquisition of fixed assets is the: <br />(Points: 1) <br />       <br />       capital expenditures budget <br /><br /><br />38. <br />Management accountants usually provide for a minimum cash balance in their cash budgets for which of the following reasons: <br />(Points: 1) <br />       <br />       it is an important way of effectively managing cash <br />       <br /><br /><br />39. <br />Periodic comparisons between planned objectives and actual performance are reported in: <br />(Points: 1) <br />       <br />       budget performance reports <br /><br /><br />40. <br />The standard price and quantity of direct materials are separated because: <br />(Points: 1) <br />       </p><p>       direct materials prices are controlled by the purchasing department, and quantity used is controlled by the production department <br />       <br /><br />41. <br />Standard costs are divided into which of the following components? <br />(Points: 1) <br />       Price Standard and Quantity Standard <br /><br /><br />42. <br />A favorable cost variance occurs when <br />(Points: 1) <br /><br />       Standard costs are more than actual costs. <br />       <br /><br />43. <br />If the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is termed: <br />(Points: 1) <br />       time variance <br />       <br /><br />44. <br />Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the: <br />(Points: 1) <br />       factory overhead cost volume variance <br />       <br /><br />45. <br />Variances from standard costs are usually reported to: <br />(Points: 1) <br />     <br />       management <br /><br /><br /><br />46. <br />If at the end of the fiscal year the variances from standard are significant, the variances should be transferred to the: <br />(Points: 1) <br />              cost of goods sold account <br /><br /><br />47. <br />The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed: <br />(Points: 1) <br />       <br />       differential revenue <br /><br /><br />48. <br />The amount of increase or decrease in cost that is expected from a particular course of action as compared with an alternative is termed: <br />(Points: 1) <br />       <br />       differential cost <br /><br /><br /><br />49. <br />A cost that will not be affected by later decisions is termed a(n): <br />(Points: 1) <br />       <br />       sunk cost <br />       <br /><br /><br />50. <br />Discontinuing a product or segment is a huge decision that must be carefully analyzed. Which of the following would be a valid reason not to discontinue an operation? <br />(Points: 1) <br />       <br />       when the variable costs are less than revenues <br />        </p><p> </p><p> </p><p>IF You like the answer then accept it and leave a positive feedback</p>
Expert:  Manal Elkhoshkhany replied 5 years ago.

Hello nacho

 

I am not sure if the answers provided above are correct, I can just see that they cannot be read

 

Please click here for the solutions

 

Regards,

 

Expert:  Aun Ali replied 5 years ago.
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Expert:  Aun Ali replied 5 years ago.
<p>Dear Nacho</p><p> </p><p>Thanks. Definately it will be my pleasure to work with you in future. you may direct the question in my name if you want.</p><p> </p><p>Take care.</p><p> </p><p> </p>

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