Question 1

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company), Gregory Food Retailers (a merchandising company), and Larson Real Estate (a service sector company). Classify each item as either inventoriable (I)costs or period (P)costs.

Accepted Answer

The answer of Each of the following items pertains to...

Question 2

Which of the following formulas determine cost of goods sold in a merchandising entity?

Accepted Answer

A)  Beginning inventory + Purchases + Ending inventory = Cost of goods sold
B)  Beginning inventory + Purchases - Ending inventory = Costs of goods sold
C)  Beginning inventory - Purchases + Ending inventory = Cost of goods sold
D)  Beginning inventory - Ending inventory - Purchases = Cost of goods sold

Question 3

What are the differences between direct costs and indirect costs? Give an example of each.

Accepted Answer

Direct costs are costs that can be trace...

Question 4

Answer the following questions using the information below:
 
-What is gross margin for 20X3?

Accepted Answer

A)  $283,000
B)  $355,000
C)  $230,000
D)  $257,000

Question 5

Why is it possible that a raw material such as glue might be considered as an indirect material for one furniture manufacturer and as a direct material for another furniture manufacture?

Accepted Answer

It is possible for a raw material such a...

Question 6

For a manufacturing company, direct material costs may be included in:

Accepted Answer

A)  direct materials inventory only
B)  merchandise inventory only
C)  both work-in-process inventory and finished goods inventory
D)  direct materials inventory, work-in-process inventory, and finished goods inventory accounts

Question 7

The following information pertains to the Cannady Corporation:  What is cost of goods sold?

Accepted Answer

A)  $1,235,000
B)  $1,205,000
C)  $1,218,000
D)  $1,222,000

Question 8

Answer the following questions using the information below:
The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows:
 
-What are the variable costs per unit associated with Product ORD203?

Accepted Answer

A)  $60
B)  $82
C)  $73
D)  $105

Question 9

A customer could be considered a cost object.

Accepted Answer

A) True 
 B)False

Question 10

Misallocated indirect costs may lead to NOT promoting profitability.

Accepted Answer

A) True 
 B)False

Question 11

Helmer Sporting Goods Company manufactured 100,000 units in 20X5 and reported the following costs:
  Required:
a. What is the amount of direct materials used during 20X5?
b. What manufacturing costs were added to WIP during 20X5?
c. What is cost of goods manufactured for 20X5?
d. What is cost of goods sold for 20X5?

Accepted Answer

a. $384,000 + $3,136,000 - $275,200 = $3...

Question 12

Accountants define a cost as a resource to be sacrificed to achieve a specific objective.

Accepted Answer

A) True 
 B)False

Question 13

Budgeted costs are:

Accepted Answer

A)  the costs incurred this year
B)  the costs incurred last year
C)  planned or forecasted costs
D)  competitor's costs

Question 14

Answer the following questions using the information below:
Pederson Company reported the following:
 
-________ - sector companies purchase and then sell tangible products without changing their basic form.

Accepted Answer

A)  Merchandising
B)  Professional
C)  Service
D)  Manufacturing

Question 15

Unit costs and average costs are really the same thing.

Accepted Answer

A) True 
 B)False

Question 16

Service-sector companies report:

Accepted Answer

A)  only merchandise inventory
B)  only finished goods inventory
C)  direct materials inventory, work-in-process inventory, and finished goods inventory accounts
D)  no inventory accounts

Question 17

Which statement is true?

Accepted Answer

A)  A direct cost of one cost object cannot be an indirect cost of another cost object.
B)  All variable costs are direct costs.
C)  A direct cost of one cost object can be an indirect cost of another cost object.
D)  All fixed costs are direct costs.

Question 18

________ are the acquisition costs of all materials that eventually become part of the cost object and can be traced to the cost object.

Accepted Answer

A)  Direct manufacturing labor costs
B)  Direct material costs
C)  Indirect manufacturing costs
D)  Manufacturing overhead costs

Question 19

A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of indirect cost for the soccer equipment line is:

Accepted Answer

A)  material used to make the soccer balls
B)  labor to shape the leather used to make the soccer ball
C)  shift supervisor for the soccer line
D)  plant supervisor

Question 20

Products, services, departments, and customers may be cost objects.

Accepted Answer

A) True 
 B)False

Exam 2: An Introduction to Cost Terms and Purposes

What are the differences between direct costs and indirect costs? Give an example of each.

Correct Answer
verified
Direct costs are costs that can be trace...
View Answer

A customer could be considered a cost object.

Correct Answer
verified

Why is it possible that a raw material such as glue might be considered as an indirect material for one furniture manufacturer and as a direct material for another furniture manufacture?

Correct Answer
verified
It is possible for a raw material such a...
View Answer

A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of indirect cost for the soccer equipment line is:

Correct Answer
verified

Service-sector companies report:

Correct Answer
verified

Budgeted costs are:

Correct Answer
verified

For a manufacturing company, direct material costs may be included in:

Correct Answer
verified

Answer the following questions using the information below: -What is gross margin for 20X3?

Correct Answer
verified

Correct Answer
verified
a. $384,000 + $3,136,000 - $275,200 = $3...
View Answer

________ are the acquisition costs of all materials that eventually become part of the cost object and can be traced to the cost object.

Correct Answer
verified

Answer the following questions using the information below: Pederson Company reported the following: -________ - sector companies purchase and then sell tangible products without changing their basic form.

Correct Answer
verified

Accountants define a cost as a resource to be sacrificed to achieve a specific objective.

Correct Answer
verified

Unit costs and average costs are really the same thing.

Correct Answer
verified

Answer the following questions using the information below: The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows: -What are the variable costs per unit associated with Product ORD203?

Correct Answer
verified

Products, services, departments, and customers may be cost objects.

Correct Answer
verified

Misallocated indirect costs may lead to NOT promoting profitability.

Correct Answer
verified

The following information pertains to the Cannady Corporation: What is cost of goods sold?

Correct Answer
verified

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company), Gregory Food Retailers (a merchandising company), and Larson Real Estate (a service sector company). Classify each item as either inventoriable (I)costs or period (P)costs.

Correct Answer
verified

Which of the following formulas determine cost of goods sold in a merchandising entity?

Correct Answer
verified

Which statement is true?

Correct Answer
verified

Exam 2: An Introduction to Cost Terms and Purposes

What are the differences between direct costs and indirect costs? Give an example of each.

Correct AnswerverifiedDirect costs are costs that can be trace...View AnswerShow Answer

A customer could be considered a cost object.

Correct AnswerverifiedShow Answer

Why is it possible that a raw material such as glue might be considered as an indirect material for one furniture manufacturer and as a direct material for another furniture manufacture?

Correct AnswerverifiedIt is possible for a raw material such a...View AnswerShow Answer

A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of indirect cost for the soccer equipment line is:

Correct AnswerverifiedShow Answer

Service-sector companies report:

Correct AnswerverifiedShow Answer

Budgeted costs are:

Correct AnswerverifiedShow Answer

For a manufacturing company, direct material costs may be included in:

Correct AnswerverifiedShow Answer

Answer the following questions using the information below: -What is gross margin for 20X3?

Correct AnswerverifiedShow Answer

Correct Answerverifieda. $384,000 + $3,136,000 - $275,200 = $3...View AnswerShow Answer

________ are the acquisition costs of all materials that eventually become part of the cost object and can be traced to the cost object.

Correct AnswerverifiedShow Answer

Answer the following questions using the information below: Pederson Company reported the following: -________ - sector companies purchase and then sell tangible products without changing their basic form.

Correct AnswerverifiedShow Answer

Accountants define a cost as a resource to be sacrificed to achieve a specific objective.

Correct AnswerverifiedShow Answer

Unit costs and average costs are really the same thing.

Correct AnswerverifiedShow Answer

Answer the following questions using the information below: The East Company manufactures several different products. Unit costs associated with Product ORD203 are as follows: -What are the variable costs per unit associated with Product ORD203?

Correct AnswerverifiedShow Answer

Products, services, departments, and customers may be cost objects.

Correct AnswerverifiedShow Answer

Misallocated indirect costs may lead to NOT promoting profitability.

Correct AnswerverifiedShow Answer

The following information pertains to the Cannady Corporation: What is cost of goods sold?

Correct AnswerverifiedShow Answer

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company), Gregory Food Retailers (a merchandising company), and Larson Real Estate (a service sector company). Classify each item as either inventoriable (I)costs or period (P)costs.

Correct AnswerverifiedShow Answer

Which of the following formulas determine cost of goods sold in a merchandising entity?

Correct AnswerverifiedShow Answer

Which statement is true?

Correct AnswerverifiedShow Answer

Correct Answer
verified
Direct costs are costs that can be trace...
View Answer

Correct Answer
verified

Correct Answer
verified
It is possible for a raw material such a...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
a. $384,000 + $3,136,000 - $275,200 = $3...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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