Font size
WorksheetsCost Concepts
Total questions: 32
Worksheet time: 22mins
Property taxes and insurance premiums paid on a factory building are examples of manufacturing overhead
TRUE
FALSE
Variable costs are costs whose per unit costs vary as the activity level rises and falls
TRUE
FALSE
Advertising costs are considered product costs for external financial reports since they are incurred in order to promote specific products
TRUE
FALSE
Wages paid to a labor who was engaged in production activities can be termed as indirect cost
TRUE
FALSE
Indirect material used in production is classified as factory overhead
TRUE
FALSE
Prime cost includes direct materials and direct labor
TRUE
FALSE
Managerial accounting places less emphasis on precision and more emphasis on flexibility and relevance of data than does financial accounting
TRUE
FALSE
In external financial reports, factory utilities costs incurred may be included in an asset account on the balance sheet at the end of the period
TRUE
FALSE
Manufacturing overhead combined with direct materials is known as conversion cost
TRUE
FALSE
Variable costs
are always indirect costs
include most personnel costs and depreciation on machinery
can always be traced directly to the cost object
increase in total when the actual level of activity increases
The cost of rent for a manufacturing plant is generally considered to be a
Product cost but not Prime Cost
Prime Cost but not Product cost
Both Prime Cost and Product Cost
Neither of the two
Manufacturing overhead consists of
all manufacturing costs
all manufacturing costs, except direct materials and direct labor
indirect materials but not indirect labor
indirect labor but not indirect materials
An opportunity cost is
the difference in total costs which results from selecting one alternative instead of another
the benefit forgone by selecting one alternative instead of another
a cost which may be saved by not adopting an alternative
a cost which may be shifted to the future with little or no effect on current operations
Conversion cost consists of which of the following?
Manufacturing overhead cost
Direct materials and direct labor cost
Direct labor cost
Direct labor cost and Manufacturing Cost
Which one of the following costs should NOT be considered an indirect cost of serving a particular customer at a Dairy Queen fast food outlet?
the wages of the employee who takes the customer's order
the cost of the hamburger patty in the burger they ordered
the cost of heating and lighting the kitchen
the salary of the outlet's manager
A cost that is easily traceable to a cost object is known as
indirect cost
variable cost
direct cost
fixed cost
A cost that changes in total peso amount with the change in the level of activity is known as
fixed cost
mixed cost
conversion cost
variable cost
A cost that does not change, in total, with the change in activity is called
mixed cost
fixed cost
prime cost
unchanged cost
Which of the following costs is not a product cost?
Depreciation on the plant installed in the factory
The electricity cost of the office of factory foreman
The cost of shipping finished products to customers
The cost of fuel used in the factory
Manufacturing cost
Prime cost + Conversion cost
Prime cost + Direct Labor
Direct Materials + Conversion cost
Direct Labor + Conversion cost
The term quality cost refers to
the cost incurred to purchase expensive materials
the cost incurred to purchase very high quality materials
the cost incurred to higher highly skilled workers
the cost incurred to prevent, detect and remove defects from products
Step costs are _____ for a given level of output
Fluctuate
Direct labor cost
Constant
Cannot determine
Overhead can be classified as
Prime Cost
Selling Cost
Conversion Cost
Admin Cost
Manufacturing Overhead would not have a subsidiary account for
Utilities
property taxes
insurance
raw materials inventory
Financial statements for external users can be described as
user specific
general purpose
special purpose
management reports
Which of the following is not an internal users
creditor
department manager
cost accountant
controller
Internal reports must be communicated
daily
weekly
monthly
as needed
annually
Statement 1: The salary paid to managers in charge of a warehouse is probably a variable cost
Statement 2: Product Cost consist of the sum of prime cost and conversion cost
Only Statement 1 is correct
Only Statement 2 is correct
Both statements are correct
Both Statements are incorrect
Wages paid to factory machine operators of manufacturing plant are an element of
Prime Cost but No Conversion Cost
Conversion Cost but not Prime Cost
Both Prime Cost and Conversion Cost
Neither Prime Cost Nor Conversion Cost
How much is the Prime Cost
(a)
How much is the total Manufacturing Cost
(a)
Depreciation is always considered a product cost for external financial reporting purposes in a manufacturing firm
TRUE
FALSE
