WorksheetsSugar Academy - Module 1
Total questions: 20
Worksheet time: 10mins
The salaries you could be earning by working rather than attending college are an example of
Misplaced cost
Opportunity cost
Sunk cost
Outlay cost
In analyzing whether to build another regional service office, the salary of the Chief Executive Officer (CEO) at the corporate headquarters is:
Relevant because salaries are always relevant.
Relevant because this will probably change if the regional service is built.
Irrelevant since another imputed cost for the same will be considered.
Irrelevant because it is a future cost that will not differ between alternatives under consideration.
The costs presented to management for an equipment replacement decision should be limited to
Controllable Costs
Conversion Costs
Relevant Costs
Standard Costs
Management accountants are concerned with incremental unit costs. These costs are similar to the following except:
The manufacturing cost
The cost to produce an additional unit
The economic marginal cost
The variable cost.
As a part of data presented in support of a proposal to increase the production of DVD, the sales manager of Laguna Suppliers reported the total additional cost required for the proposed increase in production level. The increase in total cost is known as
Incremental Cost
Out-of-pocket cost
Opportunity cost
Controllable cost
Inventoriable (product) costs are
Manufacturing costs incurred to produce units of outputs.
The costs of direct labor and all factory overhead costs.
All costs associated with manufacturing other than direct labor costs and raw materials costs.
Costs that are associated with marketing, shipping, warehousing, and billing activities.
Sunk costs
Are relevant to long-term decisions but not to short-term decisions
In themselves are not relevant to decision making
Are relevant to decision making
Are subtitles for opportunity costs
Cost accounting
Provides information on the efficiency of factory labor.
Provides information on the cost of servicing commercial customers.
Provides information on the performance of an operating division.
All of the above.
The determination of a cost as being either direct or indirect depends upon
The accounting system.
The allocation system.
The cost tracing system.
The cost object chosen.
Which one of the following items is a direct cost?
Customer-service costs of a multiproduct firm; Product A is the cost object.
Printing costs incurred for payroll check processing; payroll check processing is the cost object.
The salary of a maintenance supervisor in a multiproduct manufacturing plant; Product B is the cost object.
Utility costs of the administrative offices; the accounting department is the cost object.
An understanding of the underlying behavior of costs helps in all of the following EXCEPT
Costs can be better estimated as volume expands and contracts.
True costs can be better evaluated.
Process inefficiencies can be better identified and as a result improved.
Sales volume can be better estimated.
At a plant where a union agreement sets annual salaries and conditions, annual labor costs usually
Are considered a variable cost.
Depend on the scheduling of floor workers.
Are considered a fixed cost.
Depend on the scheduling of production runs.
Fixed costs depend on
The amount of resources used.
The amount of resources acquired.
The volume of production.
The volume of sales.
Within the relevant range, if there is a change in the level of the cost driver then
Total fixed costs and total variable costs will change.
Total fixed costs and total variable costs will remain the same.
Total fixed costs will remain the same and total variable costs will change.
Total fixed costs will change and total variable costs will remain the same.
When 10,000 units are produced, fixed costs are P14 per unit. Therefore, when 20,000 units are produced fixed costs
Will increase to P28 per unit.
Will remain at P14 per unit.
Will decrease to P7 per unit.
Will total P280,000.
Manufacturing overhead costs in an automobile manufacturing plant MOST likely include
Labor costs of the painting department.
Indirect material costs such as lubricants.
Sales commissions.
Steering wheel costs.
Khimmy Dora is paid P10 an hour for straight-time and P15 an hour for overtime. One week he worked 42 hours, which included 2 hours of overtime. Compensation would be reported as:
P400 of direct labor and P30 of manufacturing overhead.
P400 of direct labor and zero of manufacturing overhead.
P420 of direct labor and P10 of manufacturing overhead.
P430 of direct labor and zero of manufacturing overhead.
Product costs used for pricing and product-mix decisions generally include
Manufacturing costs only.
Design costs plus manufacturing costs.
All costs incurred along the value chain.
Distribution costs only.
Which of the following statements is FALSE?
Product costs and inventoriable costs are interchangeable terms.
Inventoriable costs are important for PFRS.
Inventoriable costs are a special case of product costs.
"Product costs" refers to the particular costs of a product for the purpose at hand.
When making decisions,
It is best to use average costs.
It is best to use unit costs.
It is best to use total costs rather than unit costs.
All of the above types of costs can be used for decision making, it varies depending on the decision.
