Which of the following statements are false regarding cost allocations and product costing?

Which of the following statements are false regarding cost allocations and product costing?

A It is easier to determine the individual product cost for a manufacturer than it is for a wholesaler
B In general, indirect costs are assigned, while direct costs are allocated.
A only A is false
B Only B is false
C Both A and B are false
D neither A nor B is false


Answer: C

Which of the following is not a characteristic of job costing?

A Each job is distinguishable from the other jobs
B Identical units are produced on an ongoing basis
C Job cost data are used for setting prices and bids
D It is possible to compare actual costs with estimated costs


Answer: B

Which of the following companies would most likely use job costing?

A paper manufacturer
B paint producer
C breakfast cereal maker
D advertising agency


Answer: D

When a manufacturing company has a highly automated manufacturing plant producing many different products,

When a manufacturing company has a highly automated manufacturing plant producing many different products, what is probably the most appropriate basis of applying OH costs to WIP?

A DL hours
B DL $
C Maching H
D Cost of materials


Answer: C

The basic cost flow model is:

A BB+TO=TI+EB
B BB+TO-TI=EB
C EB=BB+TI-TO
D EB-BB=TO-TI
E EB+TI-TO=BB


Answer: C

The Cost Flow Diagram includes all of the following except:

A Selling expenses
B DM
C DL
D FMOH
E VMOH


Answer: A

In a labor intensive company in which more OH is used by more highly skilled and paid ees, which activity base would be

In a labor intensive company in which more OH is used by more highly skilled and paid ees, which activity base would be most appropriate for applying OH to production?

A DL$
B DM$
C DLH
D MH
E Sales value of the product produced


Answer: A

Which of the following is NOT a data problem an analyst must watch for when estimating cost behavior?

A missing data
B Outliers
C Allocated Costs
D Depreciable Assets


Answer: D

Which of the following is the difference between variable costs and fixed costs?

A variable costs per unity fluctuate and fixed CPU remain constant
B variable CPU are fixed over the relevant range and fixed CPU are variable
C Total variable costs are variable over the relevant range and fixed in the long term, while fixed costs never change
D Variable CPU change in varying increments, while fixed CPU change in equal units
E total variable costs can be varied by mgmt, while fixed costs are uncontrollable


Answer: B

In the standard regression equation of y=a+bx, the letter y is best described at the:

In the standard regression equation of y=a+bx, the letter y is best described at the:

A independent variable
B dependent variable
C slope of the equation
D intercept of the equation


Answer: B

Which of the following statements is (are) true regarding product costing?

A individual product costs are relevant for managerial decision-making but irrelevant for preparing the financial statements
B A common decision facing managers is determining the price at which to sell their product or provide their services.
A only A is true
B only B is true
C Both A and B are true
D neither A nor B is true


Answer: B

In the cost equation TC+F+VX, V is best described as:

A costs that do not vary with changes in the activity level.
B intercept of the cost equation
C slope of the cost equation
D activity level used to estimate the dependent variable


Answer: C

Which of the following cost estimation methods finds the variable portion of a mixed cost before calculating the fixed portion?

Which of the following cost estimation methods finds the variable portion of a mixed cost before calculating the fixed portion?

A Scattergraph
B High-Low
C Account analysis
D Linear regression
E engineering approach


Answer: B

A disadvantage of the high-low method of cost analysis is that it:

A typically results in totally inaccurate cost formula
B is too time consuming to apply
C uses only two data points, which may not be representative of normal conditions
D relies totally on the judgement of the person performing the cost analysis


Answer: C

In the standard regression equation of y=a+bx, the letter a is best described as the:

A independent variable
B dependent variable
C slope of the equation
D intercept of the equation


Answer: D

In determining cost behavior in business, the cost function is often expressed as Y= a+bX. Which on the the following cost estimate methods

In determining cost behavior in business, the cost function is often expressed as Y= a+bX. Which on the the following cost estimate methods should NOT be used in estimating fixed and variable costs for the equation?

A Scattergraph method
B Simple regression
C High-Low point method
D Multiple regression
E Management analysis of data


Answer: E

In the cost equation TC=F+VX, X is best described as the:

A costs that do not vary with changes in the activity level.
B costs that do vary with changes in the activity level.
C total cost estimate at a particular activity level.
D activity level used to estimate the total cost


Answer: D

A manager is trying to estimate the manufacturing costs of a new product. The company makes several other products that utilize some of the same manufacturing procedures as the new product. Which cost estimate method would be the best method to determine the total cost of manufacturing the new product?

A Engineering estimates
B Regression analysis
C Account Analysis
D Scattergraph
E High-low

Lakeside Company estimated manufacturing overhead costs for 2009 at $378,000, based on 180,000 estimated direct labor hours

Lakeside Company estimated manufacturing overhead costs for 2009 at $378,000, based on 180,000 estimated direct labor hours. Actual direct labor hours for 2009 totaled 195,000. Manufacturing overhead contains debit entries totaling $391,500. What was the amount of manufacturing overhead for 2009?

A) $31,500 underallocated
B) $31,500 overallocated
C) $18,000 underallocated
D) $18,000 overallocated



Answer: D

The journal entry to record $200 of depreciation on factory equipment for the current period involves which of the following?

A) debit to accumulated depreciation-factory equipment for $200
B) credit to manufacturing overhead for $200
C) debit to depreciation expense-factory equipment for $200
D) debit to manufacturing overhead for $200


Answer: D