1- Which of the following would be found on a job cost sheet under a normal cost system?

1. Actual direct material cost

2. Actual manufacturing overhead cost

a) 1 and 2

b) 1 only

c) 2 only

d) neither

2- In regards to applying manufacturing overhead to jobs, which of the following is correct?

a) The amount of overhead applied to a particular job is not the actual amount of overhead caused by the job.

b) If the overhead rate is computed annually based on the actual costs and activity for the year, the manufacturing overhead assigned to a particular job can be computed as soon as the job is completed.

c) Actual overhead costs are assigned to jobs in a normal cost system.

d) If a job is not completed by year-end, then no manufacturing overhead cost would be applied to a job when a predetermined overhead rate is used.

3 - Which of the following is correct in regards to job-order costing systems?

a) Manufacturing overhead is charged by tracing these costs to specific jobs.

b) The predetermined overhead rate is computed by dividing the total amount of the allocation base by the fixed manufacturing overhead costs.

c) The process of assigning manufacturing overhead costs to jobs is called the allocation base.

d) A cost driver is a factor, such as machine hours or computer time, that causes overhead costs.

4- Which of the following represents Contribution Margin for a merchandising company using a contribution format income statement?

a) Sales less Cost of Goods Sold

b) Sales less Variable Expenses

c) Sales less Variable and Fixed expenses

d) Beginning Inventory plus Merchandise Purchases less Ending Inventory

5-Which of the following is correct in regards to cost classifications for decision making among alternatives?

a) Incremental costs measure the potential benefit that is given up when one alternative is selected over another.

b) Differential costs are always fixed and cannot be variable.

c) Differential costs are costs that have already been incurred and therefore cannot be changed.

d) Opportunity costs are not usually found in accounting records.

6-In regards to external financial reporting purposes, which of the following is correct?

a) The accrual concept is based on recognizing expenses in the same period when they are incurred.

b) All executive salaries and sales commissions are always considered period costs.

c) Manufacturing overhead is excluded from product costs for a manufacturer for external reporting purposes.

d) Product costs are recorded as expenses on the income statement in the period they are incurred.

7-Which of the following is correct about direct and indirect costs?

a) A cost is either direct or indirect but can change classification depending on what cost object it is being assigned to.

b) The salary of a factor supervisor would be classified as a direct cost with respect to a unit of product.

c) A direct cost is one that cannot be easily traced to a specified cost object under consideration.

d) Indirect costs vary in direct proportion to changes in the underlying level of activity.