Which of the following statements is correct?

An indirect cost can be readily traced to a cost object while a direct cost is traced only to manufacturing costs.

A direct cost can be traced to a specific cost object, while an indirect cost cannot.

A direct cost can be readily traced to a cost object while an indirect cost is traced only to manufacturing costs.

An indirect cost can be traced to a specific cost object, while a direct cost cannot.

2. Which of the following is an example of a variable cost for a manufacturing firm?

The cost of depreciation on equipment.

The cost of raw materials.

The cost of factory supervision.

The cost of rent on the factory.

3. An irrelevant cost: must differ between decision alternatives. will not influence a decision. is also called a differential cost. must be incurred in the future rather than in the past.

4. Product costs are reported: on the income statement before goods are sold, and on the balance sheet after goods are sold. only on the balance sheet. on the balance sheet before goods are sold, and on the income statement after goods are sold. only on the income statement.

5. Which of the following is an indirect cost of manufacturing a table made of wood and glass for a firm that manufactures furniture?

The cost of the glass in the table.

The cost of rent on the factory where the table is manufactured.

The cost of the wood in the table.

The cost of the labor used to assemble the table.

6. Which of the following is not a characteristic of managerial accounting?

Reports are prepared as needed.

Information is used by external parties.

Information is subjective, relevant, future-oriented.

Information is reported at the decision making level.

7. Variable costs are:

costs that remain constant no matter the activity level.

costs that are not worth the effort to trace to a specific cost object.

costs that change, in total, in direct proportion to changes in activity levels.

always irrelevant.

8. Which of the following functions of management involves setting short and long-term objectives and the tactics to achieve them?

Reviewing

Planning

Control

Implementing

9. Which of the following costs is not relevant to the decision whether to replace an old computer with a new one?

The cost of the old computer.

The cost to repair the old computer if a new computer is not purchased.

The cost of the new computer.

The cost of a service plan on the new computer.

10. Which of the following is a characteristic of a manufacturing environment that would use job order costing?

Continuous manufacturing

Differentiated products

Standardized production process

Homogenous products

11. A predetermined overhead rate is calculated by dividing:

estimated manufacturing overhead cost by actual total cost driver.

estimated total cost driver by estimated manufacturing overhead cost.

estimated manufacturing overhead cost by estimated total cost driver.

actual manufacturing overhead cost by estimated total cost driver.

12. When disposed of, underapplied manufacturing overhead will:

decrease Finished Goods.

increase Cost of Goods Sold.

increase Finished Goods.

decrease Cost of Goods Sold.

13. When disposed of, overapplied manufacturing overhead will:

increase Cost of Goods Sold.

decrease Finished Goods.

decrease Cost of Goods Sold.

increase Finished Goods.

14. Which of the following types of firms would most likely use job order costing?

C-5 Cement Company

SoooSweet Beverage

Happy-Oh Cereal Company

Huey, Lewey & Dewie, Attorneys

15. Which of the following represents the cost of the jobs sold during the period?

Finished Goods Inventory

Raw Materials Inventory

Cost of Goods Sold

Work in Process Inventory

16. Manufacturing overhead was estimated to be $302,400 for the year along with 21,600 direct labor hours. Actual manufacturing overhead was $232,200, actual labor hours were 22,300. The amount of manufacturing overhead applied to production would be:

$302,400

$239,725

$232,200

$312,200

17. An activity that is performed for a specific customer is a(n):

unit-level activity.

batch-level activity.

facility-level activity.

product-level activity.

18. Which of the following is not true of activity cost drivers?

They are used in Stage 2 cost allocations.

They are strictly volume-based allocation measures.

They ideally have a cause and effect relationship with underlying activities.

They are measures of the underlying activity that occurs in each activity cost pool.

19. Using non-volume-based activity drivers allows activity-based costing to:

assign more indirect costs to products whose production volume is higher.

assign more direct costs to products whose complexity is higher.

assign more indirect costs to products whose complexity is higher.

assign more direct costs to products whose production volume is higher.

20. Using the activity-proportion method results in:

higher cost allocations than the activity rate method.

the same cost allocations as the activity rate method.

higher or lower cost allocations than the activity rate method, depending on the circumstances.

lower cost allocations than the activity rate method.