Accounting MCQ by uc86

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									Question 1

Factory overhead costs normally include all of the following except:

Answer

             Indirect labor costs.

             Indirect material costs.

             Selling costs.

             Machinery oil.

             Factory rent.

Product costs:

Answer

             Are expenditures necessary and integral to finished products.

             Are expenditures identified more with a time period rather than with finished
             products.

             Include selling and administrative expenses.

             Are costs that vary with the volume of activity.

             Are costs that do not vary with the volume of activity.

A mixed cost:

Answer

             Requires the future outlay of cash and is relevant for future decision making.

             Does not change with changes in the volume of activity within the relevant range.

             Is directly traceable to a cost object.

             Contains a combination of fixed costs and variable costs.
            Has already been incurred and cannot be avoided so it is irrelevant for decision
            making.

A manufacturing statement is also known as a schedule listing of the:

Answer

            Raw materials processed.

            Factory supplies used.

            Cost of goods manufactured.

            Total finished goods.

            Cost of goods sold.



Materials that are used in support of the production process but that do not become a part of
the product and are not clearly identified with units or batches of product are called:

Answer

            Secondary materials.

            General materials.

            Direct materials.

            Indirect materials.

            Materials inventory.

Continuous improvement:

Answer

            Is a measure of profits.

            Is a measure of costs.

            Rejects the notion of "good enough."
             Is not applicable to most businesses.

             Is possible only in service businesses.

The salary paid to the supervisor of an assembly line would normally be classified as:

Answer

             Direct labor.

             Indirect labor.

             A period cost.

             A general cost.

             An assembly cost.

A direct costs is a cost that is:

Answer

             Identifiable as controllable.

             Variable with respect to the volume of activity.

             Fixed with respect to the volume of activity.

             Traceable to a cost object.

             Sunk with respect to a cost object.

Which of the following costs would not be classified as factory overhead?

Answer

             Property taxes on maintenance machinery.

             Expired insurance on factory equipment.

             Wages of the factory janitor.

             Metal doorknobs used on wood cabinets produced.
             Small tools used in production.

The three major cost components of a manufactured product are:

Answer

             Marketing, selling, and administrative costs.

             Indirect labor, indirect materials, and miscellaneous factory expenses.

             Direct materials, direct labor, and factory overhead.

             Differential costs, opportunity costs, and sunk costs.

             General, selling, and administrative costs.



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