Chapter 002, Managerial Accounting and Cost Concepts

| October 3, 2018

27.
An example of a period cost
is:

A.
fire insurance on a factory
building.
B.
salary of a factory
supervisor.

C. direct materials.

D.
rent on a headquarters
building.

29. Transportation costs incurred by a manufacturing company to
ship its product to its customers would be classified as which of the
following?
A. Product cost
B.
Manufacturing overhead

C. Period cost

D.
Administrative cost

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Chapter 002, Managerial Accounting and Cost Concepts

30. Micro Computer Company has set up a toll-free telephone line for
customer inquiries regarding computer hardware produced by the company. The
cost of this toll-free line would be classified as which of the following?
A. Product cost

B. Manufacturing overhead C.
Direct labor
D. Period cost

31. Rossiter Company failed to record a credit sale at the end of the
year, although the reduction in finished goods inventories was correctly
recorded when the goods were shipped to the customer. Which one of the
following statements is correct?

A. Accounts receivable was
not affected, inventory was not affected, sales were understated, and cost of
goods sold was understated.
B. Accounts receivable was
understated, inventory was overstated, sales were understated, and cost of
goods sold was overstated.
C. Accounts receivable was
not affected, inventory was understated, sales were understated, and cost of
goods sold was understated.
D. Accounts
receivable was understated, inventory was not affected, sales were understated,
and cost of goods sold was not affected.

32.
Cost of goods manufactured
will usually include:

A.
only costs incurred during
the current period.
B.
only direct labor and direct
materials costs.

C.
some costs incurred during
the prior period as well as costs incurred during the current period.
D.
some period costs as well as
some product costs.

33. Which two terms below describe the wages paid to security
guards that monitor a factory 24 hours a day?

A.
variable cost and direct
cost

B. fixed cost and direct cost

C.
variable cost and indirect
cost

D.
fixed cost and indirect cost

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Chapter 002, Managerial Accounting and Cost Concepts

34. Within the relevant range, the difference between variable costs
and fixed costs is: A. variable costs per unit fluctuate and fixed costs per
unit remain constant.
B. variable costs per unit
are constant and fixed costs per unit fluctuate. C. both total variable costs
and total fixed costs are constant.
D. both total variable costs and total fixed costs fluctuate.

35. Each of the following would be classified as variable in terms of
cost behavior except: A. cost of shipping goods to customers via express mail.
B. sales commissions.

C. plant
manager’s salary. D. direct materials.

36. A lawnmower manufacturer computed a cost per unit of $53 by adding
together last month’s direct labor, direct materials, and manufacturing
overhead and dividing that total by the 10,000 units produced last month.
(There were no beginning or ending inventories.) If 9,000 units are going to be
manufactured this month, we would expect that the:

A. cost per unit will remain
the same. B. cost per unit will decrease.
C.
direction of change in unit costs cannot be determined. D. cost per unit will
increase.

37. Which one of the following costs should NOT be considered an
indirect cost of serving a particular customer at a Dairy Queen fast food
outlet?
A. the cost of the hamburger
patty in the burger they ordered. B. the wages of the employee who takes the
customer’s order. C. the cost of heating and lighting the kitchen.

D. the salary of the outlet’s manager.

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