cost-accounting-test-bank-chapter-2

1Copyright©2015PearsonEducation,Inc.CostAccounting,15e(Horngren/Datar/Rajan)Chapter2AnIntroductiontoCostTermsandPurposesObjective2.11)Anactualcostis________.A)isthecostincurredB)isapredictedorforecastedcostC)isanythingforwhichacostmeasurementisdesiredD)isthecollectionofcostdatainsomeorganizedwaybymeansofanaccountingsystemAnswer:ADiff:1Objective:1AACSB:Analyticalthinking2)Comparingbudgetedcoststoactualcostshelpsmanagerstoimprove________.A)coordinationB)controlC)implementationD)planningAnswer:BDiff:1Objective:1AACSB:Analyticalthinking3)Budgetedcostsare________.A)thecostsincurredthisyearB)thecostsincurredlastyearC)plannedorforecastedcostsD)competitor'scostsAnswer:CDiff:1Objective:1AACSB:Analyticalthinking4)Costassignment________.A)includesfutureandarbitrarycostsB)encompassesallocatingindirectcoststoacostobjectC)isthesameascostaccumulationD)isthedifferencebetweenbudgetedandactualcostsAnswer:BDiff:1Objective:1AACSB:Analyticalthinking2Copyright©2015PearsonEducation,Inc.5)Acostsystemdeterminesthecostofacostobjectby________.A)accumulatingandthenassigningcostsB)accumulatingcostsC)assigningandthenaccumulatingcostsD)assigningcostsAnswer:ADiff:1Objective:1AACSB:Analyticalthinking6)Acostobjectisanythingforwhichacostmeasurementisdesired.Answer:TRUEDiff:1Objective:1AACSB:Analyticalthinking7)Costsareaccountedforintwobasicstages:assignmentfollowedbyaccumulation.Answer:FALSEExplanation:Costsareaccountedforintwobasicstages:accumulationfollowedbyassignment.Diff:1Objective:1AACSB:Analyticalthinking8)Anactualcostisthecostincurred–ahistoricalorpastcost.Answer:TRUEDiff:1Objective:1AACSB:Analyticalthinking9)Accountantsdefineacostasaresourcetobesacrificedtoachieveaspecificobjective.Answer:TRUEDiff:1Objective:1AACSB:Analyticalthinking10)Acostisaresourcesacrificedorforgonetoachieveaspecificobjective.Answer:TRUEExplanation:Acostobjectcouldbeanythingmanagementwishestodeterminethecostof,forexample,adepartment.Diff:1Objective:1AACSB:Analyticalthinking11)Managersusecostaccumulationdatatomakedecisionsandimplementthem.Answer:TRUEDiff:1Objective:1AACSB:Analyticalthinking3Copyright©2015PearsonEducation,Inc.12)LucasManufacturinghasthreecostobjectsthatitusestoaccumulatecostsforitsmanufacturingplants.Theyare:Costobject#1:ThephysicalbuildingsandequipmentCostobject#2:TheuseofbuildingsandequipmentCostobject#3:TheavailabilityanduseofmanufacturinglaborThefollowingmanufacturingoverheadcostcategoriesarefoundintheaccountingrecords:a.Depreciationonbuildingsandequipmentb.Lubricantsformachinesc.Propertyinsuranced.Supervisorssalariese.Fringebenefitsf.Propertytaxesg.UtilitiesRequired:Assigneachoftheabovecoststothemostappropriatecostobject.Answer:Costobject#1includescategoriesa,c,andf.Costobject#2includescategoriesbandg.Costobject#3includescategoriesdande.Diff:2Objective:1AACSB:Applicationofknowledge4Copyright©2015PearsonEducation,Inc.Objective2.21)Whichofthefollowingfactorsaffectthedirect/indirectclassificationofacost?A)thelevelofbudgetedprofitforthenextyearB)theestimationoftimerequiredtocompletetheorderC)theabilitytoexecuteanorderinthemostcost-efficientmannerD)thedesignoftheoperationAnswer:DDiff:1Objective:2AACSB:Analyticalthinking2)Thegeneraltermusedtoidentifyboththetracingandtheallocationofaccumulatedcoststoacostobjectis________.A)costaccumulationB)costassignmentC)costtracingD)conversioncostingAnswer:BDiff:1Objective:1AACSB:Analyticalthinking3)Costaccumulationis________.A)thecollectionofcostdatainsomeorganizedwaybymeansofanaccountingsystemB)anythingforwhichacostmeasurementisdesiredC)anythingforwhichaprofitmeasurementisdesiredD)thecollectionofprofitdatainsomeorganizedwaybymeansofanaccountingsystemAnswer:ADiff:2Objective:1AACSB:Analyticalthinking4)Whichofthefollowingstatementsaboutthedirect/indirectcostclassificationistrue?A)Indirectcostsarealwaystraced.B)Indirectcostsarealwaysallocated.C)Thedesignofsalestargetaffectsthedirect/indirectclassification.D)Thedirect/indirectclassificationdependsonthecostcontrolmeasures.Answer:BDiff:1Objective:2AACSB:Analyticalthinking5Copyright©2015PearsonEducation,Inc.5)Costtracingis________.A)theassignmentofdirectcoststothechosencostobjectB)afunctionofcostallocationC)theprocessoftrackingbothdirectandindirectcostsassociatedwithacostobjectD)theprocessofdeterminingtheactualcostofthecostobjectAnswer:ADiff:1Objective:2AACSB:Analyticalthinking6)Costallocationis________.A)theprocessoftrackingbothdirectandindirectcostsassociatedwithacostobjectB)theprocessofdeterminingtheopportunitycostofacostobjectchosenC)theassignmentofindirectcoststothechosencostobjectD)madebasedonmaterialacquisitiondocumentAnswer:CDiff:1Objective:2AACSB:Analyticalthinking7)Thedeterminationofacostaseitherdirectorindirectdependsuponthe________.A)accountingstandardsB)taxsystemchosenC)inventoryvaluationD)costobjectchosenAnswer:DDiff:1Objective:2AACSB:Analyticalthinking8)Classifyingacostaseitherdirectorindirectdependsupon________.A)thebehaviorofthecostinresponsetovolumechangesB)whetherthecostisexpensedintheperiodinwhichitisincurredC)whetherthecostcanbeeasilytracedwiththe