Question : 41) Which statement about conversion costs correct, using the three-part : 1186148

41) Which statement about conversion costs is correct, using the three-part classification of costs?

A) They include only direct manufacturing labour costs.

B) They include only indirect manufacturing costs.

C) They include both direct manufacturing labour costs and manufacturing overhead costs.

D) They include indirect manufacturing labour costs but not manufacturing overhead costs.

E) They include indirect manufacturing costs and direct manufacturing labour costs.

42) Cost tracing is

A) the assignment of direct costs to the chosen cost object.

B) a function of cost allocation.

C) the process of tracking both direct and indirect costs associated with a cost object.

D) the process of determining the actual cost of the cost object.

E) the assignment of both direct and indirect costs associated with a cost object.

43) Cost allocation is

A) the process of tracking both direct and indirect costs associated to a cost object.

B) the process of determining the actual cost of the cost object.

C) the assignment of indirect costs to the chosen cost object.

D) a function of cost tracing.

E) the assignment of direct costs to the chosen cost object.

44) The components of prime costs in the three-part classification include

A) only direct materials costs.

B) only direct manufacturing labour costs.

C) both direct materials and direct manufacturing labour costs.

D) only conversion costs.

E) direct materials, direct manufacturing labour and conversion costs.

45) Classifying a cost as either direct or indirect depends upon

A) the behaviour of the cost in response to volume changes.

B) whether the cost is expensed in the period in which it is incurred.

C) whether the cost can be identified with the cost object.

D) whether an expenditure is avoidable or not in the future.

E) the inventory classification system.

46) A manufacturing plant produces two product lines: football equipment and hockey equipment. Direct costs for the football equipment line are the

A) beverages provided daily in the plant break room.

B) monthly lease payments for a specialized piece of equipment needed to manufacture the football helmet.

C) salaries of the clerical staff that work in the company administrative offices.

D) utilities paid for the manufacturing plant.

E) advertising costs.

47) A manufacturing plant produces two product lines: football equipment and hockey equipment. An indirect cost for the hockey equipment line is the

A) material used to make the hockey sticks.

B) labour to bind the shaft to the blade of the hockey stick.

C) shift supervisor for the hockey line.

D) plant supervisor.

E) salesperson travelling expenses.

48) Sheen Manufacturing has three cost objects that it uses to assign costs in its manufacturing plants. They are:

Cost object #1The existence of buildings and equipment

Cost object #2The use of buildings and equipment

Cost object #3The availability and use of manufacturing labour

The following manufacturing overhead costs categories are found in the accounting records:

1.Amortization on buildings and equipment

2.Fringe benefits

3.Idle time wages

4.Lubricants for machines

5.Night security

6.Overtime premiums

7.Property insurance

8.Property taxes

9.Safety hats and shoes

10.Supervisor’s salaries

11.Utilities

Required:

Assign each of the cost categories to the one cost object you consider most appropriate.