11. Cost objects may be:
A. Products.
B. Processes.
C. Departments.
D. All of the other answers are correct.
12. Cost accumulation is used to:
A. Identify fixed and variable costs.
B. Identify and estimate opportunity costs.
C. Determine the cost of a particular cost object.
D. Set the selling price for a service.
13. Select the true statement from the following.
A. Only direct costs are assigned to cost objects.
B. The same cost may be assigned to more than one cost object.
C. General, selling, and administrative costs cannot be assigned to a cost object.
D. A given cost cannot be driven by more than one cost driver.
14. Which of the following is not an example of a cost object and its related cost driver?
A. Option A
B. Option B
C. Option C
D. Option D
15. Select the incorrect statement from the following.
A. It is better to be approximately right than precisely wrong.
B. Actual costs are useful for evaluating managerial performance.
C. Actual costs are not relevant in many decisions because actual costs cannot be determined until after the decision has been made.
D. When accumulating the cost of a specific cost object, the indirect costs are traced directly to the cost object.
16. Which of the following costs is most likely to be directly traceable to a specific department in a retail clothing store?
A. The cost of heating and air conditioning the department.
B. The cost of supplies.
C. The cost of commissions paid to the sales staff.
D. All of the other answers are correct.
17. A chair manufacturer makes custom chairs using hand tools, wood, glue, and varnish. Which of the following statements is true?
A. The costs of wood and glue would be treated as direct costs.
B. Wood, glue, and varnish would all be direct materials.
C. Wood would be accounted for as a direct cost, and glue and varnish as indirect costs.
D. The concepts of direct and indirect costs are not applicable here.
18. Managers of a supermarket are considering whether to add a new deli department. In reaching this decision, the managers should consider:
A. Direct costs only.
B. Neither direct nor indirect costs.
C. Both direct and indirect costs.
D. Indirect costs but not direct costs.
19. Northside Manufacturing Company has identified the following cost objects:
Cost Object 1: Determine the cost of operating the finishing department
Cost Object 2: Determine the cost of operating the factory
Cost Object 3: Determine the cost of a particular product made in June
With respect to these cost objects, the cost of the salary of the supervisor of the finishing department is directly traceable to cost objects:
A. 1 and 2.
B. 2 and 3.
C. 1 and 3.
D. 1, 2, and 3.
20. Cobalt Company management has identified the following cost objects:
Cost Object 1: Determine the cost of operating the finishing department
Cost Object 2: Determine the cost of operating the factory
Cost Object 3: Determine the cost of a particular product made in June
With respect to these cost objectives, how would rent paid by the finishing department for storage space be classified?
A. Option A
B. Option B
C. Option C
D. Option D
