Question :
Multiple Choice Questions
1.Cost objects may be:
A. Products.
B. Services.
C. Departments.
: 1257116
Multiple Choice Questions
1.Cost objects may be:
A. Products.
B. Services.
C. Departments.
D. All of these answers are correct.
2.Cost accumulation is used to:
A. Determine the cost of a particular cost object.
B. Identify and estimate opportunity costs.
C. Identify fixed and variable costs.
D. Set the selling price for a service.
3.Select the false statement from the following.
A. Only direct costs are traced 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 can be driven by more than one cost driver.
4.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
5.Select the incorrect statement from the following.
A. The difference between a direct cost and an indirect cost is that the direct cost is physically present in the cost object.
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 allocated to the cost object.
6.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.
B. The cost of supplies.
C. The cost of the department manager’s salary.
D. Rent on the store building.
7.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.
8.Managers of a discount store chain are considering whether to add a new auto service department. In reaching this decision, the managers should consider:
A. Direct costs only.
B. Both direct and indirect costs.
C. Neither direct nor indirect costs.
D. Indirect costs but not direct costs.
9.Southeast Manufacturing Company has identified the following cost objects:Cost Object 1: The cost of operating the finishing departmentCost Object 2: The cost of a particular product made in JuneCost Object 3: The cost of operating the factoryWith 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.
10.Cobalt Company management has identified the following cost objects:Cost Object 1: The cost of operating the finishing departmentCost Object 2: The cost of operating the factoryCost Object 3: The cost of a particular product made in JuneWith 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
