Question : 71.Which of the following cost amounts can be found in : 1169335

 

 

71.Which of the following cost amounts can be found in a firm’s accounting records?   

A. opportunity costs

 

B. differential costs

 

C. incremental costs

 

D. sunk costs

 

 

 

 

72.A segment of a business probably should be discontinued if   

A. its common costs exceed its contribution margin.

 

B. its contribution margin exceeds its controllable fixed costs and its common costs.

 

C. it cannot produce a contribution margin.

 

D. it has a net loss.

 

 

 

 

73.Costs that are not directly traceable to a segment of a business are called   

A. sunk costs.

 

B. common costs.

 

C. fixed costs.

 

D. incremental costs.

 

 

 

 

74.When direct costing is used, cost of goods sold reflects   

A. both variable and fixed manufacturing costs.

 

B. variable manufacturing costs and variable selling and administrative expenses.

 

C. variable manufacturing costs only.

 

D. fixed manufacturing costs only.

 

 

 

 

75.On an income statement prepared with a direct costing approach, the excess of sales over the cost of goods sold, based on variable costs only, is referred to as   

A. the marginal gross profit on sales.

 

B. the manufacturing margin.

 

C. the marginal income on sales.

 

D. the contribution margin.

 

 

 

 

76.Fixed manufacturing costs are written off as current expenses of the period in which they occurred when using   

A. direct costing.

 

B. standard costing.

 

C. absorption costing.

 

D. differential costing.

 

 

 

 

77.Which inventory costing system is required by GAAP for financial reporting purposes?   

A. direct costing

 

B. absorption costing

 

C. standard costing

 

D. variable costing

 

 

 

 

78.Which of the following would not be relevant to a decision about whether to continue making a part or whether to buy it from an outside supplier?   

A. alternative uses for the plant where the part was produced if the part is purchased

 

B. a fee previously spent for design of the part

 

C. the variable costs of making the part

 

D. the number of additional employees needed to make the part

 

 

 

 

79.In making a decision to replace a machine, which of the following is not relevant?   

A. the training that workers will need in order to use the new machine

 

B. the variable costs of operating the new machine

 

C. the variable costs of operating the old machine

 

D. the book value of the old machine

 

 

 

 

80.Which of the following is not true of the direct costing procedure?   

A. Variable and fixed costs are considered as part of the cost of goods manufactured.

 

B. The cost of goods sold, based solely on variable costs, is subtracted from net sales to arrive at the manufacturing margin.

 

C. Variable selling expenses are deducted from the manufacturing margin.

 

D. Variable administrative expenses are deducted from the manufacturing margin.