Cost Accounting Exam Solutions
Course Introduction
Cost Accounting is a course designed to introduce students to the principles, techniques, and procedures involved in determining and analyzing the costs associated with producing goods or providing services. The course covers topics such as cost classification, cost behavior, job order costing, process costing, standard costing, budgeting, variance analysis, and activity-based costing. By focusing on the use of cost information for internal planning, control, and decision-making, students learn how cost accounting aids managers in budgeting, evaluating operational efficiency, setting prices, and implementing strategies to achieve organizational objectives.
Recommended Textbook Managerial Accounting v. 2.1 by Kurt Heisinger and Joe Hoyle
Available Study Resources on Quizplus 13 Chapters
876 Verified Questions
876 Flashcards
Source URL: https://quizplus.com/study-set/3576 Page 2
Chapter 1: What Is Managerial Accounting
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/71029
Sample Questions
Q1) The term "product costs" refers exclusively to the direct labor used in the production process.
A)True
B)False
Answer: False
Q2) It is important to include small inexpensive items (such as glue or nails)related to production as direct materials,in order to calculate accurate product cost data.
A)True
B)False
Answer: False
Q3) All of the following are examples of managerial accounting information except: A)budget versus actual reports.
B)monthly income statement for each store.
C)monthly analysis of product profitability.
D)annual balance sheet prepared in accordance with U.S.GAAP.
E)None of the above.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: How Is Job Costing Used to Track Production
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/71028
Sample Questions
Q1) All of the following are examples of firms who would use process costing except:
A)A chewing gum manufacturer.
B)An ice cream manufacturer.
C)An oil refinery.
D)A plumbing contractor.
E)None of the answer choices is correct.
Answer: D
Q2) Records at Sandy Inc.indicate that indirect materials totaling $800 were requisitioned and placed in production.Which one of the following journal entries should Sandy record for this transaction?
A)Raw Materials Inventory 800
Work in Process Inventory 800
B)Manufacturing Overhead 800
Raw Materials Inventory 800
C)Raw Materials Inventory 800
Accounts Payable 800
D)Work in Process Inventory 800
Raw Materials Inventory 800
E)None of the answer choices is correct.
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/71027
Sample Questions
Q1) One important reason that managers allocate overhead costs to products is to promote the efficient use of resources.
A)True
B)False Answer: True
Q2) Both manufacturing and service organizations use activity-based costing.
A)True
B)False Answer: True
Q3) Refer to Exhibit 3-3.Using the direct method of allocating service department costs to production departments,how much of the Human Resource service department costs should be allocated to the Lamination Department?
A)$70,000
B)$150,000
C)$40,000
D)$50,000
E)None of the answer choices is correct.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: How Is Process Costing Used to Track
Production Costs
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/71026
Sample Questions
Q1) A process costing system is used by companies that produce similar or identical units of product.
A)True
B)False
Q2) Refer to Exhibit 4-2.What is the cost per gallon for the mixing process?
A)$5.88
B)$0.50
C)$0.48
D)$0.54
E)None of the answer choices is correct.
Q3) In a process costing system,the department where production begins will never have transferred-in costs from another department.
A)True
B)False
Q4) When units are transferred from one production process to another,the journal entry will include a debit and a credit to two different Work-in-Process Inventory accounts.
A)True
B)False
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/71025
Sample Questions
Q1) Variable costs such as direct labor and direct materials typically stay constant on a per unit basis.
A)True
B)False
Q2) Total costs at the low point were $340,000 when 30,000 units were produced and total costs at the high point were $400,000 when 40,000 units were produced.Using the high-low method,what are the estimated total costs for a production level of 36,000 units?
A)$400,000
B)$240,000
C)$160,000
D)$376,000
E)None of the answer choices is correct.
Q3) When using a graph of total mixed costs,the y-intercept represents:
A)unit mixed costs
B)total mixed costs
C)total variable costs
D)total fixed costs
E)None of the answer choices is correct.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/71024
Sample Questions
Q1) A change in the sales mix will always decrease the break-even point.
A)True
B)False
Q2) All of the following are assumptions required to perform break-even and target profit calculations except:
A)Costs can be separated into fixed and variable components.
B)Contribution margin ratio remains constant for each product,segment,or department.
C)Break-even points can only be calculated for single product companies.
D)Sales mix remains constant with changes in sales volume.
E)None of the answer choices is correct.
Q3) All of the following are steps used to find the target profit for companies that incur income taxes except:
A)convert the desired target profit after taxes to target profit before taxes.
B)determine the desired target profit after taxes.
C)convert the desired target profit before taxes to target profit after taxes.
D)use the target profit before taxes to calculate target profit in units or in sales dollars.
E)None of the answer choices is correct.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
Available Study Resources on Quizplus for this Chatper
76 Verified Questions
76 Flashcards
Source URL: https://quizplus.com/quiz/71023
Sample Questions
Q1) Individual product profitability will vary depending on which allocation method is chosen to allocate joint costs.
A)True
B)False
Q2) Allocated fixed costs are easily traceable to individual products.
A)True
B)False
Q3) In which of the following cases is a customer most likely to be dropped?
A)When the customer's variable costs are more than its total fixed costs.
B)When the customer's avoidable fixed costs are more than its contribution margin.
C)When the customer's total fixed costs are more than its contribution margin.
D)When the customer's contribution margin is more than its avoidable fixed costs.
E)None of the answer choices is correct.
Q4) One of the factors to consider when evaluating special orders is the impact that special pricing will have on long-run pricing with existing customers.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: How Is Capital Budgeting Used to Make Decisions
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/71022
Sample Questions
Q1) If the IRR of a new machine investment proposal is 10% when the company's required rate of return is 18%,then the best decision would be to accept the investment.
A)True
B)False
Q2) The payback period is typically stated :
A)in days,months,or years.
B)as a percent.
C)as a dollar amount.
D)in the same format as the required rate of return.
E)None of the answer choices is correct.
Q3) Most managers use spreadsheets to calculate the internal rate of return for an investment proposal.
A)True
B)False
Q4) The payback method of evaluating long-term investments is the most popular method used by managers.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: How Are Operating Budgets Created
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/71021
Sample Questions
Q1) The first line that appears on the direct labor budget is:
A)direct labor hours per unit.
B)projected sales in units.
C)units to be produced.
D)quantity of beginning direct materials ending inventory.
E)None of the answer choices is correct.
Q2) In general,the budgeted income statement is probably the most carefully scrutinized component of the master budget.
A)True
B)False
Q3) All of the following appear on the manufacturing overhead budget except:
A)direct materials cost per unit.
B)indirect materials cost per unit.
C)indirect labor cost per unit.
D)total variable overhead costs.
E)None of the answer choices is correct.
Q4) A direct labor budget is regarded as the starting point for the master budget.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/71020
Sample Questions
Q1) Which of the following could be indicated by the fixed overhead production volume variance?
A)Labor rates were lower than expected.
B)A higher mix of unskilled workers were utilized.
C)Raw materials were of lower quality than expected.
D)The quantity of units produced was different than expected.
E)None of the answer choices is correct.
Q2) Refer to Exhibit 10-5.What is the variable overhead efficiency variance for the product testing activity?
A)$8,000 favorable
B)$8,000 unfavorable
C)$3,800 unfavorable
D)$3,800 favorable
E)None of the answer choices is correct.
Q3) The labor rate variance is defined as the difference between actual costs for direct labor and budgeted costs based on the standards.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/71019
Sample Questions
Q1) Refer to Exhibit 11-1.Using the segmented income statements,what is the profit margin ratio for the Bikes Division (to the nearest tenth of a percent)?
A)13.5
B)41.7%
C)22.5%
D)58.3%
E)None of the answer choices is correct.
Q2) Most organizations use only residual income for performance measurement because of the weaknesses associated with using return on investment (ROI).
A)True
B)False
Q3) Refer to Exhibit 11-4.What is the ROI for the Chair Division (rounded to the nearest tenth of a percent)?
A)66.7%
B)14.0%
C)33.3%
D)9.3%
E)None of the answer choices is correct.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: How Is the Statement of Cash Flows Prepared and Used
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/71018
Sample Questions
Q1) During Benson Company's most recent fiscal year,beginning plant assets,net of depreciation,totaled $150,000,and ending plant assets totaled $187,500.Depreciation expense of $10,500 and a loss on sale of equipment of $1,125 was reported on the income statement.The company purchased plant assets for $60,050 during the year.How much will be reported as cash received from the sale of equipment in the investing activities section of the statement of cash flows?
A)$22,550
B)$10,925
C)$21,425
D)$36,375
E)None of the answer choices is correct.
Q2) The issuance of common stock would be included in the financing activities section when preparing a statement of cash flows.
A)True
B)False
Q3) Most companies prefer to use the indirect method when preparing a statement of cash flows.
A)True
B)False
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
Available Study Resources on Quizplus for this Chatper
62 Verified Questions
62 Flashcards
Source URL: https://quizplus.com/quiz/71017
Sample Questions
Q1) All of the following are measures used in the balanced scorecard except:
A)external business process.
B)customer.
C)learning and growth.
D)internal business process.
E)None of the answer choices is correct.
Q2) A trend percentage is calculated as the current year divided by the base year.
A)True
B)False
Q3) Refer to Exhibit 13-1.What is the debt to assets ratio for 2016 (rounded to two decimal places)?
A)0.30
B)0.50
C)2.00
D)2.05
E)None of the answer choices is correct.
Q4) The price-earnings ratio measures the premium investors are willing to pay for a company's stock relative to its earnings.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15