Chapter 2 assignment questions Flashcards
The cost of beginning work in process plus the total manufacturing costs for the current period is the cost of goods manufactured.
True False
false
Fixed costs are costs that remain the same per unit regardless of changes in the activity level
true or false
false
Both direct and indirect materials may physically become part of the finished product
true or false
true
Product costs are costs that are a necessary and integral part of producing the finished product.
true or false
true
Raw materials inventory is not an asset until it is used to make a product
true or false
false
The high-low method is a quick means of separating fixed and variable costs
true or false
true
Raw materials are equal to direct materials
true or false
false
Manufacturing costs that cannot be classified as direct material or direct labour are classified as operating expenses
true or false
false
What the high-low method may lack in precision, it makes up for in efficiency and ease of use.
true or false
true
If the ending work in process inventory is less than the beginning work in process inventory, then the cost of goods manufactured will be less than total manufacturing costs for the period
true or false
false
n which of the following categories do indirect materials belong?
Product Cost
Manufacturing Overhead
Period Cost
all of them bruv
Which one of the following represents a period cost?
a) company advertisement
b) depreciation of plant equipment
c) production manager’s salary
d) direct materials
a) company advertisement
Which of the following would most likely be viewed as indirect materials?
a) ball bearings associated with an industrial tractor wheel
b) axle grease associated with the suspension of a new car
c) new tires for a commercial truck
d) cost of boring a cylinder in assembly
b) axle grease associated with the suspension of a new car
Which of the following is considered manufacturing overhead?
a) depreciation on the press that moulds the plastic into work in process
b) the line worker’s Christmas bonus designated by management
c) tools that were originally utilized for production but are currently being used by management to fix a copier in the upstairs corporate office
d) the courier charge for delivering a new ball bearing joint for a robotic paint arm
a) depreciation on the press that moulds the plastic into work in process
Which of the following are period costs?
a) workers wages in the shipping department
b) factory workers wages paid for statutory holidays
c) workers wages in the plant maintenance department
d) workers wages on an assembly line
a) workers wages in the shipping department
Which of the following is true? (wtf is this question)
a) Within the relevant range a valid argument can be made for the assumption of linearity of variable costs.
b) At the upper and lower limits of the relevant range of company activity, linearity of variable c) costs is a given.
c) The relevant range is reflective of the relevant range of products a company offers to its customers.
d) Fixed costs vary in total within the relevant range.
a) Within the relevant range a valid argument can be made for the assumption of linearity of variable costs.
Examples of fixed costs include all but one of the following:
a) cost of factory rent for the 12 month contract term.
b) cost of Janet’s apartment rent during her 3rd year of university.
c) cost of a car rental which includes a fee per km driven.
d) a one-week rental of a carpet cleaning machine.
c) cost of a car rental which includes a fee per km driven.
Which of the following would most likely be considered direct labour?
a) a worker installing components in a computer
b) a maintenance worker
c) a security guard
d) a sales person
a) a worker installing components in a computer
Fees for office telephones are
a) fixed period costs.
b) mixed period costs.
c) variable period costs.
d) direct, fixed, or variable period costs.
b) mixed period costs.
A curvilinear relationship between variable costs and changes in activity levels suggests what? (bruh what)
a) A strictly linear relationship between fixed costs and activity levels is implausible.
b) A strictly curvilinear relationship between changes in activity levels and variable costs is possible only within the relevant range.
c) Since the relationship between activity levels and variable costs is linear within the relevant range and less linear at lower and higher levels outside the relevant range, the straight-line (linear) relationship takes on a curvature in the real world.
d) None of the above.
c) Since the relationship between activity levels and variable costs is linear within the relevant range and less linear at lower and higher levels outside the relevant range, the straight-line (linear) relationship takes on a curvature in the real world.
The high-low method
a) is a useful means of predicting the highest cost a company will incur in the operating period.
b) is a useful means of separating fixed and variable elements from a mixed cost.
c) is more time-consuming than the scatter diagram method.
d) is more complex than the use of linear regression analysis.
b) is a useful means of separating fixed and variable elements from a mixed cost.
Ending finished goods inventory
a) appears on a cost of goods manufactured schedule.
b) for a manufacturing company is equivalent to merchandise inventory for a merchandising company.
c) represents the cost of completed goods available for sale to customers.
d) is calculated by adding beginning finished goods inventory to cost of goods sold and subtracting cost of goods manufactured.
b) for a manufacturing company is equivalent to merchandise inventory for a merchandising company.
Oriole Combines, Inc. has $4400 of finished goods inventory as of December 31, 2020.
If beginning finished goods inventory was $1600 and cost of goods sold was $7500, how much would Oriole report for cost of goods manufactured?
a) $13500
b) $1500
c) $10300
d) $5900
c) $10300
What amount is given by the sum of direct materials, direct labour, and manufacturing overhead incurred?
a) total cost of work in process
b) cost of goods available for sale
c) total manufacturing costs
d) cost of goods manufactured
c) total manufacturing costs
