exam 2 questions

Question 1

A cost not relevant to deciding whether to purchase a new machine is:

Answer 1

The Cost of the old machine

Question 2

Which of the following product situations is better suited to job order costing than to process costing?

Answer 2

The costs are easily traced to a specific product

Question 3

Factors in a decision problem that cannot be expressed in numerical terms are:

Answer 3

qualitative in nature

Question 4

Activity-based costing systems:

Answer 4

often reveal products that were under or over-costed by traditional costing systems or frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product

Question 5

Which statement is correct?

Answer 5

Activity-based cost systems are more accurate than traditional cost systems.

Question 6

A job order costing system is most likely used by which of the following?

Answer 6

an accounting firm specializing in tax returns

Question 7

In activity-based costing system, direct materials used would typically be classified as a:

Answer 7

unit-level cost

Question 8

ABC Production manufactures products X and Y and has been applying overhead on the basis of direct labor hours. Product X is a high-volume product and relatively simplistic in nature. Product Y is a low-volume product that requires a variety of complex manufacturing procedures.

What would an activity-based costing system likely disclose about products X and Y?

Answer 8

Product X was over costed and product Y was undercosted

Question 9

Which of the following is most likely to be a cost driver for a packaging and shipping activity?

Answer 9

Number of orders

Question 10

Manufacturing overhead:

Answer 10

is a pool of indirect production costs that must somehow be attached to each unit manufactured

Question 11

matching question

Question 12

Which of the following would activity-based costing most likely lead to?

Answer 12

Raising the sale price of low-column products

Question 13

Which of the following is a reason a company would implement activity-based costing?

Answer 13

They want to improve the data on which decisions are made.

Question 14

The cost of inventory owned by a company is considered a:

Answer 14

sunk cost

Question 15

Consider the following statements regarding traditional costing systems. Which of the statements is the most accurate?

Answer 15

Overhead costs are applied to products on the basis of volume-related measures and traditional costing systems tend to distort unit manufacturing costs when numerous goods are made that have widely varying production requirements

Question 16

Which if the following costs are relevant to a decision making situation?

Answer 16

the cost of special electrical wiring in an equipment acquisition decision

Question 17

Which of the following is not a qualitative decision that should be considered in an outsourcing decision?

Answer 17

relevant costs

Question 17

ABC Co.,is analyzing whether to expand operations by adding a new product line. Which of the following choices correctly identifies the costs that should be considered in this decision?

Answer 17

Opportunity costs only

Question 18

which of the following cost drivers would best be associated with the activity of a physician’s time in a medical clinic?

Answer 18

Physician minutes with a patient

Question 19

which of the following types of companies would most likely use process costing?

Answer 19

Textile manufacturers