managerial acct chapter 1 multiple choices

23 terms by jecheverria07

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For a lamp manufacturing company, the cost of the insurance on its vehicles that deliver lamps to customers is best described as a:

period cost

Manufacturing overhead consists of:

all manufacturing costs, except direct materials and direct labor.

Which of the following should NOT be included as part of manufacturing overhead at a company that makes office furniture?

sheet steel in a file cabinet made by the company.

Which of the following costs would not be included as part of manufacturing overhead?

Insurance on sales vehicles.

Conversion cost consists of which of the following?

Direct labor and manufacturing overhead cost.

The advertising costs that Pepsi incurred to air its commercials during the Super Bowl can best be described as a:

fixed cost.

Each of the following would be a period cost except:

depreciation of a machine used in manufacturing.

Which of the following costs is an example of a period rather than a product cost?

Wages of salespersons.

Which of the following would be considered a product cost for external financial reporting purposes?

Cost of sand spread on the factory floor to absorb oil from manufacturing machines.

Which of the following would NOT be treated as a product cost for external financial reporting purposes?

Advertising expenses.

The salary of the president of a manufacturing company would be classified as which of the following?

period cost

Conversion costs do NOT include:

direct materials

Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the:

total cost per unit will decrease.

Variable cost:

remains constant on a per unit basis as the number of units produced increases.

Which of the following statements regarding fixed costs is incorrect?

Expressing fixed costs on a per unit basis usually is the best approach for decision making.

The salary paid to the production manager in a factory is:

part of conversion cost.

Within the relevant range, variable cost per unit will:

remain constant.

The term "relevant range" means the range of activity over which:

the assumptions about fixed and variable cost behavior are reasonably valid.

An example of a committed fixed cost is:

property taxes on the factory building.

In describing the cost formula equation Y = a + bX, which of the following statements is correct?

"a" is the fixed component.

Which one of the following costs should NOT be considered a direct cost of serving a particular customer who orders a customized personal computer by phone directly from the manufacturer?

the cost of leasing a machine on a monthly basis that automatically tests hard disk drives before they are installed in computers.

Which of the following costs is often important in decision making, but is omitted from conventional accounting records?

Opportunity cost.

When a decision is made among a number of alternatives, the benefit that is lost by choosing one alternative over another is the:

opportunity cost.

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