Question 1

The goal in allocating a cost to cost objects is to achieve a rational allocation.

Accepted Answer

A) True 
 B)False

Question 2

Assume that factory depreciation for the year is $240,000.What problem could result from dividing that amount by 12 and assigning $20,000 in depreciation to the products made each month?

Accepted Answer

Answers will vary
Volume of pr...

Question 3

How a particular cost behaves (fixed versus variable)is dependent of whether the cost is classified as direct or indirect.

Accepted Answer

A) True 
 B)False

Question 4

Which of the followings statements is correct regarding direct and indirect costs?

Accepted Answer

A)   Direct costs cannot easily be traced to a cost object,whereas indirect costs can be easily traced to a cost object.
B)   Direct costs can be easily traced to a cost object,whereas indirect costs cannot be easily traced to a cost object.
C)   Direct costs are always relevant to a particular cost decision,whereas indirect costs are never relevant to a cost decision.
D)   Direct costs are never relevant to a particular cost decision,whereas indirect costs are always relevant to a cost decision.E) B) and C)
F) A) and C)

Question 5

Vanguard Company makes three products,M,N,and P,which come from a joint process.The joint costs for each batch of the products are: $80,000 for direct materials,$40,000 for direct labor,and $30,000 for indirect costs (overhead).Each batch produces 10,000 pounds of product M with a market value of $6 per pound;5,000 pounds of N with a market value of $12 per pound;and 9,000 pounds of P with a market value of $10 per pound.
Required:
1)Determine the total amount of joint cost allocated to each of the products,assuming that the allocation is based on the weight of products produced.(Do not round your intermediate calculations.Round each of your final answers to the nearest whole dollar. )2)Determine the total amount of joint cost allocated to each of the products,assuming that the allocation is based on the market value of the products.(Do not round your intermediate calculations.Round each of your final answers to the nearest whole dollar. )

Accepted Answer

1)Total quantity = 10,000 + 5,000 + 9,00...

Question 6

Sometimes,volume-based cost drivers are used to allocate fixed indirect costs.

Accepted Answer

A) True 
 B)False

Question 7

During the current year,Kemp Cons

Accepted Answer

A)   Number of homes built during the month.
B)   Number of months in the year.
C)   Number of homes built during the year.
D)   Size of the home.E) B) and C)
F) All of the above

Question 8

Which of the following regarding direct costs is a correct statement?

Accepted Answer

A)   Direct costs are always fixed costs.
B)   Direct costs are always variable costs.
C)   Direct costs are easily traced to cost objects.
D)   Direct costs are never selling and administrative expenses.E) None of the above
F) A) and D)

Question 9

Custom Quilters makes decorative comforters,quilted garments,and other products in a small sewing factory.The company expects to make 2,000 comforters during the current year.With respect to the comforters,how would the supervisory salaries be classified?

Accepted Answer

A)   Direct and variable
B)   Direct and fixed
C)   Indirect and variable
D)   Indirect and fixedE) None of the above
F) All of the above

Question 10

The primary advantage of establishing cost pools is reducing the number of individual cost allocations that are made.

Accepted Answer

A) True 
 B)False

Question 11

Indicate whether each of the following statements is

Accepted Answer

Joint costs include materials,labor and ...

Question 12

Inaccurate allocation of joint costs to the individual products could cause an unprofitable product to appear to be profitable.

Accepted Answer

A) True 
 B)False

Question 13

The method of allocating service department costs that allocates the costs to both service departments and operating departments is the:

Accepted Answer

A)   direct method.
B)   indirect method.
C)   weighted average method.
D)   step method.E) A) and C)
F) C) and D)

Question 14

Select the

Accepted Answer

A)   Only direct costs are traced to cost objects.
B)   The same cost may be assigned to more than one cost object.
C)   General,selling,and administrative costs cannot be assigned to a cost object.
D)   A given cost can be driven by more than one cost driver.E) C) and D)
F) B) and D)

Question 15

Once indirect costs are pooled,they must remain pooled for all allocations.

Accepted Answer

A) True 
 B)False

Question 16

An allocation base has a cause-and-effect relationship with a cost object.

Accepted Answer

A) True 
 B)False

Question 17

At the beginning of the year,Barcroft Co.estimated that its total annual fixed overhead costs would amount to $25,000.Further,Barcroft estimated that its volume of production would be 2,000 units of product.Based on these estimates,Barcroft computed a predetermined overhead rate that was used to allocate overhead costs to the products made during the year.As predicted,actual fixed overhead costs did amount to $25,000.However,actual volume of production amounted to 2,200 units of product.Based on this information alone:

Accepted Answer

A)   Products were costed accurately during the year.
B)   Products were overcosted during the year.
C)   Products were undercosted during the year.
D)   The answer cannot be determined from the information provided.E) C) and D)
F) B) and D)

Question 18

Select the incorrect statement from the following.

Accepted Answer

A)   The difference between a direct cost and an indirect cost is that a direct cost relates to a given cost object while an indirect cost does not.
B)   Actual costs are useful for evaluating managerial performance.
C)   Actual costs are not relevant in many decisions because actual costs cannot be determined until after the decision has been made.
D)   When accumulating the cost of a specific cost object,the indirect costs are allocated to the cost object.E) A) and C)
F) All of the above

Question 19

Which of the following is an appropriate cost driver for allocating indirect costs to a human resources department in a service company?

Accepted Answer

A)   Number of employees
B)   Number of customers
C)   Square footage of office space
D)   Either number of employees or square footage of office space depending on the nature of the indirect costE) B) and D)
F) A) and D)

Question 20

Blankenship Company operates a factory with two departments,X and Y.The utilities to heat and light the manufacturing facility would most likely be allocated to departments X and Y on the basis of:

Accepted Answer

A)   Square footage occupied.
B)   Machine hours.
C)   Direct labor hours.
D)   Units sold.E) A) and B)
F) None of the above

Exam 4: Cost Accumulation,Tracing,and Allocation

Correct Answer
verified
1)Total quantity = 10,000 + 5,000 + 9,00...
View Answer

The method of allocating service department costs that allocates the costs to both service departments and operating departments is the:

Correct Answer
verified

Assume that factory depreciation for the year is $240,000.What problem could result from dividing that amount by 12 and assigning $20,000 in depreciation to the products made each month?

Correct Answer
verified
Answers will vary
Volume of pr...
View Answer

Select the incorrect statement from the following.

Correct Answer
verified

Which of the following regarding direct costs is a correct statement?

Correct Answer
verified

How a particular cost behaves (fixed versus variable)is dependent of whether the cost is classified as direct or indirect.

Correct Answer
verified

The primary advantage of establishing cost pools is reducing the number of individual cost allocations that are made.

Correct Answer
verified

An allocation base has a cause-and-effect relationship with a cost object.

Correct Answer
verified

During the current year,Kemp Cons

Correct Answer
verified

Sometimes,volume-based cost drivers are used to allocate fixed indirect costs.

Correct Answer
verified

Which of the following is an appropriate cost driver for allocating indirect costs to a human resources department in a service company?

Correct Answer
verified

Inaccurate allocation of joint costs to the individual products could cause an unprofitable product to appear to be profitable.

Correct Answer
verified

Custom Quilters makes decorative comforters,quilted garments,and other products in a small sewing factory.The company expects to make 2,000 comforters during the current year.With respect to the comforters,how would the supervisory salaries be classified?

Correct Answer
verified

Blankenship Company operates a factory with two departments,X and Y.The utilities to heat and light the manufacturing facility would most likely be allocated to departments X and Y on the basis of:

Correct Answer
verified

Once indirect costs are pooled,they must remain pooled for all allocations.

Correct Answer
verified

Which of the followings statements is correct regarding direct and indirect costs?

Correct Answer
verified

Select the

Correct Answer
verified

The goal in allocating a cost to cost objects is to achieve a rational allocation.

Correct Answer
verified

Correct Answer
verified

Indicate whether each of the following statements is

Correct Answer
verified
Joint costs include materials,labor and ...
View Answer

Exam 4: Cost Accumulation,Tracing,and Allocation

Correct Answerverified1)Total quantity = 10,000 + 5,000 + 9,00...View AnswerShow Answer

The method of allocating service department costs that allocates the costs to both service departments and operating departments is the:

Correct AnswerverifiedShow Answer

Assume that factory depreciation for the year is $240,000.What problem could result from dividing that amount by 12 and assigning $20,000 in depreciation to the products made each month?

Correct AnswerverifiedAnswers will varyVolume of pr...View AnswerShow Answer

Select the incorrect statement from the following.

Correct AnswerverifiedShow Answer

Which of the following regarding direct costs is a correct statement?

Correct AnswerverifiedShow Answer

How a particular cost behaves (fixed versus variable)is dependent of whether the cost is classified as direct or indirect.

Correct AnswerverifiedShow Answer

The primary advantage of establishing cost pools is reducing the number of individual cost allocations that are made.

Correct AnswerverifiedShow Answer

An allocation base has a cause-and-effect relationship with a cost object.

Correct AnswerverifiedShow Answer

During the current year,Kemp Cons

Correct AnswerverifiedShow Answer

Sometimes,volume-based cost drivers are used to allocate fixed indirect costs.

Correct AnswerverifiedShow Answer

Which of the following is an appropriate cost driver for allocating indirect costs to a human resources department in a service company?

Correct AnswerverifiedShow Answer

Inaccurate allocation of joint costs to the individual products could cause an unprofitable product to appear to be profitable.

Correct AnswerverifiedShow Answer

Custom Quilters makes decorative comforters,quilted garments,and other products in a small sewing factory.The company expects to make 2,000 comforters during the current year.With respect to the comforters,how would the supervisory salaries be classified?

Correct AnswerverifiedShow Answer

Blankenship Company operates a factory with two departments,X and Y.The utilities to heat and light the manufacturing facility would most likely be allocated to departments X and Y on the basis of:

Correct AnswerverifiedShow Answer

Once indirect costs are pooled,they must remain pooled for all allocations.

Correct AnswerverifiedShow Answer

Which of the followings statements is correct regarding direct and indirect costs?

Correct AnswerverifiedShow Answer

Select the

Correct AnswerverifiedShow Answer

The goal in allocating a cost to cost objects is to achieve a rational allocation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Indicate whether each of the following statements is

Correct AnswerverifiedJoint costs include materials,labor and ...View AnswerShow Answer

Correct Answer
verified
1)Total quantity = 10,000 + 5,000 + 9,00...
View Answer

Correct Answer
verified

Correct Answer
verified
Answers will vary
Volume of pr...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
Joint costs include materials,labor and ...
View Answer