6. An example of a period cost is a(n):
Answer

A. selling cost

B. product cost

C. manufacturing cost

D. inventoriable cost

9. An example of a qualitative factor is:
Answer

A. an irrelevant cost

B. customer satisfaction

C. a relevant cost

D. increased income

13. Using ABC can help a firm:

A. reduce costs

B. increase the retail price of its products

C. decrease the wholesale prices of its products

D. reduce its workforce

14. The two methods for determining the cost of products are:

A. process and absorption costing

B. job order and consumer based costing

C. activity-based and process costing

D. job order and process costing

20. A typical example of a quantitative factor is:
Answer

A. the purchase price of a new machine

B. customer satisfaction

C. product quality

D. employee morale

21. Sunk costs:

A. can be changed by future actions only

B. can be changed by current actions only

C. can be changed by current or future actions depending on the situation

D. None of these answers is correct

22. Another term used for regression analysis is:

A. the least-squares method

B. the high-low metho

C. the engineering approach

D. scatter graphing

23. A method used to separate a mixed cost using experts or other professionals that are familiar with technical aspects of the activity and associated costs is the:

A. scatter graphing

B. high-low metho

C. engineering approach

D. regression analysis

24. Activity-based costing uses:

A. multiple cost pools to develop a single allocation rate

B. multiple cost pools to develop multiple allocation rates

C. a single cost pool to develop multiple allocation rates

D. a single cost pool to develop a single allocation rate

25. Manufacturing overhead allocated using ABC will:

A. be more accurate and representative of resources consumed than a traditional allocation method

B. always be lower than if a traditional allocation method is used

C. always be higher than if a traditional allocation method is used

D. generally be the same as when a traditional allocation method is used

27. Using another firm to make a product or part of a product, rather than making it internally, is an example of:

A. relevant costing

B. outsourcing

C. opportunity costing

D. special ordering

28. One benefit of using activity-based costing is that it:

A. views more costs as indirect costs and therefore they need to be allocated

B. is easier to use than more traditional methods

C. follows established GAAP guidelines and is therefore more accepted

D. reclassifies certain manufacturing overhead costs into direct components

29. There are several variations of the cost-volume-profit formula. One determines the required sales in dollars, while the other determines sales in units. The formula which determines required sales in dollars uses the:
Answer

A. break-even point in units

B. contribution margin ratio

C. contribution margin per unit

D. gross profit point

30. The break-even point is important to managers because it:

A. tells managers how far sales can decline before the company will incur a loss

B. determines the required sales in dollars to achieve a profit

C. is useful to owners and managers starting a business

D. Answers A and C are both correct

31. In a job order costing system the term “job” refers to a:

A. single unit

B. batch of units

C. process

D. Answers A and B are both correct

34. A product held for sale by a retailer is know as a(n):

A. common cost

B. liability

C. asset

D. indirect cost

35. The job order and process costing systems are:

A. not considered a part of management accounting

B. not interchangeable

C. based on GAAP

D. interchangeable

36. An appropriate cost allocation base should:

A. be correlated to the amount of administrative overhead incurred annually

B. be easy to identify, compute, and journalize

C. be correlated to the amount of overhead resources consumed

D. None of these answers is correct

38. Anita’s Art Gallery sells pictures for $50 each. She pays $20 for the print and frame, and pays the sales clerk 10% as a commission. She has $5,000 of monthly fixed costs as well. How many sales dollars in pictures does Anita need to sell to break even?

A. $12,500

B. $5,000

C. $20,000

D. $10,000