Management Accounting_CH_2_MCQS

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Multiple Choice Quiz

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1

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All of the following would be classified as manufacturing overhead except
the:

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

wages of supervisor of the machining shop.

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

depreciation of the equipment in the machining
shop.

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

property taxes relating to the building that
houses the machining shop.

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

All of the above would be classified as
manufacturing overhead.

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2

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All of the following would be classified as product costs except:

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

the cost of air-conditioning the factory
foreman’s office.

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

depreciation on the machinery in the factory.

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

the cost of shipping units of product to one of
the company’s customers.

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

All of the above would be classified as product
costs.

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3

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Within the relevant range:

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

both total variable costs and total fixed costs
will remain constant.

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

both total variable costs and total fixed costs
fluctuate.

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

fixed costs per unit will remain constant and
variable costs per unit will fluctuate.

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

variable costs per unit will remain constant and
fixed costs per unit will fluctuate.

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4

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An analysis of a particular cost incurred in a factory revealed that the cost
is averages $0.40 per machine-hour at an activity level of 20,000 machine
hours and increases to an average of $0.50 per machine hour at an activity
level of 16,000 machine hours. Assuming that this activity is within the
relevant range, what is the total expected cost if the activity level is
17,300 machine hours?

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$1,600

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$6,960

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$8,000

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$9,000

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5

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Given the cost formula Y = $30,000 + $5X, total cost at an activity level of
16,000 units would be:

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$30,000.

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$46,000.

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$80,000.

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$110,000.

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6

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The Sante Company incurred $40,000 to ship 19,000 pounds and $34,000 to ship
16,000 pounds. If the company ships 18,000 pounds, its expected shipping
expense is closest to:

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$37,000.

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$37,895.

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$38,000.

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$38,250.

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7

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The following information was summarized from the records of the Muentes
Company for the first quarter of the year:

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The company’s gross margin for the quarter was:

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$280,000.

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$380,000.

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$420,000.

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$440,000.

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8

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The following information was summarized from the records of the Muentes
Company for the first quarter of the year:

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The company’s contribution margin for the quarter
was:

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$280,000.

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$380,000.

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$420,000.

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

$600,000.

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9

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Which one of the following costs would not be considered an indirect cost of
serving a particular customer at a delicatessen?

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

The salary of the manager.

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

The cost of the tables and chairs used to furnish
the restaurant.

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

The cost of the bread used to make the sub
sandwich that is ordered.

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

The cost of lighting and heating the restaurant.

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10

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An opportunity cost is:

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A).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

the difference between the total cost of one
alternative and the total cost of another alternative.

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B).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

the benefit forgone when one alternative is
selected rather than another.

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C).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

a cost that is saved by not adopting a given
alternative.

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D).png” alt=”http://highered.mcgraw-hill.com/olcweb/styles/shared/spacer.gif”>

a cost that continues to be incurred even when
there is no activity.

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