Reference no: EM1310579

Determined with absorption costing & direct costing.

1. The shift in the amount of manufacturing overhead costs applied to the mix of products produced that occurs when using a single cost driver rate as compared to using activity-based costing rates is known as:

a.under applied overhead

b.over applied overhead

c.cost absorption

d.cost distortion

2. An excess of cost of goods manufactured over cost of goods sold for the period represents:

a.an increase in gross profit.

b.a decrease in work in process inventory.

c.over applied manufacturing overhead.

d.an increase in finished goods inventory.

3. Which of the following will cause income determined with absorption costing to be higher than income determined with direct costing?

a.units produced equals units sold.

b.units produced is greater than units sold.

c.units produced is less than units sold.

d.income determined with absorption costing will always equal income determined with direct costing.

4. For the partial value chain functions given below, which sequence is correct?

a.design, production, marketing

b.marketing, production, distribution

c.research and development, production, distribution

d.customer service, marketing, distribution

5. An example of a cost likely to have an indirect relationship with products being manufactured:

a.oduction labor costs.

b.w material costs.

c.ectricity costs for packaging equipment.

d.ne of the above.

6.Costs may be allocated to a product or activity for many purposes, but care must be exercised when using allocated costs because:

a.rect costs identified with the product or activity may not be accurately assigned.

b.xed costs will change in total if the volume of activity changes.

c.l costs may not have been allocated to the product or activity.

d.bitrarily allocated costs may not behave in the way assumed in the allocation method.

7. When the high-low method of estimating a cost behavior pattern is used:

a.st and volume data must be reviewed for outliers.

b.e direct result of the high-low calculations is the fixed expense amount.

c. highest and lowest sales price and volume amounts are used in the calculation.

d.e resulting cost formula will explain total cost accurately for every value between the high and low volumes.