Financial Accounting > QUESTIONS & ANSWERS > Chapter 2 An Introduction to Cost Terms and Purposes (All)

Chapter 2 An Introduction to Cost Terms and Purposes

Document Content and Description Below

Cost Accounting: A Managerial Emphasis, 16e (Horngren) Chapter 2 An Introduction to Cost Terms and Purposes 2.1 Objective 2.1 1) Which of the following would be considered an actual cost of a curre... nt period? A) The $25 of materials in a manufactured chair that is ready to be shipped to the customer B) The $22 of direct material cost per unit assumed in the actual budget of a manufacturer of chairs C) The expected cost of materials for a chair as a result of engineering specifications D) The average of historical material cost data for a chair manufactured in several past accounting periods Answer: A Diff: 2 Objective: 1 AACSB: Analytical thinking 2) The collection of cost data in an organized way, such as in various categories such as materials, labor, and manufacturing overhead, is called: A) cost application B) cost accumulation C) cost assignment D) cost reporting Answer: B Diff: 2 Objective: 1 AACSB: Analytical thinking 3) Budgeted costs are ________. A) the costs incurred this year B) the costs incurred last year C) planned or expected costs D) competitor's costs Answer: C Diff: 1 Objective: 1 AACSB: Analytical thinking 4) Cost assignment ________. A) includes future and arbitrary costs B) associates accumulated costs with certain cost objects C) is the same as cost accumulation D) is the difference between budgeted and actual costs Answer: B Diff: 1 Objective: 1 AACSB: Analytical thinking5) A cost system determines the cost of a cost object by ________. A) accumulating and then assigning costs B) accumulating costs C) assigning and then accumulating costs D) assigning costs Answer: A Diff: 1 Objective: 1 AACSB: Analytical thinking 6) A cost object is anything for which a cost measurement is desired. Answer: TRUE Diff: 1 Objective: 1 AACSB: Analytical thinking 7) Costs are accounted for in two basic stages: assignment followed by accumulation. Answer: FALSE Explanation: Costs are accounted for in two basic stages: accumulation followed by an assignment. Diff: 1 Objective: 1 AACSB: Analytical thinking 8) An actual cost is the cost incurred–a historical or past cost. Answer: TRUE Diff: 1 Objective: 1 AACSB: Analytical thinking 9) Accountants define a cost as the amount of money spent on a resource. Answer: FALSE Explanation: A cost is a resource sacrificed or foregone and the requirement of "spending" or cash expended is not part of the definition. Diff: 1 Objective: 1 AACSB: Analytical thinking 10) A cost is a resource sacrificed or forgone to achieve a specific objective. Answer: TRUE Explanation: A cost object could be anything management wishes to determine the cost of, for example, a department. Diff: 1 Objective: 1 AACSB: Analytical thinking [Show More]

Last updated: 2 years ago

Preview 1 out of 66 pages

Buy Now

Instant download

We Accept: