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Principles of Cost Accounting

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1. At a plant where car doors are manufactured, all of the following would be classified as direct labor except: a. Machinists. b. Assembly workers. c. Supervisor. d. Painters. ANSWER: c RATI... ONALE: Maintenance workers, while integral to the manufacturing process as the because they do not actually add value to the product. Machinists, asse manufacture of a car door. POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: PRIN.EDWA.16.1 – Introduction ACCREDITING STANDAR DS: AACSB Reflective Thinking ACCT.AICPA.FN.03 – Measurement BUSPROG.06 – Reflective Thinking IMA-Cost Management OTHER: Bloom’s: Understanding 2. Wages of the following personnel would be classified as indirect labor except the: a. painter. b. supervisor. c. fork lift driver. d. plant janitor. ANSWER: a RATIONALE: The machinist would most likely be a direct laborer. The supervisor, fork process, do not add value to the goods being produced. POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: PRIN.EDWA.16.1 – Introduction ACCREDITING STANDAR DS: AACSB Reflective Thinking ACCT.AICPA.FN.03 – Measurement BUSPROG.06 – Reflective Thinking IMA-Cost Management OTHER: Bloom’s: Understanding 3. All of the following are characteristics of hourly wage plans except: a. They provide no extra recognition for doing more than the minimum required. b. They are easy to apply. c. They establish a definite rate per hour for each employee. d. They encourage employees to sacrifice quality in order to maximize earnings. ANSWER: d RATIONALE: Hourly wage plans pay a fixed rate per hour, so they are easy to apply, b required, nor do they encourage employees to work so fast as to sacrific POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: PRIN.EDWA 16.14 – LO 3:1 ACCREDITING STANDAR DS: AACSB Reflective Thinking ACCT.AICPA.FN.03 – Measurement BUSPROG.06 – Reflective Thinking IMA-Cost Management OTHER: Bloom’s: Understanding 4. A wage plan based solely on an employee’s quantity of production is known as a(n): a. Modified wage plan. b. Hourly-rate plan. c. Incentive wage plan. d. Piece-rate plan. ANSWER: d RATIONALE: A piece-rate plan bases an employee’s earnings strictly POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: PRIN.EDWA 16.14 – LO 3:1 ACCREDITING STANDARDS: AACSB Analytic ACCT.AICPA.FN.03 – Measurement BUSPROG.03 – Analytic IMA-Cost Management OTHER: Bloom’s: Remembering [Show More]

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