testbankgo.eu · Web viewBeginning inventory finished goods 15,000 Cost of goods available for sale $139,800 Less: Ending inventory finished goods 17,100 122,700 Gross margin $ 43,200

CHAPTER 2: BASIC COST MANAGEMENT CONCEPTS

1. Thecostmanagementinformationsystemisprimarilyconcernedwithproducingoutputsforinternalusersusinginputsandprocessesneededtosatisfymanagementobjectives.a. Trueb. False

ANSWER: True

2. TheFinancialaccountinginformationsystemprovidesinformationforthreebroadobjectives:costingservicesandproducts,planningandcontrol,anddecisionmaking.a. Trueb. False

ANSWER: False

3. Thevaluechainisthesetofactivitiesrequiredtodesign,develop,produce,market,deliverandprovidepost-salesservicefortheproductsandservicessoldtocustomers.a. Trueb. False

ANSWER: True

4. Costmanagementinformationbenefitsproduction,marketing,andcustomerservicesystemsaswellasbeingacrucialpartofmanagerialdecisionmaking.a. Trueb. False

ANSWER: True

5. Anintegratedcostmanagementsystemreceivesinformationfromandprovidesinformationtoonlythecontrollerofacompany.a. Trueb. False

ANSWER: False

6. Costassignmentisoneofthekeyprocessesofthecostaccountingsystem.a. Trueb. False

ANSWER: True

7. Costisthecashorcashequivalentvaluesacrificedforgoodsandservicesthatareexpectedtobringacurrentorfuturelosstothecompany.a. True

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From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowenb. False

ANSWER: False8. Thethreemethodsofcostassignmentaredirecttracing,drivertracing,andallocation.

a. Trueb. False

ANSWER: True

9. Assigningcostsaccuratelytocostobjectsisoflowpriority.Accuracyisnotevaluatedbasedonknowledgeofsomeunderlying“truecost”.a. Trueb. False

ANSWER: False

10. Themostpreciseofthethreemethodsofcostassignmentisdirecttracingsinceitreliesonobservablecausalrelationships.a. Trueb. False

ANSWER: True

11. Servicesdifferfromtangibleproductsonthreedimension:intangibility,perishability,andinseparability.a. Trueb. False

ANSWER: True

12. Intangibleproductsaregoodsproducedbyconvertingrawmaterialintofinishedproductsthroughtheuseoflaborandcapitalinputs.a. Trueb. False

ANSWER: False

13. Productioncostsarecostsassociatedwithmanufacturinggoodsorprovidingservicesandareclassifiedasdirectmaterials,directlabor,andoverhead.a. Trueb. False

ANSWER: True

14. Conversioncostisthesumofdirectmaterialsanddirectlaborcostandprimecostisthesumofdirectlaborandoverheadcost.a. Trueb. False

ANSWER: False


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen15. Produ

ctcostsincludeproduction,marketing,andcustomerservice,andareusedforstrategicdesigndecisionsandtacticalprofitabilityanalysis.a. Trueb. False

ANSWER: True

16. Theincomestatementpreparedforexternalpartiesisfrequentlyreferredtoasabsorption-costingincome,orfullcostingincome.a. Trueb. False

ANSWER: True

17. Thecostofgoodssoldisthecostofdirectmaterials,directlaborandoverheadattachedtotheunitssold.a. Trueb. False

ANSWER: True

18. Thecostofgoodsmanufacturedrepresentsthetotalmanufacturingcostofgoodscompletedduringthecurrentperiod.a. Trueb. False

ANSWER: True

19. Workinprocessconsistsofallpartiallycompletedunitsfoundinproductionatagivenpointintime.a. Trueb. False

ANSWER: True

20. Grossmargin,alsocalledgrossprofit,isthedifferencebetweensalesandcostsofgoodssold.a. Trueb. False

ANSWER: True

21. Costmanagementsystemscanbebroadlyclassifiedastraditionaloractivitybased.a. Trueb. False

ANSWER: True


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen22. A

traditionalcostaccountingsystemassumesthatallcostscanbeclassifiedasfixedwithrespecttochangesintheunitsorvolumeproduced.a. Trueb. False

ANSWER: False

23. Theoverallobjectiveofanactivity-basedcostmanagementsystemistomanageactivitiestoreducecostsandimprovecustomervalue.a. Trueb. False

ANSWER: True

24. Thecostaccountingsystemthatemphasizestracingoverallocationiscalledanactivity-basedaccountingsystem.a. Trueb. False

ANSWER: True

25. Errorcostsarecostsassociatedwithmeasurementsrequiredbythecostmanagementsystemandmeasurementcostsarethecostsassociatedwithmakingpoordecisions.a. Trueb. False

ANSWER: False

26. Asubsystemoftheaccountinginformationsystemdesignedtosatisfycosting,controllinganddecisionmakingobjectivesiscalledthe system.

ANSWER: costmanagement

27. Thecostmanagementsubsystemdesignedtoprovideaccurateandtimelyfeedbackconcerningtheperformanceofmanagersrelative totheir control ofactivities is the informationsystem.

ANSWER: operationalcontrol

28. Theoverallobjectiveofaccountinginformationistoprovideinformationto .

ANSWER: users

29. Theresourcesgivenupthatareexpectedtobringacurrentorfuturebenefittotheorganizationarecalled__________.

ANSWER: costs




From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen30. Expiredcostsusedupinthegenerationofrevenuesarecalled .

ANSWER: expenses

31. Theleastaccuratebuteasiesttoapplymethodofcostassignmentisthe method.

ANSWER: allocation

32. meanstheconsumercannotsee,hear,feel,ortasteaservicebeforeitisbought.

ANSWER: Intangibility

33. aregenerallymaterialsnecessaryforproductionthatdonotbecomepartofthefinishedproductorarenotusedtoprovideaservice.

ANSWER: Supplies

34. Costsnecessarytomarketanddistributeaproductorserviceareoftenreferredtoasorder-__________andorder-__________costs.

ANSWER: getting;filling

35. Inpreparinganincomestatement, and costsareseparated.

ANSWER: production;nonproduction

36. Grossmarginisthedifferencebetween andthecostofgoodsorservicessold.

ANSWER: salesrevenues

37. incomeisthedifferencebetweengrossmarginandsellingandadministrativeexpenses.

ANSWER: Operating

38. Costmanagementsystemsaremadeupoftwosubsystems:the accountingsystemandthe controlsystem.

ANSWER: cost;operational

39. Generally,moremanagerialobjectivescanbemetwithanactivity-basedsystemthanwitha system.

ANSWER: traditional

40. Indecidingwhethertoimplementa(n) costmanagementsystem,managersmustevaluatethetrade-offbetweencostsofmeasurementandcostoferrors.

ANSWER: activity-based




From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen41. Thesetofinterrelatedpartsthatperformsoneormoreprocessestoaccomplishspecificobjectivesiscalleda(n):

a. costobjectiveb. systemc. activityd. costdriver

ANSWER: b

42. Theoverallobjectiveofaccountinginformationsystemsistoa. provideinformationtousers.b. managetheorganization.c. preparefinancialreports.d. reporttothegovernment.

ANSWER: a

43. Inanaccountinginformationsystem,whichofthefollowingisNOTatransformationprocess?a. collectingdatab. performancereportsc. analyzingdatad. summarizingdata

ANSWER: b

44. Whichofthefollowingisacostmanagementsubsystemdesignedtoassigncoststoindividualproductsandservicesandotherobjects,asspecifiedbymanagement?

a. financialaccountinginformationsystemb. operationalcontrolinformationsystemc. costaccountinginformationsystemd. alloftheabove

ANSWER: c

45. Inacompanythatsuppliesmuffinstobakeries,whichofthefollowingwouldbeconsideredaninput?a. deliveredmuffinsb. flourc. bakingd. noneofthese

ANSWER: b


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen46. Inacompanythatsuppliesmuffinstobakeries,whichofthefollowingwouldNOTbeconsideredaninput?

a. deliveredmuffinsb. flourc. eggd. oil

ANSWER: a

47. Inacompanythatsuppliesmuffinstobakeries,whichofthefollowingwouldNOTbeconsideredatransformingprocess?a. deliveredmuffinsb. bakingc. packagingd. mixing

ANSWER: a

48. Inacompanythatsuppliesmuffinstobakeries,whichofthefollowingwouldbeconsideredatransformingprocess?a. deliveredmuffinsb. bakingc. eggd. oil

ANSWER: b

49. Inacompanythatsuppliesmuffinstobakeries,deliveredmuffinstobakerieswouldbea(n)a. interrelatedpart.b. input.c. output.d. process.

ANSWER: c

50. Inanaccountinginformationsystem,theinputsareusuallya. financialstatements.b. analyzingdata.c. economicevents.d. performancereports.

ANSWER: c


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen51. Whi

chofthefollowingisacostmanagementsubsystemdesignedtoprovideaccurateandtimelyfeedbackconcerningtheperformanceofmanagersandothersrelativetotheirplanningandcontrolofactivities?

a. financialaccountinginformationsystemb. operationalcontrolinformationsystemc. costaccountinginformationsystemd. alloftheabove

ANSWER: b

52. Theaccountinginformationsubsystemthatisprimarilyconcernedwithproducingoutputsforexternalusersiscalled:a. costmanagementinformationsystemb. computersystemc. internalaccountingsystemd. financialaccountinginformationsystem

ANSWER: d

53. Highqualitycostmanagementsystemsshouldhaveanorganization-wideperspective.WhichofthefollowingwouldNOTbeabenefitofacostmanagementsystem?

a. increasesspeedbyignoringnon-financialinformationb. reducesduplicatedatastorageanduseofdatac. improvestimelinessofreportsd. increasestheefficiencyofgeneratingreliableandaccurateinformation

ANSWER: a

54. Whichofthefollowingisamajorsubsystemofthecostaccountinginformationsystem?a. ERPb. Operationalcontrolinformationsystemc. OLAPd. EDI

ANSWER: b

55. Acomputerizedinformationsystemthatstrivestoinputdataonceandtomakeitavailabletopeopleacrossthecompanyfordifferentpurposesiscalleda:

a. costmanagementinformationsystemb. enterpriseresourceplanningsystemc. internalaccountingsystemd. financialaccountinginformationsystem

ANSWER: b


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen56. A

costmanagementsubsystemdesignedtoprovideaccurateandtimelyfeedbackconcerningtheperformanceofmanagersandothersrelativetotheirplanningandcontrolactivitiesiscalledthe:

a. costaccountinginformationsystemb. financialaccountingsystemc. operationalcontrolinformationsystemd. taxreportingsystem

ANSWER: c

57. WhichofthefollowingisNOToneofthefeaturesofanoperationalcontrolinformationsystem?a. toassistincontinuousimprovementofallaspectsofthebusinessb. toimprovethevaluereceivedbycustomersc. toprovideproductcostinformationneededbymanagementd. toimproveprofitsbyimprovingvalue

ANSWER: c

58. WhichofthefollowingisNOTanobjectiveoftheoperationalcontrolsystem?a. increasingvaluetocustomersb. increasingprofitbyprovidingvaluec. Increasingpostpurchasecostsd. alloftheabove

ANSWER: c

59. Theresourcesgivenupthatareexpectedtobringacurrentorfuturebenefittotheorganizationarerepresentedby:a. Costsb. Expiredcostsc. Expensesd. Losses

ANSWER: a

60. Thecashorcashequivalentvaluesacrificedforgoodsandservicesthatareexpectedtobringacurrentorfuturebenefittotheorganizationis/arecalled:

a. Expensesb. Costc. Anactivityd. Aloss

ANSWER: b



61. Acostusedupintheproductionofrevenuesisa(n)a. unexpiredcost.b. loss.c. expense.d. asset.

ANSWER: c

62. Whichofthefollowingisanexampleofaloss?a. thecostofaproductdeliveredtoacustomerb. thecostofadeliveredadvertisingcampaignc. thecostofthepurchaseofequipmentd. thewrite-offofanobsoleteproduct

ANSWER: d

63. Whichofthefollowingisanexampleofanexpense?a. thecostofaproposedadvertisingcampaignb. thecostofaproductdeliveredtoacustomerc. thecostofthepurchaseofequipmentd. thewrite-offofanobsoleteproduct

ANSWER: b

64. Whichofthefollowingisanexampleofapossiblecostobject?a. aproductb. acustomerc. adepartmentd. alloftheabove

ANSWER: d

65. Traceabilityisafunctionofa. anindirectrelationshiptothecostobject.b. distortion.c. acausalrelationship.d. noneofthese.

ANSWER: c



66. Factorsthatcausechangesinresourceusage,activityusage,costsandrevenuesarecalleda. indirectcosts.b. drivers.c. assignments.d. costobjects.

ANSWER: b

67. Themostlikelymethodtoassignthecostofanassembly-linesupervisorwhentheassemblylineisthecostobjectisthe:

a. drivertracingmethodb. arbitrationmethodc. allocationmethodd. directtracingmethod

ANSWER: d

68. Whichcostassignmentmethodwouldlikelyassignthecostofheatinginaplantthatmakesbedsanddresserswhenthebedproductlineisthecostobject?

a. drivertracingb. directtracingc. allocationd. arbitration

ANSWER: c

69. Whichcostassignmentmethodwouldlikelyassignthecostofmaintenanceformachinesinadepartmentthatdoescuttingwhenthecuttingactivityisthecostobject?

a. drivertracingb. directtracingc. allocationd. arbitration

ANSWER: a

70. Whichofthefollowingexpensesincurredbyadepartmentstoreisadirectcostforthewomen'sshoedepartment?a. thesalespersons'commissionsinthewomen'sshoedepartmentb. thesalariesforindividualsworkingintheaccountingdepartmentc. theadvertisingexpensefortheservicedepartmentd. theallocatedrentexpensefortheclothingdepartment

ANSWER: a



71. Whichofthefollowingcostsincurredbyachairmanufacturerwouldbetracedtotheproductcostthroughdirecttracing?

a. thedepreciationonfactoryequipmentb. thesupervisor'ssalaryc. theinsuranceonthefactorybuildingd. thewoodworker'ssalary

ANSWER: d

72. Directcostsa. areincurredforthebenefitofthebusinessasawhole.b. wouldcontinueevenifaparticularproductwerediscontinued.c. arethosecoststhatcanbeeasilyandaccuratelytracedtoacostobject.d. canbeassignedtoproductsonlybyaprocessofallocation.

ANSWER: c

73. ThedirectcostsofoperatingacollegecomputercenterwouldNOTincludea. rentpaidforcomputers.b. afairshareofcollegeutilities.c. paperusedbythecenter.d. computerconsultants'salaries.

ANSWER: b

74. Whichofthefollowingmethodsofassigningcostsisbasedonconvenienceorsomeassumedlinkage,andreducestheoverallaccuracyofthecostassignments?

a. directtracingb. drivertracingc. allocationd. alloftheabove

ANSWER: c

75. WhichofthefollowingcostsincurredbyabusmanufacturerwouldNOTbedirectlyattributabletothefinishedproduct?

a. thewagespaidtoassembly-lineproductionworkersb. thetiresforbusesc. thewindshieldsforbusesd. thedepreciationonfactorybuilding

ANSWER: d





76. Theassignmentofindirectcoststocostobjectsisreferredtoas:a. Allocationb. Directtracingc. Physicalobservationd. Costmanagement

ANSWER: a

77. Whatisadisadvantageofassigningcostsevenlyoverallcostobjects?a. notallcostswillbeassignedb. totalcostswillbedistortedc. costsmaybedistortedbyconsumptionpatternsofothercostobjectsd. noneofthese

ANSWER: c

78. Theinsurancepaidonthefactoryisa. adirectcostifthecostobjectisthefactory.b. anindirectcostifthecostobjectistheproductproduced.c. couldbeeitheradirectcostoranindirectcost,dependingonthecostobject.d. alloftheabove.

ANSWER: d

79. WhichofthefollowingwouldNOTbeacostthatcouldbedirectlytracedtoacustompieceoffurniturebaseduponphysicalobservation?

a. thewoodandupholsterymaterialsthatareinthefinalpieceb. thedepreciationpaidonfactoryequipmenttc. helaboroftheworkerassemblingthepieceoffurnitured. thelaborofthewoodworkerwhofinishesthewoodofthepiece

ANSWER: b

80. Theprecisionofdrivertracingdependsupona. physicallyobservablerelationships.b. thestrengthofcausalrelationshipsdescribedbythedriver.c. allocationestimations.d. bothbandc.

ANSWER: b



81. IfphysicalobservationcanNOTbeusedtoidentifytheexactamountofresourcesconsumedbyacostobject,thenextbestapproachis

a. drivertracing.b. allocation.c. estimation.d. noneofthese.

ANSWER: a

82. Servicesdifferfromtangibleproductsinwhichofthefollowingdimensions?a. intangibilityb. inseparabilityc. perishabilityd. alloftheabove

ANSWER: d

83. Withregardstoproducts,perishabilitycanbedefinedasa. buyersofproductswhocannotsee,feel,hearortastetheproductbeforeitisbought.b. servicesthatcannotbestored.c. buyersandsellerswhomustbeindirectcontactforthesaletotakeplace.d. buyersoftheproductwhodonotneeddirectcontactwiththemanufactureroftheproduct.

ANSWER: b

84. Intangibilityofservicesmeansthata. productscannotbeseen,tasted,heardorfeltbeforethepurchase.b. productscannotbestored.c. exchangetakesplaceindirectcontact.d. bothaandc.

ANSWER: a

85. Anexampleofatangibleproduct,ratherthanaservice,wouldbea. housekeeping.b. insurancecoverage.c. paper.d. medicalexam.

ANSWER: c



86. Withregardtoservices,inseparabilitymeansthata. productscannotbestored.b. directcontactmusttakeplaceforanexchange.c. productshaveaphysicalpresence.d. noneoftheaboveapplytoinseparability.

ANSWER: b

87. Anexampleofaservice,ratherthanatangibleproduct,wouldbea. medicalexams.b. cloths.c. trucks.d. radios.

ANSWER: a

88. Whichofthefollowingisaserviceorganization?a. grocerystoreb. CPAfirmc. cattleranchd. departmentstore

ANSWER: b

89. Whichofthefollowingcostswouldbeincludedinvalue-chainproductcosts?a. researchanddevelopmentb. productionc. customerserviced. alloftheabove

ANSWER: d

90. Productvalue-chaincostsassistmanagersinmeetingwhichofthefollowingobjectives?a. productmixdecisionsb. tacticalprofitabilityanalysisc. externalfinancialreportingd. strategicdesigndecisions

ANSWER: a



91. Value-chainproductcostsincludewhichofthefollowing?a. customerservicecostsb. marketingcostsc. researchanddevelopmentd. alloftheabove

ANSWER: d

92. WhichofthefollowingcostswouldNOTbeincludedinoperatingproductcosts?a. productionb. marketingc. researchanddevelopmentd. alloftheabove

ANSWER: c

93. Whichofthefollowingcostswouldbeincludedintraditionalproductcostsusedforexternalreporting?a. researchanddevelopmentb. productionc. marketingd. alloftheabove

ANSWER: b

94. WhichofthefollowingcostsisNOTaproductcost?a. rentonanofficebuildingb. indirectlaborc. repairsonmanufacturingequipmentd. steelusedininventoryitemsproduced

ANSWER: a

95. Whichofthefollowingcostsisanexampleofproductcosts?a. sellingcommissionsb. nonfactoryofficesalariesc. directmaterialsd. advertisingexpense

ANSWER: c



96. Whichofthefollowingcostsincurredbyafurnituremanufacturerwouldbeaproductcost?a. officesalariesb. lumberc. commissionspaidtosalesstaffd. controller'ssalary

ANSWER: b

97. Whichofthefollowingcostsisaproductcost?a. leasepaymentsoncarsusedbysalespersonsb. president'ssalaryc. propertytaxesonfactorybuildingd. depreciationonofficeequipment

ANSWER: c

98. Whichofthefollowingcostsisaperiodcostforamanufacturingcompany?a. controller'ssalaryb. wagesofmachineoperatorsc. insuranceonfactoryequipmentd. fringebenefitsforfactoryemployees

ANSWER: a

99. Inatraditionalmanufacturingcompany,productcostsincludea. directmaterialsonly.b. directmaterials,directlabor,andfactoryoverhead.c. directmaterialsanddirectlaboronly.d. directlaboronly.

ANSWER: b

100. Whichofthefollowingcostsisanindirectproductcost?a. president'ssalaryb. wagesofassemblyworkersc. materialsusedd. propertytaxesonplantfacilities

ANSWER: d


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen101. I

fthetotalwarehousingcostfortheyearamountsto$450,000,and40percentofthewarehousingactivityisassociatedwithfinishedgoodsand60percentwithdirectmaterials,howmuchofthecostwouldbechargedasaproductcost?a.$90,000b.$180,000c.$270,000d.$450,000

ANSWER: cRATIONALE: SUPPORTINGCALCULATIONS:$450,000×0.60=$270,000

102. Whichofthefollowingcostswouldbeincludedaspartofdirectmaterialsintheproductionofanautomobile?a. glueforastickerappliedtotheautomobileb. steelc. gasolineusedtofuelmachinesinproductiond. noneofthese

ANSWER: b

103. AllofEvaEnterprise'soperationsarehousedinonebuildingwiththecostsofoccupyingthebuildingaccumulatedinaseparateaccount.ThetotalcostsincurredinJulyamountedto$48,000.Thecompanyallocatesthesecostsonthebasisofsquarefeetoffloorspaceoccupied.Administrativeoffices,salesoffices,andfactoryoperationsoccupy9,000,6,000,and30,000squarefeet,respectively.HowmuchwillbeclassifiedasaproductcostforJuly?a.$9,600b.$6,400c.$16,000d.$32,000

ANSWER: dRATIONALE: SUPPORTINGCALCULATIONS:[30,000/(9,000+6,000+30,000)]×$48,000=$32,000

104. Whichofthefollowingcostswouldbeconsideredadirectmaterial?a. glueintheproductionofautomobilesb. laborusedtofinishproductc. paperusedintheproductionofbooksd. depreciationonthecorporation'sofficebuilding

ANSWER: c

105. Thedifferencebetweenasupplyandanindirectmaterialisthata. suppliesarenotnecessaryforproduction.b. indirectmaterialsarenotphysicallypartoftheproduct.c. suppliesarenotnecessaryforproductionandarenotphysicallypartoftheproduct.d. suppliesarenecessaryforproductionandarenotphysicallypartoftheproduct.

ANSWER: d


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen106. Whichofthefollowingcostswouldbeincludedaspartofdirectlabor?

a. amaterialshandlerb. acutterintheproductionofshelvingc. anassembly-linesupervisord. ajanitor

ANSWER: b

107. Whichofthefollowingcostswouldbeincludedaspartoffactoryoverhead?a. depreciationofplantequipmentb. directlaborc. depreciationonthecorporation'sofficebuildingd. paperusedintheproductionofbooks

ANSWER: a

108. WhichofthefollowingitemswouldNOTbeclassifiedaspartoffactoryoverheadofafirmthatmakessailboats?a. factorysuppliesusedb. depreciationoffactorybuildingsc. canvasusedinsaild. indirectmaterials

ANSWER: c

109. Wagespaidtoajanitorinthefactorywouldbeclassifiedasa. directlabor.b. directjanitorsalaries.c. supervisorsalaries.d. factoryoverhead.

ANSWER: d

110. AllofthefollowingcostsareincludedinfactoryoverheadEXCEPTa. factorysupplies.b. indirectlabor.c. plantforeman'ssalary.d. directlabor.

ANSWER: d


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen111. Sellingandadministrativecostsareclassifiedas

a. productcosts.b. conversioncosts.c. periodcosts.d. factoryoverhead.

ANSWER: c

112. WhichofthefollowingcostsisNOTaperiodcost?a. receptionist'ssalaryb. steelusedinsteelrailingsc. depreciationonsalesstaffs'carsd. salescommission

ANSWER: b

113. Whichofthefollowingcostsisaperiodcost?a. depreciationoffactoryequipmentb. transportation-informaterialshipmentsc. amortizationofapatentforthecompany'sproductd. depreciationofofficecomputers

ANSWER: d

114. Anexampleofaperiodcostisa. president'ssalary.b. insuranceonfactoryequipment.c. propertytaxesonfactorybuilding.d. wagesoffactorycustodians.

ANSWER: a

115. Anexampleofanonproductioncostisa. wagespaidtoassembly-lineemployees.b. manufacturingsupplies.c. insuranceonmanufacturingfacilities.d. thetreasurer'ssalary.

ANSWER: d


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen116. Whichofthefollowingcostsareexpensedintheperiodinwhichtheyareincurred?

a. Directmaterialscostsb. Productcostsc. Factoryoverheadcostsd. Nonproductioncosts

ANSWER: d

117. Order-gettingcostswouldNOTincludea. marketingcosts.b. customerservicecosts.c. advertising.d. salariesofsalespersonnel.

ANSWER: b

118. PeriodcostsdoNOTincludea. order-gettingcosts.b. order-fillingcosts.c. order-makingcosts.d. alloftheaboveareperiodcosts.

ANSWER: c

119. Primeproductcostsincludea. onlyfactoryoverhead.b. onlydirectlabor.c. directlaborandfactoryoverhead.d. directmaterialsanddirectlabor.

ANSWER: d

120. Thesumofdirectlaborandfactoryoverheadisreferredtoasa. periodcosts.b. conversioncosts.c. primecosts.d. directproductcosts.

ANSWER: b


July1,2016 July31,2016 Directmaterials $36,000 $42,000Workinprocess 75,000 84,000Finishedgoods 69,000 57,000

From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen121. ConversioncostsdoNOTinclude

a. directmaterials.b. directlabor.c. factoryoverhead.d. anyofthesecosts.

ANSWER: a

122. WhichofthefollowingwouldNOTbeincludedintheconversioncostofanautomobile?a. screwsusedinassemblyb. assemblyworkerwagesc. depreciationonmachineryd. steel

ANSWER: d

123. Coststhatareexpensedintheperiodinwhichtheyareincurredarecalled:a. Directmaterialscostsb. Productcostsc. Noninventoriablecostsd. Inventoriablecosts

ANSWER: c

Figure2-11

InformationfromtherecordsoftheAbelCorporationforJuly2016wasasfollows:

Sales $1,230,000Sellingandadministrativeexpenses 210,000Directmaterialsused 264,000Directlabor 300,000Factoryoverhead**variableoverheadis$205,000,fixedoverheadis$200,000

405,000

Inventories


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen124. RefertoFigure2-11.Theconversioncostis

a.$960,000b.$1,179,000c.$705,000d.$564,000

ANSWER: cRATIONALE: $300,000+$405,000=$705,000

125. RefertoFigure2-11.Theprimecostsarea.$210,000b.$264,000c.$300,000d.$564,000

ANSWER: dRATIONALE: $264,000+$300,000=$564,000

126. RefertoFigure2-11.Thevariableproductcostsarea.$969,000b.$769,000c.$764,000d.$1,179,000

ANSWER: bRATIONALE: $264,000+$300,000+$205,000=$769,000

127. RefertoFigure2-11.Thetotalproductcostisa.$1,179,000b.$969,000c.$615,000d.$764,000

ANSWER: bRATIONALE: $264,000+$300,000+405,000=$969,000


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-MowenFigure2-12

InformationfromtherecordsoftheConundrumCompanyforSeptember2016wasasfollows:

Sales $307,500

Sellingandadministrativeexpenses 52,500Directmaterialsused 66,000Directlabor 75,000Variablefactoryoverhead 50,000Factoryoverhead 51,250

Inventories Sept.1,2016 Sept30,2016

Directmaterials $8,000 $10,500

Workinprocess 18,750 21,000Finishedgoods 17,250 14,250

ConundrumCorporationproduced20,000units.

128. RefertoFigure2-12.TheprimecostsperunitforSeptemberwerea.$7.05b.$8.8125c.$14.7375d.$20.00

ANSWER: aRATIONALE: $66,000+$75,000 =$141,000/20,000units =$7.05 perunit

129. RefertoFigure2-12.Whataretheconversioncostsperunit?a.$7.05b.$8.8125c.$12.1125d.$14.7375

ANSWER: bRATIONALE: $75,000+$50,000+$51,250=$176,250/20,000units=$8.8125


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen130. RefertoFigure2-

12.Ifproductionincreasedto32,000unitsnextyear,whatistheeffectonvariableproductcostsperunitandtotalproductcostsperunitrespectively?

a. remainthesame;remainthesameb. remainthesame;decreasec. increase;remainthesamed. decrease;increase

ANSWER: bRATIONALE: variableproductcostperunitremainthesame;totalproductcostperunitwilldecrease

131. RefertoFigure2-12.Whatarethetotalvariablecostsperunit?a.$7.05b.$9.55c.$2.175d.$6.25

ANSWER: bRATIONALE: $66,000+75,000+50,000=$191,000/20,000units=$9.55perunit

132. RefertoFigure2-12.Whatisthetotalproductcostperunit?a.$14.7375b.$12.1125c.$12.175d.$12.2375

ANSWER: bRATIONALE: $66,000+$75,000+$50,000+$51,250=$242,250/20,000=$12.1125

133. Productcostsareconvertedfromcosttoexpensewhena. unitsarecompleted.b. materialsarepurchased.c. unitsaresold.d. materialsarerequisitioned.

ANSWER: c

134. Acompanyhaspurchasedsomesteeltouseintheproductionofsteelrailings.IfthissteelhasNOTbeenputintoproduction,itwouldbeclassifiedas

a. finishedgoodsinventory.b. factorysupplies.c. work-in-processinventory.d. directmaterialsinventory.

ANSWER: d


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen135. Theincomestatementpreparedforexternalreportingis

a. basedonafunctionalclassification.b. referredtoasabsorption-costingincome.c. calledfull-costingincome.d. alloftheabove.

ANSWER: d

136. WhichofthefollowingcostswouldNOTbeincludedincalculatinginventoryvaluesundertheabsorption-costingbasis?a. directmaterialsb. fixedoverheadc. sellingandadministrativeexpensesd. directlabor

ANSWER: c

137. Whencalculatingtheabsorption-costingincomeforexternalreporting,alla. manufacturingcostsultimatelybecomenonmanufacturingcosts.b. manufacturingcostsareproductcostsandproductcostsareneverexpensed.c. costsofsellingmanufacturedproductsareclassifiedasproductcosts.d. sellingandadministrativecostsareclassifiedasnonmanufacturingcosts.

ANSWER: d

138. WhichofthefollowingaccountswouldappearonthefinancialstatementsofONLYamanufacturingfirm?a. materialsinventoryb. bondspayablec. prepaidinsuranced. retainedearnings

ANSWER: a

139. Whichtypeofinventoryisnormallysoldtootherorganizations?a. directmaterialsb. factorysuppliesc. workinprocessd. finishedgoods

ANSWER: d


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen140. TherecordsofCustomChoppers,Inc.forSeptember2016showsthefollowinginformation:

Sales $820,000Sellingandadministrativeexpenses 140,000Directmaterialspurchases 176,000Directlabor 200,000Factoryoverhead 270,000Directmaterials,September1 24,000Workinprocess,September1 50,000Finishedgoods,September1 46,000Directmaterials,September30 28,000Workinprocess,September30 56,000Finishedgoods,September30 38,000

ThenetincomeforthemonthofSeptemberisa.$644,000.b.$36,000.c.$636,000.d.$180,000.

ANSWER: bRATIONALE: SUPPORTINGCALCULATIONS:

COGM= ($24,000 + $176,000- $28,000) + $200,000 +$270,000+$50,000-$56,000=$636,000COGS = $636,000 +$46,000 - $38,000 =$644,000NI = $820,000- $140,000- $644,000 =$36,000

141. Themerchandiseinventoryinamerchandisingbusinesscorrespondsmostcloselytowhichofthefollowingitemsinamanufacturingfirm?a. materialsinventoryb. costofgoodsavailableforsalec. costofgoodsmanufacturedd. finishedgoodsinventory

ANSWER: d

142. Ifbeginningwork-in-processinventoryis$160,000,endingwork-in-processinventoryis$180,000,costofgoodsmanufacturedis$500,000,anddirectmaterialsusedare$130,000,whataretheconversioncosts?a.$210,000b.$320,000c.$340,000d.$390,000

ANSWER: dRATIONALE: SUPPORTINGCALCULATIONS:$500,000+$180,000-$160,000-


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen$130,000=$390,000


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen143. ThefollowinginformationpertainstoSteelWheels,Inc:

Costofgoodsmanufactured $350,000Beginningwork-in-processinventory 110,000Endingwork-in-processinventory 80,000Manufacturingoverhead 50,000

Whataretheprimecostsfortheyear?a.$360,000b.$480,000c.$270,000d.$300,000

ANSWER: cRATIONALE: SUPPORTINGCALCULATIONS:$350,000+$80,000-$110,000-$50,000=$270,000

144. InventorybalancesfortheBeemerEnterprisesinApril2016areasfollows:

April1,2016 April30,2016 Rawmaterials $27,000 $21,000Workinprocess 48,000 37,200Finishedgoods 108,000 90,000

DuringApril,purchasesofdirectmaterialswere$36,000.Directlaborandfactoryoverheadcostswere$60,000and$84,000,respectively.

PrimecostsforAprilwerea.$102,000b.$96,000c.$87,000d.$81,000

ANSWER: aRATIONALE: SUPPORTINGCALCULATIONS:($27,000+$36,000-$21,000)+$60,000=$102,000


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen145. InventorybalancesforMarshall,Inc.,inJune2016areasfollows:

June1,2016 June30,2016 Rawmaterials $1,125 $ 875Workinprocess 2,000 1,550Finishedgoods 4,500 3,750

DuringJune,purchasesofdirectmaterialswere$1,500.Directlaborandfactoryoverheadcostswere$2,500and$3,500,respectively.ConversioncostsforJunewerea.$8,200.b.$7,750.c.$7,500.d.$6,000.

ANSWER: dRATIONALE: SUPPORTINGCALCULATIONS:$2,500+$3,500=$6,000

Figure2-13

InventorybalancesfortheJamesonCompanyinOctober2016areasfollows:

October1,2106 October31,2016 Rawmaterials $27,000 $21,000Workinprocess 48,000 37,200Finishedgoods 108,000 90,000

DuringOctober,purchasesofdirectmaterialswere$36,000.Directlaborandfactoryoverheadcostswere$60,000and$84,000,respectively.

146. RefertoFigure2-13.Whatisthecostofmaterialsusedinproduction?a.$36,000b.$42,000c.$47,800d.$54,000

ANSWER: bRATIONALE: $27,000+$36,000-$21,000=$42,000


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen147. RefertoFigure2-13.Whatarethetotalmanufacturingcostsaddedtoproductionintheperiod?a.$186,000

b.$180,000c.$144,000d.$174,200

ANSWER: aRATIONALE: $42,000+$60,000+$84,000=$186,000

148. RefertoFigure2-13.Whatisthecostofgoodsmanufactured?a.$180,000b.$186,000c.$194,000d.$196,800

ANSWER: dRATIONALE: $42,000+$60,000+$84,000+$48,000-$37,200=$196,800

149. Thesumofthetotaladditionstoworkinprocessduringaperiodisa. totalmanufacturingcostsadded.b. factoryoverheadapplied.c. materialused.d. costofgoodsmanufactured.

ANSWER: a

150. ThefollowinginformationfortheSuttonGlassCompanyhasbeenprovided:

Costofgoodsmanufactured $100,000Workinprocess:

Beginning 15,000Ending 20,000

Directlabor 30,000Directmaterialsused ?Factoryoverhead 45,000

Whatistheamountofdirectmaterialsused?a.$25,000b.$30,000c.$35,000d.$100,000

ANSWER: bRATIONALE: SUPPORTINGCALCULATIONS:$100,000+$20,000-$15,000-$30,000-$45,000=$30,000


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen151. Theendingwork-in-processinventoryisdeductedonthe

a. balancesheet.b. incomestatement.c. statementofcostofgoodsmanufactured.d. statementofcashflows.

ANSWER: c

152. Costofgoodssoldequalscostofgoodsmanufactureda. whenfinishedgoodsinventoriesremainconstant.b. whenwork-in-processinventoriesremainconstant.c. plusbeginningwork-in-processinventoryminusendingwork-in-processinventory.d. whenmaterialsinventoriesremainconstant.

ANSWER: a

153. InventorybalancesforSpiritlightVenturesforNovember2016areasfollows:

November1,2016 November30,2016 Materials $9,000 $7,000Workinprocess 16,000 12,400Finishedgoods 36,000 30,000

DuringNovember,purchasesofdirectmaterialswere$18,000.Directlaborandfactoryoverheadcostswere$20,000and$28,000,respectively.ThecostofgoodsmanufacturedinNovemberwasa.$68,000.b.$77,600.c.$74,000.d.$71,600.

ANSWER: dRATIONALE: SUPPORTINGCALCULATIONS:$9,000+$18,000-$7,000+$20,000+$28,000+$16,000-$12,400=$71,600


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen154. Selecteddataconcerningthepastyear'soperationsoftheMotorCityCorporationareasfollows:

Sellingandadministrativeexpenses $225,000Directmaterials used 467,500Directlabor(50,000hours) 450,000Factory overhead applicationrate 8perDLH

Inventories Beginnin g Ending

Directmaterial $75,000 $67,500Workin process 112,500 135,000Finishedgoods 60,000 37,500

Thecostofdirectmaterialspurchasedisa.$467,500.b.$460,000.c.$437,500.d.$445,000.

ANSWER: bRATIONALE: SUPPORTINGCALCULATIONS:$467,500+$67,500-$75,000=$460,000


Beginning Ending Directmaterials $50,000 $45,000Workinprocess 75,000 90,000Finishedgoods 40,000 25,000

From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-MowenFigure2-14

ThefollowingisthedataforLaurenEnterprises:

Sellingandadministrativeexpenses $75,000Directmaterials used 265,000Directlabor(25,000hours)

300,000Factoryoverheadapplicationrate $16perDLH

Inventories

155. RefertoFigure2-14.Whatisthecostofgoodsmanufactured?a.$1,115,000b.$965,000c.$955,000d.$950,000

ANSWER: dRATIONALE:SUPPORTINGCALCULATIONS:$265,000+$300,000+$400,000($16×25,000)+$75,000-$90,000= $950,000

156. RefertoFigure2-14.Whatisthecostofgoodssold?a.$565,000b.$950,000c.$965,000d.$980,000

ANSWER: cRATIONALE: $265,000+$300,000+$400,000+$75,000-$90,000+$40,000-$25,000=$965,000

157. Thecostofunitscompletedduringaperiodiscalleda. costofgoodssold.b. costofgoodsmanufactured.c. currentmanufacturingcosts.d. finishedgoodsinventory.

ANSWER: b


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen158. TherecordsforthepreviousyearforSarasotaBoatBuilders,Inc.,showsthefollowingdata::

Sellingandadministrative expenses $300,000Directmaterials used 530,000Directlabor(100,000hours)

600,000Factoryoverheadapplicationrate $5perDLH

Inventories Beginnin g Ending

Work in process $150,000 $160,000Finishedgoods 80,000 50,000

Thecostofgoodssoldisa.$1,630,000.b.$1,880,000.c.$1,600,000.d.$1,650,000.

ANSWER: dRATIONALE:SUPPORTINGCALCULATIONS:$530,000+$600,000+$500,000($5×100,000)+$150,000-$160,000+$80,000-$50,000=$1,650,000

159. ThefollowinginformationhasbeenprovidedforHopenEnterprises:

Costofgoodsmanufactured $7,500Workinprocess

Beginning 1,200Ending 1,400

Directlabor 4,000Materialsplacedinproduction 1,500Factoryoverhead ?

Whatistheamountoffactoryoverhead?a.$2,000b.$2,200c.$1,400d.$5,500

ANSWER: bRATIONALE: SUPPORTINGCALCULATIONS:$7,500+$1,400-$1,200-$4,000-$1,500=$2,200


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen160. ThefollowinginformationisfromtherecordsofStretchLimousines,Inc.:

Netdirectmaterialspurchasecost $225,000Totaldirectmaterialsused 275,000Beginningdirectmaterialsinventory 125,000

Theendingdirectmaterialsinventoryisa.$175,000.b.$75,000.c.$50,000.d.$100,000.

ANSWER: bRATIONALE: SUPPORTINGCALCULATIONS:$125,000+$225,000-$275,000=$75,000

161. TheSumterCompanyrecentlyhadafireinitsaccountingoffice,destroyingmostofitsrecords.Onlythefollowinginformationcouldbesalvagedfor2016:

Directlabor $400,000Factoryoverhead 200,000Costofgoodssold 800,000Workinprocess,January1 80,000Finishedgoods,January1 160,000Workinprocess,December31 100,000Finishedgoods,December31 120,000

Thecostofdirectmaterialsusedinproductionduring2016isa.$140,000.b.$180,000.c.$200,000.d.$260,000.

ANSWER: bRATIONALE: SUPPORTINGCALCULATIONS:$800,000+$120,000-$160,000+$100,000-$80,000-$400,000-$200,000=$180,000


June1,2016 June30,2016 Directmaterials $1,200 $1,400Workinprocess 2,500 2,800Finishedgoods 2,300 1,900


Figure2-15

InformationfromtherecordsofChromePoniesEnterprisesforJune2016isasfollows:

Sales $41,000Directlabor 10,000Sellingandadministrativeexpenses 7,000Directmaterialspurchases 6,000Factoryoverhead 13,500

Inventories

162. RefertoFigure2-15.Whatwasthecostofmaterialsusedinproduction?a.$6,200b.$6,000c.$5,800d.$19,500

ANSWER: cRATIONALE: $6,000+$1,200-$1,400=$5,800

163. RefertoFigure2-15.ChromePoniesEnterprises'costofgoodsmanufacturedinJuneisa.$29,300.b.$29,700.c.$29,200.d.$29,000.

ANSWER: dRATIONALE: SUPPORTINGCALCULATIONS:($1,200+$6,000-$1,400)+$10,000+$13,500+$2,500-

$2,800=$29,000

164. RefertoFigure2-15.Whatarethetotalmanufacturingcostsadded?a.$18,500b.$19,300c.$29,000d.$29,300

ANSWER: dRATIONALE: $6,000+$1,200-$1,400+$10,000+$13,500=$29,300


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen165. RefertoFigure2-15.Whatisthegrossmargin(profit)?a.

$11,500b.$11,600c.$4,500d.$4,600

ANSWER: bRATIONALE: $41,000-($1,200+$6,000-$1,400)+$10,000+$13,500+$2,500-$2,800+$2,300-$1,900=$11,600

166. RefertoFigure2-15.Whatisthecostofgoodssold?a.$36,500b.$28,600c.$29,400d.$29,500

ANSWER: cRATIONALE: ($1,200+$6,000-$1,400)+$10,000+$13,500+$2,500-$2,800+$2,300-$1,900=$29,400

167. MortonManufacturingshowscostofgoodssoldforthemonthofMarchwas$90,000.Thefinishedgoodsinventorywas$15,000onMarch1and$17,500onMarch31.Beginningandendingwork-in-processinventorieswere$20,000and$25,000,respectively.WhatwasthecostofgoodsmanufacturedduringMarch?a.$92,500b.$90,000c.$87,500d.$97,500

ANSWER: aRATIONALE: SUPPORTINGCALCULATIONS:$90,000+$17,500-$15,000=$92,500

168. AssumethefollowinginformationfortheBlueKnightsCorporationfortheyearendedDecember31,2016:

Sales $2,250Costofgoodsmanufacturedfortheyear 1,350Beginningfinishedgoodsinventory 450Endingfinishedgoodsinventory 495Sellingandadministrativeexpenses 300

WhatisthecostofgoodssoldfortheyearendedDecember31,2016?a.$1,305b.$1,605c.$1,350d.$1,650

ANSWER: aRATIONALE: SUPPORTINGCALCULATIONS:$1,350+450-$495=$1,305


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen169. RebelYell,Inc.,recordedthefollowingdataforApril:

Beginningfinishedgoodsinventory $60,000Beginningwork-in-processinventory 40,000Endingwork-in-processinventory 80,000Endingfinishedgoodsinventory 50,000Factoryoverheadcosts 200,000Directmaterialsused 160,000Directlabor 100,000

WhatisthecostofgoodsmanufacturedforApril?a.$470,000b.$420,000c.$460,000d.$430,000

ANSWER: bRATIONALE: SUPPORTINGCALCULATIONS:$160,000+$100,000+$200,000+$40,000-$80,000=$420,000

170. TherecordsoftheWilliamsonCompanyshowthefollowinginformation:

Directmaterialsused $90,000Directlabor 130,000Factoryoverhead 150,000Beginningwork-in-processinventory 15,000Beginningfinishedgoodsinventory 20,000Endingwork-in-processinventory 42,000Sellingandadministrativeexpenses 37,500

Whatwasthecostofgoodsmanufacturedduringtheyear?a.$370,000b.$365,000c.$343,000d.$333,000

ANSWER: cRATIONALE: SUPPORTINGCALCULATIONS:$90,000+$130,000+$150,000+$15,000-$42,000=$343,000


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen171. Whi

chofthefollowingisNOTanexampleofadifferencebetweentheincomestatementofaserviceorganizationandtheincomestatementofamanufacturingorganization?

a. Aservicecompanywillneverhaveworkinprocess.b. Theservicecompanywillnothaveafinishedgoodsinventory.c. Fulfillmentcostsmaybeaddedtocostofgoodssoldofaservicecompany.d. Researchanddevelopmentexpensesarenotusuallyamajorcomponentofaserviceorganization.

ANSWER: a

172. WhichofthefollowingitemswouldNOTappearonanincomestatementofaserviceorganization?a. sellingexpensesb. costofgoodssoldc. administrativeexpensesd. grossmargin

ANSWER: b

173. WhichofthefollowingitemsisNEVERrelevanttothecostflowsofaserviceorganization?a. finishedgoodsinventoryb. materialsinventoryc. work-in-processinventoryd. alloftheabovearealwaysrelevant.

ANSWER: a

174. AssumethefollowingdataforRodriguezServices,anaccountingfirm,forNovember:

Beginningmaterialsinventory $20,000Beginningwork-in-processinventory 40,000Endingwork-in-processinventory 50,000Endingmaterialsinventory 10,000Actualoverheadcosts 100,000Directmaterialsused 60,000Directlabor 200,000

WhatisthecostofservicessoldforNovember?a.$370,000b.$350,000c.$360,000d.$330,000

ANSWER: bRATIONALE: SUPPORTINGCALCULATIONS:$60,000+$200,000+$100,000+$40,000-$50,000=$350,000


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-MowenFigure2-16Asmallenginerepairshoppurchasedmaterialscosting$9,000inJuly.Thebeginninginventoryofmaterialpartswas$4,500andtheendinginventoryofmaterialpartswas$4,000.PaymentsfordirectlaborforJulytotaled$27,000,secretarialcostswere$2,000,andoverheadof$5,000wasincurred.Inaddition,$5,000wasspentonadvertisingand$2,000forthefranchisename.RevenueforJulywas$50,000.

175. RefertoFigure2-16.WhatisthecostofservicessoldforJuly?a.$41,500b.$43,500c.$50,500d.$40,500

ANSWER: aRATIONALE: SUPPORTINGCALCULATIONS:$9,000+$4,500-$4,000+$27,000+$5,000=$41,500

176. RefertoFigure2-16.WhatisthegrossmarginforJuly?a.$41,500b.$43,500c.$1,500d.$8,500

ANSWER: dRATIONALE: SUPPORTINGCALCULATIONS:COSS=$9,000+$4,500-$4,000+$27,000+$5,000=$41,500GM=$50,000-41,500=$8,500

177. Oneormoreofthefollowingis(are)acostaccountingsystem(s)thatuse(s)onlyunit-basedactivitydriverstoassigncoststocostobjects.

a. Activity-basedmanagementb. Activity-basedcostingsystemc. Functional-basedcostmanagementsystemd. Bothaandb

ANSWER: c

178. Whichofthefollowingwouldbeassociatedwithafunctional-basedcostaccountinginformationsystem?a. setupcostsassignedtoproductsusingthenumberofsetupsasthedriverb. materialshandlingcostsassignedtoproductsusingthenumberofmovesastheactivitydriverc. customerservicecostsassignedtoproductsusingthenumberofcomplaintsastheactivitydriverd. purchasingcostsassignedtoproductsusingnumberofdirectlaborhoursastheactivitydriver

ANSWER: d


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen179. Inafunctional-basedmanagementsystem,oneisNOTlikelytofind

a. unit-andnon-unit-basedcostdrivers.b. maximizationofindividualunitperformance.c. narrowandrigidproductcosting.d. allocationintensivecostassignment.

ANSWER: a

180. Inacostmanagementsystem,thecostviewdoesNOTincludea. resources.b. activities.c. driveranalysis.d. productsandcustomers.

ANSWER: c

181. Thesystemthatfocusesonthemanagementofactivitieswiththeobjectiveofimprovingthevaluereceivedbythecustomerandtheprofitreceivedbyprovidingthisvalueiscalled.

a. Activity-basedmanagementb. Contemporarycostcontrolc. Functional-basedcostmanagementsystemd. JIT

ANSWER: a

182. Whichofthefollowingitemswouldbeassociatedwithbothafunctional-basedcostaccountinginformationsystemandanactivitybasedcostinformationsystem?

a. Overheadisassignedonaplant-wideratebasedondirectlaborhours.b. Customerservicecostsareassignedtoproductsusingnumberofcomplaintsastheactivitydriver.c. Directlaborcostisassignedtoproductsusingdirecttracing.d. Noneofthese.

ANSWER: c

183. Inacostmanagementsystem,theprocessviewdoesNOTincludea. resources.b. activities.c. driveranalysis.d. performanceanalysis.

ANSWER: a


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen184. WhichisNOTabenefitofanactivity-basedcostmanagementsystem?

a. greaterproductcostingaccuracyb. increasedcostofimplementingthesystemc. improveddecisionmakingd. enhancedstrategicplanning

ANSWER: b

185. Inanactivity-basedmanagementsystem,oneisNOTlikelytofinda. tracingofcoststoactivities.b. onlyunit-baseddrivers.c. broadflexibleproductcosting.d. systemwideperformancemaximization.

ANSWER: b

186. Whichofthefollowingisatraitofafunctional-basedcostmanagementsystem?a. unit-baseddriversb. tracingintensivec. useofbothfinancialandnonfinancialmeasuresofperformanced. detailedactivityinformation

ANSWER: a

187. WhichofthefollowingisNOTatraitofafunctional-basedcostmanagementsystem?a. unit-baseddriversb. narrowandrigidproductcostingc. allocation-intensived. focusonmanagingactivities

ANSWER: d

188. Whichofthefollowingisatraitofanactivity-basedcostmanagementsystem?a. allocation-intensiveb. narrowandrigidproductcostingc. non-unit-baseddriversd. focusonmanagingcosts

ANSWER: c


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen189. Theoptimallevelinthetrade-offbetweenmeasurementanderrorcostsiswhen

a. measurementcostsaregreaterthanerrorcosts.b. measurementcostsanderrorcostsareminimized.c. measurementcostsarelessthanerrorcosts.d. thetotalofmeasurementcostsanderrorcostsaremaximized.

ANSWER: b

190. Errorcostscanbedefinedasa. thecostsassociatedwiththemeasurementsrequiredbythecostmanagementsystem.b. unitcostsassignedbasedonactivities.c. thecostsassociatedwithmakingpoordecisionsbasedonbadcostinformation.d. noneofthese

ANSWER: c

191. Describeacostmanagementinformationsystem,itsobjectives,andmajorsubsystems.

ANSWER: Thecostmanagementinformationsystemisanaccountinginformationsubsystemthatisprimarilyconcernedwithproducingoutputsforinternalusersusinginputsandprocessesneededtosatisfymanagementobjectives.Theobjectivesareasfollows:1. Toprovideinformationforcostingoutservices,products,andotherobjectsofinteresttomanagement.2. Toprovideinformationforplanningandcontrol.3. Toprovideinformationfordecisionmaking.Themajorsubsystemsofacostmanagementinformationsystemarethecostaccountinginformationsystemandtheoperationalcontrolinformationsystem.


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen192. Thefollowingitems(partiallist)areassociatedwithafunctional-basedcostaccountinginformationsystem,anactivity-

basedcostaccountinginformationsystem,orboth:

a. materialspurchasingcostincurrenceb. assignmentofpurchasingcosttoproductsusingdirectlaborhoursc. assignmentofpurchasingcostusingnumberofpurchaseordersd. usageofdirectmaterialse. directmaterialscostassignedtoproductsusingdirecttracingf. materialshandlingcostincurrenceg. materialshandlingcostassignedusingdirectlaborhoursh. materialshandlingcostassignedusingthenumberofmovesasthedriveri. computerj. materialshandlingequipmentk. decisiontomakeapartorbuyitfromasupplierl. costingoutofproductsm. reportdetailingindividualproductcosts

Require d :

1. Foranactivity-basedcostsystem,classifytheitemsintooneofthefollowingcategories:a. interrelatedpartsb. processesc. objectivesd. inputse. outputsf. useractions

2. Howwouldthechoicesdifferbetweenthetwosystems?Whatarethecostsandbenefitsofeach?

ANSWER:

1. Theactivity-basedcostaccountingsystem:a. interrelatedparts:computerb. processe

s:costassignment:directtracingofmaterials,drivertracingofpurchasingcosts(orders),materialshandlingcost(moves)

c. objectives:costingoutofproductsd. inputs:directmaterialscost,purchasingcost,materialshandlingcoste. outputs:productcostreportf. useractions:make-or-buydecision

2. Thedifferenceinthecostingsystemsisfoundintheprocesses.Afunctional-basedcostsystemwouldnotusenonunitdriverssuchasmovesandorderstoassignoverheadbutwoulduseaunitdriverlikedirectlaborhours.Thereisincreasedaccuracyofthecostassignmentsinanactivity-basedsystem,andamorecomprehensiveideaofcostsmaybeusedfordecisionmaking.Theactivity-basedcostaccountingsystemismoreexpensivetodevelopbuthasthebenefitofmorecomprehensiveusesforcostinformation.Thefunctional-bas


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowenedcostsystemissimplerandlessexpensivetoimplementbuttheinformationgeneratedislessversatile.

193. Explainthedifferencesbetweendirecttracing,drivertracing,andallocation.

ANSWER: Directtracingistheprocessofidentifyingandassigningcoststoacostobjectthatarespecificallyorphysicallyassociatedwiththecostobject.Drivertracingisassigningcostsusingdrivers,whicharecausalfactors.Thedriverapproachreliesonidentificationoffactorsthatallegedlycapturethecausalrelationship.Allocationistheassignmentofindirectcoststocostobjectsbasedonconvenienceorassumedlinkages.

194. Classifythefollowingcostsincurredbyasteprailingmanufacturingcompanyasdirectmaterials,directlabor,factoryoverhead,orperiodcosts:

a. Wagespaidtoproductionworkersb. Utilitiesintheofficec. Depreciationonmachineryinplantd. Steele. Accountant'ssalaryf. Rentonfactorybuildingg. Rentonofficeequipmenth. Maintenanceworkers'wagesi. Utilities inthe plantj. Maintenanceonofficeequipment

ANSWER:

a. Direct labor f. Factory overheadb. Period g. Periodc. Factory overhead h. Factory overheadd. Direct materials i. Factory overheade. Period j. Period


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen195. B

igFootAthleticsdesignsandmanufacturesrunningshoes.Anewmodelofshoes,FastTrack,hasbeendevelopedandisreadyforproduction.

Require d :Whichcostswilltheproductionmanagercollectfromthevaluechain,andhowwouldthesecostsbeusedindifferentdecisions?a. traditionalproductcostsb. operatingproductcostsc. value-chainproductcosts

ANSWER: Productioncostswouldbeincludedinalloftheabovedefinitions.

a. traditional productcosts: Directmaterials,directlaborandmanufacturingoverheadarethetraditionalproductcosts.Theywouldbeusedforexternalreporting,budgeting,andcontrolofcosts.

b. operating productcosts: Inadditiontothetraditionalproductcosts,marketingandcustomerservicecostswouldbeconsideredinanalyzingprofitabilityoftheproduct.Strategicquestionsabouttheoperatingdesign,i.e.,materialsandplantlayout,wouldbeaddressed.ThefocusisontherevenueandcostofFastTrack.

c. value-chainproductcosts: ProductioncostsofFastTrackmustbeviewedinrelationtootherproducts.Strategicpricingandproductmixdecisionsmustbemade.Theprofitabilityofalltheproductlinesisatissue.


From https://testbankgo.eu/p/Test-Bank-for-Cornerstones-of-Cost-Management-3rd-Edition-Hansen-Mowen196. InformationfromtherecordsoftheMaloneyCompanyforthemonthofMay2016isasfollows:

Purchasesofdirectmaterials $54,000Indirectlabor 15,000Directlabor 31,200Depreciationonfactorymachinery 9,000Sales 165,900Sellingandadministrativeexpenses 18,900Rentonfactorybuilding 21,000

Inventories May1,2016 May31,2016

Directmaterials $24,000 $26,100Workinprocess 6,300 9,600Finishedgoods 15,000 17,100Require d :

a. PrepareastatementofcostofgoodsmanufacturedforthemonthofMay.b. PrepareanincomestatementforthemonthofMay.c. Determineprimeandconversioncosts.

ANSWER:a. Maloney Company

Statement of Cost of Goods ManufacturedFor the Month of May 2016

Direct materials:Beginning inventory $ 24,000Add: Purchases 54,000 Materials available $ 78,000Less: Ending inventory 26,100 Direct materials used in production $ 51,900

Direct labor 31,200Manufacturing overhead:

Indirect labor $ 15,000Depreciation on machinery 9,000Rent on factory 21,000 45,000

Total manufacturing costs added $128,100Add: Beginning work-in-process inventory 6,300 Total costs in process $134,400Less: Ending work-in-process inventory 9,600 Cost of goods manufactured $124,800



b. Maloney CompanyIncome Statement

For the Month of May 2016

Sales $165,900Less: Cost of goods sold:

Add: Cost of goods manufactured $124,800Beginning inventory finished goods 15,000 Cost of goods available for sale $139,800Less: Ending inventory finished goods 17,100 122,700

Gross margin $ 43,200Less: Selling and administrative expenses 18,900 Operating income $ 24,300

c. Primecosts=$51,900+$31,200=$83,100Conversioncosts=$31,200+$45,000=$76,200



197. ThefollowinginformationpertainstotheMontpelierCompany:

Directmaterialspurchases $62,400Beginningdirectmaterials 10,400Factory overhead 58,400Beginningworkinprocess 10,600Cost of goods manufactured 164,000Endingfinishedgoods 20,000Grossmargin 21,000Sellingandadministrativeexpenses 7,000Beginningfinishedgoods 16,000Endingworkinprocess 8,000Endingdirectmaterials 12,400Directlabor ?Directmaterials used ?Operatingincome(loss) ?Total manufacturing costs added ?Costofgoodssold ?Sales ?Require d :

Determinethefollowingvalues:

a. Netincomeb. Totalmanufacturingcostsaddedc. Costofgoodssoldd. Salese. Directmaterialsusedf. Directlabor

ANSWER:

a. $21,000 – $7,000 = $14,000b. $164,000 + $8,000 – $10,600 = $161,400c. $16,000 + $164,000 – $20,000 = $160,000d. $21,000 + $160,000* = $181,000e. $10,400 + $62,400 - $12,400 = $60,400f. $161,400** - $60,400*** – $58,400 = $42,600

*Found in c **Found in b***Found in e



198. InformationaboutMobileEnterprisesfortheyearendingDecember31,2016,isasfollows:

Sales $300,000Sellingandadministrativeexpenses 18,000Netincome 8,000

Beginninginventories:Directm 20,000Workin process 18,000Finishedgoods 62,000

Endingdirectmaterialsis20percentlargerthanbeginningdirectmaterials.Endingworkinprocessishalfofthebeginningworkinprocess.Endingfinishedgoodsincreasedby$8,000duringtheyear.Primecostsandconversioncostsare70percentand60percentoftotalmanufacturingcostsadded,respectively.Materialspurchasesare$113,200.

Require d :

a. Prepareastatementofcostofgoodsmanufactured.b. Prepareanincomestatement.Note:Findthenumbersfortheincomestatementfirst.

ANSWER:a.

Mobile EnterprisesStatement of Cost of Goods ManufacturedFor the Year Ended December 31, 2016

Direct materials:Beginning inventory* $ 20,000Add: Purchases* 113,200 Materials available $133,200Less: Ending inventory* ($20,000 1.20) 24,000 Direct materials used in production $109,200Direct labor [(.7 273,000) – 109,200] 81,900Manufacturing overhead [(.6 273,000) – 81,900] 81,900 Total manufacturing costs added $273,000Add: Beginning work-in-process inventory* 18,000 Total costs in process $291,000Less: Ending work-in-process inventory* ($18,000 0.50) 9,000 Cost of goods manufactured $282,000



b.Mobile EnterprisesIncome Statement

For the Year Ended December 31, 2016

Sales* $300,000Less: Cost of goods sold:Add: Cost of goods manufactured $282,000Beginning inventory finished goods* 62,000 Cost of goods available for sale $344,000Less: Ending inventory finished goods* ($62,000 + $8,000) 70,000 274,000 Gross margin $ 26,000Less: Selling and administrative expenses* 18,000 Operating income* $ 8,000

*Theseitemsareprovided.

199. ThefollowingcostswereincurredbytheAwesomeCompany:

Directlabor $600,000Directmaterialpurchases 555,000Depreciationonplant 30,000Factorysupervisor'ssalary 75,000Plantmaintenance 15,000Plantutilities 27,000Sales 1,950,000Sellingandadministrativeexpenses 300,000Beginningdirectmaterialsinventory 51,000Beginningwork-in-processinventory 24,000Beginningfinishedgoodsinventory 54,000Endingdirectmaterialsinventory 45,000Endingworkinprocess 39,000Endingfinishedgoods 72,000Require d :

Calculatethefollowingvalues:

a. Directmaterialsusedb. Costofgoodsmanufacturedc. Costofgoodssoldd. Operatingincome

ANSWER:


a. $51,000 + $555,000 – $45,000 = $561,000b. $561,000 + $600,000 + $75,000 + $30,000 + $15,000 + $27,000 + $24,000 – $39,000 =

$1,293,000c. $54,000 + $1,293,000 – $72,000 = $1,275,000d. $1,950,000 – $1,275,000 – $300,000 = $375,000


200. ForemostCorporationincurredthefollowingcosts:Beginningdirectmaterialsinventory $17,000Beginningwork-in-processinventory 8,000Beginningfinishedgoodsinventory 18,000Endingdirectmaterialsinventory 15,000Endingworkinprocess 13,000Endingfinishedgoods 24,000Factorysupervisor'ssalary 25,000Depreciationonplant 10,000Sales 650,000Sellingandadministrativeexpenses 100,000Plantmaintenance 5,000Plantutilities 9,000Directmaterialpurchases 185,000Directlabor 200,000

Require d :

Calculatethefollowingvalues:

a. Directmaterialsusedb. Costofgoodsmanufacturedc. Costofgoodssoldd. Operatingincome

ANSWER:

a. $17,000+$185,000–$15,000=$187,000 b. $187,000+$200,000+$25,000 +$10,000+$5,000+ $9,000+$8,000–$13,000 =$431,000 c. $18,000+$431,000–$24,000=$425,000 d. $650,000–$425,000–$100,000=$125,000



201. CorlisCustomBuildersdesignsdecks,gazebos,andplayequipmentforresidentialhomes.ThefollowingwasprovidedfortheyearendedSeptember30,2016:

Directlabor $600,000Directmaterialpurchases 40,000Administrative 130,000Overhead 75,000Selling 265,000Beginningdirectmaterialsinventory 20,000Beginningdesignsinprocess 14,000Endingdirectmaterialsinventory 10,000Endingdesignsinprocess 39,000

Theaveragedesignfeeis$700.Therewere2,000designsprocessedduringtheyear.Require d :a. Prepareastatementofcostofservicessold.b. Prepareanincomestatement.c. Discussthreedifferencesbetweenservicesandtangibleproducts.

ANSWER:a. Corlis Custom Builders

Cost of Services SoldFor the Year Ended September 30, 2014

Beginning materials $ 20,000Purchases 40,000Materials available 60,000

Less

Ending materials 10,000

Materials used 50,000 Direct labor 600,000Overhead 75,000 Beginning design in process 14,000Ending designs in process 39,000Cost of Services Sold $700,000

b. Corlis Custom BuildersIncome Statement

For the Year Ended September 30, 2014

Sales $1,400,000Cost of services sold 700,000Gross margin 700,000Selling 265,000Administrative 130,000Net income $ 305,000

c. Services have three attributes that are not possessed by tangible products: intangibility, perishability, and inseparability.



.



202. Defineactivity-basedmanagement.Inyouranswer,presenttheactivity-basedmanagementmodelingoodform.

ANSWER: Activity-basedmanagementfocusesonthemanagementofactivitieswiththeobjectiveofimprovingthevaluereceivedbythecustomerandtheprofitreceivedbyprovidingthisvalue;itincludesdriveranalysis,activityanalysis,andperformanceevaluationanddrawsonactivity-basedcostingasamajorsourceofinformation.Exhibit2-7inthetextpresentsthemodel.

203. Inchoosingacostmanagementsystem,thecontrollermustbalancethetotalcostsofimplementingsuchsystems.Whatcostsmustbebalancedtodeterminetotalcost?Howdofunctional-basedandactivity-basedcostsystemsbalancethetrade-offs?

ANSWER: Errorcostsandmeasurementcostsmustbeconsideredinchoosingacostmanagementsystem.Activity-basedcostmanagementhasgreatermeasurementcostsduetoanalyzingmanyactivitiesbuthasgreateraccuracyandfewererrorcosts.Functional-basedcostsystemshavelowermeasurementcostsbuthighererrorcosts.Controllersmustassesstheneedforaccuracyincosting,pricing,andmanagingprofitability.


Directmaterials $22,200Workinprocess 40,000Finishedgoods 208,500


204. ThecostofgoodssoldfortheImmaculateCorporationforthemonthofApril2016was$450,000.Work-in-processinventoryattheendofAprilwas95percentofthework-in-processinventoryatthebeginningofthemonth.Overheadis80percentofthedirectlaborcost.Duringthemonth,$110,000ofdirectmaterialswerepurchased.RevenuesforImmaculatewere$600,000,andthesellingandadministrativecostswere$70,000.OtherinformationaboutImmaculate'sinventoriesandproductionforAprilwasasfollows:Endinginventories-April30

Direct materials $19,000Work in process ?Finishedgoods 105,000

Beginninginventories-April1

Require d :a. Prepareacostofgoodsmanufacturedandcostofgoodssoldstatements.b. Prepareanincomestatement.c. Whataretheprimecosts,conversioncosts,andperiodcosts?

ANSWER: a.


Immaculate CorporationStatement of Cost of Goods Manufactured

For Month of April 2016

Direct materials:Beginning inventory* $ 22,200Add: Purchases* 110,000 Materials available $132,200Less: Ending inventory* 19,000 Direct materials used in production $113,200Direct labor below 128,500Manufacturing overhead ($128,500 ´ 0.80) 102,800 Total manufacturing costs added $344,500Add: Beginning work-in-process inventory* 40,000 Total costs in process $384,500Less: Ending work-in-process inventory ($40,000 ´ 0.95) 38,000 Cost of goods manufactured (from COGS statement) $346,500DM used = $22,200 + $110,000 – $19,000 = $113,200CGM = $450,000 + $105,000 – $208,500 = $346,500Total manufacturing costs added =DM + DL + MOH

$344,500 = 113,200 + DL + MOH$231,300 = DL + MOH$231,300 = DL + {MOH = 0.80 ´ DL} $231,300 = DL + .8DL$231,300 = 1.8DL$128,500 = DL MOH = 0.80 DL MOH = 0.80 128,500 = 102,800


ImmaculateCorporationCostofGoodsSoldStatementFor MonthofApril2016

Costofgoodssold*:Add:Costofgoodsmanufactured $346,500Beginninginventoryfinishedgoods* 208,500 Costofgoodsavailableforsale $555,000Less:Endinginventoryfinishedgoods* 105,000 CostofGoodsSold* $450,000 *Theseitemsareprovided.

b.

ImmaculateCompanyIncomeSta

tementFor MonthofApril2016

Sales* $600,000Less:Costofgoodssold*:Add:Costofgoodsmanufactured $346,500Beginninginventoryfinishedgoods* 208,500 Costofgoodsavailableforsale $555,000Less:Endinginventoryfinishedgoods* 105,000 450,000Grossmargin $150,000Less:Sellingandadministrativeexpenses* 70,000 Operatingincome $ 80,000

*Theseitemsareprovided.

c. Conversioncosts =directlaborandoverhead=$231,300=$128,500+ $102,800=$231,300

Primecosts=DM+DL=$113,200+$128,500=$241,700Periodcosts=$70,000



205. Describeseveralofthemajordifferencesbetweenafunctional-basedcostmanagementsystemandanactivity-basedcostmanagementsystem.

ANSWER: Thefunctional-basedcostaccountingsystemassumesthatallcostscanbeclassifiedasfixedorvariablewithrespecttochangesintheunitsorvolumeofproductproduced.

Theactivity-basedcostmanagementsystem'sobjectiveistoimprovethequality,content,relevance,andtimingofinformation.

Acomparisonofthetwosystemsisshownbelow:Functional-based Activity-based1. Unit-based drivers 1. Unit and nonunit-based drivers2. Allocation-intensive 2. Tracing-intensive3. Narrow and rigid product costing 3. Broad, flexible product costing4. Focus on managing costs 4. Focus on managing activities5. Sparse activity information 5. Detailed activity information6. Maximization of individual 6. Systemwide performance

unit performance maximization7. Uses financial measures of 7. Uses both financial and

performance nonfinancial measures ofperformance


Documents

testbankgo.eu · Web viewBeginning inventory finished goods 15,000 Cost of goods available for sale $139,800 Less: Ending inventory finished goods 17,100 122,700 Gross margin $ 43,200