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Cost Accounting Methods Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. How do process costing systems allocate expenses to products?

Question 2 2. What types of manufacturing companies would typically use a process costing system?

Question 3 3. What is the formula to calculate per unit cost in a process costing system?

Question 4 4. Why would a company choose a process costing system over a job costing system?

Question 5 5. What is an example of a direct materials cost?

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Question 6 6. What is an advantage of variable costing?

Question 7 7. When production increases, what typically happens to variable costs?

Question 8 8. What is variable costing?

Question 9 9. To what products or services can variable costs apply?

Question 10 10. Why do companies use variable costing?

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Question 11 11. Historical cost is the _____.

Question 12 12. Get a Good Deal Company needs of a new delivery van. They've searched the Internet for the best prices and are ready to make a purchase. The vehicle they're interested in has a list price online of $32,000, which includes all the fees ($1,500 worth) to get the van on the road. When Get a Good Deal Company approaches a dealer directly, though, they're able to negotiate a $2,000 discount - bringing their purchase price to $30,000. They decide to go with this option. The $30,000 purchase price includes the aforementioned fees. What value will be recorded as an asset under historical cost accounting principles?

Question 13 13. Historical cost accounting is _____.

Question 14 14. Why is historical cost useful as an accounting method?

Question 15 15. ABC Company buys a used piece of machinery for its warehouse. The machine cost $100,000 to purchase and $10,000 to have installed. ABC got a great deal on this piece of machinery; a brand new machine would have cost $150,000. Under historical cost accounting principles, what is the value of the machinery that will be recorded as an asset?

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Question 16 16. What is manufacturing overhead?

Question 17 17. What is product costing?

Question 18 18. If the cost-pool for labor has a total of $125,000 and the driver for that pool is 45,000 labor-hours, what is the activity-based costing rate for labor?

Question 19 19. What is the difference between traditional costing and activity-based costing systems?

Question 20 20. What is a cost pool?

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Question 21 21. Who are the principal users of cost accounting information?

Question 22 22. Who regulates a company's cost accounting systems?

Question 23 23. Why do companies use cost accounting systems?

Question 24 24. Which one of the following correctly states why financial accounting information should conform to GAAP (Generally Accepted Accounting Principles)?

Question 25 25. What is the difference between cost accounting and financial accounting?

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Question 26 26. Where would a manager find all the costs associated with a particular job or project, including materials, labor, and overhead costs?

Question 27 27.

Given the following information, what is the pre-determined overhead allocation using direct labor hours as the driver?

Total factory overhead costs = $25,000

Total direct labor hours = 5,000

Total direct labor costs = $10,000

Total materials cost = $15,000

Question 28 28. Which of the following is NOT a cost component included in a job-order costing system?

Question 29 29. Mary wants to know how many hours her assistant worked on a particular project during a certain period. Which document in a job-ordering costing system would allow her to do that?

Question 30 30. Which form would contain the materials used for a custom-ordered job?

Cost Accounting Methods Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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