Accounting 102 Chapter 5

Accounting 102 Chapter 5 - Chapter 5 Out of 20 questions...

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Chapter 5 Out of 20 questions, you answered 11 correctly, for a final grade of 55%. 11 correct (55%)  5 incorrect (25%)  4 unanswered (20%)  Your Results: The correct answer for each question is indicated by a  1 INCORRECT Which of the following best identifies the decision-making relationship between cost drivers, cost  objects and accumulated cost? A) Cost objects are used to allocate estimated accumulated costs to cost drivers. B) Cost objects are used to allocate actual accumulated costs to cost drivers. C) Cost drivers are used to allocate estimated accumulated costs to cost objects. D) Cost drivers are used to allocate actual accumulated costs to cost objects. Feedback: A cost driver has a cause-and-effect relationship with a cost object. Estimated  costs are important for decision making because actual costs are not known until after the  decision has to be made. LO 1 2 CORRECT Which of the following statements is false? A) Direct costs can be traced to cost objects in a cost-effective manner. B) Indirect costs cannot be traced to cost objects in a cost-effective manner. C) Direct costs are also called overhead costs. D) A particular cost may be a direct cost for one cost object and an indirect cost for a  different cost object. Feedback: Indirect costs are also called overhead costs. LO 2 3 INCORRECT When manufacturing air conditioners which of the following would be considered an indirect cost? A) Cost of the condenser put in an air conditioner. B) Cost of supervising the production of air conditioners. C) Cost of assembling an air conditioner D) Cost of the box and packaging for an air conditioner Feedback: The supervision cost relates to all air conditioners produced and is not easily  traced to a specific air conditioner. LO 2 4 CORRECT In a retail store which of the following would be considered an indirect cost to a department? A) Cost of merchandise
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B) Cost of the department manager's salary C) Cost of the store manager's salary D) Cost of sales commissions Feedback: The store manager’s salary is an indirect cost for a particular department. A  portion of the cost would be allocated to that department. LO 2 5 INCORRECT The process of dividing a total cost into parts and assigning the parts to particular cost objects is  known as A) cost allocation. B) cost assignment. C) allocation basing. D) allocation rating. Feedback: Cost allocation involves dividing a total cost into parts and assigning the parts  to designated cost objects. LO 3 6 CORRECT The Pager Company has three departments. The following is a summary of the direct labor hours  and number of units produced in each department:   
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