{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Quiz+1+key - A202 Spring 2010 Quiz 1A KEY Worth 20 points...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
A202 Spring 2010 Quiz 1A KEY Worth 20 points True-false questions: Please circle your answer. (1 point each.) T F 1. For a student choosing between two colleges, researching the cost of tuition, room, and board at each college is part of step three in the four-step decision-making framework. True. Step 3 includes measuring the costs of each option. T F 2. The position of treasurer manages the day-to-day accounting of a firm, and also oversees the internal audit function. False. The treasurer manages the firm’s cash flow and serves as the contact point for banks, bondholders, and other creditors. T F 3. All fixed costs are also non-controllable costs. False. A cost may be fixed in its behavior (not changing in total as volume changes), but controllable with respect to a particular decision. T F 4. Production equipment depreciation is an example of a conversion cost. True. Conversion costs include direct labor and overhead; production equipment is part of overhead. T F 5. If the Kelley Undergraduate building is the cost object, the cost of cleaning supplies used to clean the building is a direct cost. True. The entire cost of the cleaning supplies can be easily traced to the cost object. T F 6. Although firms are not required to include capacity costs on their income statements, many choose to do so anyway. False. Firms are required under GAAP to include capacity costs on their income statements. 7. Short answer question: Please keep your answer to one or two sentences. GAAP does not allow firms to include most research and development costs with their inventoriable (i.e. product) costs. Why do you think GAAP takes this approach to R & D? (2 pts) Be generous with your grading. Answer should include mention of at least one of the following: - The matching principle (R&D would be difficult to match with the revenue generated by any particular goup of products or services sold) - R & D does not relate directly to readying products or services for sale, so is not considered a product cost 8. Corn State University is facing a budget crunch and is deciding between laying off 5% of its maintenance staff, or 10% of its maintenance staff. The remaining workers will be expected to take on the duties formerly performed by the laid off workers, but without working any extra hours. Given this decision setting, for each of the costs listed below, check all boxes that describe that cost . (3 pts) Controllable? Relevant? Maintenance workers’ wages XXX XXX Depreciation, maintenance equipment (assume 5 yr life, straight-line depreciation) Utilities for dormitories For each of the three costs, subtract 1 point if correct boxes aren’t checked for that cost.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Quiz 1A key, cont’d 9. Jasper Products recorded the following costs and other activity for 2009: Direct labor $200,000 Direct materials 400,000 Overhead 500,000 Selling and admin. 160,000 Labor hours 10,000 Machine hours 50,000 Jasper Products produces grills, torches, and ovens. Here is information about the products for 2009: Grills 12,000 machine hours 3,000 labor hours Torches 5,000 machine hours 2,000 labor hours Ovens 3,000 machine hours 5,000 labor hours The company allocates overhead cost using labor hours as the cost driver.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}