MULTIPLE CHOICE14 - MULTIPLE CHOICE 38. Costs which are not...

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MULTIPLE CHOICE 38. Costs which are not economically feasible to trace but are related to a cost object are known as a. fixed costs. b. direct costs. c. indirect costs. d. variable costs. Answer: c Difficulty: 1 Objective: 1 39.Any item for which a separate measurement of cost is desired is known as a. cost allocation. b. a cost object. c. a direct cost. d. an indirect cost. Answer: b Difficulty: 1 Objective: 1 40. Indirect costs a. often comprise a large percentage of overall costs assigned to a cost object. b. specifically exclude marketing costs. c. cannot be used for external reporting. d. are treated as period costs and not as product costs. Answer: a Difficulty: 3 Objective: 1 41. All of the following illustrate purposes for allocating costs to cost objects EXCEPT a. to provide information for economic decisions. b. to motivate managers and employees. c. to determine a selling price the market will bear. d. to measure income and assets for reporting to external parties. Answer: c Difficulty: 2 Objective: 1 42. The costs of all six value-chain functions should be included when determining a. whether to add a new product line. b. the selling price of a service. c. whether to make or buy a component part from another manufacturer. d. all of the above. Answer: d Difficulty: 3 Objective: 1 43. R&D costs are used for which purpose of cost allocation? a. To provide information for economic decisions b. To report to external parties when using generally accepted accounting principles c. To calculate costs of a government contract d. All of the above purposes Answer: a Difficulty: Chapter 14 3 Page 6 Objective: 1 44. Which purpose of cost allocation is used to encourage sales
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representatives to push high-margin products or services? a. To provide information for economic decisions b. To motivate managers and other employees c. To justify costs or compute reimbursement d. To measure income and assets for reporting to external parties Answer: b Difficulty: 2 Objective: 1 45 . Which purpose of cost allocation is used to decide on the selling price for a customized product or service? a. To provide information for economic decisions b. To motivate managers and other employees c. To justify costs or compute reimbursement d. To measure income and assets for reporting to external parties Answer: a Difficulty: 2 Objective: 1 46 . To guide cost allocation decisions, the cause-and-effect criterion a. is used less frequently than the other criteria. b. is the primary criterion used in activity-based costing. c. is a difficult criterion on which to obtain agreement. d. may allocate corporate salaries to divisions based on profits. Answer: b Difficulty: 3 Objective: 2 47 . To guide cost allocation decisions, the benefits-received criterion a. generally uses the cost driver as the cost allocation base. b. results in subsidizing products that are not profitable. c. is the primarily criterion used in activity-based costing. d. may
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This note was uploaded on 08/28/2010 for the course ACCTG 101 taught by Professor Smith during the Spring '10 term at Alabama State University.

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MULTIPLE CHOICE14 - MULTIPLE CHOICE 38. Costs which are not...

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