Ch02_Guan CM_AISE TB

Ch02_Guan CM_AISE TB - Chapter 2Basic Cost Management...

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Chapter 2—Basic Cost Management Concepts MULTIPLE CHOICE 1. Which of the following is NOT an example of a cost object? a. a product b. a driver c. an activity d. a department ANS: B PTS: 1 OBJ: 2-1 2. What is a disadvantage of assigning costs evenly over all cost objects? a. Not all costs will be assigned b. Total costs will be distorted c. Costs may be distorted by the consumption patterns of other cost objects d. None of the above ANS: C PTS: 1 OBJ: 2-1 3. The insurance paid on the factory is: a. a direct cost if the cost object is the factory b. an indirect cost if the cost object is the product produced c. could be either a direct cost or an indirect cost, depending upon the cost object d. all of the above ANS: D PTS: 1 OBJ: 2-1 4. Which of the following would NOT be a cost that could be directly traced to a custom made piece of furniture based upon physical observation? a. the wood and upholstery materials that are in the final piece b. the labor of the worker assembling the piece of furniture c. the depreciation paid on factory equipment d. the labor of the woodworker who finishes the wood of the piece ANS: C PTS: 1 OBJ: 2-1 5. If physical observation can NOT be used to identify the exact amount of resources consumed by a cost object, the next best approach is: a. driver tracing b. allocation c. estimation d. none of the above ANS: A PTS: 1 OBJ: 2-1 6. The precision of driver tracing depends upon: a. physically observable relationships b. allocation estimations c. the strength of the causal relationship described by the driver d. ‘b’ and ‘c’ are correct ANS: C PTS: 1 OBJ: 2-1 This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher.
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7. _______________ represents the resources given up that are expected to bring a current or future be- nefit to the organization. a. Cost b. Expired cost c. Expense d. Loss ANS: A PTS: 1 OBJ: 2-1 8. _______________ is(are) the cash or cash equivalent value sacrificed for goods and services that are expected to bring a current or future benefit to the organization. a. Expenses b. Cost c. An activity d. A loss ANS: B PTS: 1 OBJ: 2-1 9. Which of the following is an example of an expense? a. the cost of a product delivered to a customer b. the cost of a proposed advertising campaign c. the cost of the purchase of equipment d. the write-off of an obsolete product ANS: A PTS: 1 OBJ: 2-1 10. Which of the following is an example of a loss? a. the cost of a product delivered to a customer b. the cost of a delivered advertising campaign c. the cost of the purchase of equipment d. the write-off of an obsolete product ANS: D PTS: 1 OBJ: 2-1 11. A cost used up in the production of revenues is a(n) a. unexpired cost. b.
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Ch02_Guan CM_AISE TB - Chapter 2Basic Cost Management...

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