Ch07_Guan CM_AISE TB

Ch07_Guan CM_AISE TB - Chapter 7Allocating Costs of Support...

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Chapter 7—Allocating Costs of Support Departments and Joint Products MULTIPLE CHOICE 1. A common cost occurs a. when only one product or service is benefited. b. when different resources are used to produce one output. c. when the same resource is used in the output of two or more outputs. d. when a resource is used by two or more companies. ANS: C PTS: 1 OBJ: 7-1 2. Support department costs are _______________ to the producing departments. a. direct materials b. direct labor c. activity driver d. common cost ANS: D PTS: 1 OBJ: 7-1 3. Support departments a. are responsible for manufacturing the products sold to customers. b. work directly on the products of the firm. c. provide services directly to customers. d. provide essential services to the producing departments. ANS: D PTS: 1 OBJ: 7-1 4. Which of the following departments is NOT a support department? a. food services b. bottling c. health services d. security ANS: B PTS: 1 OBJ: 7-1 5. Examples of support departments include all of the following EXCEPT a. maintenance. b. personnel. c. machining. d. data processing. ANS: C PTS: 1 OBJ: 7-1 6. Examples of producing departments include all of the following EXCEPT a. mixing. b. molding. c. packaging. d. accounting. ANS: D PTS: 1 OBJ: 7-1 7. Support department costs are accounted for in which one of the following ways? 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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a. They are allocated directly to units of product. b. They are allocated to producing departments and then allocated to units of product. c. They are allocated to units of product and then allocated to the producing departments. d. They are expensed as incurred. ANS: B PTS: 1 OBJ: 7-1 8. _______________ are activities or variables within a producing department that provoke the incur- rence of support costs. a. Causal factors b. Common costs c. Cost objectives d. Activity output ANS: A PTS: 1 OBJ: 7-1 9. Which of the following would be the most appropriate base for allocating the costs of the housekeep- ing department? a. machine hours b. direct labor hours c. number of employees d. square feet ANS: D PTS: 1 OBJ: 7-1 10. A possible causal factor to use when allocating cafeteria costs would be a. number of square feet. b. number of direct labor hours. c. number of employees. d. appraised value of square footage. ANS: C PTS: 1 OBJ: 7-1 11. Which of the following would be the most appropriate base for allocating the costs of the maintenance department? a. machine hours b. direct labor hours c. number of employees d. square feet ANS: A PTS: 1 OBJ: 7-1 12. Which of the following cost categories would most likely use machine hours as its activity driver? a.
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Ch07_Guan CM_AISE TB - Chapter 7Allocating Costs of Support...

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