Chapter 7—Allocating Costs of Support Departments and Joint Products SAMPLE OF EXTRA MCQ FOR COST ALLOCATION THIS IS TO GIVE STUDENTS YET ANOTHER OPPORTUNITY TO PRACTICE THEIR PROBLEM SOLVING SKILLS IN PREPARATION FOR YOUR TEST. I TRUST YOU ARE NOE SATISFIED. YOU NOW HAVE A LOT MORE SOLVED MCQ THAN YOU EVER HOPED FOR! These MCQ are posted on blackboard to high light and complement certain aspects of the topic, facilitate those students who may have missed my lecture, balance traditional with internet based learning and overall enhance student’s learning. The MCQ are not meant to suggest what questions may be in the exams, replace textbook studying and or homework of any kind. George 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 DIF: Moderate OBJ: 7-1 NAT: AACSB Reflective 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 DIF: Easy OBJ: 7-1 NAT: AACSB Reflective 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 DIF: Moderate OBJ: 7-1 NAT: AACSB Reflective 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 DIF: Moderate OBJ: 7-1 NAT: AACSB Reflective 5. Examples of support departments include all of the following EXCEPT a. maintenance. b. personnel. c. machining. d. data processing. ANS: C PTS: 1 DIF: Moderate OBJ: 7-1 NAT: AACSB Reflective
6. Examples of producing departments include all of the following EXCEPT a. mixing. b. molding. c. packaging. d. accounting. ANS: D PTS: 1 DIF: Moderate OBJ: 7-1 NAT: AACSB Reflective 7. Support department costs are accounted for in which one of the following ways? 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 REF: p. 277 OBJ: 7-1 8. _______________ are activities or variables within a producing department that provoke the incurrence of support costs. a. Causal factors b. Common costs c. Cost objectives d. Activity output ANS: A PTS: 1 DIF: Easy OBJ: 7-1 NAT: AACSB Reflective 9. Which of the following would be the most appropriate base for allocating the costs of the housekeeping department? a.
This is the end of the preview. Sign up to
access the rest of the document.