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Some multiple choice questions: Wages paid to an assembly line worker in a factory are a a. Prime Cost YES.Conversion Cost NO. Prime Cost...

Some multiple choice questions:

1. Wages paid to an assembly line worker in a factory are a
a. Prime Cost YES.....Conversion Cost NO.
b. Prime Cost YES.....Conversion Cost YES.
c. Prime Cost NO....Conversion Cost NO.
d. Prime Cost NO.....Conversion Cost YES.

2. A cost incurred in the past that is not relevant to any current decision is classified as:
a. period cost.
b. incremental cost.
c. opportunity cost.
d. None of the above

3. The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n):
period cost.
direct material cost.
indirect manufacturing cost.
direct labor cost.
None of the above

4. When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following?
Fixed costs per unit increase and variable costs per unit increase.
Fixed costs per unit decrease and variable costs per unit do not change.
Fixed costs per unit do not change and variable costs per unit do not change.
Fixed costs per unit do not change and variable costs per unit increase.

5. Emco Company uses direct labor cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for last year, the company included in direct labor cost a portion of indirect labor. The effect of this misclassification will be to:
understate the predetermined overhead rate.
overstate the predetermined overhead rate.
have no effect on the predetermined overhead rate.
This cannot be determined from the information given.

6. A job-order cost system is employed in those situations where:
many different products, jobs, or batches of production are being produced each period.
manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis.
the product moves from department to department before being completed.
the unit cost of production is computed by dividing the total production costs by the number of units produced.

7. Equivalent units for a process costing system using the FIFO method would be equal to:
units completed during the period, plus equivalent units in the ending work-in-process inventory.
units started and completed during the period, plus equivalent units in the ending work-in-process inventory.
units completed during the period and transferred out.
units started and completed during the period, plus equivalent units in the ending work-in-process inventory, plus work needed to complete units in the beginning work-in-process inventory.

8. The contribution margin equals:
sales - expenses.
sales - cost of goods sold.
sales - variable costs.
sales - fixed costs.

9. The unit sales needed to attain the target profit is found by:
dividing fixed costs by the contribution margin.
adding variable expenses to fixed expenses and dividing the total by the contribution margin.
adding target profit to the fixed expenses and then dividing the total by the unit contribution margin.
adding target profit to the fixed expenses and then dividing the total by the contribution margin.

10. Under variable costing:
net operating income will tend to move up and down in response to changes in levels of production.
inventory costs will be lower than under absorption costing.
net operating income will tend to vary inversely with production changes.
net operating income will always be higher than under absorption costing.
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