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Wages paid to an assembly line worker in a factory

1. (TCO A) Wages paid to an assembly line worker in a factory are a (Points : 6)

      Prime Cost YES…..Conversion Cost NO.

      Prime Cost YES…..Conversion Cost YES.

      Prime Cost NO….Conversion Cost NO.

      Prime Cost NO…..Conversion Cost YES.

 

Question 2.2. (TCO A)  The costs of staffing and operating the accounting department at Central Hospital would be considered by the Department of Surgery to be (Points : 6)

      direct costs.

      sunk costs.

      incremental costs.

      None of the above

 

Question 3.3. (TCO A) Depreciation of office buildings and office equipment is also known as (Points : 6)

      variable costs.

      conversion costs.

      product costs.

      period costs.

 

Question 4.4. (TCO A) When the activity level is expected to increase within the relevant range, what effects would be anticipated with respect to each of the following? (Points : 6)

      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.

 

Question 5.5. (TCO F) 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 (Points : 6)

      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.

 

Question 6.6. (TCO F) A job-order cost system is employed in those situations where (Points : 6)

      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.

 

Question 7.7. (TCO F) The FIFO method only provides a major advantage over the weighted-average method in that (Points : 6)

      the calculation of equivalent units is less complex under the FIFO method.

      the FIFO method treats units in the beginning inventory as if they were started and completed during the current period.

      the FIFO method provides measurements of work done during the current period.

      the weighted-average method ignores units in the beginning and ending work-in-process inventories.

 

Question 8.8. (TCO B) The contribution margin ratio always increases when the (Points : 6)

      break-even point increases.

      break-even point decreases.

      variable expenses as a percentage of net sales decrease.

      variable expenses as a percentage of net sales increase.

 

Question 9.9. (TCO B)  Which of the following would not affect the break-even point? (Points : 6)

      Number of units sold

      Variable expense per unit

      Total fixed expenses

      Selling price per unit

 

Question 10.10. (TCO E) In an income statement prepared using the variable costing method, variable selling and administrative expenses would (Points : 6)

      be used in the computation of the contribution margin.

      be used in the computation of net operating income but not in the computation of the contribution margin.

      be treated differently from variable manufacturing expenses.

      not be used.

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