Accounting Mid-Term

1. Question: (TCO A) Wages paid to a timekeeper in a factory are a:

Prime Cost YES.....Conversion Cost NO

Prime Cost YES.....Conversion Cost YES

Prime Cost NO....Conversion Cost NO

Prime Cost NO.....Conversion Cost YES CORRECT

2. Question: (TCO A) A cost incurred in the past that is not relevant to any current decision is classified as a(n):

period cost.

opportunity cost.

sunk cost. CORRECT

differential cost.

3. Question: (TCO A) Inventoriable costs are also known as:

variable costs

conversion costs

product costs CORRECT

fixed costs

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

Fixed Cost Per Unit Variable Cost Per Unit

Increase No Change CORRECT

Increase Increase

No Change No Change

No Change Increase

5. Question: (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 misclassified a portion of direct labor cost as indirect labor. The effect of this misclassification will be to:

understate the predetermined overhead rate

overstate the predetermined overhead rate CORRECT

have no effect on the predetermined overhead rate

cannot be determined from the information given

6. Question: (TCO F) Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged...