1.

Costing of products and services is an objective of a company's:

a. Cost management system
b. EDI system
c. Financial accounting system
d. all of the above
2. Cost accounting
a. is concerned with assigning costs to various cost objects.
b. attempts to satisfy the costing objectives of both financial accounting and management accounting.
c. provides cost information that supports planning, controlling, and decision making.
d. All of the above descri ptions are true.
3

The
a.
b.
c.
d.

insurance paid on the factory is:

a direct cost if the cost object is the factory
an indirect cost if the cost object is the product produced
could be either a direct cost or an indirect cost, depending upon the cost object
al I of the above

4. Which of the following costs would be included in value-chain product costs?

e. research and development
f. production
g. customer service
h. all of the above
5

Which of the following costs is an example of product costs?

a. selling commissions
b. non factory office salaries
c. direct materials
d. advertising expense
6 If total warehousing cost for the year amounts to $350,000, and 40% of the warehousing activity is
associated with finished goods and 60% with direct materials, how much of the cost would be charged
as a product cost?
a. $70,000
b. $140,000
c. $210,000
d. $350,000

7 Given the following information:

Sales Revenue
$500,000
Operating Expenses
$230,000
Operating Income
$110,000
What is cost of goods sold?
a. $270,000
b. $160,000
c. $390,000
d. Not enough information
8 The following information pertains to Fry
Enterprises: Cost of goods
manufactured

$450,000

Beginning work-in-process inventory

Ending work-in-process inventory
Manufacturing overhead
What are the prime costs for the year?
a. $360,000
b. $480,000
c. $270,000
d. $300,000

210,000
180,000
150,000

9 Which of the following costs is a period cost for a manufacturing company?

a. controller's salary
b. wages of machine operators
c. insurance on factory equipment
d. fringe benefits for factory employees
10 Which of the following costs would be included as part of direct labor?
a. a cutter in the production of shelving
b. a materials handler
c. an assembly-line supervisor
d. a janitor