1.Cost assignment : d.
is includes tracing and allocating
2 A band of normal activity or volume in which specific cost-volume relationships are maintained is
referred to as the: a. relevant range
3 Cost allocation is: d. the assignment of indirect costs to the chosen cost object
4 Which of the following is a fixed cost for an automobile manufacturing plant?: d. administrative
salaries
5 Fixed costs depend on the: amount of resources acquired
6 Cost objects include: b. All of these answers are correct.
7 The collection of accounting data in some organized way is: a. cost accumulation
8 Indirect manufacturing costs: b. may include both variable and fixed costs
9 A manufacturing plant produces two product lines: golf equipment and soccer equipment. An
example of direct costs for the golf equipment line are: b. monthly lease payments for a specialized
piece of equipment needed to manufacture the golf driver
10 At a plant where a union agreement sets annual salaries and conditions, annual labor costs usually:
d. are considered a fixed cost
11 Which of the following statements about the direct/indirect cost classification is NOT true?
b. Indirect costs are always traced
12 The most likely cost driver of distribution costs is the: d. number of miles driven
13 Classifying a cost as either direct or indirect depends upon: c. whether the cost can be easily
identified with the cost object
14 A cost system determines the cost of a cost object by: d. accumulating and then assigning costs
15 Which of the following statements is FALSE? c. Fixed costs have cost drivers over the short run.
16 Actual costs are: b. the costs incurred
17 All of the following are true EXCEPT that indirect costs: d. may be included in prime costs
18 An understanding of the underlying behavior of costs helps in all of the following EXCEPT:
c. sales volume can be better estimated
19 Which one of the following is a variable cost for an insurance company? d. sales commissions
20 A manufacturing plant produces two product lines: golf equipment and soccer equipment. An
example of indirect cost for the soccer equipment line is: d. plant supervisor
21 Cost behavior refers to: c. how costs react to a change in the level of activity
22 Budgeted costs are: a. planned or forecasted costs
23 Variable costs: c. increase in total when the actual level of activity increases
24 The most likely cost driver of direct labor costs is the: d. number of production hours
25 The general term used to identify both the tracing and the allocation of accumulated costs to a cost
object is: a. cost assignment
26 Fixed costs: b. may include either direct or indirect costs
27 Which of the following does NOT affect the direct/indirect classification of a cost? b. the level of
budgeted profit for the next year
28 mixed cost is: c. a cost with fixed and variable elements
29 Which statement is true? d. A direct cost of one cost object can be an indirect cost of another cost
object.
30 If each motorcycle requires a belt that costs $20 and 2,000 motorcycles are produced for the
month the total cost for belts is: a. considered to be a direct variable cost
