Question 1

Which of the following would generally be considered a fixed factory overhead cost? $\begin{array}{ll}
\text { Straight-line}&\text { Factory } & \text { Units-of-production } \
\underline{\text { depreciation}}&\underline{\text { insurance} } &\underline{ \text { depreciation }}
\end{array}$ 
A) no no no
B) yes no yes
C) yes yes no
D) no yes no

Accepted Answer

Straight-line depreciation and insurance are typically considered fixed factory overhead costs because they do not vary with production levels. Units-of-production depreciation varies with production and is not fixed.

Question 2

Another name for inventoriable costs is ____________________ costs.

Accepted Answer

The answer of Another name for inventoriable costs is ____________________...

Question 3

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a ____________________ cost.

Accepted Answer

The answer of A cost that shifts upward or downward...

Question 4

Which of the following defines variable cost behavior? $\begin{array}{llcc}
  \text {Total cost reaction   } &  \text {Cost per urit reaction   } \
  \text { to increase in activity  } &  \text {to increase in activity  } 
\end{array}$

A) remains constant remains constant
B) remains constant increases
C) increases increases
D) increases remains constant

Accepted Answer

Variable costs increase in total with an increase in activity, but the cost per unit remains constant.

Question 5

The three stages of production for a manufacturing firm are _________________________, ______________________________, and _________________________.

Accepted Answer

The answer of The three stages of production for a...

Question 6

Costs that result from defective units, product returns, and complaints are referred to as ____________________ costs.

Accepted Answer

The answer of Costs that result from defective units, product...

Question 7

A cost that remains constant on a per unit basis within the relevant range is a ____________________ cost.

Accepted Answer

The answer of A cost that remains constant on a...

Question 8

A cost that has both fixed and variable components is known as a ____________________ cost.

Accepted Answer

The answer of A cost that has both fixed and...

Question 9

When the number of units manufactured increases, the most significant change in unit cost will be reflected as a(n)
A) increase in the fixed element.
B) decrease in the variable element.
C) increase in the mixed element.
D) decrease in the fixed element.

Accepted Answer

When the number of units manufactured increases, the fixed element of cost per unit decreases because fixed costs (such as rent, salaries, and equipment costs) are spread over more units. This does not change the total fixed costs but reduces the cost per unit.

Question 10

The term "relevant range" as used in cost accounting means the range over which
A) costs may fluctuate.
B) cost relationships are valid.
C) production may vary.
D) relevant costs are incurred.

Accepted Answer

The relevant range refers to the range of activity or production over which the assumptions made about cost behavior are valid. In other words, it is the range of activity over which total fixed costs, variable costs per unit and total variable costs remain constant. Therefore, choice B is the correct answer as it states that the relevant range refers to the range over which cost relationships are valid.

Question 11

A cost that varies in total in direct proportion to changes in activity is known as a ____________________ cost

Accepted Answer

The answer of A cost that varies in total in...

Question 12

A cost that varies inversely with the level of production is known as a ____________________ cost.

Accepted Answer

The answer of A cost that varies inversely with the...

Question 13

When cost relationships are linear, total variable prime costs will vary in proportion to changes in
A) direct labor hours.
B) total material cost.
C) total overhead cost.
D) production volume.

Accepted Answer

When cost relationships are linear, total variable prime costs will vary in proportion to changes in production volume. This means that as production volume increases or decreases, the total variable prime costs will also increase or decrease proportionally. This relationship assumes that the cost per unit of production remains constant.

Question 14

A(n) ____ cost increases or decreases in intervals as activity changes.
A) historical cost
B) fixed cost
C) step cost
D) budgeted cost

Accepted Answer

Step cost increases or decreases in intervals as activity changes. Historical cost refers to past costs that are not relevant to current decision making. Fixed cost remains constant despite changes in activity levels. Budgeted cost is the predicted cost for a future period.

Question 15

The assumed range of activity that reflects the company's normal operating range is referred to as the ______________________________.

Accepted Answer

The answer of The assumed range of activity that reflects...

Question 16

A cost that remains constant in total but varies on a per-unit basis with changes in activity is called a(n)
A) expired cost.
B) fixed cost.
C) variable cost.
D) mixed cost.

Accepted Answer

Fixed costs remain constant in total regardless of changes in the level of activity. However, on a per-unit basis, these costs will vary inversely with changes in activity.

Question 17

Which of the following always has a direct cause-effect relationship to a cost? $\begin{array}{llcc}
 \underline{ \text { Predictor } }& \underline{ \text {  Cost driver} }\
\end{array}$
 
A) yes yes
B) yes no
C) no yes
D) no no

Accepted Answer

A cost driver is a factor that directly causes a change in the cost of an activity, thus always having a direct cause-effect relationship to a cost.

Question 18

An example of a fixed cost is
A) total indirect material cost.
B) total hourly wages.
C) cost of electricity.
D) straight-line depreciation.

Accepted Answer

Straight-line depreciation is a fixed cost because it is a cost that remains constant regardless of the level of production or sales. It is a non-cash expense that reflects the decline in value of an asset over time. Total indirect material cost, total hourly wages, and cost of electricity are variable costs because they change with the level of production or sales.

Question 19

Costs incurred for monitoring or inspecting products are known as ____________________ costs.

Accepted Answer

The answer of Costs incurred for monitoring or inspecting products...

Question 20

Costs that are incurred to improve quality by precluding defects and improper processing are referred to as ____________________ costs.

Accepted Answer

The answer of Costs that are incurred to improve quality...

Quiz 1: Cost Terminology and Cost Behaviors

Which of the following would generally be considered a fixed factory overhead cost? $\begin{array}{ll}\text { Straight-line}&\text { Factory } & \text { Units-of-production } \\\underline{\text { depreciation}}&\underline{\text { insurance} } &\underline{ \text { depreciation }}\end{array}$

Another name for inventoriable costs is ____________________ costs.

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a ____________________ cost.

Which of the following defines variable cost behavior? $\begin{array}{llcc} \text {Total cost reaction } & \text {Cost per urit reaction } \\ \text { to increase in activity } & \text {to increase in activity } \end{array}$

The three stages of production for a manufacturing firm are _, , and ___.

Costs that result from defective units, product returns, and complaints are referred to as ____________________ costs.

A cost that remains constant on a per unit basis within the relevant range is a ____________________ cost.

A cost that has both fixed and variable components is known as a ____________________ cost.

When the number of units manufactured increases, the most significant change in unit cost will be reflected as a(n)

The term "relevant range" as used in cost accounting means the range over which

A cost that varies in total in direct proportion to changes in activity is known as a ____________________ cost

A cost that varies inversely with the level of production is known as a ____________________ cost.

When cost relationships are linear, total variable prime costs will vary in proportion to changes in

A(n) ____ cost increases or decreases in intervals as activity changes.

The assumed range of activity that reflects the company's normal operating range is referred to as the ______________________________.

A cost that remains constant in total but varies on a per-unit basis with changes in activity is called a(n)

Which of the following always has a direct cause-effect relationship to a cost? $\begin{array}{llcc} \underline{ \text { Predictor } }& \underline{ \text { Cost driver} }\\\end{array}$

An example of a fixed cost is

Costs incurred for monitoring or inspecting products are known as ____________________ costs.

Costs that are incurred to improve quality by precluding defects and improper processing are referred to as ____________________ costs.

Quiz 1: Cost Terminology and Cost Behaviors

Another name for inventoriable costs is ____________________ costs.

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a ____________________ cost.

The three stages of production for a manufacturing firm are _________________________, ______________________________, and _________________________.

Costs that result from defective units, product returns, and complaints are referred to as ____________________ costs.

A cost that remains constant on a per unit basis within the relevant range is a ____________________ cost.

A cost that has both fixed and variable components is known as a ____________________ cost.

When the number of units manufactured increases, the most significant change in unit cost will be reflected as a(n)

The term "relevant range" as used in cost accounting means the range over which

A cost that varies in total in direct proportion to changes in activity is known as a ____________________ cost

A cost that varies inversely with the level of production is known as a ____________________ cost.

When cost relationships are linear, total variable prime costs will vary in proportion to changes in

A(n) ____ cost increases or decreases in intervals as activity changes.

The assumed range of activity that reflects the company's normal operating range is referred to as the ______________________________.

A cost that remains constant in total but varies on a per-unit basis with changes in activity is called a(n)

Which of the following always has a direct cause-effect relationship to a cost? Predictor ‾ Cost driver‾\begin{array}{llcc} \underline{ \text { Predictor } }& \underline{ \text { Cost driver} }\\\end{array} Predictor ​​ Cost driver​​

An example of a fixed cost is

Costs incurred for monitoring or inspecting products are known as ____________________ costs.

Costs that are incurred to improve quality by precluding defects and improper processing are referred to as ____________________ costs.

The three stages of production for a manufacturing firm are _, , and ___.

Which of the following always has a direct cause-effect relationship to a cost? $\begin{array}{llcc} \underline{ \text { Predictor } }& \underline{ \text { Cost driver} }\\\end{array}$