Question 1

Provide a description of an activity or process that a company could undertake to integrate sustainability into the value chain.

Accepted Answer

The answer of Provide a description of an activity or...

Question 2

Indirect costs can be traced to specific units.

Accepted Answer

Indirect costs cannot be traced to specific units as they are not directly related to the production of a specific product or service. Examples of indirect costs include rent, utilities, and administrative salaries, which are generally incurred on a company-wide basis rather than on a per-unit basis.

Question 3

Name and briefly describe the activities that make up the value chain.

Accepted Answer

The answer of Name and briefly describe the activities that...

Question 4

Direct costs are allocated to cost objects.

Accepted Answer

Direct costs are traced to cost objects, not allocated. Allocation is used for indirect costs that cannot be directly traced.

Question 5

Costs can be either direct or indirect, depending upon the cost object.

Accepted Answer

Costs are categorized as direct or indirect based on the cost object. Direct costs can be specifically identified with a particular cost object, while indirect costs cannot.

Question 6

Place the six business functions in the order they appear along the value chain: A = Customer service
B = Design
C = Distribution
D = Production or purchases
E = Research and Development
F = Marketing
A) A, E, B, D, C, F
B) A, C, D, B, F, E
C) E, B, D, F, C, A
D) E, B, A, D, F, C

Accepted Answer

The value chain typically starts with Research and Development (E), followed by Design (B), then moves into Production or Purchases (D), followed by Marketing (F), Distribution (C), and ends with Customer Service (A). This sequence aligns with the process of developing a product, making it, promoting it, delivering it, and supporting it.

Question 7

When determining the cost of a manufactured product, a salesperson's salary would be classified as
A) a direct cost.
B) an indirect cost.
C) a period cost.
D) a conversion cost.

Accepted Answer

The answer of When determining the cost of a manufactured...

Question 8

Match the following:
A) Research and Development
B) Customer Service
C) Marketing
D) Design
E) Production
F) Distribution
1) Cost of a commercial during a TV program
2) Cost of shipping goods to customers
3) Costs associated with repairing costs under warrantee
4) Costs of developing a new produce
5) Cost of making a prototype of a new product
6) Cost of labour for machine operator in factory

Accepted Answer

The answer of Match the following:
A) Research and Development
B) Customer...

Question 9

When determining the cost of a manufactured product, the cost of lighting the factory would be classified as
A) a direct cost.
B) an indirect cost.
C) a period cost.
D) a conversion cost.

Accepted Answer

The cost of lighting the factory is an indirect cost, as it cannot be directly traced to a specific product or production process. It is a cost that is necessary to keep the production facility running, but it is not directly related to the production process itself. Direct costs are those that can be directly traced to the production of a specific product, such as raw materials and labor. Period costs are expenses that are not related to production and are expensed in the period they are incurred. Conversion costs include direct labor and manufacturing overhead costs that are necessary to convert raw materials into finished products.

Question 10

What is the meaning of the term "cost object"? Give an example of a cost object that would be used in a manufacturing company, a merchandising company, and a service sector company.

Accepted Answer

The answer of What is the meaning of the term...

Question 11

Place the value chain elements in the normal order by numbering them from 1 to 6.
________ Design
________ Customer Service
________ Marketing
________ Research and Development
________ Distribution
________ Production or Purchases

Accepted Answer

The answer of Place the value chain elements in the...

Question 12

An inventoriable cost could be the cost of the marketing and distribution of a product.

Accepted Answer

An inventoriable cost is a cost that can be directly traced to the production of a product and is therefore included in inventory until the product is sold. The cost of marketing and distribution does not directly relate to production and is considered a period cost, which is expensed in the period incurred rather than included in inventory.

Question 13

Cost tracing is
A) the assignment of direct costs to the chosen cost object.
B) a function of cost allocation.
C) the process of determining the actual cost of the cost object.
D) the assignment of both direct and indirect costs associated with a cost object.

Accepted Answer

Cost tracing involves assigning direct costs to a specific cost object, such as a product or service. This is distinct from cost allocation, which involves assigning indirect costs to a cost object based on a predetermined method. Cost tracing allows for a more accurate determination of the actual cost of a particular product or service.

Question 14

When determining the cost of a manufactured product, a factory janitor's wages would be classified as
A) a direct cost.
B) an indirect cost.
C) a period cost.
D) a conversion cost.

Accepted Answer

A factory janitor's wages would be considered an indirect cost, as they are not directly tied to the production of a specific product. Indirect costs are often classified as overhead expenses and are essential for maintaining operations but cannot be easily traced to a single product or process. Direct costs, on the other hand, can be directly linked to a specific product or process. Period costs are expenses that are not tied to production at all, such as administrative expenses. Conversion costs refer specifically to the direct costs associated with transforming raw materials into finished goods, such as labor and overhead costs.

Question 15

Indirect costs cannot be traced to the cost objects, so they are allocated.

Accepted Answer

Indirect costs, such as rent or overhead, cannot be directly attributed to a specific cost object (such as a product or project) and thus must be allocated based on some predetermined method or formula.

Question 16

Which function of the value chain incorporates the most opportunity to create sustainability for manufacturing companies?
A) Research & development
B) Design
C) Distribution
D) Marketing

Accepted Answer

The design function of the value chain incorporates the most opportunity to create sustainability for manufacturing companies, as design decisions impact the entire product lifecycle, from sourcing sustainable materials to reducing waste during manufacturing and use, and ultimately facilitating end-of-life disposal or recycling. By optimizing design for sustainability, companies can reduce their environmental impact and improve their social responsibility efforts. In contrast, while other functions like research & development, distribution, and marketing can contribute to sustainability efforts, their impact is more limited and may only address certain stages of the value chain.

Question 17

A product support hot line would be considered
A) customer service.
B) distribution.
C) production or purchases.
D) marketing.

Accepted Answer

A product support hot line is a service provided to customers to assist with any issues or questions they may have regarding the product. Therefore, it falls under the category of customer service.

Question 18

If a company wants to determine a product's cost, they must assign only direct costs.

Accepted Answer

In order to determine a product's cost, a company must assign both direct and indirect costs. Direct costs are expenses that can be directly attributed to the production of a specific product or service, such as materials and labor. Indirect costs include expenses that are not directly traceable to a specific product or service, such as rent and utilities for the factory. Both direct and indirect costs must be taken into account to determine a product's total cost.

Question 19

The determination of a cost as being either direct or indirect depends upon
A) the accounting system.
B) the allocation system.
C) the cost tracing system.
D) the cost object chosen to determine its individual costs.

Accepted Answer

The determination of a cost as being either direct or indirect depends upon the cost object chosen to determine its individual costs. If a cost can be easily identified and traced to a specific cost object, it is considered a direct cost. On the other hand, if a cost cannot be directly traced to a specific cost object, it is considered an indirect cost. The accounting system, allocation system, and cost tracing system are all tools and methods used to allocate and trace costs to cost objects, but they do not determine whether a cost is direct or indirect.

Question 20

What are the differences between direct costs and indirect costs? Give an example of each.

Accepted Answer

The answer of What are the differences between direct costs...

Quiz 2: Building Blocks of Managerial Accounting

Provide a description of an activity or process that a company could undertake to integrate sustainability into the value chain.

Indirect costs can be traced to specific units.

Name and briefly describe the activities that make up the value chain.

Direct costs are allocated to cost objects.

Costs can be either direct or indirect, depending upon the cost object.

Place the six business functions in the order they appear along the value chain: A = Customer service B = Design C = Distribution D = Production or purchases E = Research and Development F = Marketing

When determining the cost of a manufactured product, a salesperson's salary would be classified as

When determining the cost of a manufactured product, the cost of lighting the factory would be classified as

What is the meaning of the term "cost object"? Give an example of a cost object that would be used in a manufacturing company, a merchandising company, and a service sector company.

Place the value chain elements in the normal order by numbering them from 1 to 6. Design Customer Service Marketing Research and Development Distribution Production or Purchases

An inventoriable cost could be the cost of the marketing and distribution of a product.

Cost tracing is

When determining the cost of a manufactured product, a factory janitor's wages would be classified as

Indirect costs cannot be traced to the cost objects, so they are allocated.

Which function of the value chain incorporates the most opportunity to create sustainability for manufacturing companies?

A product support hot line would be considered

If a company wants to determine a product's cost, they must assign only direct costs.

The determination of a cost as being either direct or indirect depends upon

What are the differences between direct costs and indirect costs? Give an example of each.

Quiz 2: Building Blocks of Managerial Accounting

Provide a description of an activity or process that a company could undertake to integrate sustainability into the value chain.

Indirect costs can be traced to specific units.

Name and briefly describe the activities that make up the value chain.

Direct costs are allocated to cost objects.

Costs can be either direct or indirect, depending upon the cost object.

Place the six business functions in the order they appear along the value chain: A = Customer service B = Design C = Distribution D = Production or purchases E = Research and Development F = Marketing

When determining the cost of a manufactured product, a salesperson's salary would be classified as

When determining the cost of a manufactured product, the cost of lighting the factory would be classified as

What is the meaning of the term "cost object"? Give an example of a cost object that would be used in a manufacturing company, a merchandising company, and a service sector company.

Place the value chain elements in the normal order by numbering them from 1 to 6. ________ Design ________ Customer Service ________ Marketing ________ Research and Development ________ Distribution ________ Production or Purchases

An inventoriable cost could be the cost of the marketing and distribution of a product.

Cost tracing is

When determining the cost of a manufactured product, a factory janitor's wages would be classified as

Indirect costs cannot be traced to the cost objects, so they are allocated.

Which function of the value chain incorporates the most opportunity to create sustainability for manufacturing companies?

A product support hot line would be considered

If a company wants to determine a product's cost, they must assign only direct costs.

The determination of a cost as being either direct or indirect depends upon

What are the differences between direct costs and indirect costs? Give an example of each.

Place the value chain elements in the normal order by numbering them from 1 to 6. Design Customer Service Marketing Research and Development Distribution Production or Purchases