Chose the right answer for the 15 multiple choices

1. Perminusunit
cost is the ________ unit cost.
A.
one
B.
only
C.
complex
D.
average
E.
simple
2. A difference between costing a job with normal costing and actual costing is that normal
costing uses which of the following cost rates?
A.
Budgeted
preferredcost
rates.
B.
Budgeted
actualcost
rates.
C.
Budgeted
realcost
rates.
D.
Budgeted
indirectcost
rates.
E.
Budgeted
directcost
rates.
3. The Operations Manager at Mary's Pastry Shoppe requested a machine shop to build a
special pastry machine to add extra jellies and sprinkles on their pastries. Mary estimated
that the actual annual
indirectcosts
to make pastries in the new machine are $6,000 and the actual annual quantity of the
costallocation
base is2,000. Compute the budgeted
indirectcost
rate.

A.
$1
B.
$2
C.
$3
D.
$4
E.
$5
4. When individual jobs are completed,
workinprocess
inventory becomes:
A.
billing of goods sold.
B.
finished goods inventory.
C.
manufacturing labor.
D.
an income statement.
E.
workinprocess
inventory.
5. In 2012, Alan's Seafood Supply Manufacturing uses machinehours as the only overhead
costallocation base. The accountant reported the following information:
Estimated
Actual
Manufacturing overhead costs
$225,000
$250,000
Machinehours
50,000
55,000
Using job costing, compute the 2012 actual indirect cost rate.
A.
$3.95 per machine hour
B.
$4.55per machine hour
C.
$4.85 per machine hour
D.
$3.85 per machine hour

E.
$4.45 per machine hour
6. The Chesapeake Organization reported $400,000 of indirectcost pool in design activity.
The manager reported a costallocation base of 110 parts per square feet.
Required:
Compute the amount of design activity per partsquare
foot.
A.
$3,000.22
B.
$3,025.25
C.
$399,890
D.
$3,636.36
E.
$400,110
7. The costing system that refines a costing system by identifying individual activities as the
fundamental cost object is ________.
A.
activitybased
costing system
B.
costallocation
base
C.
managerbased
costing system
D.
cost hierarchy
E.
refinedcosting
system
8. Managers that compare the predicted cost amounts against actual costs to evaluate how
well they did on a specific job is an example of which step in the fivestep
decisionmaking
process?
A.
Step 1: Identify the problems with uncertainties.

B.
Step 2: Obtain information.
C.
Step 3: Make predictions about the future.
D.
Step 4: Make decisions by choosing among alternatives.
E.
Step 5: Implement the decision, evaluate performance, and learn.
9. Broad averaging leads to ________.
A.
variable product costs
B.
accurate service costs
C.
accurate product costs
D.
inaccurate product costs
E.
service product cost
10. A group of coworkers went to lunch at the mall. Listed below is the total cost of each
individual meal.
Matthew
Hank
Shawn
Rachel
Marla
Jim
Entree Cost
$12
$21
$16
$15
$61
$14
Dessert
0
8
5
5
17
3
Drinks
3
13
7
5
31
7
Total
$15
$42
$28
$25
$109
$24
Required:
Compute the average cost per dinner. When the costs are averaged across all six dinners, is
Marla overcosted or undercosted?
A.
$30.10; undercosted.
B.
$45.25; overcosted.
C.
$62.19; overcosted.
D.
$58.19; undercosted.
E.
$40.50; undercosted.

11. Which of the following is not a level in the cost hierarchy?

A.
Productsustaining
costs.
B.
Outputunit
level costs.
C.
Facilitysustaining
costs.
D.
Inputlevel
unit costs.
E.
Batchlevel
costs.
12. The specific term for assigning direct costs is:
A.
cost pool.
B.
jobcosting
system.
C.
cost assignment.
D.
cost tracing.
E.
cost allocation base.
13. Managers use the jobcost record (jobcost sheet) to:
A.
indicate the quantity of each product received.
B.
record only manufacturing costs accrued on the job.
C.
indicate the type of each product received.
D.
record raw material purchases from suppliers.
E.

record and accumulate all costs assigned to a specific job.

14. Which approach is known for spreading the under allocated overhead or over allocated
overhead among ending workinprocess inventory, finished goods inventory, and cost of
goods sold?
A.
Adjusted
allocationrate.
B.
Denominator reason.
C.
Numerator reason.
D.
Proration.
E.
Writeoff
to cost of goods sold.
15. Mug King reported the following information:
1
2
3
4
5

Small mugs
50,000
240
?
3 hours
?

Large mugs
25,000
75
?
5 hours
?

Total

Quantity of mugs
Number of mugs produced per batch
Number of batches
Setup time per batch
Total
?
setuphours
Required:
Compute the number of batches for small and large mugs, the total setuphours, and the total
setuphours for both mugs.
A.
Batches: Small = 225.35; Large = 350.50
Total Setuphours:
Small = 650.50; Large = 1,750.25
Total: 2,500.50
B.
Batches: Small = 230.61; Large = 385.64
Total Setuphours:
Small = 695.25; Large = 1,895.62
Total: 3,500
C.
Batches: Small = 260.52; Large = 1,950.62
Total Setuphours:
Small = 685.24; Large = 1,962.35
Total: 4,200
D.
Batches: Small = 208.33; Large = 333.33
Total Setuphours:
Small = 624.99; Large = 1,666.65

Total: 2,291.64
E.
Batches: Small = 275.62; Large = 2,062.25
Total Setuphours:
Small = 285.63; Large = 2,650.36
Total: 4,695