Accounting 204 and 205

Cost Accounting
Prelim – Q1

b) Is constant if expressed on a per unit basis.

1. Indirect material cost is a c) Remains the same in total as production
Conversion Cost Prime Cost increases.
a) No No d) Is not affected by changes in activity from period
b) No Yes to period.
c) Yes Yes
d) Yes No 10. For a manufacturing company, the cost of goods
available for sale during a given accounting period is
a) The beginning inventory of finished goods.
2. Indirect labor is a b) The cost of goods manufactured during the period.
a) Prime Cost c) Period Cost c) The sum of the above.
b) Conversion Cost d) Non-manufacturing Cost d) None of the above.

11. Sales commissions are classified as

3. Prime cost and conversion cost share what common a) Prime Cost c) Product Cost
element of cost? b) Period Cost d) Indirect Labor
a) Variable Overhead c) Direct Materials
b) Fixed Overhead d) Direct Labor 12. For inventoriable costs to expensed under the
matching principle
4. Wages paid to factory machine operators of a a) The product must be finished and in stock.
manufacturing plant are an element of b) The product must be expensed based on its
Prime Cost Conversion Cost percentage of completion.
a) No No c) The product to which they attach must be sold.
b) No Yes d) Any of the above.
c) Yes No
d) Yes Yes 13. A manufacturing company reports cost of goods
manufactured as
5. Costs that vary inversely with changes in volume a) A current asset on the balance sheet.
include b) An administrative expense on the income
a) Total variable costs statement.
b) Total variable costs divided by volume c) A component in the calculation of cost of goods
c) Total fixed costs sold.
d) Total fixed costs divided by volume d) A component of the raw materials inventory on
the balance sheet.
6. For a manufacturing company, which of the following
is an example of a period rather than a product cost? 14. Cost of goods manufactured in a manufacturing
a) Depreciation of factory equipment company is analogous to
b) Wages of a salesperson a) Ending inventory in a merchandising company.
c) Wages of machine operators b) Beginning inventory in a merchandising company.
d) Insurance on factory equipment c) Cost of goods available for sale in a merchandising
company.
7. The wage of a timekeeper in the factory would be d) Cost of goods purchased in a merchandising
classified as company.
a) Prime Cost c) Indirect Labor
b) Direct Labor d) Administrative Expense 15. Cost of goods manufactured in a manufacturing
company is analogous to
8. Indirect costs are also known as a) Ending inventory in a merchandising company.
a) Differential costs b) Beginning inventory in a merchandising company.
b) Common costs c) Cost of goods available for sale in a merchandising
c) Opportunity costs company.
d) Sunk costs d) Cost of goods purchased in a merchandising
company.
9. Variable cost
a) Increases on a per unit basis.