61. In an organization, departments that have tasks leading to the primary objectives of the organization are: 
A. Service departments.
B. Primary departments.
C. Operating departments.
D. Strategic departments

62. In an organization, departments that provide support to other departments are called: 
A. Service departments.
B. Primary departments.
C. Operating departments.
D. Strategic departments.

63. In a manufacturing company, service department costs are: 
A. Reported as selling and administrative expenses.
B. Classified as direct costs.
C. Allocated to the products made by the company.
D. Expensed when incurred.

64. Using the direct method of allocating service department costs, the costs are allocated to: 
A. Service departments only.
B. Operating departments only.
C. Both service departments and operating departments.
D. Neither service departments nor operating departments.

65. Using the step method of allocating service department costs, the costs are allocated to: 
A. Service departments only.
B. Operating departments only.
C. Both service departments and operating departments.
D. Neither service departments nor operating departments.

66. The method of allocating service department costs that allocates the costs to both service departments and operating departments is the: 
A. Direct method.
B. Step method.
C. Secondary method.
D. Indirect method.

67. Custom Quilters makes decorative comforters, quilted garments, and other products in a small sewing factory. In 2012, the company expects to make 2,000 comforters. With respect to the comforters, how would the wages of sewing machine operators be classified? 
A. Direct and fixed
B. Direct and variable
C. Indirect and fixed
D. Indirect and variable

68. Custom Quilters makes decorative comforters, quilted garments, and other products in a small sewing factory. In 2012, the company expects to make 2,000 comforters. With respect to the comforters, how would the supervisory labor costs be classified? 
A. Direct and fixed
B. Direct and variable
C. Indirect and fixed
D. Indirect and variable

69. Custom Quilters makes decorative comforters, quilted garments, and other products in a small sewing factory. In 2012, the company expects to make 2,000 comforters. With respect to the comforters how would the fabric used to make the comforters be classified? 
A. Direct and fixed
B. Direct and variable
C. Indirect and fixed
D. Indirect and variable

70. A factor having a “cause and effect” relationship with a cost object called a: 
A. Direct cost
B. Relevant cost
C. Cost driver
D. Indirect cost