Objective 4.1

 

1) Job costing information is used:

A) to develop strategies

B) to make pricing decisions

C) for external financial reporting

D) All of these answers are correct.

 

2) Product costing information is used by managers:

A) to make decisions and strategy

B) for planning and control

C) for cost management

D) All of these answers are correct.

 

3) A ________ is a grouping of individual indirect cost items.

A) cost allocation base

B) cost assignment

C) cost pool

D) job-costing system

4) Each indirect-cost pool of a manufacturing firm:

A) utilizes a separate cost-allocation rate

B) is a subset of total indirect costs

C) relates to one cost object

D) All of these answers are correct.

 

5) Direct costs

A) are anything for which a measurement of costs is desired.

B) are costs related to a particular cost object that can be traced to that cost object in an economically feasible (cost-effective) way

C) focus specifically on the costing needs of the CFO

D) provide all information for management decision needs

 

6) In a costing system:

A) cost tracing allocates indirect costs

B) cost allocation assigns direct costs

C) a cost-allocation base can be either financial or nonfinancial

D) a cost object should be a product and not a department or a geographic territory

 

7) Assigning direct costs to a cost object is called:

A) cost allocation

B) cost assignment

C) cost pooling

D) cost tracing

8) ________ is the process of distributing indirect costs to products.

A) Cost allocation

B) Job cost recording

C) Cost pooling

D) Cost tracing

 

9) A ________ links an indirect cost to a cost object.

A) cost-allocation base

B) cost pool

C) cost assignment

D) cost tracing

 

10) Which of the following includes both traced direct costs and allocated indirect costs?

A) cost tracing

B) cost pools

C) cost assignments

D) cost allocations