CHAPTER 2 QUIZ
1.
Tanner Co. management desires cost information regarding their Rawhide brand. The Rawhide
brand is a(n)
a.
cost object.
b.
cost driver.
c.
cost assignment.
d.
actual cost.
2.
The cost of replacement light bulbs on campus would be a direct cost to a college but would need
to be allocated as an indirect cost to
a.
departments.
b.
buildings.
c.
schools.
d.
individual student instruction.
3.
What is the total fixed cost of the shipping department of EZ-Mail Clothing Co. if it has the
following information for 2002?
Salaries
$800,000 75% of employees on guaranteed contracts
Packaging
$400,000 depending on size of item(s) shipped
Postage
$500,000 depending on weight of item(s) shipped
Rent of warehouse space
$250,000 annual lease
a.
$850,000
b.
$900,000
c.
$1,050,000
d.
$1,950,000
4.
Morton Graphics successfully bid on a job printing standard notebook covers during the year
using last year鈥檚 price of $0.27 per cover. This amount was calculated from prior year costs,
noting that no changes in any costs had occurred from the past year to the current year. At the end
of the year, the company manager was shocked to discover that the company had suffered a loss.
鈥淗ow could this be?鈥?nbsp;she exclaimed. 鈥淲e had no increases in cost and our price was the same as
last year. La
st year we had a healthy income.鈥?nbsp;What could explain the company鈥檚 loss in income
this current year?
a.
Their costs were all variable costs and the amount produced and sold increased.
b.
Their costs were mostly fixed costs and the amount produced this year was less than last
year.
c.
They used a different cost object this year than the previous year.
d.
Their costs last year were actual costs but they used budgeted costs to make their bids.
5.
Which type of company converts materials into finished products?
a.
Not-for-profit
b.
Service
c.
Merchandising
d.
Manufacturing
6.
The three categories of inventories commonly found in many manufacturing companies are:
a.
Direct materials, direct labor, and indirect manufacturing costs.