The least accurate but easiest to apply method of cost assignment is the method. ANSWER: allocation means the consumer cannot see, hear, feel, or taste a service before it is bought. ANSWER: Intangibility are generally materials necessary for production that do not become part of the finished product or are not used to provide a service. ANSWER: Supplies Costs necessary to market and distribute a product or service are often referred to as order- __________ and order- __________ costs. ANSWER: getting; filling In preparing an income statement, and costs are separated. ANSWER: production; nonproduction Gross margin is the difference between and the cost of goods or services sold. ANSWER: sales revenues income is the difference between gross margin and selling and administrative expenses. ANSWER: Operating Cost management systems are made up of two subsystems: the accounting system and the control system. ANSWER: cost; operational Generally, more managerial objectives can be met with an system than with a system. ANSWER: traditional In deciding whether to implement a(n) cost management system, managers must evaluate the trade- off between costs of measurement and cost of errors. ANSWER: activity-based The set of interrelated parts that performs one or more processes to accomplish specific objectives is called a(n): cost objective system activity
In a company that supplies muffins to bakeries, which of the following would NOT be considered a transforming process? delivered muffins baking packaging mixing ANSWER: a In a company that supplies muffins to bakeries, of the following would be considered a transforming process? delivered muffins baking egg oil ANSWER: b In a company that supplies muffins to bakeries, delivered muffins to bakeries would be a(n) interrelated part. input. output. process. ANSWER: c In an accounting information system, the inputs are usually financial statements. analyzing data. economic events. performance reports. ANSWER: c of the following is a cost management subsystem designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities? financial accounting information system operational control information system cost accounting information system all of the ANSWER: b The accounting information subsystem that is primarily concerned with producing outputs for external users is called:
$2,200 c. $1,400 d. $5,500 ANSWER: b RATIONALE: SUPPORTING CALCULATIONS: $7,500 + $1,400 - $1,200 - $4,000 - $1,500 = $2,200
$1,605 c. $1,350 d. $1,650 ANSWER: a RATIONALE: SUPPORTING CALCULATIONS: $1,350 + 450 - $495 = $1,305 Rebel Yell, Inc., recorded the following data for April: Beginning finished goods inventory $60,000 Beginning work-in-process inventory Ending work-in-process inventory Ending finished inventory Factory overhead costs Direct materials used Direct labor What is the cost of goods manufactured for April? a. $470,000 b. $420,000 c. $460,000 d. $430,000 ANSWER: b RATIONALE: SUPPORTING CALCULATIONS: $160,000 + $100,000 + $200,000 + $40,000 - $80,000 = $420,000 The records of the Williamson Company show the following information: Direct materials used $90,000 Direct labor Factory overhead Beginning work-in-process inventory Beginning finished goods inventory Ending work-in-process inventory Selling and administrative expenses What was the cost of goods manufactured during the year? a. $370,000 b. $365,000 c. $343,000 d. $333,000 ANSWER: c RATIONALE: SUPPORTING CALCULATIONS: $90,000 + $130,000 + $150,000 + $15,000 - $42,000 =