Question

QUESTION 1

The cost of milk used to manufacture ice cream would most likely be classified as a(n):

Variable cost Indirect cost Sunk cost Differential cost

QUESTION 2

Which of the following would not usually be considered a fixed cost?

Insurance Executive salaries Plant depreciation Needles used in a hospital

QUESTION 3

The product costs of a software development company would NOT include:

Computer lease Salary of the CEO Supplies used by programmers Computer programmers's salaries

QUESTION 4

Which of the following would NOT be included in manufacturing overhead?

Indirect materials Factory utilities Factory fire insurance Direct labor

QUESTION 5

You currently work as a machinist for a factory. Your salary is $28,000 per year. You are thinking about quitting your job and going back to college. It will take you tow year to obtain your college degree. Tuition and other costs of the education will total $24,000. You also intend to keep your car by making $250 per month payments out of your savings. How much is the opportunity cost of going to college.

$28,000 $56,000 $52,000 $62.000

QUESTION 6

The scattergraph is a useful tool for:

Analyzing abrupt changes in cost behavior Determining actual variable costs Determining the break-even point Working outside the relevant range

QUESTION 7

Which type of business organization allows the business to be a separate, distinct entity away from its owners?

Partnership Proprietorship Corporation All of the above

QUESTION 8

Compared with preferred stock, common stock usually has a favorable prefence in terms of:

Dividends Voting rights Liquidated assets Resale value

QUESTION 9

On January 1, 2013, Georgi Company was authorized to issue 10,000 share of $2 par value common stock and 5,000 shares of $5 preferred stock. Given this information, if Georgi Company issued 3,000 shares of common stock for $7 per share on January 10, 2013, the entry to record the issuance of the stock would include a

Debit to Cash of $6,000 Credit to Premium on Common Stock of $6,000 Credit to Common Stock of $6,000 Debit to Cash of $15,000

QUESTION 10

Moomey Corporation had 20,000 shares of $4 par value common stock outstanding on January 1, 2013. On January 10, 2013, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2013, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the reissuance of the stock on July 22 would include a credit to:

Treasury stock of $4,000 Common stock of $4,000 Paid-In Capital of $18,000 Gain on Sale of Treasury Stock of $4,000

Answer 1

1. Option A Variable costs are the costs which are in direct proportion to the production. That is they increase or decrease based on the increase or decrease of production.

2. Option D Fixed costs are costs that remain fixed even when the output changes.

3. Option B Product costs are the costs incurred in the production of a product

7. Option D