Chose the right answer for the 15 multiple choices
1. Perminus?unit
cost is the ________ unit cost.
A.
one
B.
only
C.
complex
D.
average
E.
simple
2. A difference between costing a job with normal costing and actual costing is that normal
costing uses which of the following cost rates?
A.
Budgeted
preferred?cost
rates.
B.
Budgeted
actual?cost
rates.
C.
Budgeted
real?cost
rates.
D.
Budgeted
indirect?cost
rates.
E.
Budgeted
direct?cost
rates.
3. The Operations Manager at Mary’s Pastry Shoppe requested a machine shop to build a
special pastry machine to add extra jellies and sprinkles on their pastries. Mary estimated
that the actual annual
indirect?costs
to make pastries in the new machine are $6,000 and the actual annual quantity of the
cost?allocation
base is2,000. Compute the budgeted
indirect?cost
rate.

A.
$1
B.
$2
C.
$3
D.
$4
E.
$5
4. When individual jobs are completed,
work?in?process
inventory becomes:
A.
billing of goods sold.
B.
finished goods inventory.
C.
manufacturing labor.
D.
an income statement.
E.
work?in?process
inventory.
5. In 2012, Alan’s Seafood Supply Manufacturing uses machine?hours as the only overhead
cost?allocation base. The accountant reported the following information:
Estimated
Actual
Manufacturing overhead costs $225,000 $250,000
Machine?hours
50,000
55,000
Using job costing, compute the 2012 actual indirect cost rate.
A.
$3.95 per machine hour
B.
$4.55per machine hour
C.
$4.85 per machine hour
D.
$3.85 per machine hour

E.
$4.45 per machine hour
6. The Chesapeake Organization reported $400,000 of indirect?cost pool in design activity.
The manager reported a cost?allocation base of 110 parts per square feet.
Required:
Compute the amount of design activity per part?square
foot.
A.
$3,000.22
B.
$3,025.25
C.
$399,890
D.
$3,636.36
E.
$400,110
7. The costing system that refines a costing system by identifying individual activities as the
fundamental cost object is ________.
A.
activity?based
costing system
B.
cost?allocation
base
C.
manager?based
costing system
D.
cost hierarchy
E.
refined?costing
system
8. Managers that compare the predicted cost amounts against actual costs to evaluate how
well they did on a specific job is an example of which step in the five?step
decision?making
process?
A.
Step 1: Identify the problems with uncertainties.

B.
Step 2: Obtain information.
C.
Step 3: Make predictions about the future.
D.
Step 4: Make decisions by choosing among alternatives.
E.
Step 5: Implement the decision, evaluate performance, and learn.
9. Broad averaging leads to ________.
A.
variable product costs
B.
accurate service costs
C.
accurate product costs
D.
inaccurate product costs
E.
service product cost
10. A group of coworkers went to lunch at the mall. Listed below is the total cost of each
individual meal.
Matthew Hank Shawn Rachel Marla Jim
Entree Cost
$12
$21 $16
$15 $61 $14
Dessert
0
8
5
5
17
3
Drinks
3
13
7
5
31
7
Total
$15
$42 $28
$25 $109 $24
Required:
Compute the average cost per dinner. When the costs are averaged across all six dinners, is
Marla overcosted or undercosted?
A.
$30.10; undercosted.
B.
$45.25; overcosted.
C.
$62.19; overcosted.
D.
$58.19; undercosted.
E.
$40.50; undercosted.

11. Which of the following is not a level in the cost hierarchy?
A.
Product?sustaining
costs.
B.
Output?unit
level costs.
C.
Facility?sustaining
costs.
D.
Input?level
unit costs.
E.
Batch?level
costs.
12. The specific term for assigning direct costs is:
A.
cost pool.
B.
job?costing
system.
C.
cost assignment.
D.
cost tracing.
E.
cost allocation base.
13. Managers use the job?cost record (job?cost sheet) to:
A.
indicate the quantity of each product received.
B.
record only manufacturing costs accrued on the job.
C.
indicate the type of each product received.
D.
record raw material purchases from suppliers.
E.

record and accumulate all costs assigned to a specific job.
14. Which approach is known for spreading the under allocated overhead or over allocated
overhead among ending work?in?process inventory, finished goods inventory, and cost of
goods sold?
A.
Adjusted
allocation?rate.
B.
Denominator reason.
C.
Numerator reason.
D.
Proration.
E.
Write?off
to cost of goods sold.
15. Mug King reported the following information:
Small mugs Large mugs Total
1 Quantity of mugs
50,000
25,000
2 Number of mugs produced per batch
240
75
3 Number of batches
?
?
4 Setup time per batch
3 hours
5 hours
5 Total
?
?
?
setup?hours
Required:
Compute the number of batches for small and large mugs, the total setup?hours, and the total
setup?hours for both mugs.
A.
Batches: Small = 225.35; Large = 350.50
Total Setup?hours:
Small = 650.50; Large = 1,750.25
Total: 2,500.50
B.
Batches: Small = 230.61; Large = 385.64
Total Setup?hours:
Small = 695.25; Large = 1,895.62
Total: 3,500
C.
Batches: Small = 260.52; Large = 1,950.62
Total Setup?hours:
Small = 685.24; Large = 1,962.35
Total: 4,200
D.
Batches: Small = 208.33; Large = 333.33
Total Setup?hours:
Small = 624.99; Large = 1,666.65

Total: 2,291.64
E.
Batches: Small = 275.62; Large = 2,062.25
Total Setup?hours:
Small = 285.63; Large = 2,650.36
Total: 4,695