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201510 ACC315-O Cost Accounting

Pre test
5 out of 10 points

Question 1
Since indirect cost cannot be conveniently or economically traced directly to a cost pool or
cost objective, the management accountant will:
Selected Answer:

d. Not assign them at all

Question 2
Cantrell Company has a product which it currently sells in the market for $50 per unit.
Cantrell has developed a new feature which, if added to the existing product, will allow
Cantrell to receive a price of $65 per unit. The cost of adding this new feature is $26,000 and
Cantrell expects to sell 1,600 unites over the next year. What is the effect on operating
income of adding the feature to the product?
Selected Answer:

a. A $2,000 increase in operating income

Question 3
A manufacurer planned to use $82 of materials per unit produced, but in the most recent
period it actually used $80 of material per unit produced. During this same period, the
company planned to produce 1,200 units, but actually produced only 1,000 units. The
flexible-budget variance for materials is:
Selected Answer:

a. Impossible to determine

Question 4
Henry Ford was an early pioneer in the use of:
Selected Answer:

Question 5

b. target costing

The major problem with relevant cost determination is that it fails to recognize the:
Selected Answer:

a. impact of variable costs in the long run.

B. Long-term
nature of
most productrelated
decisions.

Question 6
Electronic Component Company (ECC) is a producer of high-end video and music
equipment. ECC currently sells its top of the line "ECC" DVD player for a price of $250. It
costs ECC $210 to make the player. ECC's main competitor is coming to market with a new
DVD player that will sell for a price of $220. ECC feels that it must reduce its price to $220
in order to compete. The sales and marketing department of ECC believes the reduced price
will cause sales to increase by 15%. ECC currently sells 200,000 DVD players per year.
Irrespective of te competitor's price, what is ECC's required selling price if the target profit is
25% of sales and current costs cannot be reduced?
Selected Answer:

a. $280

Question 7
Which of the following does not represent a main focus of cost management information?
Selected Answer:

c. Internal audit and control

Question 8
Which of the four types of cost drivers - activity-based, volume-based, structural and
executional - are often best related to linear cost estimation methods?
Selected Answer:

Question 9

c. Activity-based and volume-based

Data collected on the cost objects and cost drives for cost estimation must be:
Selected Answer:

a. consistent and accurate

Question 10
The following information pertains to Lee Corporation:
Sales (22,500 units)

$900,000

Fixed costs

$350,000

Breakeven sales point in dollars $700,000

If the sales price per unit were decreased by 5% and variable expenses were to increase by
$2.00 per unit, which of the follwing is true?
Selected Answer:

a. The new selling price is $36 per unit