1.

If functional-based product costing is used, which of the following would be traced directly to the
product: direct labor
2. Material amounts of under-applied or over-applied overhead should be: allocated to work in
process, finished goods, and cost of goods sold
3. Quantity price standards: specify how much should be paid for the quantity of input to be
used
4. Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis,
which of the following costs would be represented by a line that starts at the origin and reaches a
maximum value beyond which the line is parallel to the horizontal axis: a consultant paid $100
per hour with a maximum fee of $2,00
5. Which of the following equations measures the total budget variance: (AQ × AP) - (SQ × SP)
6. Salaries paid to shift supervisors is an example of a: step-fixed cost
7. __is a simple list of activities identified in an ABC system: Activity inventory
8. Dams Corporation rents a truck for a flat fee plus an additional charge per mile. What type of cost
is the rent: mixed cost
9. A materials price variance would NOT be caused by: requiring laborers to work overtime
10. Which is NOT an acceptable method of disposing of variances:closing them to raw materials,
work-in-process, and finished goods
11. Fixed cost per unit is $9 when 20,000 units are produced and $6 when 30,000 units are produced.
What is the total fixed cost when nothing is produced: $180,000
12. A _______________ method first traces costs to a department and then to products: a
functional based costing
13. An activity dictionar: lists the activities in an organization along with desired attributes
14. __are non-financial and financial data that describe individual activities: Activity attributes
15. Mixed costs, by definition, contain both: fixed and variable cost
16. Which of the following decision-making tools would NOT be useful in determining the slope and
intercept of a mixed cost: linear programming
17. A company usually processes 20,000 orders at a total cost of $300,000. During the year, only
16,000 orders were processed. What is the cost of unused activity: $60.000
18. In a department that is drilling holes in materials, which activity base is likely to be most
appropriate for assigning overhead costs: machine hours
19. Functional product costing assigns: direct materials and direct labor directly to products and
assigns overhead to departmental pools which are assigned to products using predetermined
overhead rates based on unit-level drivers
20. Which of the following is an example of a committed fixed expense?: depreciation on a factory
building
21. Which of the following quantities is an example of an activity driver in activity-based costing: all
of the above
22. When a firm acquires the resources needed to perform an activity, it is obtaining: activity
capacity
23. Which of the following costs is a variable cost: materials used in production
24. ___________ are costs incurred that provide long-term activity capacity, usually as the result of
strategic planning: Committed fixed expenses
25. A supervisor's salary of $2,000 per month is an example of a: fixed cost.
26. The standard overhead cost assigned to each unit of product manufactured is called the:
An equipment lease that specifies a payment of $5,000 per month plus $8 per machine hour
used is an example of a: step cost
27. For a labor-intensive manufacturing operation, which of the following would be the most
appropriate activity driver: direct labor hour
28. If a firm has implemented activity-based procedures for home office expenses, it will: allocate
the costs in a pool using a predetermined rate per unit of activity
29. Which of the following factors would cause an UNFAVORABLE material quantity
variance: using poorly maintained machinery
30. auipment lease that specifies a payment of $5,000 per month plus $8 per machine hour used is an
example of a: step cost
31. If all the activity capacity acquired is NOT used, this is an example of: unused capacity
32. Fixed cost per unit is $9 when 20,000 units are produced and $6 when 30,000 units are produced.
What is the total fixed cost when nothing is produced: $180,000
33. A company usually processes 20,000 orders at a total cost of $300,000. During the year, only
16,000 orders were processed. What is the cost of unused activity:$60,000
34. The unit standard cost is: the product of the standard price times the standard quantity for
each unit
35. _____ are those that are acquired from outside sources, where the terms of acquisition do NOT
require any long-term commitment for any given amount of the resource: Flexible resources
36. A supervisor's salary of $2,000 per month is an example of: fixed cost.
37. An unexpected (not in the standard) five-percent wage increase for all factory employees would
affect which of the following variances: direct labor rate variance
38. Price standards are the responsibility of: purchasing
39. An equipment lease that specifies a payment of $5,000 per month plus $8 per machine hour used
is an example of a: step cost
40. Which of the following is NOT a limitation of a plant-wide or departmental overhead rate:
predetermined rates use budgeted overhead is usually the firm’s best estimate of the amount
of overhead
41. Mixed costs, by definition, contain both:fixed and variable costs
42. The high-low method may give unsatisfactory results if: the points are unrepresentative
43. The range of activity within which a linear cost function is valid is called the: relevant range
44. Which of the following equations measures a price variance: AQ × (AP - SP)
45. Direct labor variances: all of the above are correct
46. The standard cost sheet includes all of the following EXCEPT: the standard quantity allowed
for actual production
47. All of the following are unit-based activity drivers EXCEPT: number of setups
48. The usage variances focus on the difference between: actual quantity used and standard
quantity allowed for actual production
49. Quantity price standards: specify how much should be paid for the quantity of input to be
used
50. Weaknesses of the high-low method include all of the following EXCEPT:The method is
relatively complex and difficult to apply
51. During January, 7,000 direct labor hours were worked at a standard cost of $20 per hour. If the
direct labor rate variance for January was $17,500 favorable, the actual cost per direct labor hour
must be: The correct answer is: $17.50
52. A costing system that uses actual costs for direct materials and labor and predetermined overhead
rates to apply overhead is called: a normal costing system
53. A costing system that uses actual costs for direct materials and labor ancommicomd
predetermined overhead rates to apply overhead is called: a normal costing system
54. A _____ method first traces costs to a department and then to products: functional-based costing.
Which of the following is an example of a committed fixed expense?: depreciation on a factory
building
55. If functional-based product costing is used, which of the following would be traced directly to the
product: direct labor
56. Which of the following equations measures a price variance: AQ × (AP - SP)
57. All of the following are unit-based activity drivers EXCEPT: number of setups
58. Flexible resources: All of the above are correct
59. The usage variances focus on the difference between: actual quantity used and standard
quantity allowed for actual production
60. _______________ aids management in achieving objectives such as product or customer costing,
continuous improvement and environmental management: Activity classification
61. Committed resources: may exceed the demand for their usage
62. Which of the following factors would cause an UNFAVORABLE material quantity
variance: using poorly maintained machinery
63. Price standards are the responsibility of: purchasing
64. Which of the following statements is true about relevant range: Linear estimates of an
economist's curvilinear cost function is only valid within the relevant range
65. The efficient level of activity performance is called: practical capacity
66. Which of the following costs is a variable cost: materials used in production
67. A predetermined overhead rate is calculated using which of the following formulas: Budgeted
annual overhead / Budgeted annual driver levelg
68. A company usually processes 20,000 orders at a total cost of $300,000. During the year, only
16,000 orders were processed. What is the cost of resource usage: $240,000
69. Which of the following is NOT a correct statement concerning cost behavior: all of the above
statements are correct
70. The unit standard cost is: the product of the standard price times the standard quantity for
each unit
71. Which of the following factors would cause an UNFAVORABLE labor rate variance: using
more highly skilled workers
72. Carlson Company uses a predetermined rate to apply overhead. At the beginning of the year,
Carlson estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours
at 10,000. Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000,
and actual machine hours were 11,000. What is the predetermined overhead rate per machine hour
for Carlson: $24.00
73. In the formula Y = F + VX, V refers to the: slope
74. Direct materials are an example of a: variable cost
75. Which is NOT an acceptable method of disposing of variance: closing them to raw materials,
work-in-process, and finished goods
76. Which of the following statements is true about relevant range: : Linear estimates of an
economist's curvilinear cost function is only valid within the relevant range
77. Variances indicate: that actual performance is not going according to plan
78. Using more highly skilled direct laborers might affect which of the following variances: all of the
above
79. Which of the following decision-making tools would NOT be useful in determining the slope and
intercept of a mixed cost: linear programming
80. In the formula Y = F + VX, VX refers to the: d. total variable costs
81. Which is NOT a characteristic of a functional-based costing system : It offers greater product
costing accuracy than an activity-based costing system
82. Cost behavior analysis focuses on: how costs react to changes in activity level
83. The efficient level of activity performance is called: practical capacity
84. B-land Company uses a predetermined overhead rate of $12 per direct labor hour to apply
overhead. During the year, 30,000 direct labor hours were worked.
Actual overhead costs for the year were $320,000. The overhead variance is: none of the above
85. Flexible resources: All of the above are correct
86. The high-low method may give unsatisfactory results if: : the points are unrepresentative
87. Which of the following is an advantage of using the scatterplot method over the high-low method
to estimate costs : : A cost analyst can review the data visually and eliminate outliers
88. As the volume of activity increases within the relevant range, the variable cost per unit:remains
the same.
89. Which of the following equations measures a price variance: AQ × (AP - SP)
90. Committed resources: may exceed the demand for their usage#
91. Demand maximum efficiency and can be achieved only if everything operates perfectiy: ideal
standard
92. Unit-based product costing uses which of the following procedures: Overhead costs are traced
to departments, then costs are traced to products.
93. Product costs can be distorted if a unit-based activity driver is used and : . Both a and b
94. All of the following are non-unit-based activity drivers EXCEPT: Number of direct labor hours
95. During June, 12,000 pounds of materials were purchased at a cost of $8 per pound. If there was an
unfavorable direct materials price variance of $6,000 for June, the standard cost per pound must
be : c. $7.50.
96. The __is the standard plus the allowable deviation is called the: upper control limit
97. The unit standard cost is the product of the standard price times the standard quantity for
each unit.
98. when the volume of activity increases within the relevant range the fixed cost per unit :decrease
99. a __systems first traces cost to activities and then to products : activity based costing
100. Which of the following statements is TRUE regarding fixed and variable costs : Fixed costs
are fixed in total, and variable costs are fixed per unit.
101. Assuming costs are represented on the vertical axis and volume of activity on the horizontal
axis, which of the following costs would be represented by a line that is parallel to the horizontal
axis: d. rent on exhibit space at a convention
102. a hospital requires one nurse for each eight patient's. this is an example of : step cost
103. During August, 10,000 units were produced. The standard quantity of material allowed per
unit was 10pounds at a standard cost of $3 per pound. If there was an unfavorable usage variance
of $18,750 forAugust, the actual quantity of materials used must be : a.106,250
104. Standard costing : establishes price and quantity standard for inputs
105. Unit-based product costing uses which of the following procedures: Overhead costs are
traced to departments, then costs are traced to product
106. The usage variances focus on the difference between: : actual quantity used and standard
quantity allowed for actual production
107. Common measures of production activity include: all of the above
108. The direct material cost is $10,000 when 2,000 units are produced. What is the direct
material cost for 2,500 units produced: a. $12,500
109. A manufacturing company pays an assembly line worker $10 per hour. What is the proper
classification of this labor cost: variable cost
110. If all the activity capacity acquired is NOT used, this is an example of: unused capacity
111. Which of the following quantities is an example of an activity driver in activity-based costing:
all the above
112. Direct materials are an example of a: variable cost
113. Which of the following is an advantage of using the scatterplot method over the high-low
method to estimate costs: A cost analyst can review the data visually and eliminate outliers
114. A company usually processes 20,000 orders at a total cost of $300,000. During the year, only
16,000 orders were processed. What is the cost of unused activity:$ 60.000
115. Cost behavior analysis focuses on : how costs react to changes in activity level
116. A predetermined overhead rate is calculated using which of the following formulas: :
Budgeted annual overhead / Budgeted annual driver levelg
117. are costs incurred that provide long-term activity capacity, usually as the result of strategic
planning: Committed fixed expenses
118. Which of the following equations measures a price variance: AQ × (AP - SP)
ROSS COMPANY

Required:
A. Identify each cost as being variable, fixed, or mixed by writing the name of each cost under
one of the following headings:
Mixed Costs : Maintenance dan Utilities
Fixed Costs : Supervisor’ s Salaries, Depreciation, Insurance, Property Taxes.
Variable Costs ; Direct Materials, Direct Labor , Indirect Materials
B. Develop an equation for total monthly production costs. Y-$30,600 +27x
C. Predict total costs for a monthly production volume of 8,000 units. $ 246,600