.png){kind=logo}
1 Copyright © 2014 Pearson Education, Inc.Introduction to Management Accounting, 16e (Horngren) Chapter 2 Introduction to Cost Behavior and Cost-Volume-Profit Relationships
2.1 Questions
1) Why is it important to identify the most appropriate cost drivers for a particular product?
- so managers can identify the activities necessary to manufacture a product
- so managers can control product costs better
- so managers can predict product costs better and make better decisions
- B and C
Answer: D
Diff: 1
LO: 2-1
AACSB: Reflective thinking skills
Learning Outcome: None
2) A brainstorming group in the Research and Development area is charged with developing new product ideas for the company. What is a good cost driver of the cost of this activity?
- number of parts in new products proposed
- number of new product proposals
- number of workers
- number of engineering hours
Answer: B
Diff: 1
LO: 2-1
AACSB: Reflective thinking skills
Learning Outcome: None
3) Janitors clean the factory at the end of each workday. The wages of the janitors are used to determine the cost of the only manufactured product in the factory. What is a good cost driver for the wages of the janitors?
- number of janitors
- number of kilowatt hours used
- number of machine hours on cleaning machines
- number of labor hours worked by janitors
Answer: D
Diff: 1
LO: 2-1
AACSB: Reflective thinking skills
Learning Outcome: None
Introduction to Management Accounting 16th Edition Horngren Test Bank Visit TestBankDeal.com to get complete for all chapters
2 Copyright © 2014 Pearson Education, Inc.4) Janitors clean the factory with scrubbing machines and polishing machines. Scrubbing machines scrub the factory floor and polishing machines polish the floor. The cost associated with cleaning the factory is treated as a product cost. What is a good cost driver for the Depreciation Expense associated with the scrubbing and polishing machines?
- number of janitors operating machines
- number of labor hours put in by janitors
- number of kilowatt hours used
- number of machine hours used
Answer: D
Diff: 1
LO: 2-1
AACSB: Reflective thinking skills
Learning Outcome: None
5) Cost drivers are ________.
- the different functions in the value chain
- different types of functional areas in the firm
- measures of activities that require the use of resources and thereby cause costs
- different types of cost calculations
Answer: C
Diff: 2
LO: 2-1
AACSB: Reflective thinking skills
Learning Outcome: None
6) Consider the following activity: The installation of seats by an airplane manufacturer in a commercial airplane. What is an appropriate cost driver for the labor resources used for this activity?
- number of service center hours
- number of labor hours used to install seats
- number of mechanic hours
- number of engineering hours
Answer: B
Diff: 2
LO: 2-1
AACSB: Analytic skills
Learning Outcome: None
7) Consider the following activity: The manufacturer in a commercial airplane. What is an appropriate cost driver for the cost of the seats?
- number of seats installed
- number of labor hours used to install seats
- number of mechanic hours
- number of engineering hours
Answer: A
Diff: 2
LO: 2-1
AACSB: Analytic skills
Learning Outcome: None
3 Copyright © 2014 Pearson Education, Inc.
2.2 Questions
1) Within the relevant range, the total amount of ________ cost changes in direct proportion to changes in the cost driver. Within the relevant range, the total amount of ________ cost does not change in direct proportion to changes in the cost driver.
- fixed; variable
- variable; fixed
- step; mixed
- mixed; step
Answer: B
Diff: 2
LO: 2-2
AACSB: Reflective thinking skills
Learning Outcome: Define and distinguish between variable, fixed and mixed costs
2) As cost-driver level decreases in the relevant range, fixed costs per unit of cost driver ________, but total fixed costs ________.
- increase; do not change
B) decrease: do not change
- do not change; increase
- do not change; decrease
Answer: A
Diff: 2
LO: 2-2
AACSB: Analytic skills
Learning Outcome: Define and distinguish between variable, fixed and mixed costs
3) As cost-driver level increases in the relevant range, a fixed cost does not change ________, but the fixed cost ________ becomes progressively smaller.
- per unit of cost driver; total
- in total; per unit of cost driver
- per-unit; per unit of cost driver
- in total; per year
Answer: B
Diff: 1
LO: 2-2
AACSB: Analytic skills
Learning Outcome: Define and distinguish between variable, fixed and mixed costs
4 Copyright © 2014 Pearson Education, Inc.4) As the cost-driver level increases in the relevant range, variable costs per unit of cost driver ________ but total variable costs ________.
- do not change; increase in direct proportion to the cost-driver activity level
- do not change; decrease in direct proportion to the cost-driver activity level
- increase; do not change
- decrease; do not change
Answer: A
Diff: 1
LO: 2-2
AACSB: Analytic skills
Learning Outcome: Define and distinguish between variable, fixed and mixed costs 5) Which of the following costs is a variable cost?
- rental expense for factory building for manufacturer of electronics
- lease cost for factory machine for manufacturer of electronics
- fuel for airplane for airline
- depreciation expense of airplane for airline
Answer: C
Diff: 1
LO: 2-2
AACSB: Analytic skills
Learning Outcome: Define and distinguish between variable, fixed and mixed costs
6) What happens when the cost-driver level increases within the relevant range?
- Total fixed costs remain unchanged.
- Fixed costs per unit of cost driver increase.
- Total variable costs decrease.
- Variable costs per unit of cost driver increase.
Answer: A
Diff: 2
LO: 2-2
AACSB: Analytic skills
Learning Outcome: Define and distinguish between variable, fixed and mixed costs
7) What happens when the cost-driver activity level increases within the relevant range?
- Total fixed costs increase.
- Fixed costs per unit of cost driver decrease.
- Total variable costs decrease.
- Variable costs per unit of cost driver decrease.
Answer: B
Diff: 2
LO: 2-2
AACSB: Analytic skills
Learning Outcome: Define and distinguish between variable, fixed and mixed costs
.png)