LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

Copyright © 2015 Nelson Education Limited. 2-1

Chapter 2 - Basic Managerial Accounting Concepts

• What are expired costs?
• assets
• expenses
• revenues
• profit

ANSWER: b

POINTS: 1

DIFFICULTY: Easy

REFERENCES: p. 32

LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economies

KEYWORDS: Bloom's Higher order; classifying

• In terms of managerial accounting, which of the following is the best definition of cost?
• the cash sacrificed for goods expected to bring future benefit to the organization
• a dollar measure of the cash used to achieve a given benefit
• the asset incurred to produce future benefits
• the equivalent of the cost of goods sold

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

REFERENCES: p. 32

LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; differentiating

• Which of the following is a characteristic of price per unit?
• It is equal to the revenue.
• It must be less than cost for the firm to earn income.
• It is the same as total cost.
• It is the same as cost per unit plus income per unit.

ANSWER: d

POINTS: 1

DIFFICULTY: Easy

REFERENCES: p. 32

LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; inferring

• What is the definition of assigning costs?

Cornerstones of Managerial Accounting Canadian 2nd Edition Mowen Test Bank Visit TestBankDeal.com to get complete for all chapters

Chapter 2 - Basic Managerial Accounting Concepts

Copyright © 2015 Nelson Education Limited. 2-2

• the way costs are measured and recorded
• the way companies can tell what money was spent
• the allocation applied to a cost object using a reasonable method
• the benefit given up when one choice is made over another

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

REFERENCES: p. 33

LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; classifying

• Which of the following is included in nonmanufacturing costs?
• marketing
• direct materials
• indirect materials
• overhead

ANSWER: a

POINTS: 1

DIFFICULTY: Easy

REFERENCES: p. 33

LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; exemplifying

• What is one of the main purposes of assigning costs to cost objects?
• It provides information on why money was spent.
• It records the historical events of the organization.
• It allows management to incorporate products in marketing.
• It facilitates service businesses in following financial regulations.

ANSWER: a

POINTS: 1

DIFFICULTY: Medium

REFERENCES: p. 33

LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; classifying

• Which of the following is characteristic of indirect costs?
• Indirect costs can be easily and accurately traced to a cost object.

Chapter 2 - Basic Managerial Accounting Concepts

Copyright © 2015 Nelson Education Limited. 2-3

• Indirect costs are shared between or among more than one cost object.
• Indirect costs should always be assigned to a cost object.
• Indirect costs include all labour.

ANSWER: b

POINTS: 1

DIFFICULTY: Medium

REFERENCES: p. 35

LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; classifying

• What is the behaviour pattern of a variable cost?
• It increases in total as output increases.
• It remains constant in total at all levels of output.
• It increases per unit as output increases.
• It decreases per unit as output increases.

ANSWER: a

POINTS: 1

DIFFICULTY: Medium

REFERENCES: p. 36

LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; exemplifying

• What is the definition of opportunity cost?
• a cost that increases as output increases and decreases as output decreases
• a cost that does not increase as output increases and does not decrease as output decreases
• a benefit given up or sacrificed when one alternative is chosen over another
• a benefit that cannot be easily and accurately traced to a cost object

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

REFERENCES: p.33

LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; exemplifying

• Which of the following is an example of an intangible product?
• hamburgers
• computers

Chapter 2 - Basic Managerial Accounting Concepts

Copyright © 2015 Nelson Education Limited. 2-4

• automobiles
• dental care

ANSWER: d

POINTS: 1

DIFFICULTY: Easy

REFERENCES: p. 37

LEARNING OBJECTIVES: MACC.MOWE.15.2.2 - 2.2

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; exemplifying

• Which of the following is an example of a tangible product?
• funeral care
• legal services
• furniture
• video rental

ANSWER: c

POINTS: 1

DIFFICULTY: Easy

REFERENCES: p. 37

LEARNING OBJECTIVES: MACC.MOWE.15.2.2 - 2.2

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Business Economics

KEYWORDS: Bloom's Higher order; exemplifying

• What type of organization is the Hudson Bay Company?
• production organization
• service organization
• manufacturing organization
• merchandising organization

ANSWER: d

POINTS: 1

DIFFICULTY: Medium

REFERENCES: p.37

LEARNING OBJECTIVES: MACC.MOWE.15.2.2 - 2.2

NATIONAL STANDARDS: United States - AACSB Analytic

United States - IMA-Reporting

KEYWORDS: Bloom's Higher order; differentiating

• Which of the following statements best describes product costs?
• Product costs are direct materials and direct labour costs only.
• Product costs are manufacturing costs.
• Product costs do not include overhead.