MANAGERIAL COST CONC EPTS AND COST BEHAVI OUR

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CHAPTER 2

MANAGERIAL COST CONC EPTS AND COST BEHAVI OUR

ANALYSIS

SUMMARY OF QUESTION TYPES BY LEARNING OBJECTIVES AND

LEVEL OF DIFFICULTY

Item LO BT LOD AACSB CPA Item LO BT LOD AACSB CPA Item LO BT LOD AACSB CPA True-False Statements

1. 1 K E AN MA 4. 3 K E AN MA 7. 4 C E AN MA

2. 1 K E AN MA 5. 3 K E AN MA 8. 4 K E AN MA

3. 2 C E AN MA 6. 4 K E AN MA

Multiple Choice Questions

9. 1 K M AN MA 36. 1 K E AN MA 63. 2 C E AN MA

10. 1 K E AN MA 37. 1 C E AN MA 64. 2 C E AN MA

11. 1 C E AN MA 38. 1 C E AN MA 65. 2 C E AN MA

12. 1 C E AN MA 39. 1 C E AN MA 66. 2 C E AN MA

13. 1 AP E AN MA 40. 1 K E AN MA 67. 2 C E AN MA

14. 1 K E AN MA 41. 1 C M AN MA 68. 2 C E AN MA

15. 1 K E AN MA 42. 1 AP E AN MA 69. 2 K E AN MA

16. 1 C E AN MA 43. 1 C M AN MA 70. 2 K E AN MA

17. 1 K E AN MA 44. 1 C E AN MA 71. 3 K E AN MA

18. 1 C E AN MA 45. 1 C E AN MA 72. 3 K E AN MA

19. 1 C E AN MA 46. 1 C E AN MA 73. 3 AP E AN MA

20. 1 C E AN MA 47. 1 AP E AN MA 74. 3 AP E AN MA

21. 1 K E AN MA 48. 1 C E AN MA 75. 3 AP E AN MA

22. 1 C E AN MA 49. 1 C E AN MA 76. 3 C M AN MA

23. 1 C E AN MA 50. 1 C E AN MA 77. 3 AP E AN MA

24. 1 C E AN MA 51. 1 C E AN MA 78. 3 AP E AN MA

25. 1 K E AN MA 52. 2 K E AN MA 79. 3 AP M AN MA

26. 1 C E AN MA 53. 2 C E AN MA 80. 3 AP E AN MA

27. 1 C E AN MA 54. 2 C M AN MA 81. 3 AP E AN MA

28. 1 K E AN MA 55. 2 K M AN MA 82. 4 C E AN MA

29. 1 AP E AN MA 56. 2 C E AN MA 83. 4 K E AN MA

30. 1 AP E AN MA 57. 2 C E AN MA 84. 4 K E AN MA

31. 1 C E AN MA 58. 2 C E AN MA 85. 4 C E AN MA

32. 1 C E AN MA 59. 2 C E AN MA 86. 4 C E AN MA

33. 1 K E AN MA 60. 2 C E AN MA 87. 4 C E AN MA

34. 1 C E AN MA 61. 2 C E AN MA 88. 4 K E AN MA

35. 1 C E AN MA 62. 2 C E AN MA 89. 4 C E AN MA

Bloom’s: AN = Analysis AP = Application C = Comprehension K = Knowledge

LOD: E = Easy M = Medium H = Hard

AACSB: AN = Analytic

CPA: MA = Management Accounting

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SUMMARY OF QUESTION TYPES BY LEARNING OBJECTIVE,

BLOOM’S TAXONOMY, LEVEL OF DIFFICULTY, AACSB CODES , AND

CPA CODES (CONT’D)

Item LO BT LOD AACSB CPA Item LO BT LOD AACSB CPA Item LO BT LOD AACSB CPA Multiple Choice Questions (Cont’d)

90. 4 AP M AN MA 97. 4 K E AN MA 104. 4 K E AN MA

91. 4 AP M AN MA 98. 4 AP M AN MA 105. 4 C E AN MA

92. 4 AP M AN MA 99. 4 AP M AN MA 106. 4 K E AN MA

93. 4 AP M AN MA 100. 4 AN M AN MA 107. 4 C E AN MA

94. 4 AP M AN MA 101. 4 C E AN MA 108. 4 C E AN MA

95. 4 C E AN MA 102. 4 C E AN MA

96. 4 C E AN MA 103. 4 K E AN MA

Brief Exercises

109. 1 C E AN MA 115. 2 AP M AN MA 121. 4 AN M AN MA

110. 1 C E AN MA 116. 3 AP M AN MA 122. 4 AP M AN MA

111. 1 C E AN MA 117. 3 AP M AN MA 123. 4 C E AN MA

112. 1 C E AN MA 118. 4 AN M AN MA 124. 4 AP M AN MA

113. 1 C E AN MA 119. 4 AP M AN MA

114. 2 AP E AN MA 120. 4 AN M AN MA

Exercises

125. 1 C E AN MA 132. 2 AP M AN MA 139. 4 AP M AN MA

126. 1 C E AN MA 133. 2,3 AP M AN MA 140. 4 AP M AN MA

127. 1 K M AN MA 134. 3 AP M AN MA 141. 4 AP M AN MA

128. 1 C E AN MA 135. 3 AP M AN MA 142. 4 AP M AN MA

129. 1 C E AN MA 136. 4 AP M AN MA 143. 4 AP M AN MA

130. 1,4 AP M AN MA 137. 4 AP M AN MA 144. 4 AP M AN MA

131. 1,4 AP M AN MA 138. 4 AP M AN MA 145. 4 AP M AN MA

Completion Statements

146. 1 K E AN MA 150. 2 K E AN MA 154. 4 K E AN MA

147. 1 K E AN MA 151. 3 K E AN MA 155. 4 K E AN MA

148. 1 K E AN MA 152. 3 K E AN MA 156. 4 K E AN MA

149. 2 K E AN MA 153. 4 K E AN MA 157. 4 K E AN MA

Matching

158. 1,2 K E AN MA

Short-Answer Essay

159. 3 C E AN MA 160. 4 AN M AN MA

Multi-Part Question

161. 1,2 AN H AN MA

Bloom’s: AN = Analysis AP = Application C = Comprehension K = Knowledge

LOD: E = Easy M = Medium H = Hard

AACSB: AN = Analytic

CPA: MA = Management Accounting

Managerial Cost Concepts and Cost Behaviour Analysis 2 - 3

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SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE

Item Type Item Type Item Type Item Type Item Type Item Type Item Type Learning Objective 1

• TF 16. MC 25. MC 34. MC 43. MC 109. BE 129. Ex
• TF 17. MC 26. MC 35. MC 44. MC 110. BE 130. Ex
• MC 18. MC 27. MC 36. MC 45. MC 111. BE 131. Ex

10. MC 19. MC 28. MC 37. MC 46. MC 112. BE 146. C

11. MC 20. MC 29. MC 38. MC 47. MC 113. BE 147. C

• MC 21. MC 30. MC 39. MC 48. MC 125. Ex 148. C
• MC 22. MC 31. MC 40. MC 49. MC 126. Ex 158. Ma
• MC 23. MC 32. MC 41. MC 50. MC 127. Ex 161. MP
• MC 24. MC 33. MC 42. MC 51. MC 128. Ex

Learning Objective 2

3. TF 56. MC 61. MC 66. MC 114. BE 150. C

• MC 57. MC 62. MC 67. MC 115. BE 124. Ex
• MC 58. MC 63. MC 68. MC 132. Ex 158. Ma
• MC 59. MC 64. MC 69. MC 133. Ex 161. MP

55. MC 60. MC 65. MC 70. MC 149. C

Learning Objective 3

• TF 73. MC 77. MC 81. MC 134. Ex 152. C
• TF 74. MC 78. MC 116. BE 135. Ex 159. SAE

71. MC 75. MC 79. MC 117. BE 173. C

• MC 76. MC 80. MC 133. Ex 151. C

Learning Objective 4

• TF 87. MC 95. MC 103. MC 120. BE 137. Ex 145. Ex
• TF 88. MC 96. MC 104. MC 121. BE 138. Ex 153. C
• TF 89. MC 97. MC 105. MC 122. BE 139. Ex 154. C
• MC 90. MC 98. MC 106. MC 123. BE 140. Ex 155. C
• MC 91. MC 99. MC 107. MC 124. BE 141. Ex 156. C
• MC 92. MC 100. MC 108. MC 130. Ex 142. Ex 157. C
• MC 93. MC 101. MC 118. BE 131. Ex 143. Ex 160. SAE
• MC 94. MC 102. MC 119. BE 136. Ex 144. Ex

Note: TF = True-False C = Completion BE = Brief Exercise

MC = Multiple Choice Ex = Exercise SAE = Short-Answer Essay Ma = Matching MP = Multi-Part

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CHAPTER LEARNING OBJECTIVES

• Define the three classes of manufacturing costs and differentiate between product

costs and period costs.Manufacturing costs are typically classified as either (1) direct materials, (2) direct labour, or (3) manufacturing overhead. Raw materials that can be physically and directly associated with the finished product during the manufacturing process are called direct materials. The work of factory employees that can be physically and directly associated with converting raw materials into finished goods is considered direct labour. Manufacturing overhead consists of costs that are indirectly associated with the manufacture of the finished product.Product costs are costs that are a necessary and integral part of producing the finished product.Product costs are also called inventoriable costs. Under the matching principle, these costs do not become expenses until the inventory to which they attach is sold. Period costs are costs that are identified with a specific time period rather than with a saleable product. These costs relate to nonmanufacturing costs and therefore are not inventoriable costs. Prime costs and conversion costs are two other terms that manufacturing accounting systems use. Prime costs are the sum of all direct materials costs and direct labour costs. These are all direct manufacturing costs. Conversion costs are the sum of all direct manufacturing labour costs and manufacturing overhead costs, which are the costs of converting raw materials into a final product in a manufacturing firm.

• Explain variance, fixed, and mixed costs and the relevant range.

Variable costs are costs that vary in total directly and proportionately with changes in the activity index. Fixed costs are costs that remain the same in total regardless of changes in the activity index.The relevant range is the range of activity in which a company expects to operate during a year.Mixed costs increase in total but not proportionately with changes in the activity level. One method that management may use to determine the variable and fixed components of a mixed cost is the high-low method.

• Apply the high-low method to determine the components of mixed costs.

Determine the variable costs per unit by dividing the change in total costs at the highest and lowest levels of activity by the difference in activity at those levels. Then, determine fixed costs by subtracting total variable costs from the amount of total costs at either the highest or lowest level of activity.

• Demonstrate how to calculate cost of goods manufactured and prepare financial

statements for a manufacturer.The cost of the beginning work in process is added to the total manufacturing costs for the current year to arrive at the total cost of work in process for the year. The ending work in process is then subtracted from the total cost of work in process to arrive at the cost of goods manufactured.The difference between merchandising and manufacturing income statements is in the cost of goods sold section. A manufacturing cost of goods sold section shows the beginning and ending finished goods inventories and the cost of goods manufactured.