University of Minnesota, Duluth ACCT 3201 chapter 4 Job Costing QUESTIONS WITH VERIFIED SOLUTIONS
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Course
ACCT 3201
Institution
University Of Minnesota, Duluth
Cost Accounting: A Managerial Emphasis, 16e (Horngren)
Chapter 4 Job Costing
4.1 Objective 4.1
1) A cost is considered direct if it can be traced to a particular cost object in a cost
effective way which means it can be
A) traced easily with the aid of technology
B) traced in a manner that is...
16e horngren chapter 4 job costing 41 objective 41 1 a c
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ACCT 3201
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Cost Accounting: A Managerial Emphasis, 16e (Horngren)
Chapter 4 Job Costing
4.1 Objective 4.1
1) A cost is considered direct if it can be traced to a particular cost object in a cost
effective way which means it can be
A) traced easily with the aid of technology
B) traced in a manner that is accurate
C) traced in an economically feasible way
D) possibly traced accurately with an investment in hardware and software
Answer: C
Diff: 1
Objective: 1
AACSB: Analytical thinking
2) A ________ is anything for which a measurement of costs is desired.
A) cost-allocation base
B) cost pool
C) cost object
D) cost-application base
Answer: C
Diff: 1
Objective: 1
AACSB: Analytical thinking
3) A ________ is a grouping of individual indirect cost items.
A) cost-allocation base
B) cost assignment
C) cost pool
D) job-costing system
Answer: C
Diff: 1
Objective: 1
AACSB: Analytical thinking
4) A manufacturer utilizes three separate indirect cost pools. Which of the following is
true?
A) Each indirect cost pool utilizes a separate cost-allocation rate
B) Each indirect cost pool is a subset of total direct costs
C) Each indirect cost pool relates to multiple cost centers
D) Each indirect cost pool utilizes the same cost-allocation rate for all costs incurred
Answer: A
Diff: 1
Objective: 1
AACSB: Analytical thinking
,5) Direct costs ________.
A) are anything for which a measurement of costs is desired
B) are costs related to a particular cost object that can be traced to that cost object in an
economically feasible manner
C) focus specifically on the costing needs of the CFO
D) are costs related to a particular cost object that cannot be traced to that cost object in a
cost-effective manner
Answer: B
Diff: 2
Objective: 1
AACSB: Analytical thinking
6) In a costing system, ________.
A) cost tracing allocates indirect costs
B) cost allocation assigns direct costs
C) a cost-allocation base can be either financial or nonfinancial
D) a cost object should be a product and not a department or a geographic territory
Answer: C
Diff: 2
Objective: 1
AACSB: Analytical thinking
7) Assigning direct costs to a cost object is called ________.
A) cost allocation
B) cost assignment
C) cost pooling
D) cost tracing
Answer: D
Diff: 1
Objective: 1
AACSB: Analytical thinking
8) ________ is the process of assigning indirect costs to products.
A) Cost allocation
B) Job cost recording
C) Cost pooling
D) Cost tracing
Answer: A
Diff: 1
Objective: 1
AACSB: Analytical thinking
,9) Allocating indirect costs to departments based on the relative revenue earned by those
departments is done based on which of the following criterion?
A) direct hours utilized
B) benefits received
C) material resources used
D) cause-and-effect relationships
Answer: B
Diff: 1
Objective: 1
AACSB: Analytical thinking
10) Which of the following includes both traced direct costs and allocated indirect costs?
A) cost tracing
B) cost pools
C) cost assignments
D) cost allocations
Answer: C
Diff: 1
Objective: 1
AACSB: Analytical thinking
11) The cost allocation base ________.
A) is a grouping of individual indirect cost items
B) are costs related to a particular cost object that cannot be traced to that cost object in
an economically feasible way
C) is anything for which a measurement of costs is desired
D) is a systematic way to link an indirect cost or group of indirect costs to cost objects
Answer: D
Diff: 1
Objective: 1
AACSB: Analytical thinking
12) Direct costs are allocated to the cost object using a cost-allocation method.
Answer: FALSE
Explanation: Indirect costs are allocated to the cost object using a cost-allocation method.
Diff: 1
Objective: 1
AACSB: Analytical thinking
13) A cost object is anything for which a measurement of costs is desired.
Answer: TRUE
Diff: 1
Objective: 1
AACSB: Analytical thinking
, 14) Direct costs of a cost object are costs related to a particular cost object that can be
allocated to that cost object in an economically feasible (cost-effective) way.
Answer: FALSE
Explanation: Direct costs of a cost object — costs related to a particular cost object that
can be traced to that cost object in an economically feasible (cost-effective) way.
Diff: 1
Objective: 1
AACSB: Analytical thinking
15) The cost-allocation base is a systematic way to link an indirect cost or group of indirect
costs to cost objects.
Answer: TRUE
Diff: 2
Objective: 1
AACSB: Analytical thinking
16) Cost objects may be jobs, products, or customers.
Answer: TRUE
Diff: 1
Objective: 1
AACSB: Analytical thinking
17) When an organization allocated indirect costs to departments by relative size of the
budgets, it is based on the criterion of benefits received.
Answer: FALSE
Explanation: When an organization allocated indirect costs to departments by relative size
of the budgets, it is based on the criterion of ability to bear costs.
Diff: 1
Objective: 1
AACSB: Analytical thinking
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