Complete Solution Manual Horngren’s
Cost Accounting 17th Edition Questions &
Answers with rationales (Chapter 1-24)
Chapter 1: Introduction to Cost Accounting
Question 1:
Which of the following is NOT a function of cost accounting?
• A) Cost accumulation
• B) Budget preparation
• ...
Question 1:
Which of the following is NOT a function of cost accounting?
• A) Cost accumulation
• B) Budget preparation
• C) Decision support
• D) Financial statement preparation
Answer: D) Financial statement preparation
Rationale: Cost accounting focuses on accumulating and assigning costs, supporting decision-
making, and preparing budgets, but it does not prepare financial statements. Financial statements
are prepared using financial accounting principles.
Question 2:
Which of the following is NOT a type of cost?
• A) Direct cost
• B) Indirect cost
• C) Fixed cost
• D) Variable income
Answer: D) Variable income
Rationale: In cost accounting, we deal with different types of costs (direct, indirect, fixed,
variable) but variable income is not a recognized type of cost.
Chapter 2: Cost-Volume-Profit Analysis
Question 3:
The break-even point is reached when:
,2|Page
• A) Total costs equal total revenues.
• B) Fixed costs exceed variable costs.
• C) The contribution margin is zero.
• D) Total fixed costs equal total variable costs.
Answer: A) Total costs equal total revenues.
Rationale: The break-even point occurs when total revenues cover both fixed and variable
costs, resulting in zero profit.
Question 4:
In cost-volume-profit (CVP) analysis, which of the following is NOT needed to calculate the
break-even point?
• A) Fixed costs
• B) Variable cost per unit
• C) Total sales revenue
• D) Contribution margin per unit
Answer: C) Total sales revenue
Rationale: The break-even point is calculated using fixed costs, variable costs, and
contribution margin. The total sales revenue is not needed directly to calculate the break-even
point.
Chapter 3: Job Order Costing
Question 5:
Which of the following is NOT typically assigned in a job order costing system?
• A) Direct materials
• B) Direct labor
• C) Manufacturing overhead
• D) Administrative expenses
Answer: D) Administrative expenses
Rationale: In job order costing, only direct materials, direct labor, and manufacturing
overhead are assigned to jobs. Administrative expenses are considered period costs, not
product costs.
, 3|Page
Question 6:
In a job order costing system, the cost of goods manufactured includes all of the following
except:
• A) Direct materials used
• B) Direct labor incurred
• C) Applied manufacturing overhead
• D) Period expenses
Answer: D) Period expenses
Rationale: The cost of goods manufactured includes all product costs like direct materials,
direct labor, and applied overhead. Period expenses (like selling and administrative costs) are
excluded from product cost calculations.
Chapter 4: Process Costing
Question 7:
Which of the following is NOT true regarding process costing?
• A) It is used for mass production of identical items.
• B) Costs are accumulated by individual jobs.
• C) It applies to industries like chemicals, oil refining, and textiles.
• D) Units are not distinguishable from one another.
Answer: B) Costs are accumulated by individual jobs.
Rationale: In process costing, costs are accumulated for each process or department, not by
individual jobs. It’s suitable for industries producing homogeneous products.
Question 8:
Which of the following methods is used to compute equivalent units of production in process
costing?
• A) FIFO method
• B) Weighted average method
• C) Absorption costing method
• D) Both A and B
Answer: D) Both A and B
Rationale: The FIFO and weighted average methods are both used to calculate equivalent
units of production in process costing, depending on the cost flow assumption.
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