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Chapter 2

Multiple Choice

Multiple Choice

This activity contains 15 questions.

	The term used to describe the assignment of direct costs to the particular cost object is   cost assignment. cost allocation. cost accumulation. cost tracing.

	The term used to describe the assignment of indirect costs to a particular cost object would be   cost tracing. cost accumulation. cost assignment. cost allocation.

	As activity changes, a cost that is variable will   remain the same in total amount. vary per unit. vary inversely with activity per unit. remain the same per unit.

	A cost that is constant in total amount is always considered a(n)   fixed cost. indirect cost. variable cost. direct cost.

	As the quantity produced increases, fixed costs per unit are expected to   decrease per unit. increase per unit. stay the same per unit. None of the above.

	An average cost is also known as a(n)   variable cost. total cost. unit cost. fixed cost.

	A merchandising company engages in all of the following except for   distributing. wholesaling. retailing. manufacturing.

	Ford Automotive Company is considered an example of a(n)   wholesaler. service company. merchandiser. manufacturer.

	Hotels.com, a company that sells hotel reservations over the Internet is an example of a(n)   service company. merchandiser. manufacturer. None of the above.

	The cost of materials that have been started into production, but are not completely processed, would be found in which inventory account on the balance sheet?   Work-in-process inventory Supplies inventory Finished goods inventory Direct materials inventory

	Finished goods inventory costs represent the costs of goods that are   already delivered to customers. waiting to be sold. currently being worked on. waiting to be worked on.

	An example of an inventoriable cost would be   direct materials. sales commissions. shipping fees. advertising flyers.

	Prime costs would include   direct material costs, direct labor costs, and indirect manufacturing costs. direct material and direct labor costs. direct labor costs and indirect manufacturing costs. direct material costs and indirect manufacturing costs.

	Costs at a service sector company are normally considered   inventoriable costs. period costs. prime costs. None of the above.

	Cost of incoming freight on merchandise to be sold to customers by a retail chain would be considered by that merchandiser to be   period costs. inventoriable costs. prime costs. None of the above.

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