Question

Multiple choice:

1. The primary costs of the product are composed of:

a. direct materials and indirect manufacturing costs

b. direct labor and indirect labor.

c. direct labor and indirect manufacturing costs.

d. direct labor and direct materials

2. Which of the following businesses is most likely to use a cost-per-order system?

a.Coal manufacturing

b.Manufacture of computer chips

c.Restoration of antique furniture

d.Rubber manufacturing

3.The production cost sheets, used in a cost-per-order system, accumulate all of the following costs, except

a.indirect materials.

b.indirect costs applied.

c.direct materials.

d.direct labor.

4. When the manager has the responsibility and authority to make decisions that affect costs and revenues, but has no responsibility or authority over the acquisition of fixed assets, the department should be treated as a

a. profit center.

b. sales center.

c.investment center.

d. cost center.

Answer 1

1

The primary costs of the product are composed of direct labor and direct materials

Option D is correct

2

Restoration of antique furniture is most likely to use a cost-per-order system

Restoration of antique furniture requires specific costs and processes.

Option C is correct

3

The production cost sheets, used in a cost-per-order system, accumulate all of the following costs, except Indirect materials.

Option A is correct

4

In a profit center, manager has the responsibility and authority to make decisions that affect costs and revenues

Option A is correct