ACCT 505 MIDTERM EXAM QUESTIONS AND ANSWERS

ACCT 505 MIDTERM EXAM
QUESTIONS AND ANSWERS
1. Question : (TCO A) Direct material cost is a part of

Student Answer:
Conversion Cost NO.... Prime Cost NO.

Conversion Cost YES.... Prime Cost NO.

Conversion Cost YES.... Prime Cost YES.

Conversion Cost NO.... Prime Cost YES.
Instructor See Chapter 2.
Explanation:




Question 2. Question : (TCO A) A cost incurred in the past that is not relevant to any current
decision is classified as a(n)

Student Answer:
period cost.

incremental cost.

opportunity cost.

None of the above
Instructor See Chapter 2.
Explanation:




Question 3. Question : (TCO A) The cost of lubricants used to grease a production machine in a
manufacturing company is an example of a(n)

Student Answer:
period cost.

direct material cost.

indirect manufacturing cost.

, ACCT 505 MIDTERM EXAM
QUESTIONS AND ANSWERS
direct product cost.

None of the above
Instructor See Chapter 2.
Explanation:




Question 4. Question : (TCO C) When the activity level is expected to decrease within the
relevant range, what effects would be anticipated with respect to each of
the following?
Fixed cost per unit Variable cost per unit

Student Answer:
Increase No change

Increase Increase

Decrease No change

No change Increase
Instructor See Chapter 5.
Explanation:




Question 5. Question : (TCO B) When manufacturing overhead is applied to production, it is
added to

Student Answer:
the cost of goods sold account.

the raw materials account.

the direct labor account.

None of the above
Instructor See Chapter 3.
Explanation: