1) Total fixed costs will be the same regardless of activity (True/False) 2)  All costs incurred in a merchandising firm are period costs (True/False) 3) In a manufacturing firm, depreciation is always considered product cost for external financial reporting purposes (True/False) 4

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1) Total fixed costs will be the same regardless of activity (True/False)

2)  All costs incurred in a merchandising firm are period costs (True/False)

3) In a manufacturing firm, depreciation is always considered product cost for external financial reporting purposes (True/False)

4.     In external financial reports, factory utilities costs may be included in an asset account on the balance sheet at the end of the period (True/False)

5.     Advertising costs are considered product costs for external financial reports since they are incurred in order to promote specific products (True/False)

6.     Property taxes and insurance premiums paid on a factory building are examples of manufacturing overhead (True/False)

7.     Manufacturing overhead combined with direct materials is known as conversion cost (True/False)

8.     If the ending inventory of finished goods is understated, net income will be overstated (True/False)

9.     In a manufacturing company, goods available for sale equals the sum of the cost of goods manufactured and the beginning finished goods inventory (True/False)

10.  Variable costs are costs whose per unit costs vary as the activity level rises and falls (True/False)

11.  On a per unit basis, a fixed cost varies inversely with the level of activity (True/False)

12.  When raw materials are used in production, their costs are transferred to the work in process inventory account as direct materials (True/False)

13.  As goods are completed their cost is transferred from the Work in Process account to the Finished Goods account where they await sales to customer (True/False)

14.  Some companies classify labour fringe benefits for direct labour workers as part of the direct labour cost and some classify these costs as manufacturing overhead (True/False)

15.  Budgets provide information to help manage resources and are supported by the financial accounting function (True/False)

16.  Consider the following data, Direct labour is N$4 per unit, direct material is N$8 per unit, variable overhead is N$2 per unit, total fixed overheads is N$20 000, number of units produced is 5000. Under variable costing, the variable cost per unit is

a)     N$18,   b) N$12,    c) N$ 14,          d) N$

17.  Consider the following data, Direct labour is N$4 per unit, direct material is N$8 per unit, variable overhead is N$2 per unit, total fixed overheads is N$20 000, number of units produced is 5000. Under absorption costing, the absorption cost per unit is

a)     N$18,              b) N$12,      c) None of the above,                d) N$14,                  e) N$8

18.  Consider the following data, Direct labour is N$4 per unit, direct material is N$8 per unit, variable overhead is N$2 per unit, total fixed overheads is N$20 000, number of units produced is 5000. How much will be the value of ending inventory under variable costing, if only 4000 units are sold during the period?

a)     N$14 000,              b) N$12 000,      c) N$ 70 000            d) N$18 000

19.  Consider the following data, Direct labour is N$4 per unit, direct material is N$8 per unit, variable overhead is N$2 per unit, total fixed overheads is N$20 000, number of units produced is 5000. How much will be the value of ending inventory under absorption costing, if only 4000 units are sold during the period?

b)    N$13 000,              b) N$70 000,      c) N$ 14 000            d) N$18 000

20.  The first budget in the budgeting process is normally the ......... budget

a)     Cash          b) Sales      c) Purchases             d) Production

21.  The end product of the budgeting process is

a)     Cash budget       b) Functional Budget           c) Master Budget     d) None of the above

22.  Which of the budgets below is not a functional budget

a)     Sales budget   b) Master budget   c) Production budget   d) Flexible budget   e) Cash budget

23.  Fire investment CC has provided the following information for the year ended 30 June 2019: sales of N$ 100 000, purchases of N$ 70 000, opening inventory of N$ 20 000 and gross margin of N$ 30 000. Cost of sales is sales less gross profit which is equal to N$ 70 000.available inventory is opening inventory plus purchases which is equal to N$ 90 000. What is the closing inventory for the business at year-end?

a)     N$ 65 000             b) N$ 14 000           c) N$ 20 000          d) N$ 24 000

24.  Budgeting can be used in an organisation to

a)     Motivate mangers to achieve organizational goals

b)    Control operations

c)     Provide managers with information for making decisions and planning

d)    All of the above

25.  What does conversion cost consist of

a)     Manufacturing overhead cost

b)    Direct labour and manufacturing overhead cost

c)     Direct labour cost

d)    Direct materials and direct labour cost

26.  Total costs incurred in a production process is divided by total number of output units to calculate the

a)     Unit costs

b)    Cos of indirect labour

c)     Cost of direct labour

d)    Cost of direct material