Solved by verified expert :36. The
term that refers to costs incurred in the past that are not relevant to a
decision is:
A) marginal
cost.
B) indirect
cost.
C) period
cost.
D) sunk
cost.
37. Lathe
operators at KF Manufacturing are hourly employees who are paid time and a half
for hours worked in excess of 40 hours per week. Lester is a lathe operator who
worked 45 hours during the current week and had no idle time. The correct
accounting for the amounts paid to Lester would be:
A) charge
only the overtime premium earned to the overhead account.
B) charge
the hourly wage earned plus the overtime premium earned to the overhead
account.
C)
charge only the overtime premium earned
to the direct labor cost for the project Lester was working on when the
overtime was incurred.
D) charge
the hourly wage earned plus the overtime premium earned to the direct labor
cost for the project Lester was working on when the overtime was incurred.
38. The
controller of the recently organized Crandall Company is considering the two
methods listed below for accounting for labor fringe benefits. Which of the two
methods is considered acceptable?
Method A: Treat all labor fringe
benefits as indirect labor by adding them in total to manufacturing overhead.
Method B: Treat labor fringe benefits
that relate to direct labor as additional direct labor cost and fringe benefits
relating to indirect labor as part of manufacturing overhead.
A) Only
Method A is acceptable.
B) Only
Method B is acceptable.
C) Both
Method A and Method B are acceptable.
D)
Neither Method A nor
Method B is acceptable; labor fringe benefits should be treated as period
expenses and should be charged off as incurred.
22 Garrison,
Managerial Accounting, 12th Edition
Chapter
2 Cost Terms, Concepts, and Classifications
39. Which
of the following would be classified as a prevention cost on a quality cost
report?
A) Disposal
of defective products.
B) Net
cost of spoilage.
C) Depreciation
of test equipment.
D) Technical
support provided to suppliers.
40. Which
of the following would be classified as a prevention cost on a quality cost
report?
A) Debugging
software errors.
B) Quality
training.
C) Test
and inspection of incoming materials.
D) Cost
of field servicing and handling complaints.
41. Which
of the following would be classified as a prevention cost on a quality cost
report?
A) Supplies
used in testing and inspection.
B) Debugging
software errors.
C) Quality
improvement projects.
D) Lost
sales arising from a reputation for poor quality.
42. Which
of the following would be classified as an appraisal cost on a quality cost
report?
A) Final
product testing and inspection.
B) Net
cost of spoilage.
C) Repairs
and replacements beyond the warranty period.
D) Rework
labor and overhead.
Garrison, Managerial Accounting, 12th Edition 23
Chapter
2 Cost Terms, Concepts, and Classifications43.
Which of the following would
be classified as an appraisal cost on a quality cost report? A) Quality
improvement projects. B) Supplies
used in testing and inspection. C) Audits
of the effectiveness of the quality system. D) Quality
data gathering, analysis, and reporting. 44.
Which of the following
would be classified as an appraisal cost on a quality cost report? A) Maintenance
of test equipment. B) Re-entering
data because of keying errors. C) Debugging
software errors. D) Warranty
repairs and replacements. 45. Which
of the following would be classified as an internal failure cost on a quality
cost report? A) Quality
improvement projects. B) Supervision
of testing and inspection activities. C) Debugging
software errors. D) Warranty
repairs and replacements.
