1. Some costs that possibly could be traced directly to cost objects are nonetheless classified as indirect...
Question:
1. Some costs that possibly could be traced directly to cost objects are nonetheless classified as indirect costs because:
a. Such practice results in a more accurate accumulated cost for the object.
b. All of these answers are correct.
c. Such costs cannot be traced to objects in a cost-effective manner.
d. Generally accepted accounting principles require some costs to be treated as indirect.
2. The process of dividing a total cost into parts and assigning it to cost objects is known as:
a. None of these answers is correct.
b. cost division.
c. cost allocation.
d. cost tracing.
3. Michael & Co. expects overhead costs of $60,000 per month and direct production costs of $24 per unit. The estimated production activity for the 2013 accounting period is as follows:
The predetermined overhead rate based on units produced is (rounded to the nearest penny) is:
a. $18.00 per unit.
b. $2.67 per unit.
c. $42.00 per unit.
d. $1.50 per unit.
Expert Answer:
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
