ACCT 302: Cost Accounting! Trivia Questions
Need some revision for the ACCT 302 on cost accounting? In recording financial transactions and concerning a business, there must be accounting processes involved, which include summarizing, analyzing, and reporting these transactions to oversight agencies, regulators, and tax collection entities. Give the quiz a shot and keep an eye out for others to perfect your understanding before the exams!
- 1.
Inventoriable costs are assigned to inventories under GAAP.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Inventoriable costs refer to the direct costs incurred in the production of goods or services that can be easily traced to the inventory. These costs include the cost of raw materials, direct labor, and direct overhead. Under GAAP (Generally Accepted Accounting Principles), these costs are assigned to inventories to accurately reflect the cost of goods held for sale. Therefore, the statement that inventoriable costs are assigned to inventories under GAAP is true.Rate this question:
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- 2.
Mario Garcia is paid $20 an hour for straight-time and $30 an hour for overtime. One week she worked 42 hours, which included 2 hours of overtime. What is the overhead incurred to the company?
- A.
$60
- B.
$10
- C.
$30
- D.
$20
Correct Answer
D. $20Explanation
Overtime premium (2 hrs × $10) = $20Rate this question:
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- 3.
Dave Rigby is paid $30 an hour for straight-time and $40 an hour for overtime. One week he worked 45 hours, which included 5 hours of overtime, and 3 hours of idle time caused by material shortages. What is the direct labor cost incurred to the company?
- A.
$1,260
- B.
$1,400
- C.
$1,310
- D.
$1,210
Correct Answer
A. $1,260Explanation
Direct labor (45 - 3 = 42 hours × $30) = $1,260Rate this question:
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- 4.
Tony worked 48 hours last week for Bread Works Manufacturing. Of the 48 hours 5 hours were considered overtime, and also Tony was idle for 4 of the 48 hours due to an equipment malfunction. Tony makes $50 per hour and is paid $75 an hour (time and a half) for overtime. Tony's total compensation for that week would be ________, and assuming Bread Works charges overtime premium and idle time to indirect labor, the amount of this compensation credited to indirect labor would be ________.
- A.
$2,950; $325
- B.
$2,900; $280
- C.
$2,750; $300
- D.
$2,500; $350
Correct Answer
A. $2,950; $325Explanation
total compensation (44 × $50) + (5 × $75) = $2,950;
indirect labor (4 × $50) + (5 × $25) = $325Rate this question:
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- 5.
Idle time wages consist of the wages paid to all workers (for both direct labor and indirect labor) in excess of their straight-time wage rates.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Idle time wages do not consist of the wages paid to all workers in excess of their straight-time wage rates. Idle time wages refer to the wages paid to workers when they are not engaged in productive work due to reasons such as machine breakdowns, power outages, or lack of materials. These wages are typically paid at a reduced rate or may not be paid at all. Therefore, the statement is false.Rate this question:
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- 6.
Rework labor time is considered an overhead cost and not a direct labor cost.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Rework labor time is considered an overhead cost because it involves additional time and resources that are not directly related to the production of a product or service. It is an indirect cost that is incurred due to errors or defects in the initial production process. This cost includes the time spent on identifying and fixing the issues, as well as any additional materials or resources required. Therefore, it is not considered a direct labor cost, which refers to the wages or salaries paid to employees directly involved in the production process.Rate this question:
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- 7.
For external reporting purposes, indirect manufacturing costs must be allocated to individual units.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Indirect manufacturing costs, such as factory utilities and maintenance, are not directly traceable to individual units of production. However, for external reporting purposes, these costs need to be allocated to individual units to accurately reflect the total cost of production. This allocation is typically done using a predetermined overhead rate based on a cost driver, such as direct labor hours or machine hours. Therefore, the statement "For external reporting purposes, indirect manufacturing costs must be allocated to individual units" is true.Rate this question:
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- 8.
Overtime premium is normally considered as a component of direct labor.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Overtime premium is normally considered as part of indirect labor since it is usually not associated with a particular job.Rate this question:
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- 9.
If a worker is paid for 40 hours but is idle for 5 of those 40 hours, the 5 hours of idle time would be considered a component of direct labor.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Idle time is normally considered a component of indirect labor since it is usually not associated with a particular job.Rate this question:
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Mar 21, 2023Quiz Edited by
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Jun 06, 2015Quiz Created by
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