the standard cost true false question 501177

1. The standard cost is how much a product should cost to manufacture.

TRUE

FALSE

2. Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area.

TRUE

FALSE

3. An unfavorable cost variance occurs when budgeted cost at actual volumes exceeds actual cost.

TRUE

FALSE

4. A centralized business organization is one in which all major planning and operating decisions are made by top management.

TRUE

FALSE

5. The plant managers in a cost center can be held responsible for major differences between budgeted and actual costs in their plants.

TRUE

FALSE

6. Property tax expense for a department store’s store equipment is an example of a direct expense.

TRUE

FALSE

7. Differential revenue is the amount of increase or decrease in revenue expected from a particular course of action as compared with an alternative.

TRUE

FALSE

8. The product cost concept includes all manufacturing costs plus selling and administrative expenses in the cost amount to which the markup is added to determine product price.

TRUE

FALSE

9. When a bottleneck occurs between two products, the company must determine the contribution margin for each product and manufacture the product that has the highest contribution margin per bottleneck hour.

TRUE

FALSE

10. Care must be taken involving capital investment decisions, since normally a long-term commitment of funds is involved and operations could be affected for many years.

TRUE

FALSE

11. Average rate of return equals average investment divided by estimated average annual income.

TRUE

FALSE

12. Managers depend on product costing to make decisions regarding continuing operations, advertising, and product mix.

TRUE

FALSE

13. The single plantwide overhead rate method is very expensive to apply.

TRUE

FALSE

14. In the just-in-time (JIT) philosophy, unexpected downtime is the result of unreliable processes.

TRUE

FALSE

15. In a just-in-time (JIT) system, the work in process account will show more transactions than in a traditional cost system.

TRUE

FALSE