Cost Accounting, 14e (Horngren/Datar/Rajan)
Chapter 2 An Introduction to Cost Terms and Purposes

Objective 2.1

1) Cost objects include:
A) products
B) customers
C) departments
D) All of these answers are correct.
Answer: D
Diff: 2
Terms: cost object
Objective: 1
AACSB: Reflective thinking

2) Actual costs are:
A) the costs incurred
B) budgeted costs
C) estimated costs
D) forecasted costs
Answer: A
Diff: 1
Terms: actual costing
Objective: 1
AACSB: Reflective thinking

3) The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is:
A) cost accumulation
B) cost assignment
C) cost tracing
D) conversion costing
Answer: B
Diff: 1
Terms: cost assignment
Objective: 1
AACSB: Reflective thinking

4) In order to make decisions, managers need to know:
A) actual costs
B) budgeted costs
C) both costs
D) neither cost
Answer: C
Diff: 1
Terms: budgeted costs
Objective: 1
AACSB: Ethical reasoning

5) The collection of accounting data in some organized way is:
A) cost accumulation
B) cost assignment
C) cost tracing
D) conversion costing
Answer: A
Diff: 1
Terms: cost accumulation
Objective: 1
AACSB: Reflective thinking

6) Budgeted costs are:
A) the costs incurred this year
B) the costs incurred last year
C) planned or forecasted costs
D) competitor's costs
Answer: C
Diff: 2
Terms: budgeted costs
Objective: 1
AACSB: Reflective thinking

7) Cost assignment :
A) is always arbitrary
B) is includes tracing and allocating
C) is the same as cost accumulation
D) is finding the difference between budgeted and actual costs
Answer: B
Diff: 2
Terms: cost assignment
Objective: 1
AACSB: Reflective thinking

8) A cost system determines the cost of a cost object by:
A) accumulating and then assigning costs
B) accumulating costs
C)