1. A major purpose of cost accounting is to
- measure, record, and report product costs.
- measure, record, and report period costs.
- provide information to stockholders for investment decisions.
- classify all costs as operating or nonoperating.
2. The two basic types of cost accounting systems are
- job order and process cost systems.
- process cost and batch systems.
- job order and batch systems.
- job order and job accumulation systems.
3. A process cost system would most likely be used by a company that makes
- college graduation announcements.
- motion pictures.
- repairs to automobiles.
- breakfast cereal.
4. Which of the following would be accounted for using a job order cost system?
- The production of personal computers.
- The production of automobiles.
- The construction of a new campus building.
- The refining of petroleum.
5. The flow of costs in a job order cost system
- cannot be measured until all jobs are complete.
- generally follows a LIFO cost flow assumption.
- involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done.
- measures product costs for a set time period.
6. The entry to record the acquisition of raw materials on account is
- Raw Materials Inventory
- Accounts Payable
- Work in Process Inventory
- Accounts Payable
- Manufacturing Overhead
- Raw Materials Inventory
- Accounts Payable
- Accounts Payable
- Raw Materials Inventory
7. Time tickets should be approved by
- the employee's supervisor.
- the audit committee.
- the payroll department.
- co-workers.
8. The labor costs that have been identified as indirect labor should be charged to
- the individual jobs worked on.
- direct labor.
- salary expense.
- manufacturing overhead.
9. Manufacturing overhead is applied to each job
- by means of a predetermined overhead rate.
- at the time when the overhead cost is incurred.
- only if the overhead costs can be directly traced to that job.
- at the end of the year when actual costs are known.
10. A process cost accounting system is most appropriate when
- similar products are mass-produced.
- a variety of different products are produced, each one requiring different types of materials, labor, and overhead.
- individual products are custom made to the specification of customers.
- the focus of attention is on a particular job or order.
11. Which of these best reflects a distinguishing factor between a job order cost system and a process cost system?
- The manufacturing cost elements included.
- The time period each covers.
- The number of work in process accounts.
- The detail at which costs are calculated.
12. In process cost accounting, manufacturing costs are summarized on a
- process order cost sheet.
- manufacturing cost sheet.
- production cost report.
- job order cost sheet.
13. In a process cost system, product costs are summarized:
- on production cost reports.
- when the products are sold.
- on job cost sheets.
- after each unit is produced.
14. Which of the following is considered a difference between a job order cost and a process cost system?
- The manufacturing cost elements.
- Documents used to track costs.
- The accumulation of the costs of materials, labor, and overhead.
- The flow of costs.
15. The costs that are easiest to trace directly to products are
- A.direct materials and direct labor.
- B.direct labor and overhead.
- C.direct materials and overhead.
- D.None of the above; all three costs are equally easy to trace to the product.
16. Often the most difficult part of computing accurate unit costs is determining the proper amount of _________ to assign to each product, service, or job.
- direct materials and direct labor
- direct labor
- overhead
- direct materials
17. The last step in activity-based costing is to
- compute the activity-based overhead rate per cost driver.
- identify and classify the major activities involved in the manufacture of specific products.
- identify the cost driver that has a strong correlation to the activity cost pool.
- assign manufacturing overhead costs for each activity cost pool to products.
18. The first step in activity-based costing is to
- identify and classify the major activities involved in the manufacture of specific products.
- assign manufacturing overhead costs for each activity cost pool to products.
- identify the cost driver that has a strong correlation to the activity cost pool.
- compute the activity-based overhead rate per cost driver.
19. A well-designed activity-based costing system starts with
- analyzing the activities performed to manufacture a product.
- assigning manufacturing overhead costs for each activity cost pool to products.
- identifying the activity-cost pools.
- computing the activity-based overhead rate.
20. An example of an activity cost pool is
- number of inspections.
- setting up machines.
- machine hours.
- number of setups.