1.The basic types of cost accounting systems are:
- Job order cost systems, activity based cost systems, and process cost systems.
- Direct cost systems and indirect cost systems.
- Completed job cost systems and work in process cost systems.
- Fixed cost systems and variable cost systems.
2.Under a job order cost system, costs are accumulated for:
- Each department in the production cycle.
- Each batch of production, known as a job or lot.
- Each individual unit produced.
- Each job supervisor.
3.Which of the following statements is true about activity-based costing?
- Only one activity should be used for a company.
- Many different activity bases are used in applying overhead.
- There can only be one cost driver.
- Direct materials and direct labor are applied to work-in-process based upon cost drivers.
4.Manufacturing overhead is:
- A direct cost that can traced to a specific job.
- An indirect cost that can be traced to a specific job.
- A direct cost that cannot be traced to a specific job.
- An indirect cost that cannot be traced to a specific job.
5.A summary of work completed with related unit and total costs in a process costing system is called a(n):
- Equivalent units production form.
- Cost requisition form.
- Summary of conversion costs.
- Production cost report.
6.Process cost systems:
- Are good when companies produce homogeneous units.
- May have work-in-process accounts for each department.
- Use equivalent units of production.
- All of the above.
7.Per-unit costs:
- Are relevant only when a company is engaged in manufacturing activities.
- Are determined in job order cost systems but cannot be computed when a process cost system is in use.
- Are relevant in manufacturing, merchandising, and service industries, regardless of the type of cost accounting system in use.
- Are determined by relating manufacturing costs to the number of units sold.
8.Equivalent units are usually computed for:
- Only direct materials.
- Only direct labor.
- Only factory overhead.
- All three of the above.
9.Which of the following costing systems would always use job cost sheets?
- Job order costing.
- Process costing.
- Activity-based costing.
- All three systems.
10.The basic types of cost accounting systems are:
- Direct cost systems and indirect cost systems.
- Fixed cost systems and variable cost systems.
- Completed job cost systems and work in process cost systems.
- Job order cost systems, activity based cost systems, and process cost systems.
11.A job order cost system would be appropriate in the manufacture of:
- Breakfast cereal.
- Standard-grade plywood.
- Custom-made furniture.
- Paints.
12.A job order cost system traces direct materials cost to a particular job by means of:
- A production budget.
- Materials requisitions.
- The Materials Inventory controlling account.
- A debit to the job cost sheet for the job.
13.A job cost sheet should:
- Contain information that summarizes all jobs finished.
- Contain information on each individual job in process.
- Contain only the direct costs of a particular job.
- Only be used for jobs that have been completed.
14.Underapplied overhead at the end of a month:
- Is represented by a credit balance remaining in the Manufacturing Overhead account.
- Is represented by a debit balance remaining in the Manufacturing Overhead account.
- Indicates a poorly designed cost accounting system.
- Results when actual overhead costs are less than amounts applied to work in process.
15.Which of the following statements is true about activity-based costing?
- Direct materials and direct labor are applied to work-in-process based upon cost drivers.
- Many different activity bases are used in applying overhead.
- Only one activity should be used for a company.
- There can only be one cost driver.
16.In an activity-based costing system, manufacturing overhead costs are divided into separate:
- Activity bases.
- Indirect cost centers.
- Activity cost pools.
- Cost drivers.
17.A job order cost system would be suitable for which of the following
- A manufacturer of candy bars
- A manufacturer of laundry detergent
- A sailboat builder
- A sugar refinery
18.Process costing would be suitable for
- Kitchen remodeling
- Automobile repair
- Boat building
- Production of television sets
19.Process cost systems
- Are good when companies produce homogeneous units
- May have work-in-process accounts for each department.
- Use equivalent units of production
- All of the above.
20.Equivalent units of production are
- A measure representing the percentage of a unit's cost that has been completed.
- May be computed separately for each input added during production
- May be assigned to beginning work-in-process or ending work-in-process
- All of the above