Problem 1: Luca Company over applied manufacturing overhead during 2006. Which one of the following is part of the year end entry to dispose of the over applied amount assuming the amount is material?
A. An increase to finished goods
B. A decrease to work in process inventory
C. An increase to cost of goods sold
D. A decrease to applied overhead
Problem 2: Why is factory overhead applied to products and jobs by manufacturing companies?
A. Total actual overhead costs can never be accurately determined for production.
B. It allows managers more timely determination of product costs during the manufacturing process.
C. It provides a more accurate cost of the job or products being processed.
D. Because indirect costs are easy to trace to products and jobs.
Problem 3: Which of the following represents the two basic types of cost accounting systems?
A. Job order and process cost systems
B. Job order and batch systems
C. Process cost and batch systems
D. Job order and job accumulation systems
Problem 4: In a job order cost accounting system, the Work in Process account is
A. a control account
B. closed at year end
C. an expense
D. a period cost
Problem 5: Which one of the following is an important feature of a job order cost system?
A. Each job has characteristics similar to the next.
B. Each must be completed before a new product order is accepted.
C. Each job uses similar processes to produce.
D. Each consists of features which distinguish it from the next.
Problem 6: What broad functions do the management of an organization perform?
A. Planning, manufacturing, and controlling
B. Directing, manufacturing, and controlling
C. Planning, directing, and selling
D. Planning, directing, and controlling
Problem 7: Which of the following represents the correct order in which inventories are reported on a manufacturer's balance sheet?
A. Work in process, raw materials, finished goods
B. Raw materials, work in process, finished goods
C. Finished goods, work in process, raw materials
D. Work in process, finished goods raw materials
Problem 8: Managerial accounting
A. places emphasis on special-purpose information
B. is concerned with costing products
C. pertains to the entity as a whole and is highly aggregated
D. is governed by generally accepted accounting principles