1.Cost accounting systems used by manufacturing companies are based on the:
A) Periodic inventory system.
B) Perpetual inventory system.
C) Finished goods inventories.
D) Weighted average inventories.
E) LIFO inventory system.
2. Penn Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $30,500 for direct labor and $6,100 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Penn make to assign the Factory Payroll?
General Journal Debit Credit
(A) Payroll Expense 36,600
Cash 36,600
(B) Payroll Expense 30,500
Factory Overhead 6,100
Factory Payroll 36,600
(C) Goods in Process Inventory 30,500
Factory Overhead 6,100
Factory Payroll 36,600
(D) Goods in Process Inventory 30,500
Factory Overhead 6,100
Accrued Wages Payable 36,600
(E) Goods in Process Inventory 36,600
Factory Payroll 36,600
3. Which of the following characteristics applies to process cost accounting and not to job order cost accounting?
A) Use of a predetermined overhead rate.
B) Identifiable lots of production.
C) Equivalent units of production.
D) Labor time ticket for each employee.
E) Use of a single Goods in Process account.
4. Which of the following journal entries correctly records the current month's activity where $76,000 of direct material and $29,000 of indirect materials were used in the production process?
A) Goods in process 105,000
Raw materials inventory 105,000
B) Goods in process 76,000
Factory overhead 29,000
Raw materials inventory 105,000
C) Raw materials inventory 105,000
Goods in process inventory 76,000
Factory overhead 29,000
D) Goods in process 29,000
Factory overhead 76,000
Cash 105,000
E) Raw materials inventory 105,000
Cash 105,000
5. What are the main advantages of traditional volume-based allocation methods compared to activity-based costing?
A) Traditional volume-based methods are easier to use and less costly to implement and maintain.
B) Traditional volume-based methods are more accurate and allowed by GAAP.
C) Traditional volume-based methods are less accurate and easier to use.
D) Traditional volume-based methods are harder to use and more costly to implement and maintain.
E) There are no advantages to using traditional volume-based methods.