Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Accounting
Q:
If factory overhead applied exceeds the actual costs, overhead is said to be underapplied.
a. True
b. False
Q:
Activity-based costing is a method of accumulating and allocating costs by department.
a. True
b. False
Q:
As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.
a. True
b. False
Q:
The job order cost and process cost systems are the same in how they accumulate and record costs.
a. True
b. False
Q:
When goods are sold, their costs are transferred from Work in Process to Finished Goods.
a. True
b. False
Q:
The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.
a. True
b. False
Q:
The debit to Factory Overhead for the cost of indirect materials is obtained from the summary of the materials requisitions.
a. True
b. False
Q:
Job cost sheets can be used to analyze the possible reasons for increased materials costs for a type of job.
a. True
b. False
Q:
Interim financial statements for a manufacturing business would report overapplied factory overhead as a deferred item on the balance sheet.
a. True
b. False
Q:
In a job order cost accounting system for a service business, materials costs are normally included as part of overhead.
a. True
b. False
Q:
The job order cost system may be used by service firms to determine revenues, expenses, and ultimately profit.
a. True
b. False
Q:
Job order cost accounting systems may be used to evaluate a company's efficiency.
a. True
b. False
Q:
A job order cost system would be appropriate for a crude oil refining business.
a. True
b. False
Q:
On the balance sheet for a manufacturing business, the cost of direct materials, direct labor, and factory overhead, which have entered into the manufacturing process but are associated with products that have not been finished, are reported as direct materials inventory.
a. True
b. False
Q:
A process cost accounting system is best used by manufacturers of like units of product that are not distinguishable from each other during a continuous production process.
a. True
b. False
Q:
Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods in job order cost systems.
a. True
b. False
Q:
Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.
a. True
b. False
Q:
If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the fiscal year.
a. True
b. False
Q:
A process cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.
a. True
b. False
Q:
Each account in the work in process subsidiary ledger in a job order cost system is called a job cost sheet.
a. True
b. False
Q:
Cost accounting systems measure, record, and report product costs.
a. True
b. False
Q:
In a factory with several processing departments, a single factory overhead rate may not provide accurate product costs and effective cost control.
a. True
b. False
Q:
A process cost accounting system provides product costs for each of the departments or processes within the factory.
a. True
b. False
Q:
Information about costs developed through a job order cost system cannot be used to evaluate an organizations cost performance.
a. True
b. False
Q:
In the job order cost system, the finished goods account is the controlling account for the factory overhead ledger.
a. True
b. False
Q:
A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.
a. True
b. False
Q:
Nonmanufacturing costs are generally classified into two categories: selling and administrative.
a. True
b. False
Q:
Job order cost systems can be used to compare unit costs of similar jobs to determine if costs are staying within expected ranges.
a. True
b. False
Q:
The materials requisition serves as the source document for debiting the accounts in the materials ledger.
a. True
b. False
Q:
Factory overhead is applied to production using a predetermined overhead rate.
a. True
b. False
Q:
The inventory accounts generally maintained by a manufacturing firm are only finished goods and materials.a. Trueb. False
Q:
If factory overhead applied exceeds the actual factory overhead costs, the factory overhead account will have a credit balance.a. Trueb. False
Q:
A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.a. Trueb. False
Q:
Match each of the following items to the type of cost (a or b) it most typically represents.a. Product costb. Period costSalespersons' commissions
Q:
Match each of the following items for Mostess Company, a cake factory, to the type of cost (a or b) it represents.a. Product costb. Period costDelivery expense
Q:
Match each of the following descriptions to the phase of the management process (ae) it describes.a. Planningb. Directingc. Controllingd. Improvinge. Decision makingProcess by which managers run day-to-day operations
Q:
Match each description to the appropriate term (ad). Each cost type may be used more than once.a. Direct materialsb. Selling and administrative expensec. Factory overheadd. Direct laborAdvertising expense
Q:
Match each of the following items for a bakery to the type of cost (ad) it represents. Each type may be used more than once.a. Direct materialsb. Direct laborc. Factory overheadd. Nonmanufacturing costSprinkles for decoration (indirect material)
Q:
Match each of the following items for Bartel Corporation, a manufacturer of bar stools, to the type of cost (a or b) it represents.a. Direct costb. Indirect costNails and screws used in the production of the bar stools
Q:
Match each of the following items to the type of cost (ac) it represents.a. Direct costb. Indirect costc. Neither direct nor indirect costUtilities on administrative facilities
Q:
Match each of the following items for Cupcake Company to the type(s) of cost (ad) it represents. Each type may be used more than once.a. Prime costb. Conversion costc. Both prime and conversion costsd. Neither prime nor conversion costSprinkles for decoration (indirect material)
Q:
Match each of the following items for Green Company, a lawn mower manufacturer, to the type of manufacturing cost (ac) it represents.a. Direct materialsb. Direct laborc. Factory overheadGrease for wheel axles
Q:
In order to be useful to managers, managerial accounting reports should possess all of the following characteristics excepta. provide objective measures of past operations and subjective estimates about future decisionsb. be prepared in accordance with generally accepted accounting principlesc. be provided at any time management needs informationd. be prepared to report information for any unit of the business to support decision making
Q:
All of the following could be considered a direct material except
a. steel
b. fabric
c. glue
d. lumber
Q:
Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as
a. factory overhead costs
b. miscellaneous expenses
c. product costs
d. period costs
Q:
Which of the following is not a characteristic of useful managerial accounting reports?
a. accurate
b. adhere to GAAP
c. historical and estimated data
d. prepared as needed
Q:
Which of the following is not a prime cost?
a. plant janitors wages
b. direct labor wages
c. machine operator wages
d. assembly line wages
Q:
What term refers to the cost of changing direct materials into a finished manufactured product?
a. factory overhead cost
b. period cost
c. conversion cost
d. direct labor cost
Q:
Purchases on the income statement of a retail business is comparable to _____ on the income statement of a manufacturing business.
a. finished goods
b. cost of merchandise available
c. cost of goods manufactured
d. work in process
Q:
Indirect costs incurred in a manufacturing environment that are not traced directly to a product are treated as
a. period costs and expensed when incurred
b. product costs and expensed when the goods are sold
c. product costs and expensed when incurred
d. period costs and expensed when the goods are sold
Q:
Which of the following is true of preparing managerial accounting reports?
a. Managerial accounting reports are prepared according to GAAP.
b. Managerial accounting reports must contain objective data only.
c. Managerial accounting reports may be prepared at fixed intervals or on an as-needed basis.
d. Managerial accounting reports are prepared for external users and company management.
Q:
All of the following employees hold line positions except
a. vice president of production
b. vice president of finance
c. manager of equipment
d. vice president of sales
Q:
Indirect labor and indirect materials are classified as
a. factory overhead and product costs
b. factory overhead and period costs
c. operating costs and period costs
d. operating costs and product costs
Q:
What is the purpose of the statement of cost of goods manufactured?
a. to determine the ending materials inventory
b. to determine the ending work in process inventory
c. to determine the amount transferred to finished goods
d. All of these choices
Q:
An example of a period cost is
a. advertising expense
b. indirect materials
c. depreciation on factory equipment
d. property taxes on plant facilities
Q:
All of the following are examples of indirect labor except
a. maintenance personnel
b. janitorial personnel
c. machine operators
d. plant managers
Q:
Managerial accountants could prepare all of the following reports except a(n)
a. performance report identifying amounts of scrap
b. control report comparing direct material usage over time
c. sales report targeting monthly sales and potential bonuses
d. annual report for external regulators such as the SEC
Q:
In most business organizations, the chief management accountant is called the
a. chief accounting officer
b. controller
c. chairman of the board
d. chief executive officer
Q:
Cost of goods manufactured during the year is $240,000, and work in process inventory on December 31 is $50,000. Work in process inventory during the year decreased by 60%. Total manufacturing costs incurred are
a. $190,000
b. $165,000
c. $290,000
d. $315,000
Q:
Work in process inventory on December 31 of the current year is $44,000. Work in process inventory increased by 60% during the year. Cost of goods manufactured amounts to $275,000. What are the total manufacturing costs incurred in the current year?
a. $291,500
b. $302,000
c. $275,750
d. $233,750
Q:
Cost of goods sold for a manufacturer equals cost of goods manufactured plus
a. beginning work in process inventory less ending work in process inventory
b. ending work in process inventory less beginning work in process inventory
c. beginning finished goods inventory less ending finished goods inventory
d. ending finished goods inventory less beginning finished goods inventory
Q:
Given the following data:Beginning raw materials inventory$30,000Materials purchased65,000Ending raw materials inventory40,000What is the amount of raw materials used?a. $5,000b. $55,000c. $75,000d. $30,000
Q:
Use the information provided for Jensen Company to answer the questions that follow. Jensen CompanyDirect materials used$345,000Direct labor incurred 250,000Factory overhead incurred 400,000Operating expenses 175,000Jensen Companys product costs area. $995,000b. $920,000c. $825,000d. $770,000
Q:
Which of the following manufacturing costs is an indirect cost of producing a product?a. oil lubricants used for factory machineryb. commissions for sales personnelc. hourly wages of an assembly workerd. memory chips for a microcomputer manufacturer
Q:
Which of the following accounts will not be found on the statement of cost of goods manufactured?
a. Factory Overhead
b. Work in Process
c. Purchases
d. Cost of Goods Sold
Q:
Materials must have which two qualities in order to be classified as direct materials?
a. They must be classified as both prime costs and conversion costs.
b. They must be introduced into the process in both work in process inventories and finished goods inventories.
c. They must be an integral part of the finished product, but can be an insignificant portion of the total product cost.
d. They must be an integral part of the finished product and a significant portion of the total product cost.
Q:
Beginning work in process is equal to
a. cost of goods manufactured plus ending work in process minus manufacturing costs incurred during the current period
b. cost of goods manufactured minus ending work in process plus manufacturing costs incurred during the current period
c. ending work in process plus manufacturing costs incurred during the current period
d. manufacturing costs incurred during the current period minus ending work in process
Q:
Which of the following will not be found on the balance sheet of a manufacturing company?
a. cost of goods sold
b. materials
c. work in process
d. finished goods
Q:
Use the information provided for Darwin Company to answer the questions that follow. Darwin CompanySales$76,500Direct materials used7,300Depreciation on factory equipment4,700Indirect labor5,900Direct labor10,500Factory rent4,200Factory utilities1,200Sales salaries expense15,600Office salaries expense8,900Indirect materials1,200Darwin Company's product costs area. $24,500b. $30,300c. $29,200d. $35,000
Q:
Which of the following is most associated with managerial accounting?a. must follow GAAPb. may rely on estimates and forecastsc. is prepared for users outside the organizationd. always reports on the entire entity
Q:
Given the following data:Work in process, beginning$14,000Work in process, ending20,000Direct labor costs4,000Cost of goods manufactured8,000Factory overhead8,000Direct materials used isa. $2,000b. $4,000c. $8,000d. $14,000
Q:
Accounting designed to meet the needs of decision makers inside the business is
a. general accounting
b. financial accounting
c. managerial accounting
d. external accounting
Q:
A company sells goods for $150,000 that cost $54,000 to manufacture. Which of the following statements is true?
a. The company will recognize sales on the balance sheet of $150,000.
b. The company will recognize $96,000 gross profit on the balance sheet.
c. The company will decrease finished goods by $54,000.
d. The company will increase finished goods by $54,000.
Q:
Managerial accounting reports are
a. prepared according to GAAP
b. prepared according to management needs
c. prepared periodically only
d. related to the entire business entity only
Q:
Compute conversion costs given the following data: direct materials, $347,500; direct labor, $196,300; factory overhead, $187,900; and selling expenses, $45,290.
a. $543,800
b. $187,900
c. $731,700
d. $384,200
Q:
The cost of a manufactured product generally consists of which of the following costs?
a. direct materials cost and factory overhead cost only
b. direct labor cost and factory overhead cost only
c. direct labor cost, direct materials cost, and factory overhead cost
d. direct materials cost and direct labor cost only
Q:
Which of the following are basic phases of the management process?
a. supervising and directing
b. decision making and supervising
c. organizing and directing
d. planning and controlling
Q:
A plant managers salary is a(n)
a. direct cost and an indirect cost
b. direct cost
c. indirect cost
d. period cost
Q:
What is the primary criterion for the preparation of managerial accounting reports?
a. relevance of the reports
b. manager needs
c. timing of the reports
d. cost of the reports
Q:
Which of the following are reported on the income statement as part of cost of goods?
a. administrative expenses
b. period costs
c. cost of goods manufactured
d. operating expenses