acct 2302 test1 (17)

1) Cost accounting systems are used ________. A) to accumulate product cost information B) to accumulate and assign period costs to products C) by manufacturing companies, not service companies D) by stockholders for decision-making purposes

Which one of the following companies is most likely to use job order costing? A) a gold refinery B) a law firm C) a surfboard manufacturer D) a soft drink company

Which of the following is true about ERP systems? A) Because ERP systems are software based, they have given way to a more service-based economy. B) Because ERP systems track costs more efficiently, the benefit from the cost information outweighs the cost of obtaining the information. C) Because ERP systems track costs more efficiently, process costing systems are becoming more prevalent. D) Because ERP systems have the ability to trace all production costs to individual units, all product costs can now be classified as either direct materials or direct labor.

Which of the following is a reason why a job order costing system is appropriate for a custom furniture manufacturer? A) The cost incurred for each job will differ as per the order specifications. B) The direct costs incurred for each job are the same, only indirect costs vary. C) The raw materials used have already been accounted for using process costing. D) Custom furniture manufacturers produce large quantities of similar products.

Which of the following statements is true of costing systems? A) A process costing system would be used by manufacturers of custom-made perfumes. B) A job order costing system would be used by manufacturers of baking utensils. C) A construction company would likely use a process costing system. D) An accounting firm would likely use a job order costing system.

Which of the following would use a process costing system rather than a job order costing system? A) a health-care service provider B) a music production studio C) a paint manufacturer D) a home remodeling contracting company

Which of the following businesses is most likely to use a process costing system? A) a baker producing cakes to order B) a legal service provider C) an audit service provider D) a candy manufacturer

Which of the following is the correct order of the four steps of tracking product costs? A) assign → accumulate → allocate → adjust B) accumulate → assign → allocate → adjust C) adjust → allocate → accumulate → assign D) allocate → adjust → accumulate → assign

The entry to record the purchase of direct materials on account would include a ________. A) debit to the Raw Materials Inventory account B) debit to the Work-in-Process Inventory account C) credit to the Work-in-Process Inventory account D) credit to the Raw Materials Inventory account

Which of the following accounts would be debited in the journal entry to record the issuance of direct materials? A) Cost of Goods Sold B) Work-in-Process Inventory C) Finished Goods Inventory D) Raw Materials Inventory

Manufacturing Overhead is a temporary account used to ________ indirect production costs during the accounting period. A) allocate B) assign C) accumulate D) approximate

The journal entry to issue indirect materials to production should include a debit to the ________. A) Finished Goods Inventory account B) Raw Materials Inventory account C) Manufacturing Overhead account D) Work-in-Process Inventory account

The journal entry to record direct labor costs actually incurred involves a debit to the ________. A) Work-in-Process Inventory account B) Wages Payable account C) Manufacturing Overhead account D) Raw Materials Inventory account

The journal entry to record indirect labor costs incurred involves a debit to the ________. A) Manufacturing Overhead account B) Wages Payable account C) Finished Goods Inventory account D) Work-in-Process Inventory account

Which of the following describes the allocation base for allocating manufacturing overhead costs? A) the primary cost driver of indirect manufacturing costs B) the estimated base amount of manufacturing overhead costs in a year C) the percentage used to allocate direct labor to Work-in-Process Inventory D) the main element that causes direct costs

Which of the following correctly describes the term cost driver? A) the inflation rate that causes costs to rise B) the average inventory costs incurred at any point of time C) the primary factor that causes a cost to be incurred D) the total material, labor, and overhead costs of a completed job

The predetermined overhead allocation rate is the rate used to ________. A) assign direct material costs to jobs B) allocate actual manufacturing overhead costs incurred during a period C) allocate estimated manufacturing overhead costs to jobs D) trace manufacturing and non-manufacturing costs to jobs

The predetermined overhead allocation rate is calculated by dividing ________. A) the total estimated overhead costs by total number of days in a year B) the estimated amount of cost driver by actual total overhead costs C) the actual overhead costs by actual amount of the cost driver or allocation base D) the estimated overhead costs by total estimated quantity of the overhead allocation base

The predetermined overhead allocation rate for a given production year is calculated ________. A) at the end of the production year B) before the accounting period begins C) after completion of each job D) after the preparation of financial statements for the year

When goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account, ________. A) total assets and total liabilities increase by the same amount B) total assets of the company remain constant C) total equity and total assets increase by the same amount D) total liabilities increase and total equity decreases by the same amount

The journal entry for adjustment of overallocated manufacturing overhead includes a ________. A) credit to Finished Goods Inventory B) credit to Manufacturing Overhead C) debit to Work-in-Process Inventory D) credit to Cost of Goods Sold

The journal entry for adjustment of underallocated manufacturing overhead includes a ________. A) credit to Finished Goods Inventory B) credit to Manufacturing Overhead C) debit to Work-in-Process Inventory D) credit to Cost of Goods Sold

Underallocated overhead occurs when ________. A) allocated overhead costs are less than actual overhead costs B) actual overhead costs are less than allocated overhead costs C) estimated overhead costs are greater than budgeted overhead costs D) estimated overhead costs are greater than actual overhead costs