Cost

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1.

Which of the following is not approach or method that must be considered by a management accountant in
determining costing system?

2. Electricity costs that were incurred by a company’s production processes should be debited to:
Ans. Manufacturing Overhead

3. In a traditional job-order cost system, the issuance of supplies to a production department increases
Ans. Factory Overhead Control

4. In a job-order cost system, the application of factory overhead is usually reflected in the general ledger as an
increase in
Ans. Work in process control

5. In a job-order costing system, the peso amount of the entry that debits Finished Goods Inventory and credits Work
in Process Inventory is the sum of the costs charged to all jobs
Ans. completed during the period

6. The three major differences between process and job order costing systems are those relating to:
Ans. Cost object, product or service variety, and timing of unit cost calculation.

7. A normal costing system uses actual costs for direct materials and direct labor, and:
Ans.  Estimated costs for factory overhead

8. The two main advantages of using predetermined factory overhead rates are to provide more accurate unit cost
information and to:
Ans. Provide cost information on a timely basis

9. Volume-based rates are appropriate in situations where the incurrence of factory overhead:
Ans. Is related to a single, common cost driver.

10. Which of the following industries is more suitable for using a job costing system?
Ans. Medical clinics

11. The primary focus of job costing in service industries is on:


Ans. Direct labor

12. Factory overhead can be over- or under-applied because


Ans. Some actual factory overhead costs are incurred unexpectedly

13. The predetermined overhead rate is usually calculated


Ans. Beginning of the year

14. The ideal criterion for choosing an allocation base for overhead is
Ans. A cause and effect relationship

15. Which one of the following documents records and summarizes the costs of direct materials, direct labor, and
factory overhead for a particular job?
Ans. job cost sheet

16. Which one of the following is the amount of factory overhead applied that exceeds the actual factory overhead
cost?
Ans. overapplied overhead

17. Units of production is an appropriate method of assigning overhead when


Ans. Only one product is manufactured

18. Which of the following costs is not included on a job-order cost sheet?
Ans. actual plantwide overhead costs

19. For job costing in service industries, overhead costs are usually applied to jobs based on:
Ans. direct labor-hours or dollars(pesos ata nakalagay kay sir) hahaha
20. Which of the following can produce unit product costs that fluctuate significantly?
Ans. Actual costing system

21. In a job-order costing system, direct labor costs usually are recorded initially with a debit to
Ans. Work in process

22. Which of the following is the correct method to calculate a predetermined overhead rate?
Ans. Budgeted overhead cost ÷ budgeted amount of cost driver.

23. A company services office equipment. Some customers bring their equipment to the company’s service shop;
other customers prefer to have the company’s service personnel come to their offices to repair their equipment. The
most appropriate costing method for the company is
Ans. A job order costing system

24. Operation costing is a hybrid costing system for products and services that uses:
Ans. Job costing for direct materials costs and process costing for conversion cost.

25. In job order costing, payroll taxes paid by the employer for the factory employees are commonly accounted for as
Ans. Manufacturing overhead cost

26. When completed units are transferred to the warehouse


Ans. finished goods inventory account is debited

27. When completed units are sold:


Ans. finished goods inventory account is credited

28. At the end of a fiscal year, overapplied factory overhead should be:
Ans. credited to cost of goods sold

29. Product costing provides useful cost information for all the following except
Ans. identifiying and hiring competent managers

30. The key distinction between job costing and process costing is;
Ans. the cost object for which costs are accumulated

31. Which of the following are easy to trace to individual jobs?


Ans. Direct materials and direct labor

32. In a job-order costing system, the use of direct materials that have been previously purchased is recorded as a
debit to:
Ans. Work in process inventory

33. On the Schedule of Cost of Goods Manufactured, the final Cost of Goods Manufactured figure represents:
Ans. the amount of cost of goods completed during the current year whether they were started before or during the
current year.

34. A non manufacturing organization may use


Ans. Either job-order or process costing

35. Which of the following is NOT a characteristic of the job costing method?
Ans. Companies typically produce a large quantity of identical units

36. A new advertising agency serves a wide range of clients including manufacturers, restaurants, service businesses,
department stores, and other retail establishments. The accounting system the advertising agency has most likely
adopted for its record keeping in accumulating costs is
Ans. Job-order costing.

37. Which of the following manufacturers would most likely use job-order costing?
Ans. custom-furniture manufacturers

38. A typical job-cost record would provide information about all of the following items related to an
order except:
Ans. administrative costs
39. What type of event would cause two separate journal entries to be made?
Ans. Selling the good

40. The term "normal costing" refers to the use of:


Ans.predetermined overhead rates.

41. When underapplied or overapplied manufacturing overhead is prorated, amounts can be assigned to which of the
following accounts?
Ans. Cost of Goods Sold, Work-in-Process Inventory, and Finished-Goods Inventory

42. All of the following items are debited to work in process except:
Ans. Completed goods being transferred out of the plant

43. In job order costing the basic document to accumulate the cost of each order is the
Ans.Job- cost sheet

44. Which of the following can serve as a subsidiary ledger for the finished goods inventory?
Ans. Job-order cost sheets for completed jobs.

45. Debited Cost of Goods Sold and credited Manufacturing Overhead at year-end. On the basis of this information,
one can conclude that:
Ans. ACTUAL overhead exceeded APPLIED overhead

46. A factory overhead control account is used to accumulate 


Ans. actual factory overhead cost incurred.

47. In a job-order costing system, the use of indirect materials that have been previously purchased is recorded as a
credit to:
Ans. Raw Materials Inventory

48. The journal entry required to record factory depreciation includes:


Ans. A debit to the Cost of Goods Manufactured account.

49. In a manufacturing environment, job order cost accounting systems and process cost accounting systems differ in
the way
Ans. costs are assigned to production runs and the number of units for which costs are averaged

50. If a firm is following the cost leadership strategy, and overhead accounts are complex, then the
Ans. Traditional volume-based job costing will not usually provide the needed cost accuracy. 

51. The final step in recognizing the completion of production requires a company to:
Ans. debit Finished-Goods Inventory and credit Work-in-Process Inventory. 

52. As a product takes place, all manufacturing costs are added to the:
Ans. Work in process inventory account

53. Standard costs are:


Ans. Planned costs the firm should attain.

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