Cost

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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1.

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

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

13. The predetermined overhead rate is usually calculated

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

26. When completed units are transferred to the warehouse

27. When completed units are sold:

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

34. A non manufacturing organization may use

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

46. A factory overhead control account is used to accumulate

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

53. Standard costs are:

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