Question 1

Your answer is correct.

A major purpose of cost accounting is to

provide information to stockholders for investment decisions.

measure, record, and report product costs.

measure, record, and report period costs.

classify all costs as operating or nonoperating.

Question2
Your answer is correct.
The two basic types of cost accounting systems are

job order and job accumulation systems.

job order and process cost systems.

process cost and batch systems.

job order and batch systems.

Question3
Your answer is correct.
A process cost system would most likely be used by a company that
makes

breakfast cereal.
motion pictures.
college graduation announcements.

repairs to automobiles.

Question4
Your answer is correct.

Which of the following would be accounted for using a job order cost
system?

The production of automobiles.

The construction of a new campus building.

The refining of petroleum.

The production of personal computers.

Question 5
Your answer is correct.
The flow of costs in a job order cost system

measures product costs for a set time period.

generally follows a LIFO cost flow assumption.

involves accumulating manufacturing costs incurred and assigning

the accumulated costs to work done.
cannot be measured until all jobs are complete.

Question 6
Your answer is correct.
The entry to record the acquisition of raw materials on account is

Manufacturing Overhead
Raw Materials Inventory
Accounts Payable

Accounts Payable
Raw Materials Inventory

Work in Process Inventory

Accounts Payable

Raw Materials Inventory

Accounts Payable
Question 5
Your answer is correct.
Time tickets should be approved by

co-workers.
the audit committee.

the payroll department.

the employee's supervisor.

Question 8
Your answer is correct.
The labor costs that have been identified as indirect labor should be
charged to

manufacturing overhead.

direct labor.
the individual jobs worked on.

salary expense.

Question9
Your answer is correct.
Manufacturing overhead is applied to each job

at the end of the year when actual costs are known.

by means of a predetermined overhead rate.

only if the overhead costs can be directly traced to that job.

at the time when the overhead cost is incurred.

Question 10
Correct.
A process cost accounting system is most appropriate when

individual products are custom made to the specification of

customers.
a variety of different products are produced, each one requiring
different types of materials, labor, and overhead.
the focus of attention is on a particular job or order.

similar products are mass-produced.

Question 11
Correct.

Which of these best reflects a distinguishing factor between a job order

cost system and a process cost system?

The manufacturing cost elements included.

The time period each covers.

The detail at which costs are calculated.

The number of work in process accounts.

Question 12
Correct.
In process cost accounting, manufacturing costs are summarized on a

manufacturing cost sheet.

production cost report.

job order cost sheet.

process order cost sheet.

Question 13

Correct.
In a process cost system, product costs are summarized:

on production cost reports.

after each unit is produced.

when the products are sold.

on job cost sheets.

Question14
Correct.
Which of the following is considered a difference between a job order
cost and a process cost system?

Documents used to track costs.

The accumulation of the costs of materials, labor, and overhead.

The manufacturing cost elements.

The flow of costs.

Question15
Correct.
The costs that are easiest to trace directly to products are

A.direct materials and direct labor.

B.direct labor and overhead.

C.direct materials and overhead.

D.None of the above; all three costs are equally easy to trace to the
product.

Question 16
Correct.
Often the most difficult part of computing accurate unit costs is
determining the proper amount of _________ to assign to each
product, service, or job.

overhead

direct materials
direct labor
direct materials and direct labor

Question 17
Correct.
The last step in activity-based costing is to

identify and classify the major activities involved in the manufacture

of specific products.
identify the cost driver that has a strong correlation to the activity
cost pool.
assign manufacturing overhead costs for each activity cost pool to
products.
compute the activity-based overhead rate per cost driver.

Question 18
Correct.
The first step in activity-based costing is to

identify the cost driver that has a strong correlation to the activity
cost pool.
identify and classify the major activities involved in the manufacture
of specific products.
compute the activity-based overhead rate per cost driver.

assign manufacturing overhead costs for each activity cost pool to

products.

Question 19
Correct.
A well-designed activity-based costing system starts with

identifying the activity-cost pools.

computing the activity-based overhead rate.

analyzing the activities performed to manufacture a product.

assigning manufacturing overhead costs for each activity cost pool

to products.

Question20
Correct.

An example of an activity cost pool is

number of inspections.

machine hours.
setting up machines.
number of setups.