Question 1

Which of the following businesses is most likely to use process cost accounting system?

Accepted Answer

A)  Custom cabinet manufacturer
B)  Dress designer
C)  Lumber mill
D)  Printing firmE) A) and B)
F) None of the above

Question 2

A manufacturing business reports three types of inventory on its balance sheet: direct materials,products in the process of being manufactured,and finished products.

Accepted Answer

A) True 
 B)False

Question 3

In job order cost accounting system used by a service business,which of the following items would normally not be included as part of overhead?

Accepted Answer

A)  Materials
B)  Direct labor
C)  Rent
D)  SuppliesE) A) and B)
F) B) and D)

Question 4

In response to materials requisition,materials are transferred from the storeroom to the factory.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is most likely to be a product cost?

Accepted Answer

A)  Salary of the vice president of sales
B)  Advertising for a particular product
C)  Drill bits for a drill press used in the plant assembly area
D)  Salary of the company receptionistE) A) and B)
F) B) and C)

Question 6

Which of the following businesses is most likely to use a job order costing system?

Accepted Answer

A)  A paper mill
B)  A swimming pool installer
C)  A company that manufactures chlorine for swimming pools
D)  An oil refineryE) None of the above
F) A) and B)

Question 7

Using the job order cost system,service business are able to bill clients on a weekly or monthly basis,even when the job has not been completed.

Accepted Answer

A) True 
 B)False

Question 8

One of the ways in which just-in-time processing is accomplished in manufacturing and nonmanufacturing processes is by:

Accepted Answer

A)  moving a product from process to process as each function is completed.
B)  combining processing functions into work centers and cross-training workers to perform more than one function.
C)  having production supervisors attempt to enter enough materials into manufacturing to keep all manufacturing departments operating.
D)  having workers typically perform one function on a continuous basis.E) A) and D)
F) B) and C)

Question 9

Factory overhead is applied to production using a predetermined overhead rate.

Accepted Answer

A) True 
 B)False

Question 10

A job order cost system provides for a separate record of the costs for each particular quantity of product that is manufactured.

Accepted Answer

A) True 
 B)False

Question 11

Indirect labor is included in factory overhead.

Accepted Answer

A) True 
 B)False

Question 12

A company may use a job order cost system for some of its products and a process cost system for other products.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a characteristic of the just-in-time philosophy?

Accepted Answer

A)  Increases inventory to protect against process problems
B)  Tolerates defects
C)  Emphasizes push manufacturing
D)  Emphasizes product-oriented layoutE) A) and B)
F) B) and C)

Question 14

Direct materials costs are included in the conversion costs of a product.

Accepted Answer

A) True 
 B)False

Question 15

The amount of time spent by each employee and the labor costs incurred for each individual job or for factory overhead are recorded on the:

Accepted Answer

A)  employees' earnings records.
B)  in-and-out board.
C)  time tickets.
D)  receiving orderE) B) and C)
F) A) and C)

Question 16

The direct labor and overhead costs of providing services to clients are accumulated in a Work-in-Process account.

Accepted Answer

A) True 
 B)False

Question 17

The finished goods account is a controlling account for the subsidiary:

Accepted Answer

A)  sales ledger.
B)  materials ledger.
C)  work-in-process ledger.
D)  stock ledger.E) All of the above
F) B) and C)

Question 18

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Accepted Answer

A) True 
 B)False

Question 19

Depreciation expense on factory equipment is part of factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 20

Service companies can effectively use activity-based costing to compute product (service)costs.

Accepted Answer

A) True 
 B)False

Exam 10: Accounting Systems for Manufacturing Businesses

The finished goods account is a controlling account for the subsidiary:

Correct AnswerverifiedShow Answer

A job order cost system provides for a separate record of the costs for each particular quantity of product that is manufactured.

Correct AnswerverifiedShow Answer

Service companies can effectively use activity-based costing to compute product (service)costs.

Correct AnswerverifiedShow Answer

Which of the following is most likely to be a product cost?

Correct AnswerverifiedShow Answer

Depreciation expense on factory equipment is part of factory overhead cost.

Correct AnswerverifiedShow Answer

A company may use a job order cost system for some of its products and a process cost system for other products.

Correct AnswerverifiedShow Answer

Indirect labor is included in factory overhead.

Correct AnswerverifiedShow Answer

A manufacturing business reports three types of inventory on its balance sheet: direct materials,products in the process of being manufactured,and finished products.

Correct AnswerverifiedShow Answer

One of the ways in which just-in-time processing is accomplished in manufacturing and nonmanufacturing processes is by:

Correct AnswerverifiedShow Answer

Which of the following businesses is most likely to use process cost accounting system?

Correct AnswerverifiedShow Answer

Using the job order cost system,service business are able to bill clients on a weekly or monthly basis,even when the job has not been completed.

Correct AnswerverifiedShow Answer

In job order cost accounting system used by a service business,which of the following items would normally not be included as part of overhead?

Correct AnswerverifiedShow Answer

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Correct AnswerverifiedShow Answer

Factory overhead is applied to production using a predetermined overhead rate.

Correct AnswerverifiedShow Answer

Which of the following businesses is most likely to use a job order costing system?

Correct AnswerverifiedShow Answer

Direct materials costs are included in the conversion costs of a product.

Correct AnswerverifiedShow Answer

The direct labor and overhead costs of providing services to clients are accumulated in a Work-in-Process account.

Correct AnswerverifiedShow Answer

The amount of time spent by each employee and the labor costs incurred for each individual job or for factory overhead are recorded on the:

Correct AnswerverifiedShow Answer

In response to materials requisition,materials are transferred from the storeroom to the factory.

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of the just-in-time philosophy?

Correct AnswerverifiedShow Answer

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