Chapter 5

Question 1

intangibilitiy

Answer 1

the nonphysical nature of services as opposed to products

Question 2

inseparability

Answer 2

production and consumption are inseparable for services

Question 3

Heterogeneity

Answer 3

the greater changes for variation in the performance of services than in the production of products

Question 4

perishability

Answer 4

services cannot be inventoried, but must be consumed when performed

Question 5

operation costing

Answer 5

a hybrid of job order and process costing

Question 6

cost accumulation

Answer 6

the recognition and recording of costs

Question 7

cost measurement

Answer 7

involves determining the dollar amounts of direct materials, direct labor, and overhead used in production

Question 8

cost assignment

Answer 8

the association of production costs with the units produced

Question 9

source document

Answer 9

describes a transaction

Question 10

actual cost system

Answer 10

uses actual costs for direct materials, direct labor, and overhead to determine unit cost

Question 11

normal costing system

Answer 11

measures overhead costs on a predetermined basis and uses actual costs for direct materials and direct labor

Question 12

expected activity level

Answer 12

the production level the firm expects to attain for the coming year

Question 13

normal activity level

Answer 13

average activity usage that a firm experiences in the long term

Question 14

predetermined overhead rate

Answer 14

those rates corresponding to the theoretical and practical levels

Question 15

theoretical activity level

Answer 15

the absolute maximum production activity of a manufacturing firm

Question 16

practical activity level

Answer 16

the maximum output that can be realized if everything operates efficiently

Question 17

job order costing system

Answer 17

costs are accumulated by job

Question 18

job order cost sheet

Answer 18

the document that identifies each job and accumulates its manufacturing costs

Question 19

work in process inventory file

Answer 19

the collection of all job cost sheets

Question 20

materials requisition form

Answer 20

the cost of direct materials is assigned to a job by use of a source document known as this

Question 21

time ticket

Answer 21

direct labor is assigned to each particular job by this

Question 22

normal cost of goods sold

Answer 22

cost of goods sold before a overhead variance adjustment

Question 23

adjusted cost of goods sold

Answer 23

cost of goods sold after a variance for overhead adjustment has been made

Question 24

closing the overhead to cost of goods sold is done

Answer 24

at the end of the year

Question 25

normal spoilage

Answer 25

the expected part of products manufactured that will be defective

Question 26

abnormal spoilage

Answer 26

the part of defective products that come from a specific job