Lecture 16

Question 1

A company should use process costing, rather than job order costing, if

Answer 1

the product is composed of mass-produced homogeneous units.

Question 2

Which of the following characteristics applies to process costing, but does not apply to job order costing?

Answer 2

The use of equivalent units of production.

Question 3

The computation of equivalent units under the FIFO method

Answer 3

treats units in the beginning work in process stock as if they represent a separate batch of goods separate and distinct from goods started and completed during the current period.

Question 4

Management accounting and financial accounting differ in that management accounting information is prepared

Answer 4

By using whatever methods the company finds beneficial.

Question 5

The primary objective of management accounting is

Answer 5

to provide management with information useful for planning and control of operations.

Question 6

Which of the following characteristics does NOT pertain to management accounting?

Answer 6

has externally imposed standards