Midterm Review Flashcards
Which of the following product situations is better suited to job order costing than to process costing?
a. costs are accumulated by department
b. the value of work in process is based on assigning standard costs
c. the costs are easily traced to a specific product
d. each product batch is exactly the same as the prior batch
c. the costs are easily traced to a specific product
Which of the following is a prime cost?
a. direct labor
b. indirect materials
c. administrative expenses
d. factory depreciation expenses
a. direct labor
Which of the following is a conversion cost?
a. direct materials
b. factory depreciation expenses
c. administrative expenses
d. raw materials
b. factory depreciation expenses
Which document shows the cost of direct materials, direct labor, and overhead applied for each specific job?
a. receiving document
b. purchase order
c. job cost sheet
d. materials requisition form
c. job cost sheet
In a job order cost system, raw materials purchased are debited to which account?
a. raw materials inventory
b. finished goods inventory
c. work in process inventory
d. cost of goods sold
a. raw materials inventory
The activity base for service industries is most likely to be _____.
a. machine hours
b. direct labor cost
c. administrative hours
d. direct labor hours
c. administrative hours
In a job order cost system, overhead applied is debited to which account?
a. cost of goods sold
b. work in process inventory
c. manufacturing overhead
d. finished goods inventory
b. work in process inventory
Job order cost accounting is appropriate
a. for all manufacturing companies
b. when there are continuous operations on standard types of products
c. when a company produces more than one product in batched rather than on a continuous basis
d. for goods produced on special order
d. for goods produced on special order
Actual overhead costs are
a. debited to manufacturing overhead applied when incurred
b. debited to work in process inventory when incurred
c. credited to manufacturing overhead when incurred
d. debited to manufacturing overhead when incurred
c. credited to manufacturing overhead when incurred
Which of the following production characteristics is better suited for process costing and not job order costing?
a. the costs are easily traced to a specific product
b. the value of work in process is the direct material used, the direct labor incurred, and the overhead applied to the job in process
c. each product batch is distinguishable from the prior batch
d. costs are accumulated by department
d. costs are accumulated by department
During production, how are the costs in process costing accumulated?
a. to cost of goods sold
b. to each individual department
c. to manufacturing overhead
d. to each individual product
b. to each individual department
Which is not needed to compute equivalent units of production?
a. the number of units transferred out
b. the number of units started and completed
c. the percentage of completion for inventory still in process
d. the material cost per unit
d. the material cost per unit
Process costing is used to account for
a. raw materials that are converted directly to finished goods
b. large numbers of identical products that are produced in a continuous manufacturing environment
c. large numbers of products that are produced in a non-repetitive process
d. finished goods that are refined and processed further
b. large numbers of identical products that are produced in a continuous manufacturing environment
The statement prepared under process costing is called what?
a. process cost report
b. cost of goods sold statement
c. variance statement
d. income statement
a. process cost report
The first step in preparing the production cost report is to
a. account for the amount of product cost
b. calculate the cost per equivalent unit
c. account for the number of physical units
d. assign costs to the items completed and items in ending work in process inventory
c. account for the number of physical units
