Which of the following is an example of an industry that would use a process costing—rather than a job costing—system?

 

1.      Which of the following is an example of an industry that would use a process costing—rather than a job costing—system?

A.    Brugman Custom Funiture

B.     Computer Repair

C.     Pepsi

D.    Smith & Zu Certified Public Accountants

2.      A ________ is used to accumulate the costs of a job.

1. materials requisition form
2. job cost record
3. labor time record
4. bill of materials

3.      When direct materials are requisitioned, they flow directly into

1. cost of goods sold account
2. finished goods inventory account
3. work in process inventory account
4. manufacturing overhead account

4.      A ________ is a source document used to track employee hours

1. labor time record
2. process costing
3. job cost record
4. job costing

5.      In the basic flow of inventory through a manufacturing system, which of the following occurs first in a job costing system?

1. Cost of goods sold
2. Finished goods inventory
3. Work in process inventory
4. Raw materials inventory

6.      Determining how much manufacturing overhead is overallocated or underallocated

1. is done before the period starts.
2. is done during the period.
3. can be done at any time.
4. is done at the end of the period.

7.      If manufacturing overhead has been overallocated during the period, and most of the jobs produced have been sold, then

1. Cost of Goods Sold on the income statement should be increased
2. Cost of Goods Sold on the income statement should be decreased
3. finished goods inventory should be increased
4. work in process inventory should be decreased

8.      Underallocated manufacturing overhead results when

1. production is greater than last year.
2. actual overhead is greater than expected.
3. actual overhead is greater than allocated overhead.
4. estimated overhead is greater than actual overhead.

9.      Which of the following systems focuses on activities as the fundamental cost objects and uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost objects?

1. Job costing
2. Activity-based costing
3. Process costing 
4. Product costing 

10.   Which of the following is a result of cost distortion?

1. Overcosting of all products
2. Undercosting of all products
3. Accurate costing of all products
4. Overcosting of some products and undercosting of other products

11.   In using an ABC system, all of the following steps are performed before the company's year begins except

1. identify the primary activities and estimate a total cost pool for each.
2. select an allocation base for each activity.
3. allocate the costs to the cost object using the activity cost allocation rates.
4. calculate an activity cost allocation rate for each activity.

12.   What will the use of departmental overhead rates generally result in? 

1. The use of a separate cost allocation base for each department in the factory
2. The use of a single cost allocation base
3. The use of a single overhead cost pool for the factory
4. The use of separate cost allocation base for each activity in the factory

13.   When calculating a departmental overhead rate, what should the denominator be?

1. Total estimated amount of the departmental allocation base
2. Total estimated departmental overhead cost pool 
3. Total estimated amount of manufacturing overhead for the factory
4. Actual quantity of the departmental allocation base used by the job

14.   Which of the following is true about lean thinking?

1. Customer orders drive the production process. 
2. Inventory levels are maintained at high levels.
3. Raw materials are purchased in large quantities.
4. Finished goods are produced ahead of customers' orders to protect against running out of finished goods inventory.

15.   Quality-related costs generally fall into four different categories, which include all of the following except

1. prevention costs.
2. appraisal costs.
3. internal failure costs.
4. transportation costs.