Question 1

Which of the following is a use of job and processing cost information?

Accepted Answer

A)  assign manufacturing costs to inventory 
B)  assign manufacturing costs to cost of sales 
C)  assign non-manufacturing costs to cost of sales 
D)  a and b 
A)  assign manufacturing costs to inventory 
B)  assign manufacturing costs to cost of sales 
C)  assign non-manufacturing costs to cost of sales 
D)  a and b

Question 2

Inspection for spoilage is carried out once the product is ready for sale.

Accepted Answer

A) True 
 B)False

Question 3

In both actual and normal costing the actual cost of direct materials and direct labour is recorded.

Accepted Answer

A) True 
 B)False

Question 4

All spoilage in a process costing system is considered normal spoilage.

Accepted Answer

A) True 
 B)False

Question 5

The estimated allocation rate equals actual overhead cost divided by estimated quantity of allocation base.

Accepted Answer

A) True 
 B)False

Question 6

Manufacturing overhead includes all production costs except direct materials and direct labour.

Accepted Answer

A) True 
 B)False

Question 7

Upon inspection Charlie's Chocolate Milk Company found that all the bottles of iced mochaccino in batch YC 128 had been mixed with the incorrect syrup. A batch of syrup had been incorrectly labelled by the supplier, which is highly unusual. The bottles had to be thrown away. This is an example of:

Accepted Answer

A)  scrap 
B)  rework 
C)  abnormal spoilage 
D)  both a and c 
A)  scrap 
B)  rework 
C)  abnormal spoilage 
D)  both a and c

Question 8

When raw materials are purchased the raw materials inventory account is credited.

Accepted Answer

A) True 
 B)False

Question 9

Assume there were 10,000 units in beginning work in process, 60% complete. 30,000 units were completed during the month. Ending work in process is 50% complete, which is equivalent to 4,000 units for conversion costs. Materials are added at the beginning of the process. The FIFO method is used. The number of units started this month is:

Accepted Answer

A)  20,000 units 
B)  32,000 units 
C)  28,000 units 
D)  15,280 units 
A)  20,000 units 
B)  32,000 units 
C)  28,000 units 
D)  15,280 units

Question 10

Differences between actual and expected costs can be caused by:

Accepted Answer

A)  inflation and deflation 
B)  inaccurate forecasting 
C)  unexpected improvements in production efficiency 
D)  all of the above 
A)  inflation and deflation 
B)  inaccurate forecasting 
C)  unexpected improvements in production efficiency 
D)  all of the above

Question 11

Process costing assigns costs to cost pools and allocates the costs to individual units in a two stage process.

Accepted Answer

A) True 
 B)False

Question 12

When there are differences between estimates and actual amounts, one outcome is under or over applied overhead.

Accepted Answer

A) True 
 B)False

Question 13

If scrap has value then it should be recorded as part of inventory.

Accepted Answer

A) True 
 B)False

Question 14

If the amount of over or under applied overhead is material it should be allocated on a pro rata basis to work in process, finished goods and raw materials.

Accepted Answer

A) True 
 B)False

Question 15

The true statement is:

Accepted Answer

A)  Period costs are expensed in the period the product is sold 
B)  Period costs are initially inventoried, then expensed 
C)  Product costs are expensed in the period the product is sold 
D)  Product costs are expensed as the product is produced 
A)  Period costs are expensed in the period the product is sold 
B)  Period costs are initially inventoried, then expensed 
C)  Product costs are expensed in the period the product is sold 
D)  Product costs are expensed as the product is produced

Question 16

Variable overhead includes costs such as management salaries and insurance.

Accepted Answer

A) True 
 B)False

Question 17

In job costing recording actual overhead results in a debit to:

Accepted Answer

A)  the overhead control account 
B)  the work in process inventory account 
C)  the finished goods inventory account 
D)  the cost of goods sold account 
A)  the overhead control account 
B)  the work in process inventory account 
C)  the finished goods inventory account 
D)  the cost of goods sold account

Question 18

In the weighted average method, costs from beginning work in process are averaged with costs incurred during the current period and then allocated to units completed and ending work in process.

Accepted Answer

A) True 
 B)False

Question 19

Bright n Breezy Ltd employs a process costing system. Direct materials are added at the beginning of the process. Relevant information about July's activities follows: $\begin{array}{|c|l|}
\hline \text { 1. July } & \begin{array}{l}
\text { Beginning Inventory 1,500units (60\% complete) } \
\text { DM Cost } \$ 5,925 \
\text { CC Cost } \$ 4,095
\end{array} \
\hline \text { During July } & \begin{array}{l}
15,000 \text { units started } \
\text { DM added } \$ 150,000 \
\text { CC added } \$ 83,520
\end{array} \
\hline \text { 31 July } & \text { Ending Inventory 3,000 units }(40 \%) \
\hline
\end{array}$

Using the FIFO method, the cost per equivalent unit for direct material during July was:

Accepted Answer

A)  $9.09 
B)  $9.80 
C)  $10.00 
D)  $11.11 
A)  $9.09 
B)  $9.80 
C)  $10.00 
D)  $11.11

Question 20

Equivalent units measure the resources consumed by partially completed units relative to the resources needed to complete the units.

Accepted Answer

A) True 
 B)False

Which of the following is a use of job and processing cost information?

Inspection for spoilage is carried out once the product is ready for sale.

In both actual and normal costing the actual cost of direct materials and direct labour is recorded.

All spoilage in a process costing system is considered normal spoilage.

The estimated allocation rate equals actual overhead cost divided by estimated quantity of allocation base.

Manufacturing overhead includes all production costs except direct materials and direct labour.

Upon inspection Charlie's Chocolate Milk Company found that all the bottles of iced mochaccino in batch YC 128 had been mixed with the incorrect syrup. A batch of syrup had been incorrectly labelled by the supplier, which is highly unusual. The bottles had to be thrown away. This is an example of:

When raw materials are purchased the raw materials inventory account is credited.

Differences between actual and expected costs can be caused by:

Process costing assigns costs to cost pools and allocates the costs to individual units in a two stage process.

When there are differences between estimates and actual amounts, one outcome is under or over applied overhead.

If scrap has value then it should be recorded as part of inventory.

If the amount of over or under applied overhead is material it should be allocated on a pro rata basis to work in process, finished goods and raw materials.

The true statement is:

Variable overhead includes costs such as management salaries and insurance.

In job costing recording actual overhead results in a debit to:

In the weighted average method, costs from beginning work in process are averaged with costs incurred during the current period and then allocated to units completed and ending work in process.

Equivalent units measure the resources consumed by partially completed units relative to the resources needed to complete the units.

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Costvolumeprofit Cvp Analysis

Planning Budgeting and Behaviour

Operational Budgets

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters

Exam 7: Job and Process Costing Systems

Which of the following is a use of job and processing cost information?

Inspection for spoilage is carried out once the product is ready for sale.

In both actual and normal costing the actual cost of direct materials and direct labour is recorded.

All spoilage in a process costing system is considered normal spoilage.

The estimated allocation rate equals actual overhead cost divided by estimated quantity of allocation base.

Manufacturing overhead includes all production costs except direct materials and direct labour.

Upon inspection Charlie's Chocolate Milk Company found that all the bottles of iced mochaccino in batch YC 128 had been mixed with the incorrect syrup. A batch of syrup had been incorrectly labelled by the supplier, which is highly unusual. The bottles had to be thrown away. This is an example of:

When raw materials are purchased the raw materials inventory account is credited.

Differences between actual and expected costs can be caused by:

Process costing assigns costs to cost pools and allocates the costs to individual units in a two stage process.

When there are differences between estimates and actual amounts, one outcome is under or over applied overhead.

If scrap has value then it should be recorded as part of inventory.

If the amount of over or under applied overhead is material it should be allocated on a pro rata basis to work in process, finished goods and raw materials.

The true statement is:

Variable overhead includes costs such as management salaries and insurance.

In job costing recording actual overhead results in a debit to:

In the weighted average method, costs from beginning work in process are averaged with costs incurred during the current period and then allocated to units completed and ending work in process.

Equivalent units measure the resources consumed by partially completed units relative to the resources needed to complete the units.

The Role of Accounting Information in Management Decision Making

Cost Concepts, Behaviour and Estimation

A Costing Framework and Cost Allocation

Costvolumeprofit Cvp Analysis

Planning Budgeting and Behaviour

Operational Budgets

Flexible Budgets, Standard Costs and Variance Analysis

Variance Analysis: Revenue and Cost

Activity Analysis: Costing and Management

Relevant Costs for Decision Making

Strategy and Control

Capital Budgeting and Strategic Investment Decisions

The Strategic Management of Costs and Revenues

Strategic Management Control: a Lean Perspective

Responsibility Accounting, Performance Evaluation and Transfer Pricing

The Balanced Scorecard and Strategy Maps

Rewards, Incentives and Risk Management

Sustainability Management Accounting

Filters