Question 1

Using the job order cost system, service business are able to bill clients on a weekly or monthly basis, even when the job has not been completed.

Accepted Answer

A) True 
 B)False

Question 2

At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be:

Accepted Answer

A)  transferred to Work-in-Process. 
B)  transferred to Cost of Goods Sold. 
C)  transferred to Finished Goods. 
D)  allocated between Work-in-Process and Finished Goods. 
A)  transferred to Work-in-Process. 
B)  transferred to Cost of Goods Sold. 
C)  transferred to Finished Goods. 
D)  allocated between Work-in-Process and Finished Goods.

Question 3

Which of the following statements is a difference between financial accounting and managerial accounting?

Accepted Answer

A)  Under financial accounting, reports are prepared using GAAP, whereas under managerial accounting, information that is useful to management for its decision making is not recorded using GAAP. 
B)  Financial accounting focuses on providing information for internal use, whereas managerial accounting focuses on providing information for external use. 
C)  Under financial accounting, reports are prepared as and when management needs them, whereas under managerial accounting, reports are prepared on a monthly basis. 
D)  Financial accounting has a subjective approach, whereas managerial accounting has an objective approach. 
A)  Under financial accounting, reports are prepared using GAAP, whereas under managerial accounting, information that is useful to management for its decision making is not recorded using GAAP. 
B)  Financial accounting focuses on providing information for internal use, whereas managerial accounting focuses on providing information for external use. 
C)  Under financial accounting, reports are prepared as and when management needs them, whereas under managerial accounting, reports are prepared on a monthly basis. 
D)  Financial accounting has a subjective approach, whereas managerial accounting has an objective approach.

Question 4

Which of the following businesses is most likely to use a job order costing system?

Accepted Answer

A)  A paper mill 
B)  A swimming pool installer 
C)  A company that manufactures chlorine for swimming pools 
D)  An oil refinery 
A)  A paper mill 
B)  A swimming pool installer 
C)  A company that manufactures chlorine for swimming pools 
D)  An oil refinery

Question 5

A job order cost system accumulates costs for each of the departments or processes within the factory.

Accepted Answer

A) True 
 B)False

Question 6

If factory overhead applied is less than the actual costs, the overhead is said to be underapplied.

Accepted Answer

A) True 
 B)False

Question 7

Activity-based costing is a method of accumulating and allocating costs by department.

Accepted Answer

A) True 
 B)False

Question 8

Managerial accounting reports information primarily for stakeholders that are external to the company.

Accepted Answer

A) True 
 B)False

Question 9

In response to materials requisition, materials are transferred from the storeroom to the factory.

Accepted Answer

A) True 
 B)False

Question 10

Depreciation on factory equipment is an example of a_____.

Accepted Answer

A)  period cost 
B)  product cost 
C)  selling cost 
D)  prime cost 
A)  period cost 
B)  product cost 
C)  selling cost 
D)  prime cost

Question 11

Dividing estimated total factory overhead costs by estimated activity base will give the _____.

Accepted Answer

A)  underabsorbed factory overhead rate 
B)  predetermined factory overhead rate 
C)  ​overabsorbed factory overhead rate 
D)  ​actual factory overhead rate 
A)  underabsorbed factory overhead rate 
B)  predetermined factory overhead rate 
C)  ​overabsorbed factory overhead rate 
D)  ​actual factory overhead rate

Question 12

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Accepted Answer

A) True 
 B)False

Question 13

Which of the following best explains a job order cost system?

Accepted Answer

A)  It provides product costs for each manufacturing department or process. 
B)  It is often used by companies that manufacture custom products for customers or batches of similar products. 
C)  It is often used by companies that manufacture units of a product that are indistinguishable from each other. 
D)  It is used by companies that manufacture units of a product using a continuous production process. 
A)  It provides product costs for each manufacturing department or process. 
B)  It is often used by companies that manufacture custom products for customers or batches of similar products. 
C)  It is often used by companies that manufacture units of a product that are indistinguishable from each other. 
D)  It is used by companies that manufacture units of a product using a continuous production process.

Question 14

A manufacturing business reports three types of inventory on its balance sheet: direct materials, products in the process of being manufactured, and finished products.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true of just-in-time processing?

Accepted Answer

A)  In just-in-time processing, supervisors enter materials into manufacturing so as to keep all the manufacturing departments (processes) operating. 
B)  In just-in-time processing, a worker typically performs only one function. 
C)  It assigns service activities to centralized service departments. 
D)  It is a management approach that focuses on reducing time and cost and eliminating poor quality. 
A)  In just-in-time processing, supervisors enter materials into manufacturing so as to keep all the manufacturing departments (processes) operating. 
B)  In just-in-time processing, a worker typically performs only one function. 
C)  It assigns service activities to centralized service departments. 
D)  It is a management approach that focuses on reducing time and cost and eliminating poor quality.

Question 16

Direct materials costs are included in the conversion costs of a product.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following manufacturing costs is an indirect cost of producing a product?

Accepted Answer

A)  Oil lubricants used for factory machinery 
B)  Commissions for sales personnel 
C)  Hourly wages of an assembly worker 
D)  Memory chips for a microcomputer manufacturer 
A)  Oil lubricants used for factory machinery 
B)  Commissions for sales personnel 
C)  Hourly wages of an assembly worker 
D)  Memory chips for a microcomputer manufacturer

Question 18

Recording direct labor costs in a job order cost accounting system:

Accepted Answer

A)  increases Factory Overhead and decreases Work-in-Process. 
B)  increases Finished Goods and increases Wages Payable. 
C)  increases Work-in-Process and increases Wages Payable. 
D)  increases Factory Overhead and increases Wages Payable. 
A)  increases Factory Overhead and decreases Work-in-Process. 
B)  increases Finished Goods and increases Wages Payable. 
C)  increases Work-in-Process and increases Wages Payable. 
D)  increases Factory Overhead and increases Wages Payable.

Question 19

Costs are often classified by their relationship to a segment of operations, called a _____.

Accepted Answer

A)  prime cost 
B)  controlling account 
C)  cost object 
D)  cost sheet 
A)  prime cost 
B)  controlling account 
C)  cost object 
D)  cost sheet

Question 20

Product cost consists of factory overhead.

Accepted Answer

A) True 
 B)False

Using the job order cost system, service business are able to bill clients on a weekly or monthly basis, even when the job has not been completed.

At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be:

Which of the following statements is a difference between financial accounting and managerial accounting?

Which of the following businesses is most likely to use a job order costing system?

A job order cost system accumulates costs for each of the departments or processes within the factory.

If factory overhead applied is less than the actual costs, the overhead is said to be underapplied.

Activity-based costing is a method of accumulating and allocating costs by department.

Managerial accounting reports information primarily for stakeholders that are external to the company.

In response to materials requisition, materials are transferred from the storeroom to the factory.

Depreciation on factory equipment is an example of a_____.

Dividing estimated total factory overhead costs by estimated activity base will give the _____.

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Which of the following best explains a job order cost system?

A manufacturing business reports three types of inventory on its balance sheet: direct materials, products in the process of being manufactured, and finished products.

Which of the following is true of just-in-time processing?

Direct materials costs are included in the conversion costs of a product.

Which of the following manufacturing costs is an indirect cost of producing a product?

Recording direct labor costs in a job order cost accounting system:

Costs are often classified by their relationship to a segment of operations, called a _____.

Product cost consists of factory overhead.

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 10: Accounting for Manufacturing Operations

Using the job order cost system, service business are able to bill clients on a weekly or monthly basis, even when the job has not been completed.

At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be:

Which of the following statements is a difference between financial accounting and managerial accounting?

Which of the following businesses is most likely to use a job order costing system?

A job order cost system accumulates costs for each of the departments or processes within the factory.

If factory overhead applied is less than the actual costs, the overhead is said to be underapplied.

Activity-based costing is a method of accumulating and allocating costs by department.

Managerial accounting reports information primarily for stakeholders that are external to the company.

In response to materials requisition, materials are transferred from the storeroom to the factory.

Depreciation on factory equipment is an example of a_____.

Dividing estimated total factory overhead costs by estimated activity base will give the _____.

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Which of the following best explains a job order cost system?

A manufacturing business reports three types of inventory on its balance sheet: direct materials, products in the process of being manufactured, and finished products.

Which of the following is true of just-in-time processing?

Direct materials costs are included in the conversion costs of a product.

Which of the following manufacturing costs is an indirect cost of producing a product?

Recording direct labor costs in a job order cost accounting system:

Costs are often classified by their relationship to a segment of operations, called a _____.

Product cost consists of factory overhead.

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters