Question 1

To transfer work in process inventory to finished goods inventory:

Accepted Answer

A)  debit finished goods and credit work in process 
B)  debit work in process and credit finished goods 
C)  add direct labour to the work in process inventory 
D)  add direct labour and direct material to the finished goods inventory 
A)  debit finished goods and credit work in process 
B)  debit work in process and credit finished goods 
C)  add direct labour to the work in process inventory 
D)  add direct labour and direct material to the finished goods inventory A

Question 2

The debit side of the manufacturing overhead account is used to accumulate:

Accepted Answer

A)  actual manufacturing overhead costs as they are incurred throughout the accounting period 
B)  overhead applied,to work in process inventory 
C)  predetermined overhead 
D)  overapplied overhead 
A)  actual manufacturing overhead costs as they are incurred throughout the accounting period 
B)  overhead applied,to work in process inventory 
C)  predetermined overhead 
D)  overapplied overhead A

Question 3

Bambie Ltd.applies overheads based on direct labour hours.The company has budgeted 50 000 direct labour hours at a cost of $10 per hour,and manufacturing overhead of $750 000 in the assembly division for the year.The actual direct labour hours used for the year turns out to be 47 000 hours.What is the applied overhead for the year?

Accepted Answer

A)  $705 000 
B)  $70 500 
C)  $750 000 
D)  500 000 
A)  $705 000 
B)  $70 500 
C)  $750 000 
D)  500 000 A

Question 4

Process costing is normally used when:

Accepted Answer

A)  large numbers of different products are manufactured 
B)  large numbers of nearly identical products are manufactured 
C)  small numbers of nearly identical products are manufactured 
D)  the fixed costs of manufacturing exceed the variable cost of manufacturing 
A)  large numbers of different products are manufactured 
B)  large numbers of nearly identical products are manufactured 
C)  small numbers of nearly identical products are manufactured 
D)  the fixed costs of manufacturing exceed the variable cost of manufacturing

Question 5

To calculate a predetermined overhead rate,budgeted overheads are divided by the actual cost driver.

Accepted Answer

A) True 
 B)False

Question 6

Cost of goods sold is closed into the income summary account:

Accepted Answer

A)  at the end of the production cycle 
B)  when the product is sold 
C)  at the end of the accounting period,along with other expenses and revenues of the period 
D)  at no time 
A)  at the end of the production cycle 
B)  when the product is sold 
C)  at the end of the accounting period,along with other expenses and revenues of the period 
D)  at no time

Question 7

As production takes place,all manufacturing costs are debited to the:

Accepted Answer

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

Question 8

When underapplied or overapplied overhead is allocated among the three accounts work in process,finished goods and cost of goods sold,this process is called:

Accepted Answer

A)  proration 
B)  just-in-time costing 
C)  zero-based costing 
D)  overhead application 
A)  proration 
B)  just-in-time costing 
C)  zero-based costing 
D)  overhead application

Question 9

The following data apply to Stratford Ltd
Calculate the amount of direct materials used during the year.

Accepted Answer

A)  $36 500 
B)  $42 500 
C)  $47 500 
D)  $53 500 
A)  $36 500 
B)  $42 500 
C)  $47 500 
D)  $53 500

Question 10

Gratis Company Ltd applies overhead based on direct labour hours in their printing department.At the beginning of the year,the company estimated that manufacturing overhead would be $550 000,direct labour hours would be 100 000 and direct labour cost would be $1 100 000 in the printing department.What is the printing department's predetermined overhead rate for the year?

Accepted Answer

A)  $0.18 per direct labour hour 
B)  $0.50 per direct labour hour 
C)  $2.00 per direct labour hour 
D)  $5.50 per direct labour hour 
A)  $0.18 per direct labour hour 
B)  $0.50 per direct labour hour 
C)  $2.00 per direct labour hour 
D)  $5.50 per direct labour hour

Question 11

Product costing is the process of:

Accepted Answer

A)  accumulating the costs of a production process 
B)  assigning costs to a firm's products 
C)  placing value on fixed assets owned by a producer 
D)  accumulating the costs of a production process AND assigning costs to a firm's products 
A)  accumulating the costs of a production process 
B)  assigning costs to a firm's products 
C)  placing value on fixed assets owned by a producer 
D)  accumulating the costs of a production process AND assigning costs to a firm's products

Question 12

In which of the following industries could job costing be used?

Accepted Answer

A)  Machine shop and specialty manufacturing 
B)  Bread making 
C)  Cement production 
D)  Food processing 
A)  Machine shop and specialty manufacturing 
B)  Bread making 
C)  Cement production 
D)  Food processing

Question 13

Consider the following statements regarding product cost information.i.Product cost information is necessary for planning,cost control and providing information for making decisions
Ii)Product cost information is not necessary to justify rate increases that are subject to the approval of government authorities.
Iii)Product cost information is necessary to value inventory on the balance sheet.Which of the statement/s is/are correct?

Accepted Answer

A)  i,ii and iii 
B)  i and ii 
C)  i and iii 
D)  iii 
A)  i,ii and iii 
B)  i and ii 
C)  i and iii 
D)  iii

Question 14

Which of the following would appear on the debit side of the overhead account?

Accepted Answer

A)  Actual overhead cost incurred in the period 
B)  Overhead applied (charged)to production 
C)  Overapplied overhead for the period 
D)  Actual overhead cost incurred in the period AND overapplied overhead for the period 
A)  Actual overhead cost incurred in the period 
B)  Overhead applied (charged)to production 
C)  Overapplied overhead for the period 
D)  Actual overhead cost incurred in the period AND overapplied overhead for the period

Question 15

In comparison to job-order costing,process costing is by far the most accurate costing system.

Accepted Answer

A) True 
 B)False

Question 16

A list of all materials required for a particular job is most commonly referred to as:

Accepted Answer

A)  a source document 
B)  a bill of materials 
C)  a purchase order 
D)  a schedule of goods manufactured 
A)  a source document 
B)  a bill of materials 
C)  a purchase order 
D)  a schedule of goods manufactured

Question 17

The amount of overhead applied to jobs using a predetermined (budgeted)rate is rarely equal to the actual cost of overhead incurred for a period.Which of the following is not a valid explanation for this?

Accepted Answer

A)  Actual spending for overhead is not equal to budgeted spending for overhead. 
B)  Actual use of the overhead allocation base is not equal to the budgeted use of the allocation base. 
C)  Budget estimates of overhead were unrealistically low. 
D)  Direct costs were unexpectedly high. 
A)  Actual spending for overhead is not equal to budgeted spending for overhead. 
B)  Actual use of the overhead allocation base is not equal to the budgeted use of the allocation base. 
C)  Budget estimates of overhead were unrealistically low. 
D)  Direct costs were unexpectedly high.

Question 18

Manufacturers differ from retailers in that they have three inventory accounts in the balance sheet as opposed to one.

Accepted Answer

A) True 
 B)False

Question 19

A firm's total overhead incurred for the year was $40 000,and at year-end the overhead component of WIP,FG and COGS were as follows:
If underapplied or overapplied overhead is to be prorated,what is the amount (to the nearest dollar)that will be transferred to WIP because of the proration?

Accepted Answer

A)  Credit WIP with $945 
B)  Debit WIP with $945 
C)  Credit WIP with $974 
D)  Debit WIP with $974 
A)  Credit WIP with $945 
B)  Debit WIP with $945 
C)  Credit WIP with $974 
D)  Debit WIP with $974

Question 20

If the work in process inventory has increased during the period,which of the following statements is definitely true?

Accepted Answer

A)  Cost of goods sold will be greater than cost of goods manufactured. 
B)  Cost of goods manufactured will be greater than cost of goods sold. 
C)  Total manufacturing costs for the period will be greater than cost of goods manufactured. 
D)  Total manufacturing costs for the period will be less than cost of goods manufactured. 
A)  Cost of goods sold will be greater than cost of goods manufactured. 
B)  Cost of goods manufactured will be greater than cost of goods sold. 
C)  Total manufacturing costs for the period will be greater than cost of goods manufactured. 
D)  Total manufacturing costs for the period will be less than cost of goods manufactured.

To transfer work in process inventory to finished goods inventory:

The debit side of the manufacturing overhead account is used to accumulate:

Process costing is normally used when:

To calculate a predetermined overhead rate,budgeted overheads are divided by the actual cost driver.

Cost of goods sold is closed into the income summary account:

As production takes place,all manufacturing costs are debited to the:

When underapplied or overapplied overhead is allocated among the three accounts work in process,finished goods and cost of goods sold,this process is called:

The following data apply to Stratford Ltd Calculate the amount of direct materials used during the year.

Product costing is the process of:

In which of the following industries could job costing be used?

Which of the following would appear on the debit side of the overhead account?

In comparison to job-order costing,process costing is by far the most accurate costing system.

A list of all materials required for a particular job is most commonly referred to as:

The amount of overhead applied to jobs using a predetermined (budgeted)rate is rarely equal to the actual cost of overhead incurred for a period.Which of the following is not a valid explanation for this?

Manufacturers differ from retailers in that they have three inventory accounts in the balance sheet as opposed to one.

A firm's total overhead incurred for the year was $40 000,and at year-end the overhead component of WIP,FG and COGS were as follows: If underapplied or overapplied overhead is to be prorated,what is the amount (to the nearest dollar)that will be transferred to WIP because of the proration?

If the work in process inventory has increased during the period,which of the following statements is definitely true?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters

Exam 4: Product Costing Systems

To transfer work in process inventory to finished goods inventory:

The debit side of the manufacturing overhead account is used to accumulate:

Process costing is normally used when:

To calculate a predetermined overhead rate,budgeted overheads are divided by the actual cost driver.

Cost of goods sold is closed into the income summary account:

As production takes place,all manufacturing costs are debited to the:

When underapplied or overapplied overhead is allocated among the three accounts work in process,finished goods and cost of goods sold,this process is called:

The following data apply to Stratford Ltd Calculate the amount of direct materials used during the year.

Product costing is the process of:

In which of the following industries could job costing be used?

Which of the following would appear on the debit side of the overhead account?

In comparison to job-order costing,process costing is by far the most accurate costing system.

A list of all materials required for a particular job is most commonly referred to as:

The amount of overhead applied to jobs using a predetermined (budgeted)rate is rarely equal to the actual cost of overhead incurred for a period.Which of the following is not a valid explanation for this?

Manufacturers differ from retailers in that they have three inventory accounts in the balance sheet as opposed to one.

A firm's total overhead incurred for the year was $40 000,and at year-end the overhead component of WIP,FG and COGS were as follows: If underapplied or overapplied overhead is to be prorated,what is the amount (to the nearest dollar)that will be transferred to WIP because of the proration?

If the work in process inventory has increased during the period,which of the following statements is definitely true?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters