Accounting Chp 3

Which of the following should not be included in the computation of COGS?

Selling costs

IN a process costing system, percentage of completion factors normally are obtained from?

Supervisors in the production departments

Lotus companys actual overhead is greater than the applied overhead. This difference is deemed immaterial. To record variance, the company debited the manufacturing overhead variance account and credited the COGS account. Which of the following is true of the Lotus Company?

The company has recorded the entry backwards

Prime costs is the sum of?

The direct materials cost and direct labor costs

A just in time environment has smaller inventories than the traditional manufacturing environment As a result?

The just in time environment typically experiences a higher inventory turnover than the traditional environment

A company should use process costing rather than job order costing if?

The product is composed of mass-produced homogenous units

Why are equivalent units of production used in process costing?

To determine the costs per unit and costs of inventory in each purchase

Which of the following is not an objective of product costing systems?

To determine the taxable profits

Which of the following equations is correct?

Total Manufacturing costs = Direct materials + Direct labor + manufacturing overhead

Measures of equivalent production are necessary in process costing because?

Unit costs are computed by departments or processes at fixed time intervals

The balances on the job cost sheets of uncompleted jobs will be equal to the balance in the

WIP INVENTORY

In a process costing system, some increases in Department C's Work In Process Inventory account would come from Department B's?

Work In Process Inventory account

Which of the following entities probably would use a process costing system?

An oil refinery

Which of the following is not a characteristic of a process costing system?

An oil refinery

Which of the following statements is true to financial and managerial accounting?

Both assist managers in decision making

The reason for combining direct labor and overhead costs together and calling them " conversion costs' is that?

Bothe these types of costs usually are incurred uniformly throughout the production purpose

Direct materials cost and conversion costs for the current period on a FIFIO process cost report are divided by their respective units of productions to arrive at the?

Cost per equivalent unit

Which of the following terms applies to materials an supplies that can be traced conveniently to specific products?

Direct costs

Conversion costs consist of?

Direct labor costs and manufacturing overhead costs

Which of the following is not included in conversion costs?

Direct materials

Equivalent units of production are usually determined for?

Direct materials and conversion costs

Under the new methods of management, attempts to continuously improve the work environment come from?

Everyone in the company

Which of the following cost flow assumptions most closely follows the logical product flow in a process costing environment ?

FIFO

Materials and supplies that cannot be traced conveniently to specific products are called?

Indirect materials

In a manufacturing environment, costs of raw materials purchased by the company initially flow?

Into the materials inventory account

In a manufacturing environment, direct labor costs initially flow?

Into work in process inventory account

Which of the following is true of activity based costing?

It categorizes all indirects by activity

Which of the following statements contradict the philosophy underlying the just un time operating environment?

Large inventories are maintained in order to fulfill customer orders on a timely basis (just in case)

all manufacturing costs that are assigned to complete products should be classified as?

Materials inventory costs

A process costing system accounts for product costs?

More suitable when customized products are manufacture