Accounting

Manufacturing overhead is not: A product cost. An indirect cost. A manufacturing cost. A period cost.

A period cost.

In the year-end financial statements, the Manufacturing Overhead account should have: A debit balance, representing overhead on hand and available for use. A credit balance, representing accumulated depreciation and amounts owed to suppliers of overhead items. Either a debit or a credit balance, depending upon whether the overhead application rate used throughout the year was higher or lower than 100%. A zero balance, since all overhead costs incurred during the period should have been assigned to the production of the period.

A zero balance, since all overhead costs incurred during the period should have been assigned to the production of the period.

The cost of the employee who computes total manufacturing costs would be considered: Direct labor. Indirect labor. Manufacturing overhead. Administrative costs.

Administrative costs.

Which of the following is not a product cost? Property tax on the factory building Advertising Factory workers' salaries Indirect materials used in production

Advertising

Manufacturing overhead is best described as: All manufacturing costs other than direct materials and direct labor. All period costs associated with manufacturing operations. Indirect materials and indirect labor. All operating expenses other than selling expenses and general and administrative expenses.

All manufacturing costs other than direct materials and direct labor.

Until the related goods are sold, product costs are viewed as: Assets. Liabilities. Operating expenses. Manufacturing overhead.

Assets.

A job cost sheet should: Contain information that summarizes all jobs finished. Contain information on each individual job in process. Contain only the direct costs of a particular job. Only be used for jobs that have been completed.

Contain information on each individual job in process.

A job order cost system would be appropriate in the manufacturing of: Paints. Custom-made furniture. Breakfast cereal. Standard-grade plywood.

Custom-made furniture.

Finished goods is comprised of direct materials purchased, direct labor, and manufacturing overhead.

False

In activity-based costing, only one cost driver should be used in applying overhead.

False

Job order costing cannot be used for a service company.

False

Which of the following is a characteristic of manufacturing overhead in a job order cost system? It is directly traceable to specific jobs or units. It includes the cost of all labor relating to manufacturing operations. It is assigned to units produced by means of an overhead application rate. It includes the cost of direct materials used and of indirect labor.

It is assigned to units produced by means of an overhead application rate.

The basic types of cost accounting systems are: Job order cost systems, activity based cost systems, and process cost systems. Direct cost systems and indirect cost systems. Completed job cost systems and work in process cost systems. Fixed cost systems and variable cost systems.

Job order cost systems, activity based cost systems, and process cost systems.

Which of the following is not a commonly used cost accounting system? Manufacturing yield costing Job order costing Process costing Activity-based costing

Manufacturing yield costing

Costs that are traceable to a particular unit and inventoriable are called: Period costs. Product costs. Overhead costs. Job costs.

Product costs.

Manufacturing companies normally have three types of inventory: Direct materials, direct labor, and manufacturing overhead. Raw materials, work in process, and finished goods. Work in process, finished goods, and returned merchandise. Economy, standard, and deluxe.

Raw materials, work in process, and finished goods.

Which of the following costs would not be considered part of the manufacturing overhead of a chemical plant? The costs of disposing of toxic waste materials. Salaries of factory medical personnel. Salaries of employees who operate distilling equipment used in the production process. The cost of complying with federal safety regulations concerning plant operations

Salaries of employees who operate distilling equipment used in the production process.

Since manufacturing costs (direct materials, direct labor, and overhead) are incurred in the process of manufacturing units of product, these costs are debited to: The Direct Materials Inventory, Direct Labor, and Manufacturing Overhead accounts. Expense accounts. The Work in Process Inventory account. The Cost of Goods Sold account.

The Work in Process Inventory account.

As units are completed, their cost is transferred from the Work in Process Inventory account to the Finished Goods Inventory account.

True

Manufacturing overhead is a term used to describe all manufacturing costs other than direct materials and direct labor.

True

Overhead application rates allow overhead to be assigned as units are being produced throughout the accounting period.

True

Product costs become part of inventory and are placed on the balance sheet until the products are sold.

True

Supervisor salaries, equipment repairs, depreciation of machinery, and indirect materials are all examples of manufacturing overhead

True

The three basic types of manufacturing costs are direct materials, direct labor, and manufacturing overhead.

True

Which of the following should not be classified as a manufacturing cost? a. Indirect factory labor costs, such as salaries of plant security guards. b. Direct materials used in the production process. c. Utility bills related to factory operations. d. Commissions paid to salespeople.

d. Commissions paid to salespeople.