ACC Topic 5

Which of the following are the inventory accounts involved in a manufacturing cost accounting system?

Raw materials, work-in-process, finished goods

What is incurred when an organization acquires the resources used to fund the activities in its value chain?

a cost

A predetermined overhead rate is used to

assign indirect costs to units produced.

The organizational process of attributing an appropriate amount of cost incurred to each cost object is known as

cost assignment

The process of using cost information to assess and manage the activities of an organization is known as

cost management

Overapplied overhead represents a ____ (debit/credit) balance in the Manufacturing overhead account that results from applied overhead in excess of actual overhead costs.

credit

Underapplied overhead represents a ____ (debit/credit) balance in the Manufacturing overhead account that results from actual overhead costs in excess of applied overhead.

debit

A cost that is clearly traceable to a product or activity such that the cost would not be incurred if the product or activity were discontinued is known as a(n) ____ cost

direct

Period costs are accounted for as ____ (assets/expenses) and recorded on the ____ ____ (balance sheet/income statement).

expenses, income statement

A cost that is not clearly traceable to a product or activity under consideration such that the cost would continue to be incurred if the product or activity were discontinued is known as a(n) ____ cost

indirect

Which of the following are associated with the cost assignment classification?

indirect cost, direct, cost

Which type of firms are likely to have the highest Work in Process Inventory balances at the end of an accounting period?

long-duration manufacturing process

The Finished Goods Inventory account is increased for the cost of goods ____ (manufactured/sold) and is decreased for the cost of goods ____ (manufactured/sold).

manufactured, sold

The product cost accounting system used when homogeneous products are manufactured in a relatively continuous production flow is known as a ____ (job/process) costing system.

process

True or false: Determining a product's cost is necessary to value the units, purchased or manufactured, of that product either as cost of goods sold or as ending inventory for any units unsold.

true

A predetermined overhead application rate is established to apply manufacturing overhead to

work in process

Which of the following process steps occurs first for managers to observe costs for different organizational reference points?

cost accumulation

The inventory account applicable to product ingredients ready for the production process is known as:

finished goods inventory

Which of the following are associated with the cost behavior classification?

mixed cost, variable cost

The ingredients used in a manufacturing firm to produce a finished product and to describe an element of the product's cost are known as

raw materials

Which of the following are associated with the cost behavior classification?

Variable cost, Mixed cost

The term used for the human effort provided by workers who are directly involved in the production of a finished product and to describe an element of the product's costs is known as ____ ____

direct labor

Cost accounting systems that mix elements of job order and process costing systems to accomplish the objective of assigning manufacturing costs to units produced are known as

hybrid cost accounting systems

The machine support and other manufacturing costs, except raw materials and direct labor, incurred as part of a product's costs is known as ____ ____

manufacturing overhead

Costs not incurred for the manufacturing of a product and not included in inventory as a product cost are known as ____ costs

period

Costs accounted for initially as inventory when produced and later as expense when sold are

product costs

For a manufacturing firm, ____ costs are inventoried and treated as assets until inventory is sold while _____ costs are recorded as expense in the accounting period incurred.

product, period

The ingredients of a product that are put into the production process to make the finished product are known as:

raw materials

A cost that has a direct relationship with products being produced is:

raw materials for a specific products

The inventory account applicable to product ingredients ready for the production process is known as:

raw materials inventory

Which inventory account is close to zero at the end of an accounting period for firms with very short production processes?

work in process

A debit balance in the Manufacturing Overhead account at the end of a period indicates that:

manufacturing overhead is underapplied

The inventory account used for the costs of items that are in production and being manufactured is known as:

work in process inventory

When a manufactured item is sold, where is its cost transferred in accounting terms?

From the balance sheet to the income statement

The total amount of cost accumulated by the accounting information system is logically categorized in different ways, such as by production jobs, which is referred to as

cost pooling