ACCT Chap 10

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

It is often used by companies that manufacture custom products for customers or batches of similar products.

Which of the following is the subsidiary ledger for work-in-process?

Job cost sheets

The recording of the jobs completed would decrease:

Work-in-Process.

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

cost object

When a job is completed and the client is billed, the costs are transferred to an account called the _____.

cost of services account

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

A swimming pool installer

Which of the following would be a period costs for a textbooks printing company?

Advertising expenses

Which of the following is true of a direct materials cost?

It is the cost of any material that is an integral part of the finished product.

The cost of wages paid to employees directly involved in the manufacturing process of converting materials into finished product is classified as:

direct labor cost.

Which of the following is considered a part of factory overhead cost?

Depreciation of factory buildings

In a job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

Direct labor

Which of the following is a product cost?

Direct labor cost

Which of the following items would be classified as a part of prime cost?

Direct labor cost

Which of the following is most likely to be a product cost?

Drill bits for a drill press used in the plant assembly area

Predetermined Factory Overhead Rate is calculated as:

Estimated Total Factory Overhead Costs ÷ Estimated Activity Base.

The recording of the factory labor costs incurred for general factory use would include a debit to:

Factory Overhead.

Which of the following is an example of a factory overhead cost?

Factory heating and lighting cost

Which of the following techniques is used by just-in-time manufacturing?

It organizes the plant in such a way as to reduce product movement from station to station.

Which of the following are the two main types of cost accounting systems for manufacturing operations?

Job order cost and process cost systems

Which of the following is true of job order cost systems?

Job order cost systems are often used by companies that manufacture custom products for customers or batches of similar products.

In which of the following cost accounting systems are perpetual inventory records maintained for materials, work-inprocess, and finished goods inventories?

Job order costing

Which of the following businesses is most likely to use process cost accounting system?

Lumber mill

Which of the following statements is true of managerial accounting?

Managerial accounting is primarily concerned with generating information for use by managers.

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the Materials account to:

Work-in-Process and Factory Overhead.

One of the ways in which just-in-time processing is accomplished in manufacturing and non manufacturing processes is by:

combining processing functions into work centers and cross-training workers to perform more than one function.

Increase in the Work-in-Process account occur when:

direct labor is recorded from the time sheets.

For a manufacturing business, work-in-process inventories consist of inventories which have _____.

entered the manufacturing process but not been completed

Finished goods inventory includes _____.

factory overhead

If the cost of direct materials is not a significant portion of the total product cost, it may be classified as:

factory overhead costs.

The sale of a finished good on account would:

increase Cost of Goods Sold and decrease Finished Goods; increase Accounts Receivable and increase Sales.

In a job order cost accounting system, the effect of the flow of direct materials into production will be:

increase in Work-in-Process and decrease in Materials Inventory

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

increases Work-in-Process and increases Wages Payable.

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

is a management approach that focuses on reducing time and cost and eliminating poor quality.

A(n) _____ provides product costs for each quantity of a product that is manufactured

job order costing

the document authorizing the issuance of materials from the storeroom for use in manufacturing is called:

materials requisition.

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

predetermined factory overhead rate

Depreciation on factory equipment is an example of a_____.

product cost

A _____ is prepared when materials that have been ordered are received and inspected.

receiving report

The finished goods account is a controlling account for the subsidiary:

stock ledger

An activity-based costing system allocates factory overhead rates to products or services using:

the cost of activities based on an activity rate times the number of activity-based usage quantities

The amount of time spent by each employee and the labor costs incurred for each individual job or for factory overhead are recorded on the:

time tickets.

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

transferred to Cost of Goods Sold.

he direct labor and overhead costs of providing services to clients are accumulated in:

work in process.

The recording of the jobs completed would increase:

Finished Goods

Which of the following statements is true of a traditional production process?

In a traditional production process, supervisors enter materials into manufacturing so as to keep all the manufacturing departments (processes) operating.

For which of the following businesses would the job order cost system be most appropriate?

Custom cabinet manufacturer

Which of the following information is provided by job cost sheets?

Cost impact of materials changes

The recording of the jobs shipped and customers billed would increase:

Cost of Goods Sold.

Which of the following is an example of direct materials cost for an automobile manufacturer?

Cost of interior upholstery

Which of the following is an example of direct labor cost for an airplane manufacturer?

Cost of wages of assembly worker

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

Oil lubricants used for factory machinery

Which of the following costs appear on a balance sheet?

Product Costs

Which of the following is most likely a period cost?

Salary of telephone receptionist in the sales office

Which of the following is a period cost?

Sales commissions

Which of the following would be classified as direct materials for an auto manufacturer?

Steel

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

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.

Direct materials, work-in-process, and finished goods inventory are most likely to be reported on the balance sheet of a(n):

automobile company.