Exam 2

Which of the following production characteristics is better suited for process costing and not job order costing?

Costs are accumulated by department.

During production, to what are the costs in job order costing applied?

Each individual product

Cost that are incurred as part of the manufacturing process, but are not clearly traceable to the specific unit of product or batches of product, are called

Overhead cost

Indirect material would fall into which category

Overhead cost

Continuous Improvement

Rejects the notion of "good enough."

Which of the following product situations is better suited to job order costing than to process costing?

The costs are easily traced to a specific product.

Which of the following is a reason a company would implement activity-based costing?

They want to improve the data on which decisions are made

A process costing system is most likely used by which of the following?

a paper manufacturing company

A job order costing system is most likely used by which of the following?

an accounting firm specializing in tax returns

Which is not a task typically associated with ABC systems?

applying a single cost rate

Which is not a step in activity-based costing?

compute a cost rate per production

The costs to be accounted for consist of which of the following?

costs in the beginning inventory and costs added during the period

What product cost is both a prime cost and a conversion cost?

direct labor

Which of the following is a prime cost?

direct labor

Conversion cost include

direct labor and overhead

Prime cost include

direct material and direct labor

The three major cost components of manufacturing a product are

direct material, direct labor, and overhead cost

Which is the correct formula for computing the overhead rate?

estimated overhead for the activity/estimated use of the cost driver for the activity

Which of the following is a conversion cost?

factory depreciation expenses

Which document shows the cost of direct materials, direct labor, and overhead applied for each specific job?

job cost sheet

Which of the following lists contains only conversion costs for an inflatable raft manufacturing corporation?

machine operator, electricity, depreciation, insurance

In a process cost system, factory depreciation expense incurred is debited to ________.

manufacturing overhead

Nonproduction cost that are expensed immediately when incurred are called:

period costs

Managerial accounting looks at three broad functions which include

planning, controlling and evaluating

Which is not needed to compute equivalent units of production?

the material cost per unit

Overhead costs are assigned to each product based on ________.

the proportion of that product's use of the cost driver

How many inventory accounts does a manufacturing company have?

three

During production, how are the costs in process costing accumulated?

to each individual department

A direct cost is one that is

traceable to the cost object

Assigning indirect costs to specific jobs is completed by which of the following?

using the predetermined overhead rate

In a process costing system, which account shows the overhead assigned to the department?

work in process inventory