Cost Accounting Exam 2

The most complicated part of activity-based costing is a. Distributing overhead dollars into the appropriate cost pools. b. Calculating overhead rates c. Applying overhead to products d. Both B and C

a. Distributing overhead dollars into the appropriate cost pools.

In a traditional costing system, how many applications of overhead are there? a. Number of overhead applications = number of products or output types b. Number of overhead applications = number of products or output types, unless one or more of the products/output types doesn't use overhead resources c. Number of overhead applications = number of products or output type ÷ number of overhead buckets d. None of these

a. Number of overhead applications = number of products or output types

In a job-order costing system, if costs are incurred to rework a job due to inadequate training of personnel, these costs would be a. debited to the job. b. debited to manufacturing overhead control. c. credited to manufacturing overhead control. d. credited to the cost of goods sold.

b. debited to manufacturing overhead control.

If unit-based product costing is used, which of the following would be traced directly to the product? a. setup costs b. direct labor c. maintenance of machinery d. inspection costs

b. direct labor

For a labor-intensive manufacturing operation, which of the following would be the most appropriate activity driver? a. machine hours b. direct labor hours c. number of employees d. units of output

b. direct labor hours

A debit balance in Overhead Control: a. indicates applied overhead exceeds actual overhead. b. gives the total actual overhead costs at a given point in time. c. indicates actual overhead costs have entered the work-in-process inventory account. d. equals the total applied overhead at a given point in time.

b. gives the total actual overhead costs at a given point in time.

The overhead rates of the traditional functional-based product costing use a. non-unit-based activity drivers. b. unit-based activity drivers. c. process costing. d. job order costing.

b. unit-based activity drivers.

What is the difference between an activity based costing system and a traditional costing system? a. ABC has more overhead rates than traditional. b. ABC has rates driving by things other than unit level drivers. c. Both of these are true. d. Neither of these are true.

c. Both of these are true.

More accurate product costing information is produced by assigning costs using a. a volume-based, plantwide rate. b. volume-based, departmental rates. c. activity-based pool rates. d. all of these.

c. activity-based pool rates.

Product costs can be distorted if a unit-based activity driver is used and a. non-unit-based overhead costs are a significant proportion of total overhead. b. the consumption ratios differ between unit-based and non-unit-based input categories. c. both a and b. d. neither a nor b.

c. both a and b.

A costing system that uses actual costs for direct materials and labor and predetermined overhead rates to apply overhead is called a(n) a. actual costing system. b. standard costing system. c. normal costing system. d. activity-based costing system.

c. normal costing system.

The method that first traces costs to a department and then to products is called: a. direct costing b. absorption costing c. unit-based costing d. indirect costing

c. unit-based costing

Products might consume overhead in different proportions due to differences in a. product size. b. setup times. c. product complexity. d. all of these.

d. all of these.

In a traditional enterprise, the flow of costs through the system is a. materials inventory, work-in-process inventory, finished goods inventory, cost of goods sold. b. materials inventory, work-in-process inventory, cost of goods sold, finished goods inventory. c. work-in-process inventory, materials inventory, finished goods inventory, cost of goods sold. d. work-in-process inventory, materials inventory, finished goods.

a. materials inventory, work-in-process inventory, finished goods inventory, cost of goods sold.

Unit-based product costing uses which of the following procedures? a. All overhead costs are expensed as incurred. b. Overhead costs are traced to departments, then costs are traced to products. c. Overhead costs are traced directly to products. d. Overhead costs are traced to activities, then costs are traced to products.

b. Overhead costs are traced to departments, then costs are traced to products.