Exam 2
During production, to what are the costs in job order costing applied?
Each individual product
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 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
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
Which is not needed to compute equivalent units of production?
the material cost per unit
During production, how are the costs in process costing accumulated?
to each individual department
Which of the following production characteristics is better suited for process costing and not job order costing?
Costs are accumulated by department.
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
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
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
Managerial accounting looks at three broad functions which include
planning, controlling and evaluating
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
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