2024 – A major purpose of cost accounting is to measure record and report product costs measure record and report period

A major purpose of cost accounting is to

 

• measure, record, and report product costs.
• measure, record, and report period costs.
• provide information to stockholders for investment decisions.
• classify all costs as operating or nonoperating.

 

The two basic types of cost accounting systems are

 

• job order and process cost systems.
• process cost and batch systems.
• job order and batch systems.
• job order and job accumulation systems.

 

A process cost system would most likely be used by a company that makes

 

• college graduation announcements.
• motion pictures.
• repairs to automobiles.
• breakfast cereal.

 

Which of the following would be accounted for using a job order cost system?

 

• The production of personal computers.
• The production of automobiles.
• The construction of a new campus building.
• The refining of petroleum.

 

The flow of costs in a job order cost system

 

• cannot be measured until all jobs are complete.
• generally follows a LIFO cost flow assumption.
• involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done.
• measures product costs for a set time period.

 

The entry to record the acquisition of raw materials on account is

 

• Raw Materials Inventory
• Accounts Payable
•  Work in Process Inventory
• Accounts Payable
•  Manufacturing Overhead
• Raw Materials Inventory
• Accounts Payable
• Accounts Payable
• Raw Materials Inventory

 

Time tickets should be approved by

 

• the employee’s supervisor.
• the audit committee.
• the payroll department.
• co-workers.

 

The labor costs that have been identified as indirect labor should be charged to 

 

• the individual jobs worked on.
• direct labor.
• salary expense.
• manufacturing overhead.

 

Manufacturing overhead is applied to each job

 

• by means of a predetermined overhead rate.
• at the time when the overhead cost is incurred.
• only if the overhead costs can be directly traced to that job.
• at the end of the year when actual costs are known.

 

A process cost accounting system is most appropriate when

 

• similar products are mass-produced.
• a variety of different products are produced, each one requiring different types of materials, labor, and overhead.
• individual products are custom made to the specification of customers.
• the focus of attention is on a particular job or order.

 

Which of these best reflects a distinguishing factor between a job order cost system and a process cost system?

 

• The manufacturing cost elements included.
• The time period each covers.
• The number of work in process accounts.
• The detail at which costs are calculated.

 

In process cost accounting, manufacturing costs are summarized on a

 

• process order cost sheet.
• manufacturing cost sheet.
• production cost report.
• job order cost sheet.

 

In a process cost system, product costs are summarized:

 

• on production cost reports.
• when the products are sold.
• on job cost sheets.
• after each unit is produced.

 

Which of the following is considered a difference between a job order cost and a process cost system?

 

• The manufacturing cost elements.
• Documents used to track costs.
• The accumulation of the costs of materials, labor, and overhead.
• The flow of costs.

 

The costs that are easiest to trace directly to products are

 

• A.direct materials and direct labor.
• B.direct labor and overhead.
• C.direct materials and overhead.
• D.None of the above; all three costs are equally easy to trace to the product.

 

Often the most difficult part of computing accurate unit costs is determining the proper amount of _________ to assign to each product, service, or job.

 

• direct materials and direct labor
• direct labor
• overhead
• direct materials

 

The last step in activity-based costing is to

 

• compute the activity-based overhead rate per cost driver.
• identify and classify the major activities involved in the manufacture of specific products.
• identify the cost driver that has a strong correlation to the activity cost pool.
• assign manufacturing overhead costs for each activity cost pool to products.

 

The first step in activity-based costing is to

 

• identify and classify the major activities involved in the manufacture of specific products.
• assign manufacturing overhead costs for each activity cost pool to products.
• identify the cost driver that has a strong correlation to the activity cost pool.
• compute the activity-based overhead rate per cost driver.

 

A well-designed activity-based costing system starts with

 

• analyzing the activities performed to manufacture a product.
• assigning manufacturing overhead costs for each activity cost pool to products.
• identifying the activity-cost pools.
• computing the activity-based overhead rate.

 

An example of an activity cost pool is

 

• number of inspections.
• setting up machines.
• machine hours.
• number of setups.