Cost Accounting Exam Questions With Correct Answers
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Cost accounting
Institution
Cost Accounting
Cost Accounting Exam Questions With
Correct Answers
For job costing in service industries, overhead costs are usually applied to jobs based on: -
answerdirect labor-hours or dollars
a time ticket - answershows the time an employee worked on each job, the pay rate, and the
total cost chargeable...
Cost Accounting Exam Questions With
Correct Answers
For job costing in service industries, overhead costs are usually applied to jobs based on: -
answer✔direct labor-hours or dollars
a time ticket - answer✔shows the time an employee worked on each job, the pay rate, and the
total cost chargeable to each job
what is the amount that actual factory overhead exceeds the factory overhead applied? -
answer✔underapplied overhead
what industry is often suitable for applying operation costing - answer✔electronic equipment
the predetermined factory overhead rate includes - answer✔estimated total amount of cost
driver
some firms pool overhead into a single plantwide overhead pool, while others accumulate
overhead costs into manufacturing departments, each of which has an overhead cost pool and
overhead cost application rate. Which approach is likely to provide more accurate cost numbers
for cost estimating, pricing, and performance evaluation? - answer✔departmental rate
when completed units are sold - answer✔finished goods inventory account is credited
standard costs are - answer✔planned costs the firm should attain
the ideal criterion for choosing an allocation base for overhead is - answer✔a cause and effect
relationship
operation costing is a hybrid costing system for products and services that uses - answer✔job
costing for direct materials costs and process costing for conversion cost
what type of firm is most likely to require a very accurate costing system - answer✔a firm in a
competitive environment
job costing in service firms uses recording procedures and accounts similar to those for
manufacturing companies except for those regarding - answer✔direct materials
departmental overhead rates are preferred over plantwide rates when - answer✔the products use
different amounts of different processes in different departments
scrap can be classified as - answer✔specific job
common to all jobs
cost system design/selection should consider all except what - answer✔customer needs
cost system design/selection should consider - answer✔-cost/benefit of system design/selection
and operation
-a firms strategy and management information needs
-nature of the industry, product, or service
an activity that is performed for each unit of production is an - answer✔unit-level activity
what is not considered a benefit of activity-based costing - answer✔decreased production
activity levels
benefits of activity-based costing - answer✔-improved understanding of cost of capacity
-a better understanding of processes
-improved planning
-improved strategic decisions
the cost to process monthly statements is an example of a - answer✔customer-sustaining cost
what is not a low value-added activity - answer✔processing
low-value-added activities - answer✔-reworking
-moving
-inspection
-warranty service
freight charges based on number of units shipped to customers is a - answer✔customer unit-
level cost
an adaptation of ABC costing that simplifies ABC by assigning resource costs directly to cost
objects is called - answer✔time-driven abc
what is considered a unit-level cost driver - answer✔-direct labor hours
-machine hours
-direct material dollars
what is an example of a high-value-added activity - answer✔shipping the customers order
what is most likely to be the cost driver for the packaging and shipping activity -
answer✔number of orders
a firm has many products, some produced in an automated production process and some
produced in a manual production process. Using direct labor hours to assign manufacturing
overhead to a product manufactured with a highly automated process is likely to -
answer✔understate overhead of the product
in an activity-based costing system, overhead costs are divided into separate - answer✔activity
cost pools
what is the weakest linkage between activity and cost driver - answer✔model: quality control
cost: square feet of floor space
the journal entry to record finished product units would include a debit to - answer✔finished
goods inventory
in a process costing system, the cost of abnormal spoilage should be - answer✔treated as a loss
in the period incurred
what is one the key steps in determining process costs - answer✔-assigning the total
manufacturing costs to the units completed and transferred out and the units of work in process at
the end of the period
-analyzing the physical flow of production units
-computing the cost per equivalent unit for each manufacturing cost element
-calculating equivalent units of production for all manufacturing cost elements
the journal entry to record incurred direct labor would include a credit to - answer✔accrued
payroll
firms should use a process costing system when they produce products that - answer✔pass
through a series of manufacturing departments
from the industries listed below, which one is most likely to use process costing in accounting
for production costs?
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