ACCT 2810 – Flashcards

The cost of a manufactured product generally consists of which of the following costs? a. direct materials cost and factory overhead cost b. direct labor cost and factory overhead cost c. direct labor cost, direct materials cost, and factory overhead cost d. direct materials cost and direct labor cost

The cost of materials entering directly into the manufacturing process is classified as a. direct labor b. factory overhead c. burden cost d. direct materials cost

Which of the following is an example of direct materials cost for an automobile manufacturer? a. cost of oil lubricants for factory machinery b. cost of wages of assembly worker c. salary of production supervisor d. cost of interior upholstery

Which of the following is an example of a factory overhead cost? a. repair and maintenance cost on the administrative building b. factory heating and lighting cost c. insurance premiums on salespersons' automobiles d. presidents salary

Which of the following items would NOT be classified as part of factory overhead? a. direct labor used b. amortization of manufacturing patents c. production supervisors' salaries d. Factory supplies used

Which of the following manufacturing costs is an indirect cost of producing a product? a. oil lubricants used for factory machinery b. commissions for sales personnel c. hourly wages of an assembly worker d. memory chips for a microcomputer manufacturer

Which of the following are the two main types of cost accounting systems for manufacturing operations? a. process cost and general accounting systems b. job order cost and process cost systems c. job order cost and general accounting systems d. process cost and replacement cost systems

For which of the following businesses would the job order cost system be appropriate? a. custom cabinet manufacturer b. automobile manufacturer c. lumber mill d. meat processor

Which of the following would most likely use a job order costing system? a. a paper mill b. a swimming pool installer c. a company that manufactures chlorine for swimming pools d. an oil refinery

For which of the following businesses would the process cost system be appropriate? a. custom cabinet manufacturer b. dress designer c. lumber mill d. printing firm

Which of the following costs are NOT included in finished goods inventory? a. direct labor b. factory overload c. company president's salary d. direct materials

The document authorizing the issuance of materials from the storeroom is the a. materials requisition b. purchase requisition c. receiving report d. purchase order

Which of the following products probably would be manufactured using a job order costing system? a. number 2 pencils b. computer monitors c. wedding invitations d. paper

In a job order cost accounting system, the effect of the flow of direct materials into production is to a. increase work in process, decrease materials inventory b. increase materials, decrease work in progress c. increase factory overhead, decrease materials inventory d. increase work in progress, decrease supplies

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the materials account to a. work in process and cost of goods sold b. work in process and factory overhead c. finished goods and cost of goods sold d. work in process and finished goods

Job order costing and process costing are a. pricing systems b. cost accounting systems c. cost flow systems d. inventory tracking systems

In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count, inspect the goods, and complete a a. Purchase order b. sales invoice c. receiving report d. purchase requisition

The amount of time spent by each employee and the labor cost incurred for each individual job or for factory overhead are recorded on a. employees earnings records b. in and out bond c. time tickets d. all of these

Which of the following is NOT true about why a service firm will use the job order costing system? a. to help control costs b. to determine client billing c. to determine department costs within the firm d. to determine profit

The basis for recording direct and indirect labor costs incurred is a summary of the periods a. job order cost sheets b. time tickets c. employees earnings records d. clock cards

Recording direct labor costs in a job order cost accounting system a. increases factory overhead, decreases work in progress b. increase finished goods, increases wages payable c. increases work in progress, increases wages payable d. increases factory overhead, increases wages payable

Increases in work in progress account occur when a. materials are received into the storeroom b. factory overhead costs are incurred c. direct labor is recorded from the time sheets d. all of these increase work in progress

at the end of the fiscal year, the balance in factory overhead is small. This balance would normally be a. transferred to work in progress b. transferred to cost of goods sold c. transferred to finished goods d. allocated between work in progress and finished goods

Each account in the work in process subsidiary ledger is called a a. finished goods sheet b. stock record c. materials requistion d. job cost sheet

The recording of the factory labor incurred for general factory use would increase a. factory overhead b. wages payable c. wages expense d. cost of goods sold

The recording of the applications of factory overhead costs to jobs would decrease a. factory overhead b. wages payable c. work in process d. cost of goods sold

the recording of the jobs completed would increase a. factory overhead b. finished goods c. work in process d. cost of goods sold

the recording of the jobs completed would decrease a. factory overhead b. finished goods c. work in process d. cost of goods sold

the finished goods account is the controlling account for the a. sales ledger b. materials ledger c. work in process ledger d. stock ledger

the sale of a finished good on account a. increases cost of goods sold and decreases finished goods b. increases cost of goods sold, decreases finished goods, increases accounts receivable, and increases sales c. increases sales expense, decreases finished goods, decreases cash, and decreases accounts recievable d. increases work in progress, decreases finished goods, increases accounts receivable, and increases sales

product costs include all of the following EXCEPT a. CEO salary b. depreciation on factory equipment c. wages of an assembly worker d. direct materials

Which of the following would most likely be a period cost? a. depreciation on factory lunchroom furniture b. salary of telephone receptionist in the sales office c. salary of a security guard for the factory parking lot d. computer chips used by a computer manufacturer

period costs include all of the following except a. ceo salary b. depreciation on office equipment c. sales commission d. wages of an assembly worker

The period costs of a textbook printer would include a. wages of a press operator b. utility costs of the factory c. advertising expenses d. paper costs

which types of inventories does a manufacturing business report on its balance sheet? a. finished goods inventory and work in process inventory b. direct materials inventory and work in process inventory c. direct materials inventory, work in process inventory, and finished goods inventory d. direct materials inventory and finished goods inventory

Costs that are treated as assets until the product is sold are called a. product costs. b. period costs. c. conversion costs. d. selling expenses.

Which of the following would most likely be a product cost? a. Salary of VP of sales b. Advertising for a particular product c. Drill bits for a drill press used in the plant assembly area d. Salary of the company receptionist

For a manufacturing business, inventory that is in the process of being manufactured is referred to as a. supplies inventory. b. work in process inventory. c. finished goods inventory. d. direct materials inventory.

58. Job cost sheets can provide information to managers for all but which of the following? a. Cost impact of materials changes b. Cost impact of continuous improvement in the manufacturing process c. Cost impact of materials price or direct labor rate changes over time d. Utilities, managerial salaries, and depreciation of computers in the corporate office

A difference in quantity of materials used on two comparable jobs may be caused by a. inadequately trained employees. b. poor quality materials. c. employee carelessness. d. all of these.

Which of the following would probably NOT be found in the accounting system of a service provider? a. Cost ledger b. Finished goods ledger c. Cost of services account d. Job cost sheets

In a job order cost accounting system used by a service business, which of the following items would normally NOT be included as part of overhead? a. Materials b. Direct labor c. Rent d. Supplies

The direct labor and overhead costs of providing services to clients are accumulated in a. finished services expense. b. work in process. c. administrative salaries expense. d. overhead.

Just-in-time processing is a business philosophy that focuses on reducing time and cost and eliminating poor quality. One of the ways in which this is accomplished in manufacturing and nonmanufacturing processes is by: a. moving a product from process to process as each function is completed. b. combining processing functions into work centers and cross-training workers to perform more than one function. c. having production supervisors attempt to enter enough materials into manufacturing to keep all manufacturing departments operating. d. having workers typically perform one function on a continuous basis.

A disadvantage of maintaining high inventory levels includes a. providing a "buffer" to protect against process problems. b. hiding underlying production problems such as unexpected scrap and rework. c. maintaining inventory is wasteful and unnecessary. d. both hiding underlying production problems and the fact that maintaining inventory is wasteful and unnecessary are disadvantages of maintaining inventory.

65. Which of the following statements is TRUE regarding lead time? a. Total lead time can be divided into acceptable and non-acceptable lead time. b. Lead time is a measure of time that elapses between the sale of a product and delivery to the customer. c. Reducing nonvalue-added lead time reduces costs and improves the speed of production. d. Reducing nonacceptable lead time improves the speed of production, but will not affect product cost.

66. Just-in-time manufacturing uses which of the following techniques? a. Provides specialized training so that employees only do one task and work individually to improve efficiencies in the department b. Organizes the plant in such a way as to reduce product movement from station to station c. Encourages management to make all operating decisions regarding the manufacturing process rather than the line employees in order to streamline the process d. All of these

67. Pull manufacturing is driven by which of the following? a. Customer demand b. Forecasting customers' requirements c. A production schedule rather than line status d. Pushing inventory ahead to the next station

68. Just-in-time manufacturing practices include all of the following EXCEPT a. eliminating defective or poor-quality products. b. partnering with suppliers to provide high-quality, low-cost, on-time materials. c. emphasizing push manufacturing to ensure inventory levels that will provide a buffer against production problems. d. employee involvement using teams organized in product cells.

69. An activity-based costing system allocates factory overhead rates to products or services using a. a single plantwide rate. b. the cost of activities based on an activity rate times the number of activity-based usage quantities. c. an allocation of budgeted revenues produced by a product or service . d. an end-of-year allocation of costs to products or services.