, lOMoARcPSD| 14860549
INTRODUCTIONfTOfCOSTfACCOUNTING
MULTIPLEfCHOICE
1.f f Factoryfoverheadfincludes:
a. Indirectflaborfbutfnotfindirectfmaterials.
b. Indirectfmaterialsfbutfnotfindirectflabor.
c. Allfmanufacturingfcosts,fexceptfindirectfmaterialsfandfindirectflabor.
d. Allfmanufacturingfcosts,fexceptfdirectfmaterialsfandfdirectflabor.
ANS: D
Factoryfoverheadfincludesfallfmanufacturingfcostsfexceptfdirectfmaterialsfandfdirectflabor.
2.f f Theftermf"primefcost"frefersfto:
a. Thefsumfoffdirectflaborfcostsfandfallffactoryfoverheadfcosts.
b. Thefsumfoffrawfmaterialfcostsfandfdirectflaborfcosts.
c. Allfcostsfassociatedfwithfmanufacturingfotherfthanfdirectflaborfcostsfandfrawfmaterialfcosts.
d. Manufacturingfcostsfincurredftofproducefunitsfoffoutput.
ANS: B
Theftermf"primefcost"frefersftofthefsumfoffrawfmaterialsfcostsfandfdirectflaborfcosts.
3.f f Theftermf"conversionfcosts"frefersfto:
a. Thefsumfoffdirectflaborfcostsfandfallffactoryfoverheadfcosts.
b. Thefsumfoffrawfmaterialfcostsfandfdirectflaborfcosts.
c. Allfcostsfassociatedfwithfmanufacturingfotherfthanfdirectflaborfcosts.
d. Directflaborfcostsfincurredftofproducefunitsfoffoutput.
ANS: A
Theftermf"conversionfcosts"frefersftofthefsumfoffdirectflaborfcostsfandfallffactoryfoverheadfcosts.
4.f f Aftypicalffactoryfoverheadfcostfis:
a. Freightfout.
b. Stationeryfandfprinting.
c. Depreciationfonfmachineryfandfequipment.
d. Postage.
ANS: C
Depreciationfonfmachineryfandfequipmentfisfaffactoryfoverheadfcostf(i.e.,fitfisfafmanufacturingfcost,fbutfi
tfcan'tfbefidentifiedfwithfspecificfjobsforfprocesses),fwhereasfthefotherfthreefitemsfarefsellingfandfadmin
istrativefexpenses.
5.f Underfafjobforderfsystemfoffcostfaccounting,fthefdollarfamountfoffthefentryftoftransferfinventoryffromfW
orkfinfProcessftofFinishedfGoodsfisfthefsumfoffthefcostsfchargedftofallfjobs:
a. Infprocessfduringfthefperiod.
b. Completedfandfsoldfduringfthefperiod.
c. Completedfduringfthefperiod.
d. Startedfinfprocessfduringfthefperiod.
, lOMoARcPSD| 14860549
ANS: C
Whenfjobsfarefcompletedfduringfthefperiod,fFinishedfGoodsfisfdebitedfandfWorkfinfProcessfisfcreditedffo
rfthefcostfofftheffinishedfjobs.
6.f Whichfofftheffollowingfproductionfoperationsfwouldfbefmostflikelyftofemployfafjobforderfsystemfoffcost
faccounting?fa. Candyfmanufacturing
b. Crudefoilfrefining
c. Printingftextfbooks
d. FlourfMilling
ANS: C
Printingfwouldfbefmostflikelyftofemployfafjobforderfsystemfoffcostfaccountingfdueftofthefnumberfoffcust
omfjobsfinvolved.f Thefmanufacturefoffcandy,fthefvulcanizingfoffrubber,fandfthefrefiningfoffcrudefoilfwoul
dfnormallyfbefafcontinuousfprocessfoffproducingflikefgoodsfandfwouldfbefaccountedfforfunderfthefproce
ssfcostfsystem.
7.f Infjobforderfcosting,fthefbasicfdocumentfforfaccumulatingfthefcostfoffeachforderfisfthe:fa.fJobfcostfsheet.
b. Requisitionfsheet.
c. Purchaseforder.
d. Invoice.
ANS: A
Infjobforderfcosting,fthefbasicfdocumentftofaccumulatefthefcostfoffeachforderfisfthefjobfcostfsheet.
8.f f Whenfshouldfprocessfcostingftechniquesfbefusedfinfassigningfcostsftofproducts?
a. Infsituationsfwherefstandardfcostingftechniquesfshouldfnotfbefused
b. Iffthefproductfisfcomposedfoffmass-producedfhomogeneousfunits
c. Whenfproductionfisfonlyfpartiallyfcompletedfduringfthefaccountingfperiod
d. Iffthefproductfisfmanufacturedfonfthefbasisfoffeachforderfreceived
ANS: B
Processfcostingftechniquesfshouldfbefusedfinfassigningfcostsftofproductsfiffthefproductfisfcomposedfoffm
ass-producedfhomogeneousfunits.
9. Anfindustryfthatfwouldfmostflikelyfusefprocessfcostingfproceduresfis:
a. Beverage.
b. HomefConstruction.
c. Printing.
d. Shipbuilding.
ANS: A
Beveragefproductionfusuallyfconsistsfoffmanufacturingf"longfruns"foffhomogeneousfproductsfforfwhichfp
rocessfcostingfisfused.f Thefotherfthreefindustriesfwouldfutilizefjobforderfcosting.
10.f Underfafjobforderfsystemfoffcostfaccounting,fCostfoffGoodsfSoldfisfdebitedfandfFinishedfGoodsfisfcre
ditedfforfa:fa. Transferfoffmaterialsftoftheffactory.
b. Shipmentfoffcompletedfgoodsftofthefcustomer.
c. Transferfoffcompletedfproductionftoftheffinishedfgoodsfstoreroom.
d. Purchasefoffgoodsfonfaccount.
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ANS: B
Whenfcompletedfgoodsfarefshippedftofcustomers,fCostfoffGoodsfSoldfisfdebitedfandfFinishedfGoodsfisfcr
edited.
11.f f PayrollfisfdebitedfandfWagesfPayablefisfcreditedfto:
a. Payfthefpayrollftaxes.
b. Recordfthefpayroll.
c. Payfthefpayroll.
d. Distributefthefpayroll.
ANS: B
Whenfthefpayrollfisfrecorded,fPayrollfisfdebitedfandfWagesfPayablefisfcredited.f Whenfpayrollftaxesfarefp
aid,fthefvariousfliabilityfaccountsfarefdebitedfandfCashfisfcredited.f Whenfthefpayrollfisfpaid,fWagesfPaya
blefisfdebitedfandfCashfisfcredited.f Whenfthefpayrollfisfdistributed,fWorkfinfProcess,fFactoryfOverhead,f
andfSellingfandfAdministrativefExpensesfarefdebitedfandfPayrollfisfcredited.
12.f Selectedfdatafconcerningfthefpastffiscalfyear'sfoperationsf(000'sfomitted)foffthefStanleyfManufacturingfC
ompanyfarefpresentedfbelow:
INVENTORIES
Beginning Endin
g
Rawfmaterials $f90 $f85
Workfinfprocess 50 65
Finished 100 90
goods
Otherfdata:
Rawfmaterialsfused $365
Totalfmanufacturingfcostsfcharged
tofproductionfduring
thefyearf(incl
udesfrawfmaterials,fdirectflabor,fandff
actory
overhead) 680
Costfoffgoodsfavailablefforfsale 765
Sellingfandfgeneralfexpenses 250
Thefcostfoffrawfmaterialsfpurchasedfduringfthefyearfa
mountedfto:
a. $455.
b. $450.
c. $365.
d. $360.
ANS:f D
Rawfmaterialsfused $365
Addfendingfinventoryfoffrawfmaterials f 85
INTRODUCTIONfTOfCOSTfACCOUNTING
MULTIPLEfCHOICE
1.f f Factoryfoverheadfincludes:
a. Indirectflaborfbutfnotfindirectfmaterials.
b. Indirectfmaterialsfbutfnotfindirectflabor.
c. Allfmanufacturingfcosts,fexceptfindirectfmaterialsfandfindirectflabor.
d. Allfmanufacturingfcosts,fexceptfdirectfmaterialsfandfdirectflabor.
ANS: D
Factoryfoverheadfincludesfallfmanufacturingfcostsfexceptfdirectfmaterialsfandfdirectflabor.
2.f f Theftermf"primefcost"frefersfto:
a. Thefsumfoffdirectflaborfcostsfandfallffactoryfoverheadfcosts.
b. Thefsumfoffrawfmaterialfcostsfandfdirectflaborfcosts.
c. Allfcostsfassociatedfwithfmanufacturingfotherfthanfdirectflaborfcostsfandfrawfmaterialfcosts.
d. Manufacturingfcostsfincurredftofproducefunitsfoffoutput.
ANS: B
Theftermf"primefcost"frefersftofthefsumfoffrawfmaterialsfcostsfandfdirectflaborfcosts.
3.f f Theftermf"conversionfcosts"frefersfto:
a. Thefsumfoffdirectflaborfcostsfandfallffactoryfoverheadfcosts.
b. Thefsumfoffrawfmaterialfcostsfandfdirectflaborfcosts.
c. Allfcostsfassociatedfwithfmanufacturingfotherfthanfdirectflaborfcosts.
d. Directflaborfcostsfincurredftofproducefunitsfoffoutput.
ANS: A
Theftermf"conversionfcosts"frefersftofthefsumfoffdirectflaborfcostsfandfallffactoryfoverheadfcosts.
4.f f Aftypicalffactoryfoverheadfcostfis:
a. Freightfout.
b. Stationeryfandfprinting.
c. Depreciationfonfmachineryfandfequipment.
d. Postage.
ANS: C
Depreciationfonfmachineryfandfequipmentfisfaffactoryfoverheadfcostf(i.e.,fitfisfafmanufacturingfcost,fbutfi
tfcan'tfbefidentifiedfwithfspecificfjobsforfprocesses),fwhereasfthefotherfthreefitemsfarefsellingfandfadmin
istrativefexpenses.
5.f Underfafjobforderfsystemfoffcostfaccounting,fthefdollarfamountfoffthefentryftoftransferfinventoryffromfW
orkfinfProcessftofFinishedfGoodsfisfthefsumfoffthefcostsfchargedftofallfjobs:
a. Infprocessfduringfthefperiod.
b. Completedfandfsoldfduringfthefperiod.
c. Completedfduringfthefperiod.
d. Startedfinfprocessfduringfthefperiod.
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ANS: C
Whenfjobsfarefcompletedfduringfthefperiod,fFinishedfGoodsfisfdebitedfandfWorkfinfProcessfisfcreditedffo
rfthefcostfofftheffinishedfjobs.
6.f Whichfofftheffollowingfproductionfoperationsfwouldfbefmostflikelyftofemployfafjobforderfsystemfoffcost
faccounting?fa. Candyfmanufacturing
b. Crudefoilfrefining
c. Printingftextfbooks
d. FlourfMilling
ANS: C
Printingfwouldfbefmostflikelyftofemployfafjobforderfsystemfoffcostfaccountingfdueftofthefnumberfoffcust
omfjobsfinvolved.f Thefmanufacturefoffcandy,fthefvulcanizingfoffrubber,fandfthefrefiningfoffcrudefoilfwoul
dfnormallyfbefafcontinuousfprocessfoffproducingflikefgoodsfandfwouldfbefaccountedfforfunderfthefproce
ssfcostfsystem.
7.f Infjobforderfcosting,fthefbasicfdocumentfforfaccumulatingfthefcostfoffeachforderfisfthe:fa.fJobfcostfsheet.
b. Requisitionfsheet.
c. Purchaseforder.
d. Invoice.
ANS: A
Infjobforderfcosting,fthefbasicfdocumentftofaccumulatefthefcostfoffeachforderfisfthefjobfcostfsheet.
8.f f Whenfshouldfprocessfcostingftechniquesfbefusedfinfassigningfcostsftofproducts?
a. Infsituationsfwherefstandardfcostingftechniquesfshouldfnotfbefused
b. Iffthefproductfisfcomposedfoffmass-producedfhomogeneousfunits
c. Whenfproductionfisfonlyfpartiallyfcompletedfduringfthefaccountingfperiod
d. Iffthefproductfisfmanufacturedfonfthefbasisfoffeachforderfreceived
ANS: B
Processfcostingftechniquesfshouldfbefusedfinfassigningfcostsftofproductsfiffthefproductfisfcomposedfoffm
ass-producedfhomogeneousfunits.
9. Anfindustryfthatfwouldfmostflikelyfusefprocessfcostingfproceduresfis:
a. Beverage.
b. HomefConstruction.
c. Printing.
d. Shipbuilding.
ANS: A
Beveragefproductionfusuallyfconsistsfoffmanufacturingf"longfruns"foffhomogeneousfproductsfforfwhichfp
rocessfcostingfisfused.f Thefotherfthreefindustriesfwouldfutilizefjobforderfcosting.
10.f Underfafjobforderfsystemfoffcostfaccounting,fCostfoffGoodsfSoldfisfdebitedfandfFinishedfGoodsfisfcre
ditedfforfa:fa. Transferfoffmaterialsftoftheffactory.
b. Shipmentfoffcompletedfgoodsftofthefcustomer.
c. Transferfoffcompletedfproductionftoftheffinishedfgoodsfstoreroom.
d. Purchasefoffgoodsfonfaccount.
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ANS: B
Whenfcompletedfgoodsfarefshippedftofcustomers,fCostfoffGoodsfSoldfisfdebitedfandfFinishedfGoodsfisfcr
edited.
11.f f PayrollfisfdebitedfandfWagesfPayablefisfcreditedfto:
a. Payfthefpayrollftaxes.
b. Recordfthefpayroll.
c. Payfthefpayroll.
d. Distributefthefpayroll.
ANS: B
Whenfthefpayrollfisfrecorded,fPayrollfisfdebitedfandfWagesfPayablefisfcredited.f Whenfpayrollftaxesfarefp
aid,fthefvariousfliabilityfaccountsfarefdebitedfandfCashfisfcredited.f Whenfthefpayrollfisfpaid,fWagesfPaya
blefisfdebitedfandfCashfisfcredited.f Whenfthefpayrollfisfdistributed,fWorkfinfProcess,fFactoryfOverhead,f
andfSellingfandfAdministrativefExpensesfarefdebitedfandfPayrollfisfcredited.
12.f Selectedfdatafconcerningfthefpastffiscalfyear'sfoperationsf(000'sfomitted)foffthefStanleyfManufacturingfC
ompanyfarefpresentedfbelow:
INVENTORIES
Beginning Endin
g
Rawfmaterials $f90 $f85
Workfinfprocess 50 65
Finished 100 90
goods
Otherfdata:
Rawfmaterialsfused $365
Totalfmanufacturingfcostsfcharged
tofproductionfduring
thefyearf(incl
udesfrawfmaterials,fdirectflabor,fandff
actory
overhead) 680
Costfoffgoodsfavailablefforfsale 765
Sellingfandfgeneralfexpenses 250
Thefcostfoffrawfmaterialsfpurchasedfduringfthefyearfa
mountedfto:
a. $455.
b. $450.
c. $365.
d. $360.
ANS:f D
Rawfmaterialsfused $365
Addfendingfinventoryfoffrawfmaterials f 85
