, lOMoARcPSD| 14860549
INTRODUCTIONbTObCOSTbACCOUNTING
MULTIPLEbCHOICE
1.b b Factoryboverheadbincludes:
a. Indirectblaborbbutbnotbindirectbmaterials.
b. Indirectbmaterialsbbutbnotbindirectblabor.
c. Allbmanufacturingbcosts,bexceptbindirectbmaterialsbandbindirectblabor.
d. Allbmanufacturingbcosts,bexceptbdirectbmaterialsbandbdirectblabor.
ANS: D
Factoryboverheadbincludesballbmanufacturingbcostsbexceptbdirectbmaterialsbandbdirectblabor.
2.b b Thebtermb"primebcost"brefersbto:
a. Thebsumbofbdirectblaborbcostsbandballbfactoryboverheadbcosts.
b. Thebsumbofbrawbmaterialbcostsbandbdirectblaborbcosts.
c. Allbcostsbassociatedbwithbmanufacturingbotherbthanbdirectblaborbcostsbandbrawbmaterialbcosts.
d. Manufacturingbcostsbincurredbtobproducebunitsbofboutput.
ANS: B
Thebtermb"primebcost"brefersbtobthebsumbofbrawbmaterialsbcostsbandbdirectblaborbcosts.
3.b b Thebtermb"conversionbcosts"brefersbto:
a. Thebsumbofbdirectblaborbcostsbandballbfactoryboverheadbcosts.
b. Thebsumbofbrawbmaterialbcostsbandbdirectblaborbcosts.
c. Allbcostsbassociatedbwithbmanufacturingbotherbthanbdirectblaborbcosts.
d. Directblaborbcostsbincurredbtobproducebunitsbofboutput.
ANS: A
Thebtermb"conversionbcosts"brefersbtobthebsumbofbdirectblaborbcostsbandballbfactoryboverheadbcosts.
4.b b Abtypicalbfactoryboverheadbcostbis:
a. Freightbout.
b. Stationerybandbprinting.
c. Depreciationbonbmachinerybandbequipment.
d. Postage.
ANS: C
Depreciationbonbmachinerybandbequipmentbisbabfactoryboverheadbcostb(i.e.,bitbisbabmanufacturingbcost,b
butbitbcan'tbbebidentifiedbwithbspecificbjobsborbprocesses),bwhereasbthebotherbthreebitemsbarebsellingban
dbadministrativebexpenses.
5.b Underbabjobborderbsystembofbcostbaccounting,bthebdollarbamountbofbthebentrybtobtransferbinventorybfro
mbWorkbinbProcessbtobFinishedbGoodsbisbthebsumbofbthebcostsbchargedbtoballbjobs:
a. Inbprocessbduringbthebperiod.
b. Completedbandbsoldbduringbthebperiod.
c. Completedbduringbthebperiod.
d. Startedbinbprocessbduringbthebperiod.
, lOMoARcPSD| 14860549
ANS: C
Whenbjobsbarebcompletedbduringbthebperiod,bFinishedbGoodsbisbdebitedbandbWorkbinbProcessbisbcredite
dbforbthebcostbofbthebfinishedbjobs.
6.b Whichbofbthebfollowingbproductionboperationsbwouldbbebmostblikelybtobemploybabjobborderbsystembof
bcostbaccounting?ba. Candybmanufacturing
b. Crudeboilbrefining
c. Printingbtextbbooks
d. FlourbMilling
ANS: C
Printingbwouldbbebmostblikelybtobemploybabjobborderbsystembofbcostbaccountingbduebtobthebnumberbofbc
ustombjobsbinvolved.b Thebmanufacturebofbcandy,bthebvulcanizingbofbrubber,bandbthebrefiningbofbcrudeb
oilbwouldbnormallybbebabcontinuousbprocessbofbproducingblikebgoodsbandbwouldbbebaccountedbforbund
erbthebprocessbcostbsystem.
7.b Inbjobborderbcosting,bthebbasicbdocumentbforbaccumulatingbthebcostbofbeachborderbisbthe:ba.bJobbcostbshe
et.
b. Requisitionbsheet.
c. Purchaseborder.
d. Invoice.
ANS: A
Inbjobborderbcosting,bthebbasicbdocumentbtobaccumulatebthebcostbofbeachborderbisbthebjobbcostbsheet.
8.b b Whenbshouldbprocessbcostingbtechniquesbbebusedbinbassigningbcostsbtobproducts?
a. Inbsituationsbwherebstandardbcostingbtechniquesbshouldbnotbbebused
b. Ifbthebproductbisbcomposedbofbmass-producedbhomogeneousbunits
c. Whenbproductionbisbonlybpartiallybcompletedbduringbthebaccountingbperiod
d. Ifbthebproductbisbmanufacturedbonbthebbasisbofbeachborderbreceived
ANS: B
Processbcostingbtechniquesbshouldbbebusedbinbassigningbcostsbtobproductsbifbthebproductbisbcomposedbo
fbmass-producedbhomogeneousbunits.
9. Anbindustrybthatbwouldbmostblikelybusebprocessbcostingbproceduresbis:
a. Beverage.
b. HomebConstruction.
c. Printing.
d. Shipbuilding.
ANS: A
Beveragebproductionbusuallybconsistsbofbmanufacturingb"longbruns"bofbhomogeneousbproductsbforbwhic
hbprocessbcostingbisbused.b Thebotherbthreebindustriesbwouldbutilizebjobborderbcosting.
10.b Underbabjobborderbsystembofbcostbaccounting,bCostbofbGoodsbSoldbisbdebitedbandbFinishedbGoodsbis
bcreditedbforba:ba. Transferbofbmaterialsbtobthebfactory.
b. Shipmentbofbcompletedbgoodsbtobthebcustomer.
c. Transferbofbcompletedbproductionbtobthebfinishedbgoodsbstoreroom.
d. Purchasebofbgoodsbonbaccount.
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ANS: B
Whenbcompletedbgoodsbarebshippedbtobcustomers,bCostbofbGoodsbSoldbisbdebitedbandbFinishedbGoodsbi
sbcredited.
11.b b PayrollbisbdebitedbandbWagesbPayablebisbcreditedbto:
a. Paybthebpayrollbtaxes.
b. Recordbthebpayroll.
c. Paybthebpayroll.
d. Distributebthebpayroll.
ANS: B
Whenbthebpayrollbisbrecorded,bPayrollbisbdebitedbandbWagesbPayablebisbcredited.b Whenbpayrollbtaxesbar
ebpaid,bthebvariousbliabilitybaccountsbarebdebitedbandbCashbisbcredited.b Whenbthebpayrollbisbpaid,bWag
esbPayablebisbdebitedbandbCashbisbcredited.b Whenbthebpayrollbisbdistributed,bWorkbinbProcess,bFactoryb
Overhead,bandbSellingbandbAdministrativebExpensesbarebdebitedbandbPayrollbisbcredited.
12.b Selectedbdatabconcerningbthebpastbfiscalbyear'sboperationsb(000'sbomitted)bofbthebStanleybManufacturi
ngbCompanybarebpresentedbbelow:
INVENTORIES
Beginning Endin
g
Rawbmaterials $b90 $b85
Workbinbprocess 50 65
Finished 100 90
goods
Otherbdata:
Rawbmaterialsbused $365
Totalbmanufacturingbcostsbcharged
tobproductionbduring
thebyearb(incl
udesbrawbmaterials,bdirectblabor,band
bfactory
overhead) 680
Costbofbgoodsbavailablebforbsale 765
Sellingbandbgeneralbexpenses 250
Thebcostbofbrawbmaterialsbpurchasedbduringbthebyearb
amountedbto:
a. $455.
b. $450.
c. $365.
d. $360.
ANS:b D
Rawbmaterialsbused $365
Addbendingbinventorybofbrawbmaterials b 85
INTRODUCTIONbTObCOSTbACCOUNTING
MULTIPLEbCHOICE
1.b b Factoryboverheadbincludes:
a. Indirectblaborbbutbnotbindirectbmaterials.
b. Indirectbmaterialsbbutbnotbindirectblabor.
c. Allbmanufacturingbcosts,bexceptbindirectbmaterialsbandbindirectblabor.
d. Allbmanufacturingbcosts,bexceptbdirectbmaterialsbandbdirectblabor.
ANS: D
Factoryboverheadbincludesballbmanufacturingbcostsbexceptbdirectbmaterialsbandbdirectblabor.
2.b b Thebtermb"primebcost"brefersbto:
a. Thebsumbofbdirectblaborbcostsbandballbfactoryboverheadbcosts.
b. Thebsumbofbrawbmaterialbcostsbandbdirectblaborbcosts.
c. Allbcostsbassociatedbwithbmanufacturingbotherbthanbdirectblaborbcostsbandbrawbmaterialbcosts.
d. Manufacturingbcostsbincurredbtobproducebunitsbofboutput.
ANS: B
Thebtermb"primebcost"brefersbtobthebsumbofbrawbmaterialsbcostsbandbdirectblaborbcosts.
3.b b Thebtermb"conversionbcosts"brefersbto:
a. Thebsumbofbdirectblaborbcostsbandballbfactoryboverheadbcosts.
b. Thebsumbofbrawbmaterialbcostsbandbdirectblaborbcosts.
c. Allbcostsbassociatedbwithbmanufacturingbotherbthanbdirectblaborbcosts.
d. Directblaborbcostsbincurredbtobproducebunitsbofboutput.
ANS: A
Thebtermb"conversionbcosts"brefersbtobthebsumbofbdirectblaborbcostsbandballbfactoryboverheadbcosts.
4.b b Abtypicalbfactoryboverheadbcostbis:
a. Freightbout.
b. Stationerybandbprinting.
c. Depreciationbonbmachinerybandbequipment.
d. Postage.
ANS: C
Depreciationbonbmachinerybandbequipmentbisbabfactoryboverheadbcostb(i.e.,bitbisbabmanufacturingbcost,b
butbitbcan'tbbebidentifiedbwithbspecificbjobsborbprocesses),bwhereasbthebotherbthreebitemsbarebsellingban
dbadministrativebexpenses.
5.b Underbabjobborderbsystembofbcostbaccounting,bthebdollarbamountbofbthebentrybtobtransferbinventorybfro
mbWorkbinbProcessbtobFinishedbGoodsbisbthebsumbofbthebcostsbchargedbtoballbjobs:
a. Inbprocessbduringbthebperiod.
b. Completedbandbsoldbduringbthebperiod.
c. Completedbduringbthebperiod.
d. Startedbinbprocessbduringbthebperiod.
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ANS: C
Whenbjobsbarebcompletedbduringbthebperiod,bFinishedbGoodsbisbdebitedbandbWorkbinbProcessbisbcredite
dbforbthebcostbofbthebfinishedbjobs.
6.b Whichbofbthebfollowingbproductionboperationsbwouldbbebmostblikelybtobemploybabjobborderbsystembof
bcostbaccounting?ba. Candybmanufacturing
b. Crudeboilbrefining
c. Printingbtextbbooks
d. FlourbMilling
ANS: C
Printingbwouldbbebmostblikelybtobemploybabjobborderbsystembofbcostbaccountingbduebtobthebnumberbofbc
ustombjobsbinvolved.b Thebmanufacturebofbcandy,bthebvulcanizingbofbrubber,bandbthebrefiningbofbcrudeb
oilbwouldbnormallybbebabcontinuousbprocessbofbproducingblikebgoodsbandbwouldbbebaccountedbforbund
erbthebprocessbcostbsystem.
7.b Inbjobborderbcosting,bthebbasicbdocumentbforbaccumulatingbthebcostbofbeachborderbisbthe:ba.bJobbcostbshe
et.
b. Requisitionbsheet.
c. Purchaseborder.
d. Invoice.
ANS: A
Inbjobborderbcosting,bthebbasicbdocumentbtobaccumulatebthebcostbofbeachborderbisbthebjobbcostbsheet.
8.b b Whenbshouldbprocessbcostingbtechniquesbbebusedbinbassigningbcostsbtobproducts?
a. Inbsituationsbwherebstandardbcostingbtechniquesbshouldbnotbbebused
b. Ifbthebproductbisbcomposedbofbmass-producedbhomogeneousbunits
c. Whenbproductionbisbonlybpartiallybcompletedbduringbthebaccountingbperiod
d. Ifbthebproductbisbmanufacturedbonbthebbasisbofbeachborderbreceived
ANS: B
Processbcostingbtechniquesbshouldbbebusedbinbassigningbcostsbtobproductsbifbthebproductbisbcomposedbo
fbmass-producedbhomogeneousbunits.
9. Anbindustrybthatbwouldbmostblikelybusebprocessbcostingbproceduresbis:
a. Beverage.
b. HomebConstruction.
c. Printing.
d. Shipbuilding.
ANS: A
Beveragebproductionbusuallybconsistsbofbmanufacturingb"longbruns"bofbhomogeneousbproductsbforbwhic
hbprocessbcostingbisbused.b Thebotherbthreebindustriesbwouldbutilizebjobborderbcosting.
10.b Underbabjobborderbsystembofbcostbaccounting,bCostbofbGoodsbSoldbisbdebitedbandbFinishedbGoodsbis
bcreditedbforba:ba. Transferbofbmaterialsbtobthebfactory.
b. Shipmentbofbcompletedbgoodsbtobthebcustomer.
c. Transferbofbcompletedbproductionbtobthebfinishedbgoodsbstoreroom.
d. Purchasebofbgoodsbonbaccount.
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ANS: B
Whenbcompletedbgoodsbarebshippedbtobcustomers,bCostbofbGoodsbSoldbisbdebitedbandbFinishedbGoodsbi
sbcredited.
11.b b PayrollbisbdebitedbandbWagesbPayablebisbcreditedbto:
a. Paybthebpayrollbtaxes.
b. Recordbthebpayroll.
c. Paybthebpayroll.
d. Distributebthebpayroll.
ANS: B
Whenbthebpayrollbisbrecorded,bPayrollbisbdebitedbandbWagesbPayablebisbcredited.b Whenbpayrollbtaxesbar
ebpaid,bthebvariousbliabilitybaccountsbarebdebitedbandbCashbisbcredited.b Whenbthebpayrollbisbpaid,bWag
esbPayablebisbdebitedbandbCashbisbcredited.b Whenbthebpayrollbisbdistributed,bWorkbinbProcess,bFactoryb
Overhead,bandbSellingbandbAdministrativebExpensesbarebdebitedbandbPayrollbisbcredited.
12.b Selectedbdatabconcerningbthebpastbfiscalbyear'sboperationsb(000'sbomitted)bofbthebStanleybManufacturi
ngbCompanybarebpresentedbbelow:
INVENTORIES
Beginning Endin
g
Rawbmaterials $b90 $b85
Workbinbprocess 50 65
Finished 100 90
goods
Otherbdata:
Rawbmaterialsbused $365
Totalbmanufacturingbcostsbcharged
tobproductionbduring
thebyearb(incl
udesbrawbmaterials,bdirectblabor,band
bfactory
overhead) 680
Costbofbgoodsbavailablebforbsale 765
Sellingbandbgeneralbexpenses 250
Thebcostbofbrawbmaterialsbpurchasedbduringbthebyearb
amountedbto:
a. $455.
b. $450.
c. $365.
d. $360.
ANS:b D
Rawbmaterialsbused $365
Addbendingbinventorybofbrawbmaterials b 85
