Acc 202 Mid-Term Study Guide

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Below is the “study guide” for the MidTerm Exam. Of the 100+ questions below – 65 of them are the MidTerm. No answers are provided in the study guide (since the whole idea is for you to” review and study” the material to prepare for the test).

True or False

Chapter 01

1.Much of managerial accounting is directed at gathering useful information about costs for planning and control decisions.

2.Direct materials are not usually easily traced to a product.

3.A variable cost changes in proportion to changes in the volume in activity.

4.34. Product costs are expenditures necessary and integral to finished products.

5.Cost concepts such as variable, fixed, mixed, direct and indirect apply only to manufacturers and not to service companies.

6.Manufacturers usually have three inventories: raw materials, goods in process, and finished goods.

7.A manufacturer's cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products.

8.Indirect labor refers to the cost of the workers whose efforts are directly traceable to specific units or batches of product.

Chapter 02

9.Cost accounting systems accumulate costs and then assign them to products or services.

10.There are two basic types of cost accounting systems: job order costing and periodic costing.

11.Job order costing is applicable to manufacturing firms only and not service firms.

12.The cost of all direct materials used on a job is debited to the Finished Goods Inventory account.

13.When materials are used as indirect materials, their cost is debited to the Factory Overhead account.

14.The predetermined overhead allocation rate is used to apply overhead cost to products.

15.The balance of the Factory Overhead account appears on the income statement.

16.In a job order cost accounting system, indirect labor costs are debited to the Factory Overhead account.

Chapter 03

17.In a process manufacturing system, products pass through a series of sequential processes.

18.A production department is an organizational unit of a factory that has the responsibility for at least partially manufacturing or producing a product or service.

19.To determine unit cost under a process cost accounting system, equivalent units produced must be calculated if the company has goods in process inventories.

20.A manufacturing company may choose to use either a job order cost accounting system or a process cost accounting system, without considering the process it uses to produce its products.

21.When defining direct costs and indirect costs in process costing, it is the process that is the cost object.

22.In process cost accounting, materials are always classified as indirect if they are not physically incorporated into the final product.

23.Once equivalent units are calculated for materials, this number will also be used for direct labor and factory overhead.

24.All costs of the processes in a process costing system ultimately pass through the Cost of Goods Sold account.

Chapter 04

25.Product costs consist of direct labor, direct materials, manufacturing overhead and indirect costs.

26.The departmental overhead rate method uses a different overhead rate for each production department.

27.By definition, costs classified as overhead are consumed in basically the same manner regardless of the process involved.

28.The premise of ABC is that it takes activities to make products and provide services and these activities drive costs.

29.A cost pool is a collection of costs that are related to the same or similar activity.

30.Allocated overhead costs vary depending upon the allocation methods used.

31.ABC can be used to assign costs to any cost object that is of management interest.

32.The more activities tracked by activity-based costing, the more accurately overhead...
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