Managerial Accounting Pre-Test with Answers

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BUS 548 SU 2012 Pre-Test #2- Key
 
1. The use of predetermined overhead rates in a job-order cost system makes it possible to estimate the total cost of a given job as soon as production is completed.  TRUE
 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Knowledge
Garrison - Chapter 03 #1
Learning Objective: 03-01 Compute a predetermined overhead rate Level: Easy
 
2. The process of assigning overhead cost to jobs is known as overhead application.  TRUE
 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Knowledge
Garrison - Chapter 03 #5
Learning Objective: 03-02 Apply overhead cost to jobs using a predetermined overhead rate Level: Easy
 
3. The cost of a completed job in a job-order costing system typically consists of the actual direct materials cost of the job, the actual direct labor cost of the job, and the actual manufacturing overhead cost of the job.  FALSE

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Comprehension
Garrison - Chapter 03 #6
Learning Objective: 03-02 Apply overhead cost to jobs using a predetermined overhead rate Level: Medium
 
4. A debit balance in the Manufacturing Overhead account at the end of the year means that manufacturing overhead is overapplied.  FALSE
 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Comprehension
Garrison - Chapter 03 #7
Learning Objective: 03-05 Use T-accounts to show the flow of costs in a job-order costing system Learning Objective: 03-07 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts Level: Medium

 
5. Underapplied or overapplied manufacturing overhead represents the difference between actual overhead costs and applied overhead costs.  TRUE
 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Knowledge
Garrison - Chapter 03 #11
Learning Objective: 03-07 Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts Level: Easy
 
6. In a process costing system, overhead costs are traced to units of product as they are incurred.  FALSE
 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Knowledge
Garrison - Chapter 04 #2
Learning Objective: 04-01 Record the flow of materials; labor; and overhead through a process costing system Level: Easy
 
7. A process costing system would be best suited for production of a large quantity of a homogeneous product.  TRUE
 

AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Measurement
Blooms: Knowledge
Garrison - Chapter 04 #4
Learning Objective: 04-01 Record the flow of materials; labor; and overhead through a process costing system Level: Easy
 
8. When computing the cost per equivalent unit, it is not necessary to consider the percentage completion of the units in beginning inventory under the weighted-average method.  TRUE
 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Comprehension
Garrison - Chapter 04 #11
Learning Objective: 04-03 Compute the cost per equivalent unit using the weighted-average method Level: Medium
 
9. The weighted-average method of process costing can only be used if materials are added at the beginning of the production process.  FALSE
 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms: Comprehension
Garrison - Chapter 04 #9
Learning Objective: 04-02 Compute the equivalent units of production using the weighted-average method Level: Medium
 
10. Under variable costing, all variable costs are treated as product costs.  FALSE
 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Blooms:...
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