1. Which of the following statements is true?
A. Service firms have little need for determining the cost of their services. B. The concept of product costing is relevant only for manufacturing firms. C. The cost of year-end inventory appears on the balance sheet as an expense. D. Service companies use cost information for planning and control purposes. E. Mining and petroleum companies have no inventoriable costs.
2. Which of the following manufacturers would most likely use job-order costing? A. Chemical manufacturers.
B. Microchip processors.
C. Custom-furniture manufacturers.
D. Gasoline refiners.
E. Fertilizer manufacturers.
3. A custom-home builder would likely utilize:
A. job-order costing.
B. process costing.
C. mass customization.
D. process budgeting.
E. joint costing.
4. The assignment of direct labor cost to individual jobs is based on: A. an estimate of the total time spent on the job.
B. actual total payroll cost divided equally among all jobs in process. C. estimated total payroll cost divided equally among all jobs in process. D. the actual time spent on each job multiplied by the wage rate. E. the estimated time spent on each job multiplied by the wage rate.
5. When using normal costing, the total production cost of a job is composed of: A. direct material and direct labor.
B. direct material, direct labor, manufacturing overhead, and outlays for selling costs. C. direct material, direct labor, manufacturing overhead, and outlays for both selling and administrative costs. D. direct material, direct labor, and applied manufacturing overhead. E. direct material, direct labor, and actual manufacturing overhead.
6. Manufacturing overhead:
A. includes direct materials, indirect materials, indirect labor, and factory depreciation. B. is easily traced to jobs.
C. includes all selling costs.
D. should not be assigned to individual jobs because it bears no obvious relationship to them....
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