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Chapter 5—Job Order Costing

MULTIPLE CHOICE

1.Which of the following organizations would be most likely to use a job-order costing system? a.| the loan department of a bank|
b.| the check clearing department of a bank|
c.| a manufacturer of processed cheese food|
d.| a manufacturer of video cassette tapes|

ANS:APTS:1DIF:ModerateOBJ:5-1
NAT:AACSB: Reflective Thinking
LOC:AICPA Functional Competencies: Measurement, Reporting

2.When job-order costing is used, the primary focal point of cost accumulation is the a.| department.|
b.| supervisor.|
c.| item.|
d.| job.|

ANS:DPTS:1DIF:EasyOBJ:5-1
NAT:AACSB: Reflective Thinking
LOC:AICPA Functional Competencies: Measurement, Reporting

3.In a job-order costing system,
a.| standards cannot be used.|
b.| an average cost per unit within a job cannot be computed.| c.| costs are accumulated by departments and averaged among all jobs.| d.| overhead is typically assigned to jobs on the basis of some cost driver.|

ANS:DPTS:1DIF:EasyOBJ:5-1
NAT:AACSB: Reflective Thinking
LOC:AICPA Functional Competencies: Measurement, Reporting

4.What is the best cost accumulation procedure to use when many batches, each differing as to product specifications, are produced? a.| job-order|
b.| process|
c.| actual|
d.| standard|

ANS:APTS:1DIF:EasyOBJ:5-1
NAT:AACSB: Reflective Thinking
LOC:AICPA Functional Competencies: Measurement, Reporting

5.Which of the following could not be used in job-order costing? a.| standards|
b.| an average cost per unit for all jobs|
c.| normal costing|
d.| overhead allocation based on the job's direct labor hours|

ANS:BPTS:1DIF:EasyOBJ:5-1
NAT:AACSB: Reflective Thinking
LOC:AICPA Functional Competencies: Measurement, Reporting

6.Which of the following costing systems allows management to quickly recognize materials, labor, and overhead variances and take measures to correct them?

Actual Cost System| Normal Cost System|

a.|   yes yes|
b.|   yes no|
c.|   no yes|
d.|   no no|

ANS:DPTS:1DIF:EasyOBJ:5-1
NAT:AACSB: Reflective Thinking
LOC:AICPA Functional Competencies: Measurement, Reporting

7.Which of the following costing methods of valuation are acceptable in a job-order costing system?

ActualMaterialCost| StandardMaterialCost| ActualLaborCost| PredeterminedOverheadCost|

a.| yes yes no yes|
b.| yes no yes no|
c.| no yes yes yes|
d.| yes yes yes yes|

ANS:DPTS:1DIF:EasyOBJ:5-1
NAT:AACSB: Reflective Thinking
LOC:AICPA Functional Competencies: Measurement, Reporting

8.In a normal cost system, a debit to Work in Process Inventory would not be made for a.| actual overhead.|
b.| applied overhead.|
c.| actual direct material.|
d.| actual direct labor.|

ANS:APTS:1DIF:EasyOBJ:5-1
NAT:AACSB: Reflective Thinking
LOC:AICPA Functional Competencies: Measurement, Reporting

9.After the completion of production, standard and actual costs are compared to determine the ____ of the production process. a.| effectiveness|
b.| complexity|
c.| homogeneity|
d.| efficiency|

ANS:DPTS:1DIF:EasyOBJ:5-1
NAT:AACSB: Reflective Thinking
LOC:AICPA Functional Competencies: Measurement, Reporting

10.A company producing which of the following would be most likely to use a price standard for material? a.| furniture|...
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