Module 2 Exercises

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Module 2 Exercises
Problem 1:
1. Process cost systems are used to apply costs to similar products that are mass-produced in a continuous fashion.

ANSWER = TRUE

2. A process cost system is used when each finished unit is indistinguishable from another.

ANSWER = TRUE

3. Companies that produce soft drinks, motion pictures, and computers chips would all use process cost accounting.

ANSWER = FALSE
-Companies that produce soft drinks and computer chips would all use process cost accounting.

4. In a process cost system, costs are tracked by individual jobs.

ANSWER = FALSE
-In a job order cost system, costs are tracked by individual jobs.

5. Job order costing and process costing track different manufacturing costs elements.

ANSWER = FALSE
-They track the same 3 cost manufacturing cost elements

6. Both job order costing and process costing account for direct materials, direct labor, and manufacturing overhead.

ANSWER = TRUE

7. Costs flow through the accounts in the same basic way for both job order costing and process costing.

ANSWER = TRUE

8. In a process cost system, only one work in process account is used.

ANSWER = FALSE
- In a process cost system, multiple work in process accounts are used.

9. In a process cost system, costs are summarized in a job cost sheet.

ANSWER = FALSE
-In a process cost system, costs are summarized in a production cost report for each department.

10. In a process cost system, the unit cost is total manufacturing costs for the period divided by the units produced during the period.

ANSWER = TRUE

Problem 2:
Value-Added Activities| Hours|
Writing contracts and letters| 1|
Taking depositions| 1|
Contemplating legal strategy| 1|
Litigating a case in court| 2.5|
| 5.5|

Non-Value-Added Activities| Hours|
Attending staff meetings| 0.5|
Doing research| 1|
Traveling to/from court| 1|
Eating lunch| 1|
Entertaining a prospective client| 2|...
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