Module 2 Exercises

Topics: Cost, Costs, Cost accounting, Manufacturing / Pages: 2 (383 words) / Published: Feb 20th, 2012
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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