CHAPTER 1:

1. Which one of the following is least likely to be an objective

2. In cost terminology, conversion costs consists of:
3. Cost is the amount measured by the current monetary value of economic resources
4. Which is the best description of traditional cost accounting?
5. In a retailing enterprise, the statement of comprehensive
6. The information contained in a cost of goods manufactured
7. All costs related to the manufacturing function
8. Indirect materials are a
9. The wages of the factory janitorial staff
10. Job-order cost accounting systems and process-cost systems differ in the way:
11. Two basic costing systems for assigning costs to products or services are job costing and process
costing
12. A company services office equipment. Some customers bring their
13. A company experienced a machinery breakdown on one
14. In job-order costing, the basic document to accumulate
15. Companies characterized by the production of heterogeneous products will most likely
16. A new advertising agency serves a wide range of clients
17. The work-in-process account is:
18. Many companies recognize three major categories of costs of manufacturing
19. Many firms use two overhead accounts
20. In a job-order cost system, the use of direct materials previously purchased
21. In a traditional job order cost system, the issue of indirect materials to a production
22. Which of the following items is not included (charged to)
23. How does a job-order cost accounting system differ from a process
24. In a job-order cost system, direct labor costs usually are recorded
25. In a job-order cost system, the application of factory
26. In a job-cost system, factory (manufacturing) overhead is:
27. A nonmanufacturing organization may use
28. The debits in work-in-process are BWIP, direct labor
29. When the amount of overapplied factory overhead is significant
30. Under a job-order system of cost accounting

1. a 6. b 11. d 16. a 21. b 26. c

2. c 7. c 12. a 17. b 22. c 27. a
3. a 8. d 13. b 18. d 23. c 28. c
4. c 9. a 14. d 19. b 24. d 29. c
5. d 10. b 15. a 20. a 25. c 30. d

CHAPTER 2:

1. In a well controlled materials system, the Purchasing Agent performs the following
2. The purchase requisition is a document used for
3. The materials requisition:
4. The purchase order:
5. The bill of materials:
6. The receiving report:
7. The purchase requisition may originate from all of the following except:
8. The receiving department does all of the following
9. A company has been ordering more than the economic order quantity. This would result in:
10. The purchasing department performs all of the following functions except:
11. An inventory control technique that review quantities on hand periodically and orders
12. The factor that need not be considered when calculating an inventory economic order quantity
13. Mars Company has correctly computed its EOQ as 500 units
14. The materials control method that is based on the premise
15. The materials control method that is based on physical observation

1. C 6. b 11. A
2. B 7. c 12. a
3. A 8. B 13. A
4. B 9. B 14. A
5. A 10. A 15. a

CHAPTER 3
1. The person who is responsible for the protection of the materials
2. The bin tag:
3. No materials may be issued without a written
4. Materials requisition should indicate the following except:
5. The person who is responsible for recording the requisition in the materials
6. A material ledger card should indicate
7. A materials requisition journal
8. After recording the materials requisition in the materials requisition
9. What is the purpose of using a materials requisition journal
10. Materials returned to storeroom are recorded in the following
11. Indirect materials that cannot be charged
12. Entries made in Materials account in the general

'

CHAPTER 4
1. The costing method that considers materials on hand to be from the last ones purchased is
2. Under what costing method are the materials on hand considered to be from the first
3. Which inventory costing method charges current costs against
4. When must a new unit cost be calculated under the moving
5. How is a loss of inventory write-down shown on the statement of
6. The costing method that is no longer permitted
7. How is recovery from a decrease in the allowance for the reduction of inventory to NRV
8. In period of rising prices, what effect would the use of FIFO
9. How is the allowance for inventory write-down shown
10. What is the major advantage of using a perpetual inventory system

1. b 6. b
2. b 7. c
3. b 8. b
4. b 9. a
5. b 10. A
 CHAPTER 5
1. To check the accuracy of hours worked, one would ordinarily compare time cards
2. The document that is used to secure information
3. An example of fringe benefit
4. An example of labor-related cost
5. Wages in excess of the regular rate period paid
6. If the job is taken as a rush order
7. If the overtime premium is charged to specific job
8. What is the procedure for keeping records
9. What is the certificate that is given to employees
10. The overtime premium spent on a regular job

CHAPTER 6
1. Costs that are not conveniently identified with a particular
2. What costing system is used to avoid any delay in the costing of jobs
3. Costing system that charge the product with the use of an arbitrary
4. What costing system is used to allocate overhead with the use of a predetermined overhead rate
5. A credit balance in manufacturing overhead control account is
6. A debit balance in the manufacturing overhead control account is:
7. Overapplied manufacturing overhead would result if
8. EG company found that the differences in product costs resulting from the application of
predetemined
9. In highly automated manufacturing, all of the following may be appropriate bases for
manufacturing overhead application
10. When the amount of overapplied manufacturing overhead is significant,
11. The most common treatment of the underapplied overhead at the
12. An objection to the use of predetermined overhead rate based on
13. All of the following phrases are used as alternate
14. This variance measures the amount by which actual overhead is more or less than the amount
15. This variance is the difference between the actual manufacturing overhead incurred and the
applied
16. The difference between the actual manufacturing overhead incurred and the budgeted
17. What does a favorable variance represent?

1. A 6. b 11. c 16. A
2. D 7. a 12. b 17. B
3. A 8. a 13. d
4. A 9. c 14. b
5. A 10. d 15. c

CHAPTER 7
1. A department that would be classified as a producing department is:
2. A department that would be classified as a service department is
3. In determining the right method for allocating depreciation of equipment
4. The following statement that best described cost allocation is
5. The method for allocating service department costs that requires the least clerical work
6. I which of he following overhead allocation methods may no other
7. The method of overhead allocation that usually starts with the service
8. Several methods are used to allocate service department costs to the production departments
9. If two service departments service the same
10. A company has two production and two service departments that are housed
11. An automotive company has three divisions. One division
12. The most accurate method for allocating service department costs

1. C 6. C 11. A
2. B 7. A 12. C
3. B 8. D
4. B 9. A
5. B 10. C

CHAPTER 8
1. Traditional costing system are characterized by their use of which of the following measures as
bases for allocating overhead costs to output:
2. ABC systems are characterized by their use of which of the following measures as bases for
allocating overhead to output:
3. All of the following are distinctions that usually exist between traditional and ABC costing sytems,
except that:
4. Activity-based costing:
5. Examples of activities at the batch level of cost include:
6. Compared to an ABC system, a traditional costing system reports:
7. Any activity that causes resources to be consumed is called:
8. Activity-based costing:
9. Examples of activities at the product level of costs include:
10. Examples of batch-level activity drivers include:
1. A 6. B
2. D 7. C
3. A 8. C
4. C 9. A
5. A 10. A

CHAPTER 10
1. In process cost system, costs are assigned only:
2. Indicate which of the following statement is not correct.
3. In making the journal entry to record raw material costs:
4. The analysis of the activity in a department or cost center for a period is called a:
5. A cost of production report:
6. The restatement of incomplete units in terms of completed units is called:
7. Purchased materials are added in the second department of a three- department process; this
increases the number of units produced in the second department and would always:
8. Purchased materials are added in the second department of a three- department process; this does
not increase the number of units pro- duced in the second department and would:
9. An equivalent unit of material or conversion cost is equal to:
10. Which statement is correct?
11. An item that does not appear on a cost of production report is:

CHAPTER 11
1. A cost of production report
2. A characteristic of a process costing system is that:
3. Indicate which of the following statements is not correct.
4. In a process cost system, costs are assigned only:
5. An equivalent unit production of material or conversion cost is equal to:
6. An item that does not appear on a cost of production report is:
7. Transferred in costs as used in a process cost accounting system are:
8. In accounting for beginning inventory costs, the method that allows the addition of beginning
inventory costs with costs incurred during the period is referred to as:
9. Assuming that there was no beginning work in process inventory and the ending work in process
inventory is 50% complete as to conversion costs, the number of equivalent units as to conversion
costs would be:
10. The first step in applying the average cost method is to:
11. In determining the cost of goods transferred in from preceding department under the average
costing method:
12. The average and FIFO process costing methods differ in that the average method