1) What is the best way to handle manufacturing overhead costs in order to get the most timely job cost

information? A. The company should add actual manufacturing overhead costs to jobs as soon as the overhead costs are incurred. B. The company should determine an allocation rate as soon as the actual costs are known, and then apply manufacturing overhead to jobs. C. The company should apply overhead using an estimated rate throughout the year. D. The company should account for only the direct production costs. 2) When a job is completed, what happens to the cost of the job? A. It is removed from materials inventory and included in work in process. B. It is removed from work in process and included in finished goods. C. It is removed from finished goods and included in cost of goods sold. D. It is removed from work in process and included in cost of goods sold. 3) What does cost accounting measure, record, and report? A. Manufacturing processes B. Managerial accounting decisions C. Future costs D. Product costs 4) What is unique about the flow of costs in a job order cost system? A. Each job is costed separately in a Work in Process subsidiary ledger. B. There are no costs remaining in Work in Process at year end. C. It involves accumulating material, labor, and manufacturing overhead costs as they are incurred in order to determine the job cost. D. Job costs cannot be measured until all overhead costs are determined. 5) Which one of the following is NEVER part of recording the issuance of raw materials in a job order cost system? A. Debit Work in Process Inventory B. Credit Raw Materials Inventory C. Debit Finished Goods Inventory D. Debit Manufacturing Overhead 6) Which one of the following is an important feature of a job order cost system? A. Each must be completed before a new product order is accepted. B. Each job has characteristics similar to the next. C. Each consists of features which distinguish it from the next. D. Each job uses similar processes to produce. 7) What broad functions do the management of an organization perform? A. Directing, manufacturing, and controlling B. Planning, manufacturing, and controlling C. Planning, directing, and controlling D. Planning, directing, and selling 8) Which one of the following is indirect labor considered? A. Product cost B. Raw material cost C. Nonmanufacturing cost D. Period cost

9) Which one of the following costs would be included in manufacturing overhead of a lawn mower manufacturer? A. The cost of the wheels B. The wages earned by motor assemblers C. The cost of the fuel lines that run from the motor to the gas tank D. Depreciation on the testing equipment 10) Which of the following is NOT typical of traditional costing systems? A. Assumption of correlation between direct labor and incurrence of overhead cost B. Use of multiple cost drivers to allocate overhead C. Use of direct labor hours or direct labor cost to assign overhead D. Use of a single predetermined overhead rate 11) An activity that has a direct cause-effect relationship with the resources consumed is a(n) A. cost pool B. product activity C. overhead rate D. cost driver 12) In traditional costing systems, overhead is generally applied based on A. direct material dollars B. units of production C. machine hours D. direct labor 13) Which of the following is a value-added activity? A. Inventory storage B. Inspections C. Machinery repair D. Engineering design 14) All of the following statements are correct EXCEPT that A. a larger proportion of overhead costs are company-wide costs in service industries B. the general approach to identifying activities and activity cost pools is the same in a service company as in a manufacturing company C. the objective of installing ABC in service firms is different than it is in a manufacturing firm D. activity-based costing has been widely adopted in service industries 15) Which of the following factors would suggest a switch to activity-based costing? A. The manufacturing process has been stable. B. Production managers use data provided by the existing system. C. Overhead costs constitute a significant portion of total costs. D. Product lines similar in volume and manufacturing complexity.