1. Cost accounting systems are used for __?

a. to accumulate products cost information

b. to accumulate and assign period cost to products

c. by manufacturing companies not service companies

d. by stockholders with decision making purposes

2. T/F A job cost system is used by companies for manufacturing batches of unique products or providing specialized services?

3. T/F A process costing system is used when a company produces identical units through a series of production steps?

4. T/F When direct materials are received on the production floor they are recorded on the job cost record?

5. T/F The amount of taxes and insurance incurred and payed for plant of a manufacturing company should be debited to the manufacturing overhead account

6. T/F When a job is completed the total cost of the job is recorded with the debit to finish goods and inventory and a credit to working process inventory.

7. T/F During the year a company incurred $522,000 overhead and allocated $483,000 of manufacturing overhead cost. At the end of the year the adjustment entry needed to adjust the manufacturing overhead account balance to 0 will include a debit to cost of goods sold.

8. T/F For a service company such as an accounting firm each client is considered a job?

9. T/F When job order costing is used in service industry the allocation of indirect cost is normally based on machine hours.

10. In a machine intensive production environment, the most accurate cost driver of manufacturing overhead cost is usually __

a. Direct Labor Cost

b. Direct Labor Hours

c. Direct Materials Used

d. Direct Machine Hours

11. T/F A textile manufacturing company is most likely to use job order costing to arrive at the cost per yard of textile manufactured and sold to customers.

12. T/F A cellular phone manufacturer is more likely to use a process costing system rather than a job order costing system.

13. Companies that manufacture identical items through a series of uniform production steps use ___ to determine the cost per unit produced

a. A process costing system

b. A job order system

c. Both Systems

d. Neither Systems

14. T/F In a process costing system equivalent units must be calculated separately from materials and conversion cost?

15. T/F A production cost report shows only the calculation for the physical flow of products.

16. The production cost reports show the calculations for the physical flows and the __ flows of products

a. Cash

b. Price

c. Cost

d. Supply

17. The cost that were incurred in a previous process and brought into a later process is the part of the products cost are called the ___ cost.

a. Transferred in

b. Transferred out

c. Accounted for

d. To account for

18. T/F When indirect materials are used in productions the raw materials inventory account is credited, processing costing is used

19. T/F In most organizations managers are often rewarded based on how well the meet the budget?

20. T/F A production cost report can help managers identify the most profitable products.

21. Which of the following statements is true:

a. Indirect cost must be allocated based on a single plant wide rate

b. Manufacturing overhead cost are accumulating in cost pools and then assigned products

c. Managers cannot wait until the end of the accounting period for product cost information

d. Managers can choose to wait until the end of the accounting period to allocate manufacturing overhead cost.

22. T/F Companies calculate the predetermined overhead rate at the beginning of the accounting period using the actual cost.

23. T/f Activity based costing uses a common allocation basis for all activities?

24. T/F in the first step in the activity based costing system for a manufacturing system a management team must determine the activity that incur the majority of the manufacturing overhead cost.

25. Which of the following decisions will most likely involve the use of activity based management?

a. Decisions related to the financing of an investment using equity or debt

b. Decisions related to the expansion of operation related to in a particular geographical location

c. Decisions related to pricing of the product

d. Decisions related to payment of dividends

26. T/F Activity based costing allows managers to evaluate overall production capacity and focus on reducing the mix of products thats is most profitable

27. T/F Activity based management is not suitable for service companies as it deals with proper allocation of manufacturing overhead cost

28. T/F Activity based costing can be used in determining the cost of services as well as products

29. The just in time managements system is an are a ___

a. Labor Management System

b. Overhead Management System

c. Cost Management System

d. Debt Management System

30. T/F Quality Management Systems (QMS) are systems that help managers improve the business performance by providing quality products or services.

31. T/F If the volume of activities double in the relevant range total variable cost will also be doubled

32. Which of the following is a variable cost

a. Property Taxes

b. Salary of Plant Manager

c. Direct Materials Cost

d. Straight line depreciation expense

33. T/F Contribution Margin is the amount that contributes to covering material cost

34. T/F The terms unit contribution and contribution margin are used interchangeably.

35. T/F CVP Analysis assumes that sales price per unit does not change as volume changes

36. Which of the following is not an assumption of Cost Volume Profit (CVP) analysis

a. The only factor that affects that total cost is a change in volume which increase or decreases total variable and mixed cost

b. The price per unit does not change as volume changes

c. Total fixed Cost do not change

d. The price per unit changes as volume change

37. T/F Sensitivity analysis empowers managers with better information for decision making by analyzing how various business strategies will affect profits earned by the company

38. ____ is what if techniques that estimates profit or loss results if sales price, cost, volume, or underlying assumptions change

a. High level method analysis

b. Sensitivity analysis

c. Contribution Margin

d. Operating Leverage

39. T/F The amount by which sales can decrease before the company incurs an operating loss is the called the break-even point.

40. T/F The variable cost increase in all other factors remain the same the margin of safety will become smaller

41. T/F Fixed manufacturing overhead is considered a product cost under variable costing

42. T/F Absorption costing considers direct materials, direct labor, variable manufacturing overhead and fixed manufacturing overhead as product cost.

43. T/F The level of inventory on hand at the end of the year does not affect the amount of operating income calculated under variable costing and absorption costing

44. T/F in the variable costing income statement variable cost are reported separate from fixed cost.

45. When there are no beginning or ending balances in finished good inventory variable and absorption costing will result in ___

a. Different Amounts for ending work and process inventory

b. The same operating income

c. Different sales revenue

d. Different amount of cost of goods sold

46. When there is no beginning finished goods inventory and all goods that are produced are sold the operating income ___

a. Will be higher under absorption costing than variable costing

b. Will be lower under absorption costing than variable costing

c. Will be higher than the gross product under variable costing

d. Will be the same for absorption costing and variable costing

47. T/F For short term pricing decisions variable costing is an appropriate costing method to use

48. T/F When setting a sales price in the long run the sales price must cover the full cost including fixed cost