Overheads are easily traceable to a product.

True

False

Job-order costing is used in manufacturing companies and process costing is used in service firms.

True

False

Which of the following costs is often important in decision making, but is omitted from conventional accounting records?

b. Sunk cost.

a. Fixed cost.

c. Opportunity cost.

d. Indirect cost.

Direct labour is not a good predictor of overheads under ABC Costing.

True

False

Process reengineering is usually strongly accepted by all employees within an organization.

True

False

Opportunity costs are recorded in books of accounts

True

False

Direct Labour is a Non Manufacturing cost

True

False

Planning memo is a document that most businesses prepare at the beginning of the year as part of the planning exercise

True

False

Valuing inventory under variable costing is greater than under absorption costing.

True

False

Machine hours is the allocation base for the single plantwide overhead rate

True

False

Managers often need to understand how costs will behave in response to changes in activity level - this is Traceability

True

False

Which of the following is not a management function?

a. Constraining

b. Planning

d. Directing

c. Controlling

Unethical behavior is often the result of managers focusing on short term results at any cost.

True

False

Selecting a course of action and specifying how the action will be implemented is part of the Implementing function

True

False

Absorption costing uses only variable costs.

True

False

Managers prefer actual costing (instead of normal costing)

True

False

In a job-order costing system, manufacturing overhead applied is recorded as a debit to:

Raw Materials inventory.

Finished Goods inventory.

Work in Process inventory.

Cost of Goods Sold.

Managerial accounting lays emphasis on precision vs timeliness

True

False

Sunk costs are not recorded in books of accounts

True

False

In process costing, you do not not wait till you get an order

True

False

Which of the following statements is true? (I) When raw materials are purchased, they are recorded as an asset. (II) The absorption cost approach provides for the absorption of all manufacturing costs, fixed and variable, into units of product.

Both statements I and II are true.

Only statement I is true.

Only statement II is true.

Neither statement is true.

FIFO Method combines beginning work in process inventory with current periods units and costs

True

False

Instead of using a job cost sheet, production reports are prepared for each department (or process) to accumulate costs of production and to account for units worked

True

False

Overhead allocation is Add ALL the Variable costs and then allocate them over number of hours of labour or machine that is utilized for making that product.

True

False

Inventory is found in the Income Statement

True

False

In Process costing, we use a Job cost sheet

True

False

You would see Perpetual inventory system in a car dealership.

True

False

Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct labour-hours.

True

False

Managers also need to know whether costs can be traced to specific cost objects - this Relevance

True

False

Process costing would be appropriate for each of the following except?

a. custom furniture.

b. Oil refining.

c. grain milling.

d. newsprint production.

Strategy would involve short term decision making

True

False

Process costing is used for the manufacture of tables

True

False

Accounting salary cost is considered

prime cost

sunk cost

period cost

product cost

If the opening stock is 100 units, Purchases are 50 units and you consumed 60 units, how much is your closing stock

210

110

90

Cannot be determined

The theory of constraint (TOC) framework focuses on effectively managing constraints as the key to success.

True

False

Purpose of an organization is the Vision

True

False

Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs:

started in process during the period.

in process during the period.

completed and sold during the period.

completed during the period.

Initially labour hours moved in direct proportion to overhead costs.

True

False

Equivalent units are extensively used and found in finished products inventory.

True

False

JIT means ordering large quantities to save time.

True

False

The salary of the president of a manufacturing company would be classified as which of the following?

a. Product cost.

b. Period cost

c. Labour cost

d. Sunk cost

Overhead costs tend to fluctuate with changes in the volume of units produced from period to period.

True

False

The main idea underlying the lean business model is the elimination of Waste.

True

False

Managerial accounting can be easily verified

True

False

The long term goal of an organization is the Mission

True

False

The costing approach that meets the requirements of financial accounting and tax reporting requirements is:

variable costing

standard costing

absorption costing

throughput costing

Periodic system is a continuous record of inventory.

True

False

The Seller does not determine the Selling Price

True

False

During July at Loeb Corporation, $83,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The journal entry to record the requisition from the storeroom would include a:

debit to Work in Process of $79,000

debit to Work in Process of $83,000

credit to Manufacturing Overhead of $4,000

debit to Raw Materials of $83,000