TRUE/FALSE

_____ 1.	When materials are purchased in a process costing system, a materials account is debited with the cost of the materials.
_____ 2.	Costs are accumulated by department in a process costing system.
_____ 3.	If direct labor-hours is used as the allocation base (cost driver) in a job-order costing system, but overhead costs are truly driven by machine hours based on prevalent automation, equipment, and robotics used in assembly, then jobs with low direct labor requirements will tend to be over-costed relative to jobs with high direct labor requirements. Hint: DL truly reflect relationship with cost).
_____ 4.	The formula for computing the predetermined overhead rate is: Predetermined overhead rate = Estimated total manufacturing overhead cost Estimated total amount of the allocation base.
_____ 5.	If the actual manufacturing overhead cost for a period exceeds the manufacturing overhead cost applied, then manufacturing overhead would be considered to be underapplied.
_____ 6.	A process cost system would likely be used to account for the cost of manufacturing enough oranges in California.
_____ 7.	After goods have been inspected and completed goods are sold, the transaction is recorded as a debit to Cost of Goods Sold and a credit to Finished Goods Inventory in the inventory subledger.

_____ 8. General Mills, Inc. manufactures flour. This company is more likely to use job-order costing while Neiman Marcus, Inc., which manufactures expensive, customized, hand-tooled leather jackets, is more likely to use process costing.

_____ 9. Job Cost time cards are used aggregate direct labor factory costs using job cost sheets.

_____10. Using process costing, it is necessary to consider the stage of completion of the units when assigning conversion cost to partially completed units in the ending work in process inventory.

_____11. Process costing is used in those situations where many different products or services are produced each period to customer specifications.

_____12. In a process costing system, overhead costs are traced to units of product as the products are produced.

_____13. In a process costing system, the Weighted-Average is the most common method of assigning overhead cost.

_____14. If direct-labor hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor hours, then jobs with high direct labor requirements will tend to be under-costed compared to jobs with low direct labor requirements. (Hint: DL truly reflect relationship with cost).

_____15. Implementation of Activity Based Costing systems help new managers reduce conflict with employees.