Determine purpose of the statement of cost

Assignment Help Financial Accounting

Reference no: EM1311913

Objective Questions on Job Order Cost Accounting System.

1. In a job order cost accounting system, the entry to record the flow of direct materials into production is:

a.debit Work in Process, credit Materials

b.debit Factory Overhead, credit Materials

c.debit Work in Process, credit Supplies

d.debit Materials, credit Work in Process

2. Which of the following is false in regards to direct materials for an auto manufacturer?

a. Small plastic clips to hold on door panels, because they become part of the auto, must be accounted for as direct materials.

b.Steel would probably be a direct material.

c.Upholstery fabric would probably be a direct material.

d.Oil to lubricate factory machines would not be a direct material.

3. Department W had 2,400 units, one-third completed at the beginning of the period, 12,000 units were transferred to Department X from Department W during the period, and 1,800 units were one-half completed at the end of the period. What is the total number of units to be assigned cost on the cost of production report for Department W?

a. 13,800 units

b.12,700 units

c.13,600 units

d.12,000 units

4. Which of the following is not a characteristic of a job order costing system?

a. It is best suited for industries that manufactures custom goods.

b.Uses only one work in process account.

c.It accumulates cost for each department within the factory.

d.It provides a separate record for the cost of each quantity of product that passes through the factory.

5. The following are true regarding product costs except

a. product costs consist of direct labor, direct materials, and factory overhead.

b.product costs are found on the balance sheet until they are sold.

c.product costs include sales and administrative expenses.

d.product costs can be found in three accounts in the balance sheet.

6. Which of the following is NOT a way in which process and job order cost systems are similar?

a. Both allocate product cost to units produced

b.Both accumulate product costs--direct materials, direct labor, and factory overhead

c.Both use job order cost cards

d.Both maintain perpetual inventories

7. What is the purpose of the Statement of Cost of Goods Manufactured?

a. to determine the ending work in process inventory

b.to determine the ending materials inventory

c.to determine the amounts transferred

d.to finished goods All of these choices are true.

8. Which of the following would most likely be a period cost?

a.Depreciation on factory lunchroom furniture.

b.Salary of a security guard for the factory parking lot.

c.Computer chips used by a computer manufacturer.

d.Salary of telephone receptionist in the sales office.

9. Which of the following would be most likely to use process costing?

a. A law firm.

b.A custom furniture manufacturer.

c.A lawn fertilizer manufacturer.

d.An auto body repair shop.

10. Form prepared periodically for each processing department summarizing (1) the units for which the department is accountable and the units to be assigned costs and (2) the costs charged to the department and the allocation of these costs is termed a:

a. manufacturing cost report

b.process cost report

c.cost of production report

d.factory overhead production report

Reference no: EM1311913

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